Full text of Commercial and Financial Chronicle : February 22, 1951, Vol. 173, No. 4988

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UNIVERSITY
OF MICHIGAN

FEB 23 1951
ESTABLISHED 1S39
business administration
library

Tk e

Financial
Reg. U. S. Pat. Office

Volume 173

Number 4988

New York, N.

EDITORIAL

Let

As
On Feb.

»

We See It

Price 35 Cents

Vice-President and Economist, Irving Trust Co.,

S.

Congressman from Massachusetts

"We have contracts that create industrial sta¬

bility.

•

shek.

fight to win them.
That means, in plain
language, full use of the
strike weapon if such a course of action is forced
upon us. We shall recommend such a course of
action to

sound

now

confident that

the

morale

plans

of

—is: which will

bodied in

experience?
of

first blush
er

seem

to

more

represent.

be any question, if indeed there

secret

Policy Committee had only
Continued

ACTIVE

on

Securities

The

or

police state that
shall political systems
the essential dignity

year

we

By the

are

on

new

of

peacetime matters.
Federal

budget uses a
billion for military

$49

police,
free

as

homes and

on

Association,

at

the

at

the

27th

Parker House,

25

and

,

.

figures tell us the rough
shape of things to come. They sug¬
gest that within the present calendar

churches

page

military spending will

year

ginning at
ing

the

an

more

&

year

at

annual

an

or

&

WHITNEY

KEYES FIBRE CO. CI. A & Com.

MFG.

&

Franklin Custodian Funds,

SALES

inc.

Continued

31
housemen's

of

AND

ELECTRIC CO.

Boston

Stock

34

the

Boston

State and

MUNICIPAL

Branches

^

Tel. HAncock 6-8200

Free

from

Tele. BS 424

BROADWAY, NEW YORK 5, N. Y.

Tel. WOrth 2-0115

THE NATIONAL CITY BANK

Exchs.

31 MILK STREET, BOSTON 9, MASS.

120

page

Bonds

Canada

across

Monthly Commercial Letter

duPont, Homsey & Co.
&

on

Boston, appear on pages 23, 24,

N

LOWELL SHOPS

York

the

by Mr. Lindow before the National Furniture Ware¬
Association, New York City, Feb. 14, 1951.

upon request

New

in

address

♦An

26.

WEST POINT MFG. CO.

Members

something

As everyone knows,

Municipal
STATE

A Mutual Fund

MCDONNELL AIRCRAFT

SAC0

of

rate

$50 billion.

DWIGHT MFG. CO.

N. E. GAS &

than double itself, be¬

ALMY

H0LLINGSW0RTH
LUDLOW

Wesley Lindow

annual rate of around $20 billion and end¬

neighborhood of $45

Dinner

Annual

•

These

..

by Cong. Martin at Lincoln Day Dinner of the Kings
County Republican Committee, Brooklyn, N. Y., Feb. 12, 1951.

THIS ISSUE—Pictures taken

aid

ending June 30,

billion. :

of

*An address

Traders

international

the

our

Continued

for
year

but

;

our

and

fiscal

Total budget expenditures are

walk

we

fearing

the

1952.

no one

victims

the

shall

or
men

spending
for

FINE SPINNING

DEWEY

a

placed at $71 % billion. Tax receipts
under present law are estimated at
$55 billion, leaving a deficit of $161/2

victorious?

become

we

be

BATES MFG. CO.
BERKSHIRE

steam in 1951.

on

the

ing spent

the

a

PICTURES IN

MARKETS

economic report
characterization I

you an

best

tional economic energy was still be¬

liquidated, or shall the morality of.
the family and the basic religious
teachings survive, mightier than ever?
Those are the questions. To meet them we must not
only possess the finest qualities of spirit and the maxi¬
mum of wisdom, but we must be able to translate those

34

page

be

emerge

Shall
Hon. J. W. Martin, Jr.

question in informed minds, what the attitude
organized labor generally is to be toward at
least one broad aspect of
wage stabilization, sosame

•

godless materialism

God?

of

This

man

earth

any

called.

The

going to be
living in a modified war economy in
sharp contrast to the beginning of the
year when practically all of our na¬

recognize

Shall

..

was

has been

ever

of

end

figure

triumphs,
that

long¬

can no

really put

or

it

Shall

than it would at

There

1951.

'

knowledge and approval of
Policy Committee, and that it

accordingly represents far

in

year of transition.
The rearmament program got started in 1950 but it will

faiths?

issued with the full
the United Labor

ahead

make about 1951 is that it will be

can

the idealism instilled in
by the religious teachings of all

Marx,

us

industrial

scarcely doubt that this statement

*

Shall it be the

what's

on

triumph, the forces of Marxism as em¬
and socialism, or the free prin¬
ciples of liberty and individual dig¬
nity of man which our civilization
has evolved out of 3,000 years of

of

can

Sees prices kept under
"reasonably good control."

communism

workers."
One

with greater saving and spending.

My assignment today is to give

we

and

war,

cally and militarily.

that it will act

wreck

two-front

with Red China, it is

war

logic to support Chinese nationalists both strategi¬

positively and sensibly and
not force us into a fight
every three months while
uncertainty, chaos and confusion meanwhile serve
to

cannot support

already at

are

taking one-sixth of national product, with
change in output of civilian supplies. Holds, because
of larger consumer income, more taxes will be paid along
little

great issue before the world today—an issue so
vital that it affects every man, woman and child on earth

convention in

our

are

we

t

Federal taxes

The

Cleveland, April 1-5.
will keep our con¬
tracts in any event whether the
government
chooses
to
pursue
its inch-by-inch policy or
whether it steps up now to its
responsibility and
protects the integrity of our contracts.
"The government should make
up its mind
"We

Says Chinese Reds

and since

had to

we

of all goods and services in 1951 will increase about
5%, despite materials and labor bottlenecks. Foresees

ume

principles of liberty and godless materialism
socialism, criticizes Administration's
foreign policy and urges opening of a second front in Asia
by the Formosan forces of Generalissimo Chiang Kai-

production that will inevitably result.
"We are prepared to fight just as hard to main¬
as

rearmament

Representatives,

of communism and

government must assume responsibility for
the chaos, the confusion and the breakdown of

contracts

of

House

the

free

tween

the

our

of

stressing greatest issue in world today is struggle be¬

If the government in any way tampers
with, abrogates or modifies those contracts then

tain

leader

City

Maintaining transition problems arising from shifts to
production will be short-lived and fairly easy
to take, New York bank economist
predicts physical vol¬

ment:

Republican

New York

,

By HON. JOSEPH W. MARTIN, Jr.*
U.

Copy

By WESLEY LINDOW*

Second Front in Asia

following state¬

a

What's Ahead in 1951?

Chiang Kai-shek Open

17, the Executive Board of the United

Automobile Workers issued the

Y., Thursday, February 22, 1951

Tele. NY 1-315

Prospectus
your

may

be

investment

obtained
dealer or

The

OF NEW YORK

FRANKLIN DISTRIBUTORS, Inc.
64 Wall

Street, New York 5

CanadianBank
4@ommme
Head Office:

Bond

Dept. Teletype: NY 1-708

New York
Seattle

Toronto

Bond

Department

THE CHASE

NATIONAL BANK
OF

NEW YORK

THE CITY OF

Agency: 20 Exchange PL

Portland, Ore. San Francisco Los Angeles

We maintain active markets in

Cffie

Brown

CANADIAN

Company

(all Issues)

Bond Fund

Underwriters
Distributors of

...OF

BOSTON

and

Municipal

and

,

BOSTON
New York

Co.

1899

Angeles




New York

Cincinnati

Chicago
Columbus

Denver
Toledo

Dortwiox Securities
Grporatioh
40

Dallas
Buffalo

upon

115 BROADWAY
NEW

YORK

Exchange Place, New York 5, N. Y.

105 W. ADAMS ST.

CHICAGO

WHitehall 4-8161

i

-

tv /: ■■

Members New York Stock Exchange
and

other

Principal Exchanges

111 Broadway, N.
WOrth 4-6000

Teletype NY 1-702-3

request
>.

IRA HAUPT&CO.

MEMBERS NEW YORK STOCK EXCH.

CLEVELAND
Chicago

Los

&

ESTABLISHED 1891

(Incorporated)
Established

Analysis

■

Goodbody

OTIS & CO.

Ill Devonshire Street

COMMON
»

CANADIAN DEPARTMENT

or

VANCK.4 SAND 10 U S & CO.

Electric Co.

BONDS & STOCKS

Steep Rock Iron Mines

Corporate Securities
Prospectus from authorised dealers

Canadian Superior 03
Company of California

Portland General

Boston

Y. 6

Teletype NY 1-2708

Telephone:

Enterprise 1820

2

The Commercial and Financial Chronicle.

(810)

MARKETS

TRADING

IN

The Security

R. Hoe & Co. A*.

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

Polaroid Corp.

Foundation Co.

(The articles contained in this forum

Works

they to be regarded,

are

as an

offer

120 Broadway, New

York 5

Teletype NY 1-583

serves

pany

of

Specialists in

in the heart and now account for 54.5% of
growing re¬ total dollar revenues. Neverthe¬
However, this less, the prospective growth in the
territory's population and overall
economy gives promise of
even
larger expansion in the company's
future
operations.
Management
has proven to be farsighted and
aggressive in expanding facilities
to meet the ever-increasing ser¬

but

is

of

one

the many rea¬
for

sons

Rights & Scrip

lecting
the

Since 1917

se¬

PGE
stock

common
as

security

like

best.

Its

I

services

Curb

Exchange

used

provided

and

Exchange

York

lowest

the

at

cost.

Tel. REctor 2-7815

As

sult

BROADWAY, NEW YORK 5

the

re¬

a

com¬

pany's

earn¬
R.

ings and oper¬

iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiur

shown substantial

Trading Markets

past

K.

Daugherty

growth over the

Its future growth
to be unlimited.

10

lion
An

•

i

V

'

1

Electric

Falls

Com¬

distance of .14
miles from Oregon City to Port¬

:

States,

a

MAINE CENTRAL

The| cpmpany

earnings
the

of

:

facilities, oldest and larg¬

utility system in Oregon, con¬
stitutes a well integrated unit de¬
voted
solely to production and

Request

of* electric

distribution

communities

other

Willamette

148 State St., Boston 9, Mass.
Teletype BS 259

N. Y. Telephone WOrth 4-5000

^

'

>'

'

■

'"

HIGHER YIELDS
ON TAX EXEMPTS

*

River

Rico

Water

in

the

bonds

of

comparably high
(about 2.75%).
No Fed¬

Carried

2,300

square

original

at

"bare-bones"

cost.

Cheap

Power

Provides

Highest

Usage at Lowest Cost
*

PGE

has

come

L

a

steam

and

plants, which have a
total capacity of 194,000 kilowatts.
The availability of this low-cost
power

mestic

abundant

encourages
use

and

PGE's

do¬

average

residential

^Bought—Sold—Quoted

1950)

use
(5,344 kwh. in
is three times the national

average, at less than half the na¬
tional average cost per kilowatt-

(Allen & Company
30 Broad

Phone'HA

St., New York, N. Y.
2-2600 —Tel. NY 1-1017




hour.

To

illustrate

this

Growth

individuals, trustees

a

holding

or

National

selecting

common

Company, Inc.

stocks for tne future we continue

better

stress

to

-

than

-

average

Common

Such prospects
found
among
the

growth prospects.

are

evident or in prospect.

Bought—Sold—Quoted
Analysis

available

request

on

I. B. Maguire & Co., Inc.

Members Nat'l Assn.

of Securities Dealers

Inc.

31 Milk Street, Boston 9, Mass.
Tel. HUbbard 2-5500

Tele. BS 142

Portland, Me.

Enterprise 2904

Hartford, Conn.

Enterprise 6800

Open End Phone to New York Canal 6-1613

As an

I would site the rail¬
tapping the Alberta oil and

example,
roads

Since 1932

NORTH and SOUTH

is soundly finance^

wnich

mineral

rights

in

MUNICIPAL BONDS

'

;

substantial

with

Ltd.,

1

:.X

CAROLINA

satisfactory earn¬
Calgary & Edmonton Cor¬

poration,

Specialists in

VIRGINIA—WEST VIRGINIA

enjoying

point, it

electric ranges in

in Portland than in New York

Taking

under sub¬

or

■F. W.-

RICHMOND, VIRGINIA

it

outlook

broader

a

CRAIGIE&CO.
Bell System

Teletype: RH 83 & 84
Telephone 3-9137

probable that the develop¬

seems

ment

of

energy

peaceful
the

of

field

medicinal

unusual promise
future.
The increasing

chemistry
the

of atomic

uses

and compounding discov¬

in

eries

for

hold

Pennsylvania Railroad

year

when I had

ago

privilege of participating in
forum, I advocated a bal¬
ancing of risks as the security I
liked best for
the

1950

accounts
managed

basis

p r e c

a

i

a

p

-

us

stock

of

biologicals

and

and
to

young
futures

of radioactive
means

Jones

William

H.

Moore

|

year-ends.

isotopes

Our

never

common

exceeded

by

a considerable margin.
In our
experience, particular benefit was
derived
from
proportionately
large commitments in oils and
certain

rubber,

and

motor stocks.
Thus,
the selection of some better-thanaverage
ance

of

New York

Bell System Teletype

PH 771

City Tel.: BOwling Green 9-4818

Direct wire to Ames Emerich, Chicago

long
The

may

BUY

be

causes

and

and

course

of fatal

U. S.

SAVINGS

malfunctioning of
body.
The great
are

BONDS

the

commercial fronts.

However, the
companies capable of mass pro¬
duction

on a

meticulous basis will

the benefits to humanity.
about 50% of total value at mar¬ Such companies seem likely to
ket which entailed some sales on enjoy better-than-average growth
and therefore should be of partic¬
the way up.
However, certain
ular
interest
to
long-term in¬
stocks or industry .groups outr,
vestors.
I would favor a crossperformed the Industrial average

and

Phila. Telephone
PEnnypacker 5^2857

all

are

have
live.

premature killers of today

be-

holdings

Members Phila.-Balto. Stock Exchange

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

immediate goals and the struggle
will be waged on academic and

increase

stock

Henry B.Warner & Co., Inc.

of tracing and record¬

human

the

average

tween

problems.

growth have before them an en¬
tirely new vista of opportunity.

diseases

trial

17.6%

financial

and

ing the

reflected
an

tific

Thus these fields of excellent past

use

the

Ind

American Marietta

the best situated

the

12%,

Dow

seem

-

of about

Central Public Utility 5]/2S

presently to cope with the scien¬

useful

t ion

whereas

the large

energy,

relatively

enjoyed

overall

of atomic

chemical and electrical equipment

biotics

by

that

on

field

Foote Mineral

Central Electric & Gas

istry the only phase of the busi¬
ness that one might call old is the
compounding of drugs in a variety
of useful forms.
Vitamins, anti¬

the

investment

us

Penna. Power & Light Common

In the field of medicinal chem¬

future.

year

Philadelphia Electric Common

only certain self-suggesting types
of business can justifiably sustain
a costly research program.
In the

companies

the

paper

City.

companies.

this

there
use

,

Companies

About

chemicals

more

common

WILLIAM H. MOORE

might be of interest to know that
are

and

Manager, Investment Department,

PGE distributed was gen¬
erated in its own hydroelectric

DAIRIES

favorably

J. & W. Seligman & Co., N. Y. City

power

FOREMOST

well with those

The

long way in
its 62 years of existence, but has
rating
eral or local tax (except estate had its greatest growth since 1939
and inheritance).
when government power became
available. The company was the
Paul Frederick first ; public utility to purchase
electricity from Bonneville Power
& Company
Administration. Today PGE is the
70 Pine Street, New York 5
largest distributor of BPA power.
WHitehall 4-1875
NY 1-2643
Still, it is not quite accurate to
speak of it as simply a distribut¬
ing utility. In 1950 a third of the

*

stocks.

In

ings,

lower

valley.

Resources

Authority
Electric
Revenue
Bonds bring greater yields than
other

-

Marie

this

During
Puerto

fully invested position in com¬

mon

per

energy.

miles,
with a population of 750,000 (50%
of Oregon's total) and with 65%
of the State's buying income.
Physical properties are in firstclass condition, with plant values
covers

area

branch offices

account

and

most

our

conservatively
proportioned
to lag, not too seriously,:

a

a

Selling in the over-the-counter taxation of corporate profits will
market, it can be purchased to further stimulate
research
and
yield about 6 ¥2 %.
development activity.
However,

Port¬
land, Salem, Oregon City and 41

"

cur¬

utility operating
company, in my opinion, an un¬
usually attractive investment for

Lines of the company serve

^

Mobile, Ala.

financially

return, make the
of

conservative

est

★

:

New Orleans, La. - Birmingham, Ala.
Direct wires to

equity and

capitalization

and insurance

PGE

:

compare

country's

liberal

Portland General, Oldest and

VERNEY CORP.

Tel. CA. 7-0425

is

sound. "Common stock

stock

Largest System in Oregon

★

mil¬

profits taxes.

excess

conservative

*

on

present

responsibility.

versus

★

outstanding are
the rate of $1.80

at

mic; ever conscious of its growing

NICKEL PLATE

Analyses

stock.

the IV4

NY 1-1557

power

It continues to be vital and dyna¬

*

(Page 46)

Exchange

New York 4, N. Y.

HAnover 2-0700

for city known electric utilities. ; Growth stantial acreage in the area, could
lighting. Thus, an industry was prospects, potentialities for fur¬ also be a major beneficiary of the
born. It has grown and prospered. ther industrialization, added to a development.
supply

to

land,

.

V

J—-r-—

*

Philadelphia, t-a.

York Curb

of

transmission

United

LD 33
••

common
on

shares

rently

The latter, in 1889, built the
line: in
the

pany.

first

IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII
1

Industry Is Born

Willamette

Lynchburg, Va.
83

Taggart & Co., inc.,

company

field

the

Scott, Horner &
Mason, Inc.

;

Charles A.

York Stock Exchange

25 Broad St,

gas areas where unusual popula¬
share, which is less than 70% of
is a pioneer in
tion, industrial and financial ex¬
five-year
average
earnings
of
hydroelectric power.
pansion
seems
inevitable.
My
about $2.60 per share. Per share
The
choice in that respect would be
original
Portland
General
Electric Company, incorporated in earnings for 1950 are estimated at the common stock of the Minne¬
$2.65 with ample protection from
1892, acquired at that time the
apolis^ St. Paul *& Sault Ste.

The

Rich., Fred. & Pot. D. 0.

■

Members New

Members New

increasing its
are
usually
by 48%.
The
companies
regularly
expending
expenditure of an additional $7,-0
large amounts on research or ex¬
000,000 on distribution and trans¬
However, this does not
mission lines is planned for 1951, ploration.
mean
that unusual
thus placing the system in a good necessarily
growth - prospects ? exist only in
position to meet defense and civil¬
such obvious fields as chemicals
ian requirements.
•
and oils.
A particular railroad or
Capitalization of this well-man¬ steel
company might be such a
aged electric utility consists of vehicle if unusual circumstances

Annual dividends

Natural Gas Co.
Dan River Mills

Steiner, Rouse & Co!

Plymouth Cordage CompanyCharles A. Taggart, President,

investment

60% debt and 40%

years.

appears

Manager,

...

have

ations

Alabama-Tennessee

expend¬

was

ed for this purpose,

plant

and

1945

Between

$33,000,000

over

dantly

Members

York Stock

New

1950

needed, abun¬

ftjC pONNELL & CO.
New

vice demands.

vitally

are

•

Bought—Sold—Quoted
H.

Investment
Department, J. & W. Seligman
& Co., New York City. (Page 2)

area

an

Louisiana Securities

Com¬

Companies—William

Moore,

of the fastest

one

gions of the world.

LY

nor

During the past ten years, PGE
President, Daugherly, Buchart & Cole,
has
experienced
a
remarkable
Portland, Ore.
growth, gross business has more
Portland General Electric Company
than
doubled, while residential
Portland General Electric Com¬ revenues have increased threefold

Corporation

Tele.

he,

Electric

Daugherty, Presi¬
dent,
Daugherty,
Bucnart
&
Cole, Portland, Ore. (Page 2)
Growth

New York Hanseatic

120

to

Alabama &

K.

pany—R.

Growth of Service Area :

R. K. DAUGHERTY

-:

intended

not

are

and

Selections

General

Portland

Thursday, February 22, 195J

Week's

Participants

Their

sell the securities discussed.)

to

Common

Preferred &

BArclay 7-5660

Forum

A continuous forum in which, each

A, B & Common

United Piece Dye

This

I Like Best

...

performers and the avoid¬
serious laggards

enabled

carry

Over-tlie-Counter
<

Quotation Services
for 38 Years

•.

section selection of the well-known

names.
American Cyanamid is
strong in the industrial and

medicinal
and

fields; Merck;, Pfizer
Sharp & Dohme all have im¬

,

National Quotation Bureau
Incorporated

pressive records and Squibb and"
Abbott

are

fine

Established 1913

manufacturers
46 Front Street

and excellent distributors.

CHICAGO

Continued

on

page

46

NewYork4,N.Y.
SAN FRANCISCO

Volume

173

Number 4988 ...The Commercial

Financial

and

Chronicle

(811)

3

LETTERS TO THE EDITOR:

INDEX

"Are We Falling Into
What's Ahead in

History's Greatest Trap?'7

Let

More letters given in this issue in connection with Melchior

issue

is

for

in

made

publication

for

today's

of

tive

to

the

this

From

article

do

b,y Melchior
Palyi, "Are We Falling Into His¬
tory's Geratest Trap?", which ap¬

not

you

have

Chiang Kai-shek Open Second Front in Asia

DESTINATION
_Cover

MOON
Caboose"—Henry Gully

Common Stocks

judge that I

may

time

the

Cover

;

to

—Paul I.

Wren

What Price Defense?—Max

that the United States must either

the

(1) restrict its defense

Consumers' Expenditures and Inflation—D.
Harry Angney___

international

of the

of

11.

Jan.

In

Western

Hemisphere

mulgate

a

zone

(2) pro¬
Doctrine

or

Monroe

new

to the

the

there

American

Continu¬

'mobilization, Dr. Palyi warned,
can
only lead to national bank¬
ruptcy.

of

Our

ters, reference is made to the fact

—Dexter

issue.

ternational
*

situation,

interested
the

WIRT FRANKLIN

to

Soviet
well

as

Ardmore, Okla.

and

his

as

I

pears

the

a

dilemma

made

this

which

Cenco

C.

"Are

was

am

who

country

I

has

the

power

that

sure

the

article

military

*

18

:

Higgins, Inc.

20

Haile Mines

Statutory Powers

Morrison.

Lear, Inc.

28

find

everyone

Dr.

Falling Into

*

*

History's Greatest Trap?"

Bought—Sold—Quoted

(Letters to
3

Then and Now—Guess Who?
The

20

Garfield

Lightbowne

•

J.F.Reilly &Co.

29

Incorporated

29

Sacrifice for the Other Fellow (Boxed)

Palyi's

discussion.

Creators—William

Sees Independent Banking Threatened

opportunity to read

will

We

*

■

Editor Relative to Melchior Palyi's
Article)

of

mobilization

readiness

32

61

Broadway, New York 6 ;

BO 9-5133

As

Dr.

forth,

Palyi

so

may

be

we

forcefully sets
falling into a

Our

present

continued

we

are

to

of conduct,
period of years,

course

over

a

It is

undoubtedly lead to a level¬
ing of all the people into a medi¬
ocrity, lowering our standard of
living, and into regimentation and

either

The article

of

seems

are

'

v-'

Vv-V:"'-

/•

%

Dr.

real

16, N. Y.

cost of

have

I

awfully busy lately since
cent
you

European

know,

trip,

was

been

my

where

I,

am

Chairman

of

the

the

re¬

So

as

question
into

United

Republics. I

am

American

a

for

socialistic

mon

leaving tomorrow

Reporter's

Report

to

answer

is

"Yes,

we

are

greatest

and

as

is

30

i

Railroad Securities

Audio Devices, Inc.

31

Securities

14

Salesman's Corner

(Manufacturers audiodiscs,

and

men

moral

and

of

41

Then and Now—Guess Who?—

falling

20

The

Security I Like Best

com¬

Tomorrow's Markets

Analysis

PETER MORGAN & CO.

4

(Walter Whyte Says)

31 Nassau Street

38

Washington and You

Teheran, Yalta

The

Tel. DI 9-3430

48

Twice

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

Weekly

COMMERCIAL

E.

C.,

Eng¬

Copyright 1951 by William B. Dana
Company

CHRONICLE

Reentered

second-class

as

Di-Noc

matter Febru¬

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

B.

Park

DANA

COMPANY,

Publishers

1879.

Place, New York 7, N. Y.

REctor

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to

WILLIAM

Trask & Co.

WILLIAM

DANA

D.

SEIBERT,

RIGGS,

President

Business

Stromberg-Carlson

Subscription Rates

9576

HERBERT D. SEIBERT, Editor & Publisher

Manager

Subscriptions

in

United

States, U.
Territories and Members
Union, $45.00 per year;

Possessions,

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Dominion

Other

of

Canada,

Countries,

$48.00

$52.00

per

per

S.
of

Virginia Dare Stores

in

year.

Bought—Sold—Quoted

year.

"

Stock

Exchange

25 Broad Street, New York 4

50 Congress Street, Boston 8
Hubbard

2-8200

Chicago




-

Glens Falls

Every

state
-

Schenectady

-

Worcester

(general news and ad¬
and every Monday (com¬
issue — market quotation

corporation

and

Other

Other

Publications

>•

Thursday

vertising issue)
plete statistical
records,

Teletype—NY 1-5
-

Thursday, February 22, 1951

Members New York Curb Exchange

HAnover 2-4300

Albany

Y.

Tele. NY 1-2078

and

Reg. U. S. Patent Office
WILLIAM
25

York

New York 5, N.

to

PREFERRED STOCKS

New

Request

and Potsdam the heave-ho."

High Grade Public Utility and Industrial

Members

on

2

The State of Trade and Industry

severally

stamina

Magnetic Recording Tape)

Securities Now in Registration

Palyi's

jointly develop enough
sense

1-18261

43

Public Utility Securities

pro¬

trap,

Republican's

Exchange PI., N.Y. 5

29

Prospective Security Offerings

that

failure

Dr.

40

46

year

FINANCIAL

encer

HA-2-0270

5

T

Our Reporter on Governments

interested in offerings of

are

May

Teletype NY 1-1825 & NY

Our

Published

We

Wilfred

history.

history's

give the

Singer, Bean
& MACKIE, Inc.

35
16

infor¬

idea

socialism

v

Haile Mines

10
j

Observations—A.

will go all the way unless Demo¬

about 145 business organi¬
Latin

6

(4)

grinding out

promote the

my

crats

the

and

the truth about

and

of

Bargeron--,.-

News About Banks and Bankers

socialism, instead of telling

vided by

States Inter-American Council of

zations

$100 million

over

to

cure

Commerce and Production, which
covers

11

40

NSTA Notes

45,000

"Control"

International Labor Organization.
I

Britain"

Indications of Business Activity

bureaus, at

"Planning"

Delegate to the

a

in

Mutual Funds

halt.

a

and

are

mation

Palyi's article

interest.

Department

to the taxpayer,

more

with

Continental

Copper & Steel

Lear, Inc.

agents in the Ex¬

press

agents of other

press

SCHELL

read

spending).

(5) 3.500

#

Co. Inc., New York

8

From Washington Ahead of the News—Carlisle

(ex¬

means

logi¬

President, Sidney Blumenthal &

have

defense

our

Inflation proceeds without

a

II. II.

I

living beyond

ecutive
%

Dealer-Broker Investment Recommendations

the

Nationalization

\?j

Industries

Harrisburg Steel

8

Einzig—"Steel

t

33

.4

clear appraisal

no

very

cal and sensible.
■

had

___il

Coming Events in the Investment Field

any
ever

tainty. (3) As a nation with the
knowledge and consent of
Congress and the President, we

Utah,

both

or

/Great American

46

full

cluding

well written and

time

the

or

has

33

Bookshelf

-

possibly be made because:
(1) We are at war. (2) There is
nothing certain in war but uncer¬

City, Utah

by Dr. Palyi is

Cabinet

future,

Cover

Stocks

can

J. BRACKEN LEE

State

taken

As to

nation has always enjoyed.

Salt Lake

his

(Editorial)

Insurance

Canadian Securities

and concern

President

our

of

and

Business Man's

disposition to make equal study.

taking away the consti¬
tutional rights and liberties which

Governor,

for regret

cause

member

controls

IION.

Richmond, Va.

that neither

will

this

Bank

Palyi has presented a clear
appraisal of. the present situation
based on. study and experience.

protect."

See It

WILLIAMS

Dr.

by making absolutely

clear the lines

Regular Features

'::y

:Jc

As We
I

trap set by Stalin.
I
agree that it is time "to call shots
advance

if

BERKELEY

deliberate

in

Philadelphia and Los Angeles

\
#

Teletype NY 1-3370

Direct Wires

worthy of further study and

sons

for

war..
f

i
■

arguments and historical compari¬

our

•1

t

Getchell Mines

the Home Front

on

Keezer_^'

the

of

faces and the action and program
now
under
way
toward a full
of

„!

•

Corp.

12

.4.

analysis of.
aggression,,

of

assessment

and

Russia.

what ap¬
striking analysis of

has

his

read

pattern

industrial

Palyi
to me

Merriam

—James

'

Dr.

Air Products

Dr.

'

*

B

WHitehall 4-6551

9
11

Wasson

Federal Reserve Should Exercise Its

Palyi has presented a very
sues, beginning with that of Jan.
clear and comprehensive account
18, and more will be given in next of
his views on the present in¬
"<!

Gordon

Let Us Not Lose the War

Machines Co., New York 22, N. Y.

week's

Population—Roger W. Babson___

—R.

Chairman, International Business

in earlier is¬

STREET, NEW YORK

8

Managing the National Debt—Thomas I. Parkinson

In addition to the following let¬
that others appeared

Winkler__

WALL

Telephone:

7

•,

WATSON

J.

6

Lending in Defense Economy—Roy L. Reierson

A Second Look at Some Popular Beliefs About
Russia

people.

THOS.

\

are

The first
rule we should adopt is to choose
good,
hard
headed,
American
traders with, of course, a substan¬
tial background in international

our present foreign policy,
policy of full and permanent

a

sophisticate

affairs

pitfalls to be avoided when
making any contracts committing

of

ance

and

communism.

of

and

buy

Obsolete Securities Dept.
99

Bank

many

specifying the areas which we are
prepared to defend against the
; march

Fallacies of Price Control—Don
Paarlberg

as

initiated

will

us!

try
•

5

However, I would agree, in gen¬
eral, with what he has to say. For

"Chronicle"

page

cover

earth"

on

write

'article, Dr. Palyi analyzed Soviet
aggression techniques and asserted

the

on

"nobody

those obsoletes,

his

peared

When

Inflation Hedge for Pension Funds

as

comprehensively
as
I
would like and to give you the
response
which Mr. Palyi's in¬
telligent article deserves.
you

4

Trustees

a

organization.

this

of

AMD COMPANY

1951?—Wesley Lindow____

"Don't Miss the

for

Orleans

Meeting

some

of the letters received rela¬

more

New

pag©

—Hon. Joseph W. Martin, Jr.____——____

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

llCHTflMlll

"

Articles and News

city

news,

Offices:

Chicago 3,

111.

135

news,

bank

clearings,

etc.).
South

(Telephone:

La

Salle

St.,

STite'2-0613);

Bank

and

Quotation

$30.00 per year.
Note—On

Record

—

Monthly,

(Foreign postage extra.)

account

of

the

fluctuations

in

the rate of exchange, remittances for for¬
eign subscriptions and advertisemen'8 must

be made

in New York

funds.

THEODORE YOUNG & CO.
40

Exchange Place, New York 5, N.T.

WHitehall 4-2250

Teletype NY 1-3236

The Commercial and Financial Chronicle
4

in observing exces¬
sive speculative enthusiasm at the
tops of previous bull markets can¬
not fail to note a strong similarity
in recent market gyrations.
The
character of the activity, the tim¬
experienced

"Don't Miss the Caboose"
By HENRY

GULLY
York

Investment Analyst, Ithaca, New

Gully contends bullish factors have run their course; that
recent seething markets are belated recognition of past infla¬

Mr.

will be dispelled by
40 to 50 point sharp break, or long bear market as in 19401941, a similar period of rising business, increasing orders,
higher earnings, yet steadily lower stock prices.
that in recent
months the market advanced
sharply to leave business far be¬
hind.
Not
satisfied
with
that
achievement, the market in recent
weeks
has
frequently displayed

"Commercial and Financial Chron¬

icle," May 29, 1947, entitled "Last
Call for the Diner," I endeavored
make

to

a

strong case for
the
of

purchase
not

stocks,

only

because

they appeared

financially,
economically
and
statisti¬
cally cheap,
because

but

they

were

than

they appeared
to
be
when

Rialto.

tations of the
The
and

market

broad

from the temp¬
enough

is big

now

enough

absorb

to

al¬

kind of liquidation, ex¬
wholesale public
stop-loss

most

any

cept

speculative excesses, usually orders; and, at a price level the
among the metals, steels, oils or best since
June, 1930. Many alert
rails, electrifying those groups, market operators and large inves¬
usually one at a time, frequently tors who study fundamental fi¬
one
stock at a time, into spurts
nancial
and
economic
figures
of extraordinary activity not seen
closely will not miss this unusual
since the market peaks of 1929,
opportunity
to
liquidate
large
1937 and 1946.
Thus trading vol¬ amounts of
stock, an opportunity
ume over the past month, or more,
that comes only once in several
has been the greatest since 1929!
years.

at¬

more

even

tractive

the proceeds

move

general tenor of the market
indicating that nearly

The

been

has

The

has

Market

months, mostly
rise.
The oils have

running

in

steady

in this

been in

a

Bull

Truman

been

19

bull market since Feb¬

a

ognition

period of market strength, instead ruary, 1942, with a good correction
was
given to of building up financial reserves after June, 1948. They are still
Henry Gully
the amount of with each market advance.
Ac¬ being purchased actively and avid¬
inflation which had been fused cordingly, this contribution to the ly at three to ten times the prices
into the nation's bloodstream since "Commercial and Financial Chron¬ registered in
the early Forties.
the closing of the banks in 1933. icle" is entitled "Don't Miss the Since
mici-1949, the rails have
Prompt purchases were recom¬ Caboose" for the fast freight-train more than doubled their average
rec

title

the

hence,

mended;

"Last

speculative excesses is passing

of

and investors and speculators are
Diner."
From May, 1947, to June. 1948, counseled not to miss the last car,
stocks enjoyed a very satisfactory for the break which the current
advance, led principally by the market enthusiasm is preparing
Call for the

will 'cancel

veloped

chemicals, electrical equip¬
generally by invest¬
ment type stocks.
However, that
initial - market
advance,
though

relatively
all but completely can¬

extended

long

sober,

was

celled

over

1949, year,
out

the

the

as

and

1948-June,

June,

fears arose through¬

country that the postwar

pipelines

were

being filled

rap¬

idly and that unemployment might
mount
the

to

spring

10,000,000 or more. In
of 1949 the govern¬

ment, before that the Federal Re¬

1946.

.

in

due

WARRANTS
last

bull

investments

in

market,
each

Tri-Continental
Stock

$85,000

If

and

Warrants

and

you

R.K.O.

Oil,

Common

respectively.

interested

appreciation,

"THE

Richfield

of

be

in

SPECULATIVE

OF C0MM0K STOCK

capital
read

to

sure

MERITS

WARRANTS,"

by Sidney Fried.
It

discusses Warrants in their different

phases—explores many avenues of their
profitable purchase and sale—describes
most

sharply

.

existing: Warrants of interest.

For your copy send $2 to the pub¬
lishers, R. H. M. Associates, Dept. C,
220 Fifth Avenue, New York 1, N. Y.,
or
send for
free
descriptive folder.

higher

Send $3.50 for the

301

E. Pikes

Peak

Avenue




the result of the com¬

as

A future de¬
equity
than the May,

higher labor costs.

a

modest increase in steel operations follow¬

industrial pro¬
However, aggregate
output continued appreciably above the level for the corresponding
period a year ago.
It was further noted that initial claims for
unemployment insurance in the week ended Jan. 27 declined for
duction

tapered off slightly the past week.

straight week, dropping nearly 12%.

third

the

Electric kilowatt

sion

its

from

record

production last week showed a slight reces¬
level of the week before.
Carloadings and

resumption of normal
automobile
production, to the use of stockpiles of steel and other materials
accumulated by producers during the strike, according to "Ward's
auto

favorably

responded

output

the

to

scheduling of the nation's railroads and, in the case of

Automotive Reports."
Production
because

this

for

the

ot

of

■

more

rail

than

60,000

cars

and

trucks

was

•

lost

strike, this agency said, and had it not been

interruption

the one-millionth

car

or

truck of the year

would have been built last week.
an estimate of the Council of Economic Advisers,
production in January of this year was the highest
since the end of World War II.
It placed the production index

According to

industrial

that

for

month

at 219%

above December,

of the

1935-39 average, or three points

last, and 36 points higher than in January, 1950.

production of goods and services in the United States

Total

during the final quarter of 1950

attained a record annual rate of

$300,000,000,000, the Council of Economic Advisers noted.
This
was a $16,000,000,000 gain over the pace in the preceding quarter.
Under a formula for modifying the present freeze, approved
early

on

zation
be

Friday of last week by a majority of the Wage Stabili¬
millions of workers in scores of industries would

Board,

permitted to enjoy substantial pay increases if their employers
disposed to grant them.
The plan would allow wage hikes

values

even

1946-May,

more

1947,

or

1948-

June,

June, 1949, bear markets.
With

the

up

to 10% above the level

threatened

exception

o|

very

a

of Jan. 15, 1950.

The proposed limita¬

proved so distasteful to labor leaders that they
drastic action. It was intimated that the current textile

other industries, including meat packing.
Committee, representing the CIO, AFL
independent unions, ordered the Wage Board's three labor

strike

may

spread; to

The United Labor Policy
and

The new wage formula will not go into effect
Economic Stabilizer Johnston and, it is ex¬
pected, he will confer with President Truman before acting.
.'■V, The squeeze on civilian steel supplies is tightening steadily,
hastening the day of widespread metalworking plant curtailments,
says "Steel," the magazine of metalworking, this week.
Defense
allocations are mounting.
Mill tonnage set-asides for military
orders are substantially upped on both carbon and alloy products
starting with the April rolling cycle.
Meanwhile, cutbacks up to
40% in use of steel in civilian items, including automobiles, are
under consideration for the second quarter.
This spells serious
economic dislocation and unemployment, unless, by some magic,
defense work spreads out quickly through industry to take up
members to

until

resign.

approved by

the threatened slack.

Moderately heavier steel tonnage is

railroad

deflate

will

cline

earmarked for directed

in April, says the magazine. A larger grab for defense
other emergency needs is indicated for May.
By that time

programs
and

expanding DO-rated orders will be supplemented by additional
directives, leaving the non-rated consumer in tightest supply

their

in the set-asides.

currently in' disfavor

groups,

earnings

or

rec¬

(50%

de¬

more),

or

such reserves until the
of
reckoning
which
will

come."
In

approaching the question of

the soundness of the current boom

stocks, it appears advisable to

psychological
technical position of the mar¬

Movies, Liquors, Department
Airlines

and

tops

for the

markets

and

market

collapse

in

January,

post-war bull
the whole
a
few months

signaled

later.

By the end of 1950, millions of
had been accumulated by

shares

bargain

hunters

and

their fol¬
low prices,

lowers at relatively
political considerations;
mostly between May, 1947, and
economic and financial
June, 1949. Additional millions of
considerations.
shares were purchased by Street

ket;

(2)

(3)

Position

customers

and

vanced
to

Technically, the market
to

be

appears

just about opposite to the

summers

of 1947 and 1949.

As the

as

and

markets

the

gave

increased commitments.

stocks,

those

even

These

bought

the Korean setback in July,
all

are

ad¬

encouragement

six-months-old

after
1950,

ful investors and traders must not

await

a

downtrend in business

profits before selling.

not'even
break

or

They do

wait for the first sharp
the subsequent rally

and

the

market

almost

can

come

at

time. Thus, the market is
vulnerable to immense profit-

on

any

very

taking

and

reserVe-building

op¬

portunities.
high
As the mark-up in stocks pro¬
(the favorite spot for "short" sell¬
ceeded recently, it was well ad¬
ing operators to take their posi¬
vertised in newspapers, magazines
tions for a substantial, sharp mar¬
and
via
radio, and the public
ket decline), for that subsequent
Continued on page 14
"failing" rally may not come in
fails

to

make

a

new

position since outbreak of the Korean
cation programs in May likely will

Whether

iron and

steel prices are in a deep freeze

remains

"Steel" states. Some trade authorities think necessary
adjustments .will be permitted from time to time as economic
developments dictate. Current schedules are stabilized at levels

to be seen,

prevailing in the closing weeks of January with the exception of
scrap on which ceilings were fixed Feb. 7 effecting a roll-back
to levels prevailing around the first of the year.
•
Contrary to the usual seasonal trend, the volume of building

slightly above the December level,
by Dun & Bradstreet, Inc. Per¬
initial month of 1951 aggregated
$446 881,401, an increase of 4.8% above the December total of
$426^607,027, and a rise of 33.4% over the corresponding 1950
month with permits totaling $334,999,161.
Last month's permit
turnover eclipsed that of any other January on record.

permits

for

January

rose

according to the latest summary
mits issued in 215 cities in the

holdings,

latter markets suggested purchas¬
the profits of which are taxable
ing heavily, so the present market
at the maximum rate of 25% of
suggests selling heavily. Success¬
profits under present laws and

which

RHEA, GREINER 6- CO.

Notwithstanding

ing the termination of the railroad strike, over-all

1946, when these securities made

in

UNABRIDGED EDITION
V. / Postage'Prepaid *

J

Stores

could

which

Psychological Position

"THE DOW THEORY"

Failures

day

reserves

Technical

authoritative book

Business

holding

cash

about

Colorado Springs, Colorado

dously

modity price boom and higher and

ognized uncertain prospects, near¬
ly all the groups on the N. Y.
velop into one or more Pearl Har¬ Stock Exchange have had a gen¬
bors, I think it wise for small in¬ erous advance, mark-up, or at
vestors to sell out and put their least a "good whirl," in the par¬
lance of the Street, and the Rails,
money jn savings banks and U. S.
Savings Bonds, and that large in¬ Oils, Metals and Steels have had
boom
rivaling
those
of the
vestors should secure substantial a
situation

tional

and

Read Robert Rhea's

Industry

War last June. New allo¬
include ship construction,
ship repairs, oil field equipment, and locomotives. These programs,
along with existing delegations for domestic and Canadian freight
cars, and lake ore carriers, were considered at last week's meet¬
ing of the NPA Steel Task Committee.
Speeding up of defense activities necessitated the new increase
in the mandatory tonnage load on mills for military account.
National Production Authority raised mill set-asides on various
carbon and alloy products for DO-rated requirements just before
expiration of tiie lead-time for April scheduling. As a result,
civilian supplies of numerous carbon and alloy products will be
cut further immediately to the extent of the percentage mark-up

and

Dow's Theory

by most aggres¬

hedges; mind you, an industry
costs
are
rising tremen¬

because of lower

three angles: (1) the

FACTS

more—an

or

whose

few

in

-

and

Production

tion, however,

high labor costs; plus government
confusion and explosive interna¬

consider the problem from at least

Know the True

Auto

harder each year

commodity prices and taxes, and
$500

appreciated to $44,000,

$104,000

are

1942-46,

to

turn

Index

Price

were

tax

Recently I made the following
observation with respect to the
1949 the Federal Reserve Board's
market: "Believing that stock and
Index of Production was rolling
commodity markets are danger¬
forward once more.
ously high and overdue for a
Since June, 1949, the stock mar¬ severe
reaction, possibly the be¬
ket and business marched forward
ginning of a bear market, due to
a
reversal in corporate earnings,

Trade

Commodity Price Index
Food

advance, note well, for the stocks,
of an industry which is being hit

all

took steps working for re¬
covery,
and by late summer of

the

to 300%

risen 200%

since

serve,

In

and numerous railroad stocks have

the excesses de¬ sive
and
financially
successful
July in this bull competition; an industry log-tied
market craze for protection against by
antiquated regulatory laws,
inflation, and possibly much more usually over-capitalized where not
of the total advance since June, recently reorganized, feather1949.
Thus it will be as critical bedded down by the tightest of
for one's personal finances to miss labor, regulations, and taxed near¬
the caboose in the current strong, ly to the death by municipalities,
active market as it was to miss counties, states and, to a lesser
the opportunity to liquidate in the extent, the Federal Government.
periods of rampant speculation of These have been bought by an
February-March,
1937,
Septem¬ avid public in enormous volumes,
ber-October, 1939, and April-May, daily and weekly, as inflation and

oils,

ments "and

Retail

State of Trade

-

aboard

band wagon

inflation

the

scrambled

has

everyone

.

....

Production

Electric Output

Carloadings

that he

conservative investor

the

except

contribution to the together

last

my

Steel

The

upward

should sell at the market and re¬
In

rr

thrusts in
key stocks, the total volume of
transactions,
the
broadness
of
markets, and the monopolization
of general conversation by mar¬
ket topics, all strongly suggest to
of sudden

ing

that current market psychology

tion;

Those

market.

unorthodox

this

.

Thursday, February 22, 1951

...

(812)

Steel Output

Makes Further Gains Following

End of

Rail Strike

shifting from peace to war
than it is this week, according to "The Iron
Age," national metalworking weekly.
Hardest hit, as usual, are
the ismall metal fabricators,,, They are- being, starvedby material
cutbacks.
Many of these small fabricators will eventually get
defense contracts or subcontracts—if they can hold out that long.
Meanwhile they are in a tough spot and they are making their
plight heard.
f
>■
••••''
- i
This economic dislocation largely results from the time lag in
Continued on page 39
Never was the

pain of an economy

goods more evident

.

Volume

173

Number 4988...The Commercial and Financial Chronicle

5

(813)
i

rived

Common Stocks

Observations.

Hedge for Pension Funds
Noting increasing investment in

that there is nothing to fore¬
forecasting the outlook for individual

instead

of

says

betting which

guessing

what direction the

in

for the

ideas
the

of

trying

to

have

never

whether

out

herd,

I

ago,

am

sure

and

a

sion

May

competition between financial editors' and advisers'
predictions
of the ensuing year's course of the Dow Jones Industrial
Average]
in 1946. Mr. May is'a
good guesser and really shouldn't leave the
game, because I feel certain that he is still
winning.

few

common

B. BARRETT GRIFFITH"

(i.e.,

of

of

But.

the
to

factors

relied

value

are

of

the

is

the

on

volved

calculation

the

of careful
such

conclusions

other

here

In estimating the investment
premise that it is the present worth* of
it, there are admittedly some imponderables in¬

on

future returns
in

amount

some

our

that

of future

based

on

quantitative data

as

earnings.

recorded

balance

But, in its context

past earnings and

with

sheet

figures evidencing
degree of financial strength supporting future earnings, the
forecasting component constitutes an unavoidable and legitimate
the

business
that
a

risk.

The

forecasting

function

here

a

is

analogous

privately held business,

to

or

of

piece of real estate.
Forecasting Preponderant in Market Timing

stock below its real investment value will never lose if his

ap¬

praisal is correct, because he will in time gain his income-plusincrement based
on
his cost price.
Furthermore, the valueanalyst can protect himself additionally by subtracting from his
value-appraisal figure

margin of safety—adjusted to
his tax bracket and his over-all portfolio status. The
forecasting
elements in this setting certainly are far different from those
involved in predicting the direction and
timing of the market's
short-term

The

movements.

"guessing," "spread

move

highly significant in this connection:

bets," "the game," "winning."

Statistics First—Psychology

Close

a

Second

psychology; not the other

way around.

chological aberrations of the market place
by

way

of

supporting

conclusions

be very useful; but

can

after

psy¬

they

have

been

first

Of
to

course

it would be

convenient,

as

well

profitable,

as

"guess the direction of the herd" and spread one's bets

individual

cows.

Unfortunately, however, there is

moving "herd" that is inclusive enough.
plain concretely before
mirage.

.

That
Success at the
is also

so

an

over

all

As

trend

we

no

the

on

uniformly-

have tried to

is merely

an

ex¬

appealing
;

.

Guessing

forecasting

Contest
game

literally in the instance

,

'

"Champagne"

referred

to

by
a

our
case

correspond¬
of

it.)

For

our Teadersr, 'Writing ih 'tb' prbtefet agaiiist' ottr
skepticism about forecasting systems, usually buttress their argu¬

but

earnestly

selves,
of

a

as

the

of their individual

market-predicting contest

urge

other winners at such

he does himself,

as

a

as

a

this

observer,

term

game to

regard them¬

accounts

service).

Such

plan

The

sum

a

trust

accumu-

during the first few

money

of its existence since the

an¬

pensioners.
After
a
period
of
years,
frequently 15 to 20, the
principal value of the fund is not

of

the

one

percentage varying with the

for business and security
From the beginning of the
pension trusts, we looked " upoh

prices.
them

as

long

duration

normal trust accounts

but

with

the

of

un¬

usually attractive feature of regu¬
lar additions to principal during
the. early years. This arrange¬
ment

puts

cash

the

trustee

at

the

stock

in the
various

of

time, thus

cost.

hands

of

levels

permitting

market,

accumulation of stocks
riod

over

a

of

the
pe¬

averaging the

i.
1

have probably
enough of the tradition of

By

now,

heard

other

and
In other

as

outlook

eiYinlovees approximate the annual
company

come

ingredients of; a
investment
program,

long-term
the

the

years,

natural

buying

of the

the

to consider common stocks

to change appreciably
since the payments to the retired

expected

ContSti(m

will, the capital is

Over

you

common

chusetts and

are

stocks in Massa¬
wondering if any

reasons are evident

the first which I should

.One of
like

to

discuss is the matter of diversifi¬

cation,
who

Those

have

in our profession
crystal ball, still not
scarred by unexpected

a

v

prove,

that

as

This

the long-

on

rather

than

of you may hope,

some

prices of equities at the

ment

has

and

investment

same

implications

I

room

ESTABLISHED

and other

1 Wall

can

many who are experts on all
phases of pension trusts, but there
may be others who are, as I was

somewhat bewildered

to the exact

as

trust.

Also, each
negotiations for

of

wave

seems

Without

in

exhausting the subject, I

like to comment

types of these funds
into

sharper

the

for

on

a

few

to bring

so as

the nature

focus

account which will

sideration

Primary Markets

Burlington
&

Rutland, Vt.

Detroit, Mich.

Montreal, Can.

Bridgeport, Conn.

to give birth

terminology.

new

Street, New York 5

implication of the

pension

new

leading exchanges

DIgby 4-2525

see

word

1865

Members New York Slock Excharine

mo¬

unusually attractive.

are

As I look around the

be under

of

con¬

balance of this

INSURANCE

OFFICES

FLORIDA

Clearwater
Deland
Ft. Lauderdale
Fort

Myers

Direct
Private

Jacksonville

Telephone

Lakeland

%

BANK

Miami

Among the various pension
under

count which

investment

your

supervision, there

may
set

was

be an ac¬
to pay

up

St.

Petersburg

Sarasota

Tampa

a

definite pension to a small group
of employees who have all retired.

PRIVATE

Here the fund, if actuarily

WIRES to

STOCKS

Meridan

sound,

will dwindle and waste away over
the
years
and
in my opinion
not

hold

the

of

common

stocks.

wrinkles

newer

Hartford

New Haven and

New York &

Waterbury, Conn.
Providence, R. I.

Philadelphia

has

been the so-called terminal fund¬

Chicago, III.

ing plan whereby the corporation

Los

does not

the

put

sum
or

funds

per

address

the

Bankers
Febi uary

money

retires
are

and

then

aside

set

person a

to

fixed

Only the actuary
by Mr. Wren

Trust

Trust

Association,
6, 1951.

at

can

of

the

New

Janney
1529 Walnut Street,

&

Co.

Philadelphia 2

RIttenhouse 6-7700

the 32nd

Conference, sponsored

Division

Angeles, Cal.

until

month for the rest of his

her life.
*An

any

the retiring

Mid-Winter

by

up

employee

sufficient
assure

joke, respectfully

merely the lucky long-odds winner

lottery—proving absolutely nothing!




Let

success.

to

nual contribution of the employer
exceeds
the distributions to the

„

philosophy to pension trusts.

One

is dangerous champagne. (This

example, many-of

who entered

trust

this

review Aull be based

should

ent, since Mr. Wiesenberger's prize consisted of

ment with reports

in

applied

funds
more

after the date of the

current

hazard."

'

talk.

arrived at from the quantitative data.

'

investment

are

should

Recognition of

bonds.

more
our

In other words, common perpetual term (or at least until cracked or
now being accepted in
he joins the pensioners under his developments of the past two and
the best society.
one-half years, may be able to
bank's- plan)
with additions to
Rather
than
assume
that be¬
principal being made during the pick out a handful of industries
cause
of this trend, they should
first few years.
Let us consider which will flourish during the
be purchased widely by pension
next period in the business cycle,
some of the factors in purchasing
funds in order to keep up with the
therefore
do
not
need
to
common
stocks for such an ac¬ and
Joneses, I should like to examine count.
v,'•
•■'V'' diversify their investments. How¬
some of the fundamental reasons
/ In Massachusetts, the philosophy ever, for the rest of us some dis¬
why my institution has for many of investments
continued on page 38
by trustees is de¬
years purchased and held common
stocks

any way

begetting

A cornerstone of

prudent.

fringe benefits

For the successful investor, the statistics must do the

fund

a

earnings of the fund.
islation passed in New Yprk alwordS) the investment supervisor
lowing a trustee to be at least 35%
a trust account of more or less

to

of the

years

the
highlighted by the leg-

was

supervision

our

accumulating

30 years.

lates

Trust Investment, and in 1950

and still am,

seems

my

.

„

adopted the Prudent Man Rule tor

a

following typical terminology excerpted from Mr. Grif¬

fith's communication

as

eight years, about three States at

stocks

hand, in trying to time movements of the stock
market as a whole,
forecasting is a primary function. Further¬
more, there is practically no margin for error.
But the buyer of

calculated

local threatre. During the last

a

under

established for the pur¬

the pension

'

present in the appraisal of

On the other

a

still

in

a

greater extent

Massachusetts trustees have
pen¬

for past service can
paid in by the company over a
period of time—sometimes as long

each of the biennial sessions have

that

means

to the utmost.

on

stock

a

he

member of the chorus

was

value-appraising of individual is¬
the forecasting elements are
fullest possible extent, while the "quantitative

point

minimized

if

correct

course,

forecasting enters into

sues.

accelerat¬

ing pace, common stocks have become respectable investments in

skeptically as the new daughterin-law of a Proper Bostonian who
in first decrying
outlook for individual

of

type of

common

be

as

with inconsistency

a

and also have used

at

determined

Paul I. Wren

at

surroundings where previ¬
ously they had been looked upon

forecasting, while myself forecasting the
companies. This is a basic and interesting point.
is,

Since

time,

many

Co., Inc.,

Investment Counsel,
Colorado Springs, Col.

He

that
an

one

earned

a

stocks.

trust

am

liability of the
company to its employees for ben¬
efits earned prior to the start of
the plan (i.e., past service) and

remarks

about

their accounts to

genera¬

diversified

"Do what you

cover

pen-

a

Recent

trustees have

attitude, therefore, is the premise,

pose

be

side

stocks.

a

sion

fund,

with
Wilfred

A.

of

insur¬

a

is ihe

which

used in

tions

in¬

was

stock, and two in¬

company

dustrial

fund

bank stock, an

a

Mr.

stocks

leaving aside

The most

port¬

should

ance

$50,000

in

if

criterion,

any

common

the investment of

bond

preferred

folio

the

vested

terminal funding trust.

stock

statis¬

"Guessing Derby"—

me

since

liked

Because of this

uncertainty, I

of

investments,

certainly

mentioned above.

discussion of

type

berger's guessing contest
[Arthur Wiesenberger &

Mr. Griffith charges

or

of

Amory's account is

amount for a period of
will waste like the one

even

most desirable

"I tied with Mr. May as
winner of Arthur Wiesen-

B. Barret Griffith &

less

years

debated would

tics psychology.

Co.'s

years

real

have been the

figured

or

the

predecessors in the manage¬

ment

investment

warns

re¬

of this phrase has increased,
anything, in the past 120 years.

Our

inflation hedge. Cites advan¬

use judgment and dis¬
selecting shares for pension and trust funds.

question to be

psychology

begot statistics

three

that

individuals.
"I

if

stocks both oppor¬

funds

than

guess

At

nence

stocks for trust funds,

common

subject of investing pen¬ give the answer to the question as
was
being considered to whether the funds in the hand
such a meeting as this more of the trustee will be at a more or

at

my bets
the vagaries
of several

on

as

Commonwealth.

Justice Putnam re¬
the possible avenues for

marked, "Do what you wili, the
capital is at hazard." The perti¬

If the

direction of the herd,

bunches within the
and then spread

Harvard

time,

viewed

science, and trustee must

cretion in

sion

fashioned

old

higher income and

is not exact

in

I will still

go

sees

tage of investment in growth companies, but

way a cow will turn

whole

bunch will go.

B. Barret Griffith

common

prominent trust executive
tunities for

"To mo it is very much like

famous

investment of trust funds and

President, Old Colony Trust Company, Boston, Mass.

by this column.

companies.

that

By PAUL I. WREN*

Forecasting, Cows and Champagne

"Wilfred May tickles me. He
casting and then winds up

the

.

We publish the
following letter because it succinctly raises
two important questions relevant
to the value approach as advo¬
cated

from

College vs. Amory case decided in
1830
by
the Supreme Judicial
Court of the

By A. WILFRED MAY
Of

Inflation

as

American

York

City,

Pittsburgh

Easton

Bethlehem

^

Financial Chronicle

The Commercial and
6

Thursday, February 22, 1951

...

(814)

Similarly,

tient.

Fallacies of Price Control

ter is

V

*

.

of inflation

'♦

sufficiently great to

are

the

Inflation is riot

symptom
turbance

for les-

to

>

showed

thought

This

prevent inflation.
has become so

partial

rise of

a

the

duce

that

many

swerve

have

ceased

time

to

a

question it.

can't

be

done

It is a

part of

days of the
Church,
a

Inflation Is

complete code

r

doctrine
handed
to the

There
were

down

thfs

Since

them

powers

the

highly descriptive

Similarlv today, the
Similarly, todav the

and

of

defense
that

sub¬

am among

costs

Needed,

of

one

heresy

fr0m the people, either by

*Part of

<

an

is to ration them

of

S?ods they can buy.

re-

Illinois Society
<f Farm Managers and Rural Appraisers,
Urbana, 111., Feb. 9, 1951.

These

thought

certain

goods which

consumer

not essential to the war effort.

are

All three

achieve

methods will

essential
'

MEMBERS

in

a^ime

like the pres-

^

people

the

and

men

tion and

uses

thereby-transfer

and

fsupplies fro£

civilian

to the rearmament program.

a

The real

;

|

.

culprit responsible for

war

thermometer

*bo*d'y.
1856

Chicago
; ;

Curb

Exchange

Cotton

Exchange

i

of

the

other

Trade

s

Exchange Bldg.

If

these




ofJ

the

many

something
or

happens

demands foi

commodities, the change is

I

doctor

mometer

therefore

at

could
98.6

]
a

value"

price level, that what goes up may
World

,

War

I,

in the United States leveled off at

the

ther-

think

he^ had cured the

that

pa-

be worrying when

so

smoothly, the question might arise as to

howl,

one

v

about 13. If the ratio
there is good rea-

ables of our troops already

Senator Taft was not willing to

as

Now, when German

'

a

the

stand it,

Continued

on oaqe

30

withdrawn.

treaties, but our government is afraid, as I

that the Russians having signed the

German^;'T am

So when we

get

it will be relatively easy to take over

us

into the worst mess?

get our "situation of strength,"

don't be slow about

what

are,

aren't we going to

"Now get on back to your own
it."
'

the Russians,

of

part and inasmuch as our purpose

they

treaties and all of us

strengthened
all of
not* sayirig this"wou'ld 'riot be the case, either, but

to the Russians,

is

get to
under¬

their troops, they will have so

Germany that

This

As I understand it,

long since manifested a willingness to

Russians have

work oil these

say

time through price controls

such a hardy oppo¬

challenge this.

and Austrian peace treaties are signed,

all Russian and Allied troops are

can't our leaders

great likelihood that if we succeed

We've got to send more troops

there.

sitionist

equilibrium for the price level;;
what goes up need not necessarily
matter of fact, there is the.

against them, one of the

willing to make expend¬

them, the argument ran, and even

East

but may stay up.

were

to support

to think it will come back,
down. But there is no long-time

for

that they

most embarrassing, was

having withdrawn

a

what is going to

the oppositionists let up a

of the most effective arguments

goes up to 18,

come down,

quibble over

about such things and it seems
everything appears to be running

by sending more troops to Europe and

difficult idea to get, but it is
extremely important.. The longtime average for the hog-corn
ratio is

sending some

"situation of strength" is definitely created.
The situation, not the "situation of strength," but just the
situation existing in Germany and Austria now is that the Russians
are there by agreement with us, there for the same reason, osten¬
sibly anyway, as we are there. This ostensible reason is to police
those countries, until a peace treaty is signed and their govern¬
ments returned to them. This is the reason we are occupying Japan.
Up until recently-it had been assumed this occupation job was all
our troops in Germany and Austria were supposed to do.
How¬
ever, they have come to serve another purpose.
When we got around to developing a "situation of strength"

that there is no normal for the
After

right
the

sending of four more divisions to Europe, and

happen when the

^ mucg

up.

called

For those who want to worry
shame to

along

tong

,

.

everything they

does not tell of an offensive on

it begins to look as though there will be little to
argue about around here; argument won't get in the way of the
confusion, it will be permitted to develop unimpeded.

that normal,

^ .^0^™agricultural

the front, now that the

not permitted to report on

are

this number, so

and that Prices somehow have to

As

set

and

of this. |

style of communique from

opposition Senators having agreed they did not mind
additional troops over there, cannot very effectively

«

fluctuate around
™s we ^

new

ahead with the

sort of normal for the Price level

registered in the price.

PITTSBURGH

SWITZERLAND

Similarly,

consists

the supplies of

The
DETROIT

GENEVA,

•

1

be hanged.

Switching over to the European front to create what are
of strength," the Administration intends to go

,

NEW YORK 4, N. Y.
CHICAGO

body

on

each With its' own supplies and

demands.

Exchanges

to

N. Y. Cotton

or

caused
Korea

"situations

.

parts—labor, agriculture, industry son

New Orleans Cotton Exchange
And

thermometer.

economic

Inc.

Exchange,

Board

one

perature rises and is recorded

Exchange

Commodity

to

happens

when it developed

the part of what are
affectionately called the United Nations' forces, to capture a par¬
ticular city or town; it is for the purpose simply of killing Com¬
munists; we do not have anything such as retreats any more.

the heart, the

the other of these organs, the tern-

Stock

York

organs,

If, something

Members

York

various

leadership. Naturally the Washington newspaper--

Well, all the apprehensions and

hear and see,

consists about two times prewar and I per-

body

;f

turning

not being

newspapermen

Spain's prices leveled off" at several times prewar, and stayed
the there. After World War II, prices

human

the

to

was

The

sonally doubt if they'll ever come
lungs, the liver and the stomach, back to the 1939 level. This is a
of

H. Hentz & Co.

New

is

The human

apparently there can be no

people became generally alarmed

our

convince the aggressor

The price system- is to

the economic body about what

,

excitement were unjustified;
apparently the State Department and the Pentagon had not made
themselves clear. The plan is now, has been all the time, simply
to' engage the aggressor and convince him that aggression is ex¬
pensive. It might be added, of course, that it is also expensive to

effort; inflation is merely a

symptom.

New

C

based on the idea that there is a

the stay

the reduced level of living is

St. Louis 1,Mo.

,

and let Europe

that a price rise must inevitably
be followed by a price decline;
may be pleasant, but the

_

York

a

deterrent to consump-

f"0™a'a?"c1ulJ"ra'

combination thereof,

,

accomplished. The resulting excitement
-general outcry to bring the boys home, get them out of

this

.

.

period

STREET

and

men

only,question is whether this ?'
is to be done by-a high level of
1910- 4
"Wha
goes
up
taxation, by an, arbitrary rationer bust come down „ we
n
Washington or by the imper- satisfje(j
our wiscjom.
sonal operations of a freely flue,
,
tuating, price system, or by some... .r:®u^ a study of history shows

Stix & Co.

:

back, it isn't necessary to agitate about "allout" war in the spring. Once again tanks and

IV of our Global

sygte^

.

The

New

.

that a-

hag al_
certain amount of

■

MIDWEST STOCK EXCHANGE

-

rolling off the assembly lines; that having
immineney of war is not so necessary.: We can
just go ahead "expanding our economy," as the expression so wit¬
tingly goes, and not have to have any more imminent war excite-,
ment until this "expanding economy" seems to be slowing down,
or the people seem to' be becoming
apathetic- or unafraid again.
Both the Pentagon and the State Department seem to have
convinced the horde of Washington newspapermen that the war in
Korea is going along just as had always been planned.
It seems
there was a tremendous misunderstanding as regards the goal out
there at first, something about running the Commies out-and set¬
ting up a democracy at a cost which would be covered under Point

rises may need to
.
by restrictions on the production" is.
of

V

gotten started, the

to

as

invoked a
inflation as a stimulus to produc-

..

+v.rv

Established

naive

.

-

.

the wheels of chaos are turn¬

was

the pHce

^

^tion.

of out'of the market.

but

address by Prof. Paarlberg

50S OLIVE

.

consumers' rise^herebTlricine
S Is Il,fIation Followed
price
^
atl0"?
be supplemented
Another charge against inflation

is not that

inflation

Washington in time of

he came to

planes and the like are

mendous production of World War

.

ing, and

Bargeron

Carlisle

H . was accomplished while timp
the
,
,
doublin£?
Tn
ways

-

and thereby limit the amount

Meeting of the

Annual

ft

to in¬

.

,

say

.But now-that

scapegoat;

trary, a rising price level is a

bf

Not; Stability

production for the

maximum

.

.

taxing them or requiring them to

and

judgment the

problem

controlling

sometimes

is

buy bonds.

First of all, in my

number

.

rv-ir\no\;

? f

f

away

Another way

Fiexibility

can

price ceil¬

and commodities and inasmuch
must pull a figure out of the hat, he
the ceiling 10% higher than the present
He has thus shown activity and no one

crisis and dawdled.

•

Inflation and Production
It

generation;
terms of fewer

+1,0

in
in

others.

of

level.

livin§ brouSht'

tne Ievel
about by war'

to anQther

real

tbe

are

Advocate

own

my

makes

been risinS

generally

like to undertake

Devil's
Devils

the
trie

be

not

do

doctrine; I

I should

them.
to

who

few

certain

a

There

economic doctrine.

scribe to this

so

hasn't yet been able to get

on wages

he

as

powerful; stimulus to increased
goods and services, must be. borne production. When prices rise encurrently. How is this reduction terprise is encouraged. Debts are
in the level of living to be brought easy *° Pay; Inventory values rise,
about? There are only three wags^modernization goes forward. Busto do ft.
Tiness ventures pay out. The tre-

for

price control has become a'4>art of
our

ings

w-jj be able to avert the reduction

S in:

wiU have fewer

not

have

people

ment

enthusiasm

an

be

30

staff, he is prepared to announce

a

good way to draw at-

not

another

it. Faced with a press con¬
minutes, he announces on his

feet' that while he

reductions in the
living_the - war effort;

us

in

ference

Prlce level cripples the protitle, "The told this but it is inescapably true, ductive plant of a nation and
There is no way that we can shift ^erefore would hamper the re-,
fear of in- the real burden of this rearma- armament program. On the contear of m

Devil's Advocate."

flation

,et

cooler and returns to find

official has swiped

think that if we halt inflation we

W< We

of evil, he acquired

tne

a

* J

,

But

useful g°ods and services to en:
shall have to take a the
re¬
duction jn the level of livi

spokes-

was

to the water

prospective

against

'^our ener^ tf S

man22* suDDOsed^^ to reSe^t
supposed
represent

good

a

frantically being thrown

whatnot, leaves his desk to go

of allocations or

tention away from the real cause

,

level ,of livmg- Jt is cer-

unbelievers, who
called to account for their
were some

is

are

together; Mr. X who has just been appointed
director of manpower, of materials, of prices,

the hu-

attributing our difficulties

inflation-that it
of the peopie and forces them to accept

Paarlberg

<

flation is

at_ the chief charge

of war-we

man

u.

ii.

us.

Inflation

reduces buying power

laymen.

L defend

ails

is not

Symptom

a

i

look

us

leveled

was
Dr.

i*

i~

i.

Let

religious

of

with a locked steer¬

ing wheel. .The key word
stability, it is flexibility.

early

this

footing;

with frozen prices

agencies

betical

.

than I can keep my car

the road

on

'

■

body is partly a symptom of
ai*d partly also a cure
for hat ailment. If a malaria pa^,len ls ru"oing a fever no good
doctor would put him into a deep
£eeze to bring down the fever,
Neither should we try to put a
freeze on prices to cure whatever

from a peace-

military

'

Doctors

have found-that fever in

is to

problem

one

the economy

any more

doctrine.
In the

number

The

production.

slightest. The bureaus and alpha-

has abated in the

economy

and man
an

ships

and

can

brings about necessary
in consumption and in-

in

in Wash¬

ington in the past two weeks. This does not mean that there is any
less confusion or that the movement towards wrecking the Ameri¬

for that sickness,

cure

it

bri
eases

food that were needed.

tanks and

economic

our

a

planes

thoroughly ingrained in
our
thinking

to

since

price index
few points; it
failed to pro-

will be because we

BARGERON

noticeable lessening of war tension

There has been a

sickness, it is a

eductions
re(

the

because

be

problem is to stabilize prices and* not

a

a

brought about by the war effort.
To some extent inflation is even

to the enemies of freedom,

economic

one

By CARLISLE

sickness, the dis¬
supply and demand

of

If we lose out
it will

armament effort.

convinced

appears

number

of the News

economy

an

and consume.

a

The country

Ahead

which is
trying to find out what to produce

price system and a return to price ceilings. Explains functions
and maintains price ceilings must be accom¬

that

Washington

handicap to a doctor who

a

handicap to

of price system

panied by rationing. Favors taxes and credit controls
sening upward pressure on price level.

From

what¬

cured

and

scrapping of the

cause a

have

A fixed thermome¬

us.

puzzled about how to diagnose
prescribe; a fixed price is a

is

Stating flexibility and not stability is key word in price economics, Purdue University economist expresses doubt dangers

.

freeze

can

we

certain date and

a

we

ailed

ever

Purdue University

^

that

think

By DON PAARLBERG*
-

of

prices as

course,

border and

call aggression on our

is to move them from where

what else would they call it?

Volume 173

Number 4988...The Commercial

Bank

and

Financial

Chronicle

Lending in
Defense

of

recent

omy is

Events

of

recent

months

have

contribution

morsel
mental

problems

commercial

tary

in

authori-

ties

the

banking.

field

The

of

to defense

bank

or

sence

*

theless

•

on

responsible
have

re¬

were

expanding so
rapidly at the

the

that

are

occu-

If the pros-

bank

loans

will

-

prospects

the,

rate

econ-

restrain

lending

the

even

the

<

be
ab-

for

of

and X- " is

*

One of the major factors that

,

Wg

have

now

started

-

.......

essential to the efficient
operation
of business

<

aspects of business operations. It
is difficult to say how effective
these

enterprise,

•

Consumer

end

comprise

credit

.

the

pass

the

at

along the same path and
Expanding Defense Program we face controls over prices,
an(j Business Loans—The outlook
wage rates, business inventories,
for Jbank loans to business is much
materials, plant programs, buildm0re
uncertain.
These loans are ing and
construction, and other

^e^e'

on

business loans

established

1941

controls

growth

in

stringent curbs

did

peaks

r0t,lng

ing system.-

compre-

may

riod

of

Credit

40%

over

and

they

of total bank

direct

controls

will

be

in

loans.

However, since they reflect this
semi-war
economy.
Their
..changing economic conditions and success will require a high degree
dismiss consumer and real estate are not
amenable, to
easy or ef- of cooperation and support from
loans fairly easily from our dis- fective control through the use of consumers,
businessmen, labor
cussion; they are not likely to be selective credit
measures, their leaders and farmers, and it is not
a
problem. There is little doubt movements are often volatile..
clear that such
Real

Estate

Loans—We

may

,

both

real

estate

loans

will

support

-

that

and

During

the

be

decade there forthcoming. Nevertheless, if acduring which companied by realistic and effecpeaks. As the requirements of the business loans
expanded rapidly tive action in the field of fiscal
military program expand, supplies and substantially.
Th^ first of policy, the direct controls will
of
raw
materials
available
for; these,, was the rearmamK.it boom.
certainly slow down the advance
civilian- durable goods and "resi- from 1939 to 1941. The second pe- in wages and prices,
dential building are certain to be riod of rapid loan
expansion was Also, these controls will help
cut rather sharply. Our entrance the great postwar boom of 1946- divert more production into milicredit

consumer

are

their

near

three

were

'1948.

past

periods

The third big rise in bank tary

loans

occurred

in

the

war-scare

inflation of the second half of 1950.

'All three periods were characterized by expanding industrial pro-

channels, restrain the competitive bidding for scarce matK
rials which would otherwise drive
some

materials

raw

much higher

levels,

prices

and

to

control

otherwise,

appear

.

we

e n

com¬

modity

prices

were

rising

sharply
raised

h

Roy

L. Reierson

a s

the

growth

economy. -1

question

of

bank

contributing

whether

credit

to

*

be

may

The

son

w

r«o„*
Bank Loans

m

commercial

banking r

policy.

during which bank loans

tem

.

It

has

been

made

abunuse

a

the last half of 1950

general upward trend.

re-

even

greater

recent

degree

than

_

.

in

siness

the

the

thorities.

It

is

certain

j

an

postwar inflation,

this

search for

will stimulate the

that

new

With

entailing

a

ing

government obligations.

In

rise

in

the

the

outbreak

of

w0rld

market

situation

complex

admittedly

difficult

to

it

•

.

,

not

-

War

expansion

mercial

..

r

occurred

maintain

high turnover of real estate erate an increase in total business
during the war years.
No* requirements for bank credit. This
sharp contraction in the volume' conclusion is suggested by our ex-

0f

real estate

loans

is anticipated

nerience in World War II

credit

will:

controls

neak in World War TT shortlv after

^
new

iending
lending.

nnlinxr

If

honnmoc

a more

restrictive • shifted to
restrictive'
tnu

noeoeeorv

policy becomes necessary for
sumer

ancj reai estate

loans,

nort

or

in

nest

con-

in

clined.

for

the

necessity of keeping the chanto
bank credit open while
yet
insuring
that
banks
and
bankers

in the

make

their

r

lnano

r»i 1 roc?

tat1

f1ervP. to restrain business demands
for fixed and working capital, and.;
hence tor bank loans,

earr\i

War 11

mad®
^a^

for bank credit in World

was

the cutback in civilian

*

necessary by rising military
,
*a^
ts. .This meant cor-

re(lu r.®m
"

,

.

Continued

on page

36

*,

'

'

V

>nppAI

:

ffi

!

,

accompanying table.

A STO R Y

of

OUTSTANDING

mercial banks during 1950 is given

maximum

production in
Vilicinpcc

1942, business loans deNot until the postwar pe-

an all-time peak.
The record of
outstanding loans of insured corn-

nels

war

1 QA9

nTrnnTiTfo

Another factor that reduced the

*

'

rva

£ .[he nearfuture' ?reached theirtdemand

loans during a comparable period
of time. Total bank loans are at;

.

mnonri

_

even

loans—a

increase during a six-month
period.
This is the most rapid
rise ever experienced in business

perspective and to arrive at a
point of view which recognizes

_

in*'com-

30%

is

_.

in

war

industrial

and

undoubtedly continue to grow.'.though direct controls will by no*,
+iilltr
However, the expanding defense means be fully effective cures for
program may significantly mod- ;our * inflationary
ills, they will

.

decline during
II, partly because of
a

.....

on

this

loans "did

«

Korea, the volume of bank loans
rose very sharply. The most strik-.

devices of credit control designed
restrict private credit without

;to

yields

ac-■
ac-

tivity and prices pre v ailing
war
throughout this period of war am

of postwar inflation,
desires of the fiscal au-

years

estate

per-cPwiVP

^roterest rates as instruments of sistent high levels of business
grow® reflected the
credit policy will be limited to
erally
an

in.

were

This

Real

'

sll0w much of

sys-1 the

corded the biggest loan expansion
in history. This followed a decade

-

dantly clear that the orthodox

after.
.

pa

inflationary

an

..v v-

the

rise in prices.
At the same time, new questions
have arisen in the field of credit

by

But

well,

use

-

w.h

<

the

So far, production cuts in pros-" duction, rising prices, and growth inventory
hoarding.
They will
should take a critical view of
pect are by no means this drastic
business inventories.
'
v.
»limit the amount of private build—^
proposals that might seriously in-* and consumer, credit
may be exIf we face a persistent rise in
and construction and probably
terfere
with
the
functioning of; pected to hold up somewhat bet- prices and business
inventories, curtan P*a.nt construction m noil-;
the
banking
system
.in
our ter than it did in 1942 and there- demands for business
loans will essential
industries. Thus, even

time

very

loans

through

as

that these three 'imite<i demands for bank credit
of loans comprise almost'
in World War II was the imnosione-half of the'total loans outtion of comprehensive direct wostanding in the commercial bank- nomic

-rapidly and if
this expansion is likely to add
sig-*.into the war brought a ; nearly
nificantly to inflationary pres-; complete halt in the production of
sures and price
increases,* the,case 'durable goods for the civilian
.for more stringent credit controls
market, and consumer credit demay be strengthened. If, however,clined almost immediately.

that

loans

re¬

opinion

an

continue -to .rise

loans.

fact

bank

central place.

a

pects

lar increase in

bank

outlook for

pies

cent spectacu¬

The

the

of the fundamental issues

some

the

concerned

the

AT-—

avoid

confronting the banking business.
In considering these
problems,

alike-

become

over

u~

sponsibility for having

...

and

bankers

*

01

to

Outlook

coping with our
ills.
Many
of- the

cannot

we

effectively

can

PT10dS °. rrth
types

production,

expansion.

must be tentative. Never¬

answers

mone¬

be achieved most
easily and

employment,

being subjected to

expected

to

inflationary

on listed securities

it

un-

would

v? n?0 r, r?1S-

of inflation.

cause

loans

un-

togetner witn tne shitt trom civillan

and

again brought to the fore funda-

n

months.

critical view of

a

cludes, because of comprehensive economic controls and shift¬
ing to defense production, there is prospect of restrained bank
lending even in absence of stringent curbs. Sees loan expan¬
problem, and denies it is

,

.

proposals that might interfere with functioning of the banking
system/' reviews recent expansion of bank loans, and con¬

easy

loans

economy
itself

express

although possibly not at the

Bank economist, warning "we should take

as

to

bank

rising prices and full

Vice-President, Bankers Trust Company, New York

sion

allowed

lThi0ntb=LC,?ntire t0 inTaS1 Reg"'ation,s T. Yd W

Economy

By ROY L. REIERSON*

-

P°,te"tial in the

be

checked,

ACHIEVEMENT

Y

Loans of Insured Commercial Banks
.

„

*

;•

.

(In billions)

.

<

.

-Amount-

Dec

Type of Loan—

Jun 39,

31,

1949

"

-Change 1950-Dec

1950

1950

Commercial and
"Industrials
On

Securities

$16.8

$22.1

$—0.1

3.0

2.8

2.7

—0.2

2.6

—

Consumer

"Year

_______

12.3

2.6

0.9

5.3

•

-0.3

0.2

2.2

8.0

9.0

10.4

1.0

1.4

1.3

0.1

0.1

0.2

$44.9

$52.7

$1.9

$7.8

$9.7

Bank loans

customarily increase

prices

spurted,

the

ing

the last

for

up

fall

and

Christmas

level

but

also

because

of industrial

increased

by

half

about
of

the

production
10% 'during
In

year.

of durable goods likely to be
in short supply during 1951,
many

of

producers kept production at high

residential building.
The loan
expansion in the last half of 1950,
however, was more than seasonal.
In. large measure, it reflected the
of

war

and

the

result¬

case

levels

even

struction

ness

sumer

spending. High prices meant
larger commodity loans. In addi¬
tion, perhaps as much as 15% of
the rise in business loans

Credit

by the

Corporation

was

due

Commodity

in

disposing

of* commodities acquired in earlier
years

grams.
mal

under

price

support

This resulted in

increase

an

pro¬

abnor¬

in commodity

loans.

if

this required

in

the

future.

*An

address

Vermont

lington,

Vt.,

by

Mr.

Bankers

Feb.

of ultimate

potentialities,

to¬

8,

Reierson

Association,
1951.




before

Bur¬

America, Kaiser Aluminum & Chemical Corporation, and Rey nolds Metals Company.
We believe that this study,

and

time peak

both

to

the investment world and the metal

working industries.

Copies

are

available

upon request.

,

con¬

of

con¬

at alllevels which could not

be sustained for
but

charts, and photo¬

maps,

some

Residential

production

which is illustrated with

graphs, and supported by statistical data, will have general and continuing interest

durable goods were

which

did

long in
add

to

any

event

The

consumer

and real estate loans.

Thus, in the

case

FIRST BOSTON

of commodity,

real
estate,- consumer and some
business loans, the combination of
circumstances that contributed to

the

unusually

rapid increase
was unique...

Business inventories rose sharp¬
loans last year
ly in the closing months of 1950,
not only
Outlook for
because raw materials

the

terms

gether with highlights of the four primary

borrowing for inventory purposes.
Incidentally,
these
inventories
may be a useful damper on prices

ing sharp rise in many commodity
prices and in consumer and busi¬

action

an

metal still in their infancy

the

business, the seasonal rise in con¬
sumer
buying, and the completion

outbreak

a

producers—Aluminium Limited, Aluminum Company of
,

the

in

Estimated.

in-the latter half of the year due
to the marketing of crops, stock¬

to

industry and

2.4

1.2

$43.0

___

pared this comprehensive study of

>

\

—

1.3

I

Our research department has pre¬

5.2

$

—0.1

0.2

13.6"

$

1.1

___

___

Total

2.8

11.4

___

_

All Other

*

$16.9

___

___

Estate

*2nd
Half

'•'•v.-'

Agricultural
Real

1st
Half

31,,

•

Bank

-

'. "

"

TOO Broadway

•

NEW YORK 5

•

•

WOrth 4-4000

Loans

It is obviously difficult to be
categorical concerning the outlook
for bank loans.

CORPORATION

in

Should the infla-

BOSTON

PITTSBURGH

.

CHICAGO

PHILADELPHIA

CLEVELAND

SAN FRANCISCO

f

f.

The Commercial and Financial Chronicle

8

...

Thursday, February 22, 1951

(816)

Burns and Haney to

What Price Defense?
By MAX
Consultant

Address

WINKLER*

International Affairs,
Research Corp.

on

Arthur

Dr.

F.

cipal
burden

against increasing armaments
at turn

speakers

forum

proportion of defense
being borne by the United States, and quotes warning
statistics to show great

Dr. Winkler cites

of the

and

Burns

Dr.

will be the prin¬
at
the
dinner

Lewis H. Haney

National Securities and

Dealer-Broker Investment

Analysts

Recommendations and Literature
understood that the firms mentioned will he pleased

It is

fourth annual con-

send interested parties the

to

by Russian Foreign Minister

of century.

Aluminum—Detailed brochure

American

North

nation has seen fit to
tions, led by the United States, do it all. Conditions are best exare
planning to spend an aggre- pressed by the lollowing excerpts
gate of about $84V2 billion a year, from
a memorandum prepared
with

Western

so-called

Sixteen

na-

tory,

one

by

amount

to

about $70

lion

bil¬

times

five
much

as

that

as

contemplated

other

the

by
15

nations.

Compared
with

Winkler

Max

Dr.

Amer-

ture, economic progress and the
the defense program production of wealth are either
(including inter alia, foreign aid paraiVzed or developed in a wrong
and related activities) is in excess direction. " Therefore,
the more
of the country's budgetary reve- armaments of each power increase,
nues
and
almost one-third
the
jess j^y answer to the objects
national income.
aimed at by the governments.
ica's budget,

„

The

should

table

subjoined

illuminating:

prove

Expenditure—«
In 'Jo
In e/c of
of Budget National Income
34.0

Belgium

16.2

Canada

52.0

7.0

Denmark

28.0

9.4

France

34.0

13.0

Ireland

30.7

Netherlands

23.8

18.0

Portugal
Spain

26.0

the
8.6

v

8.2

100.0

State.s__

.statistics

"Income

available;.

for

(latest

1942

,

.

above table is not only

'.

lightening—it
cially

as

far

terrifying, espe¬
the American tax-

is concerned, because it is
he who has apparently chosen to
bear virtually all the burden. The
situation
is
not
new.
What is,
however, • novel, is the fact that
probably for the first time in hisAbstract Of

on

increasing

these

and

find

some

means

of

an

address by

Dr. Wink-

Few will be able to identify the
quotation, its author or the time
it was written. It was back in
May, 1899, when Count Michael
Nicolayevitch Muravyev, Russian
'Minister of Foreign Affairs, addressed a memorandum to the

above has been excerpted.

breakdown of Sources of Gross Income.

a

(Toronto, Ont.,

Bond Traders Associa¬

Edward Hotel.
1951 (New York City)
Annual

Roof, Wal¬

dorf-Astoria.

Dinner

Annual

York

New

at the

Dealers Association,

,

annual

Club

Bond

McGinnis—McGinnis & Company," '

Broadway, New York 6, N. Y.

Speculations—Analysis

booklet

describing the highlights of

0$wt

the

1950

activities

of

the

outing.

power to

f

and farm

:

ern

supplying light and
the great industrial
areas

of southeast¬

Michigan. We shall be

glad to send copies of the
port to

with

Charts—Leaflet showing six of over 1,001
description of a graphic service—F. W.

a

York 5, N. Y.
"Market Pointers"—
Francis I. du Pont & Co., 1 Wall Street, New York 5, N. Y.
I
In the same issue is a discussion of Construction Activity
in prospect, and data on International Telephone and Telegraph
and the Pittston Co.
Also available is a brief analysis of
Stephens, 15 William Street, New

Bonds—In current issue of

vs.

in "The Specula¬
Warrants" by Sidney Fried,
$2.00—Dept C, R. H. M. Associates, 220 Fifth Avenue, New
York 1, N. Y. (or send for free descriptive folder).
Warrants—Discussed in different phases
Merits

tive

Stock

Common

of

❖

Hoffman

at

Convention

15, 1951

cinnati

those interested.Write *

(?ifit-

.

(Philadelphia, Pa.)
Summer

Philadelphia

Golf and Country

Detroit 26,

Mich.

Pa.




'~\k

Also

—

Memorandum

available

—

Elworthy & Co.,

•

Calif.

Co.—Memorandum—Josephthal &

Electric

New York 5, N. Y.
is a memorandum on Delaware Power &

Light.
Bulolo Gold

Dredging

Ltd.—Memorandum—Batkin & Co.,

New York 4, N. Y.
Also available is a memorandum on

22-24, 1951

(Minneapolis,

Security Traders As¬
sociation Annual Outing ("Opera¬
tion Fishbite") at Gull Lake.
Twin City

L.

S.

Jackson

Harrisburg Steel Corp.

Lumber Company

Canadian Western

Minn.)

& Company,

Liiiiited—Analysis—
West,

Ltd., 132 St. James Street,

Montreal, Que., Canada.
Cenco

Corp.—Analysis—Clayton Securities Corp., 82 Devon¬
Boston 9, Mass.

shire Street,

Sept. 30, 1951

(Coronado Beach,

National

Chicago

Security

Traders

sociation Convention opens at

Oct. 12,

As¬
Co¬

Hotel.

Also

Bond

Nov.

Day

Chicago 4, III.

available is a

Columbia Gas

1951 (Dallas, Tex.)

Dallas

Corp.—Memorandum—Hicks & Price, 231 South

La Salle Street,

,.

,

r,

«...

memorandum on Lincoln Printing Co.

System—Annual report—The Columbia
41st Street, New York 17, N. Y.

Gas

System, Inc., 120 East

Club

Connecticut

annual Col¬

Chas.

W.

25-30, 1951

(Hollywood

Beach, Fla.)
Investment Bankers

Association

Annual Convention at the
wood Beach Hotel.

Light

&

Power—Descriptive memorandum—
Church Street, New Haven 7,

Scranton & Co., 209

C°n

outing.

Also

Odrnt
SduJiix/CijyKffXMg.

Co.

.30 Broad Street,

umbus

WfmM

City

120 Broadway,

Club, Oreland,

11

•x

Trust

Street, San Francisco 4,

Atlantic

Co.,

Outing

Dinner at the Manufacturers

and

Treasurer, 2000 Second

Avenue,

Sutter

Co.

Machine

Milling

American

Investment Traders Association
of

analyses of W. F. Hall Printing Company,
Corporation, Minnesota and Ontario Paper
and Pure Oil Company and a memorandum on Cin¬

Carbonic

Company,

111

June

Manufacturing Co. — Analysis — Walston,
& Goodwin, 265 Montgomery Street, San Francisco 4,

Allis-Chalmers

Also available are

Dealers Associa¬

ronado
our

& Northwestern
Broadway, New

California.

Calif.)

re¬

Company, 61

Hutton &

F.

Co.—E.

charts

stock

(Jasper Park,

Canada

of

June

company

Chicago, Milwaukee,

of

Pacific Raiiroad Co. and Chicago

6, N. Y.

Liquid

Investment

tion

55,000 stockholders. It is an

24-page

edition—Put and Call
19 Rector Street, New

relationship to rail securities—Reprints

address by Patrick B.

an

Jasper Park Lodge.

illustrated

Inc.,

6, N. Y.

Rail Rates—Their

(Dallas, Tex.)

Canada)

to our

,

Loew's Inc.

June 11-14, 1951

just been mailed

IX of An Engi¬

York 5, N. Y.
Options—Second

Call

and

and

Stocks

Copies Are Noiv Available

Company has

up-to-date

neering Interpretation of the Economic and Financial Aspects
of American
Industry—George S. Armstrong & Co., Inc.,

Sample Page of

Waldorf-Astoria Hotel.

of The

an

York.

York

Eighteenth Annual Dinner at

Dallas

report

showing

Pulp, Paper and Board Industry—Volume

Canada)

Memorial Day

annual

about put-and-

yield and market performance over an 11-year period—
Quotation Bureau, Inc., 46 Front Street, New York 4,

to

if

Detroit Edison

!

comparison between the 30 listed industrial stocks used in the
Dow-Jones Averages and the 35 over-the-counter industrial
stocks used in the National Quotation Bureau Averages, both

Railway

May 30, 1951

The

Co.,

Portfolios—Breakdown—Laird, Bissell

Over-the-Counter Index—Booklet

Railroad

Dinner at the Starlight

&

York.

New

St. Paul &

Bond Club of New York

Hentz

options—Thomas, Haab & Botts, 50 Broadway, New York 4,

call

61

March 14,

-

Colorado Springs, Colo.

"Information Please!"—Brochure explaining

of

the King

■

Co.,'

York 4, N. Y.

Bond

Also available is

York

tion

*

•

v

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

Vv

diplomatic representatives of the
April 13, 1951 (New York City)
various powers at St. Petersburg,
Security Traders Association of

1951.

Government

.

Greiner &

Industry—Analysis—H.

Utility

Electric

Put

1951

Rhea—$3.50—Rhea,

Theory—Robert

52 Wall Street, New

Toronto

^b"atoEr bS? CN°rTBat"b. It is lrom this document that the
15,

the age of 44 after a long

March 9,

Republic Bank Building, Dallas 1,
■

Brokers

which

Companies—Comparative financial state¬

60 Beaver Street, New

New

arma¬

is

as

away at
illness.

;

National

partner
Dominick & Dominick, passed

in

S.

Investment—Tabulation—Eastman, "

for

Stocks

301 East Pikes Peak Avenue,

Batcheller, Jr.,

Adams

31

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

&

Dow

as

Adams Batcheller, Jr.

^

averting
the
calamities
en- threaten the whole world."

payer

*

limit
ments

.

.

Outlook for Investments."

"The

\
"It is the supreme duty, there¬
fore, of all states to place some

31.4

v

umnist, will speak on the subject,

the horrors, of
makes every humane mind,

shudder.'

9.7

33.0

United Kingdom

col¬

newspaper

of

thought

which

j:

25.6

37.8

financial

and

inevitably result in the very
disaster it is sought to avoid, and

40.0

20.0

__

on

will

•

43.0

;

Switzerland
United

consequently seems evident that
this situation be prolonged, it

"

Sweden

crushing burden more and

difficult for nations to bear.

if

speak

Co.,

Plant Engineering—Booklet—R.

Texas.

&

&

Morgan

400 Madison Avenue, New York 17, N. Y.

Dallas Insurance

ma¬

more

14.3

Norway

war

a

It

29.0

-

accumulation of

this

Canada;

N, Y.

ments—Sanders & Newsom,

of Eco¬
University,

Columbia

at

the subject, "The
Struggle Against Totalitarianism."
Dr.
Haney,
Professor of Eco¬
nomics at New York University
will

involved

the constant danger

today

7.7

10.1

Luxembourg

in

1.3*

6.0

___

Italy

and

nomics

Dillon

Professor

and

Research

armaments,

excessive

of

system

are

by this

great measure

in

terial, renders the armed peace of

.05

.002

Iceland

disturbances

."Economic
caused

—Defense

Country—

Inc.—Analysis—Peter

Process and

Common,-

people, labor
and capital, are diverted for the
greater part, from their natural Dr. Arthur F. Burns Lewis H. Haney
application, and wasted unproductively. Hundreds of millions are vention of the National Federa¬
tion
of
Financial Analysts So¬
spent in acquiring terrible engines
to
be
held Wednesday,
of destruction, which are regarded cieties
7,
1951,
at the Statler
today as the latest invention of March
science, but are destined tomor¬ Hotel, New York City. Dr. Burns,
row
to be rendered obsolete by Director of Research for the Na¬
tional
Bureau
of
Economic
some new discovery. National cul¬

almost

or

Chemical

lectual forces of the

to

Limited

Reynolds Metals Company)—First Boston

Devices,

Aries & Associates,

physical and intel¬

The

perity.

alone

expected

are

Audio

burdens
strike at the root of public pros¬

United

the

States

the industry and the four

Corporation, 100 Broadway, New York 5, N. Y.

even-increasing

"The

ex¬

on

(Aluminium

Company of America; Kaiser Aluminum & Chem¬

ical Corporation and

The Drastic Impact

tional defense.

penditures

Producers

Nassau Street, New York 5,

for na-

Military

Aluminum

time ago:

some

to

more

come,

following literature:

Holly¬

available is

descriptive material on American

Connecticut Power, Landers,
Electric Light and Veeder-Root.

ware,

Continental Illinois

Hard¬

Frary & Clark, Hartford

National Bank & Trust

Co.—Memoran-

Continued

on page

46

173

Volume

Number 4988... The Commercial

and

Financial

Chronicle

9

(817)

have

Consumers1 Expenditures

Federal Reserve Bank

production, sale and

selective

(5)

controls

level

Courses of Action
The

cessfully
action
all

has

by direct

been

after the

felt

Korean

expenditure at

$50

price level.

price
relatively

billion

an

or

is

appropriate

our

but

When

ernment

spending
basis.

we-go

to

Fourth,

purchas¬

of

put

we

general

on

total
a

and

preciation

have

secondary

a

task

that

just

impor¬

as

tant:

is

we

must

maintain

our

economic

strength,

means

our

produc¬

will coming

continue to expand its output and
increase

its

standard

of living

to

dwarf

all

maintain

a

con¬

tinuous flow of savings into
ductive investment.

pro¬

point

a

will

that

know now—if

we

Fluctuations

and

that

of events this country

course

total

in

we

personal

tive

wealth

saving have been great. Net sav¬
ing in 1939 was $2.7 billion. By
1944 it had risen to $35.4 billion,

and

the value

almost

dollar.

the

of

It is with par¬
ticular
refer¬
D.

Harry

Angney

value

taxes.

had

By

dropped to

habits

spondingly

credit

a
larger amount of those
savings to equity securities and to
goods and property which they
expect will increase in value as

the

have

we

the

structure of this nation by allow¬

total

of

able

to

A far more
important factor which can color
the

attitude

ing the value of the dollar to de¬
preciate further.
Although many of the things I
shall

levels

toward

saving

of

a

whole

generation is the prospec¬
tive value of the dollar. If price

businesses.

If

individuals
the

the

of

new

of

the

goods available to private buyers
at

and

lessen
for

the

competitive
Where out¬

goods.

put is enlarged

and

quantity

pressure

ers

goods and services avail¬

private

total

first point, is apparent.
production
makes
it

scramble

government makes its claim is the

by

an

expansion

labor

force, however, the
production is accompanied by

creation

of

new

in¬

personal

come/much of which returns to

current

price levels is less the market to bid for scarce goods
and
services.
Furthermore, ex¬
rising and give vevery than the quantity of money that
pansion of output through work¬
indication that they will continue private
buyers want to spend,
you, I think they should be said,
ing longer hours does not provide
nevertheless, because they are of to rise savings are inevitably dis¬ prices will rise. The attitudes of
much net gain when it is paid for
such importance at this moment. couraged. A few individuals will
consumers toward spending versus
at overtime rates.
I think that we should stress continue their saving habits with¬
The most effective type of pro¬
are,
therefore,
of
the
first the fact that saving is an out thought. Many others never¬ saving
individual matter.
Almost every theless, will realize that a dollar utmost importance in determining duction increase, from the point
of view of price inflation, is that
saved
now,
even
with interest, the
one of
us has been a saver or is
degree of future price infla¬
which results from greater worker
provide
less
purchasing
a
prospective saver. Some save may
tion. If some people
who nor¬ productivity. Where
productivity
toward the day when their income power some years hence. This at¬
goods are pro¬
ceases
and when they will have titude toward saving is particu¬ mally save choose to spend instead, increases, more
to live

ings

their accumulated

on

in order to

save

sufficient funds

late

tain

goods

example
savers.

they

to

sav¬

from

income derived

or

Others

be well known

may

say

it.

accumu¬

to

buy cer¬
a
later date—for
Christmas
Club

at

your

Others

in order that

save

be protected from un¬

may

but always threatening
emergencies.
Others
simply because they have no

larly

to

the

consume

total

individuals

Some

over."

"left

They

save

what

consume

is

what

of

investment

into

much

or

be

later

more

confidence

that
not

will

saved

and

worth

as

Destroy

on.

you

destroy

only the individual's belief in

economic

progress,

provide
nomic growth.
savings

because

capital for

from

what

A

these

policies

individuals

review

brief

nomic

role

enormous

in

the

played

economic

development of the United States;
isicontinuing to play the same

it

role.
be

Without

no>fcapital

without
there

saving

be

can

accumulation,

capital

can

there

no

and
accumulation

major economic

de¬

Annual

by Mr. Angney at the Third
Savings Bank Conference, Boston,

Feb. 9,

1951.




means, of course,
level of total tax

proximate

the

penditures.
for

of

First and

level

of

total

taxes,

and

businesses,

taxes

be

must

levied

be

Need

for

Credit

Restrictions

Along with proper fiscal and
budgetary policy, there is a con¬
tinuing need for restrictions on
the extension of credit,

the fourth
'field,
already
taken the form of Regulations W
point.

these

and

In

the

consumer

restrictions

X

and

the

have

related

regula¬

tions of the Federal Housing Ad¬
ministration and Veterans Admin¬
istration.
consumer

Their purpose is to

demand

for

Continued

on

problem

page

./

Company

Due February 15,1976

Price 101.34% and accrued interest

eco¬

before

From

us.

1949

through the third quarter of 1950,
annual

rate

of

consumer

more

The

ex¬

Prospectus may be obtained in any State in which this announcement is circulatedfrom only such
of the undersigned and other dealers as may lawfully offer these securities in such State.

rapidly

than the rate of individual income

after

taxes.

The

rate

of

savings

in

Along with this
consumer
buying of

there was a
similar but even greater increase
in the rate of investment spending
by business. These increases in
and

spending

services,

were

largely responsible

HALSEY, STUART & CO. INC.

OTIS & CO.

BEAR, STEARNS & CO.

L. F. ROTHSCHILD &, CO.

DICK& MERLE-SMITH

GREGORY &, SON

HELLER, BRUCE & CO.

INCORPORATED

for

an

age

1949

SALOMON BROS. & HUTZLER

(INCORPORATED)

,,

PAINE, WEBBER, JACKSON & CURTIS
WM. E. POLLOCK &, CO., INC.

increase of 9% in the aver¬

level of wholesale prices from
to

October

1950.

Despite

a

STERN

BROTHERS &

IRA HAUPT & CO.

personal saving during the fourth

quarter of 1950, wholesale prices

February 21,1951

CO.

;

a

COURTS &, CO.

GREEN, ELLIS &, ANDERSON

NEW YORK HANSEATIC CORPORATION

limit

durable

.

recent

in¬

increased.

Vs7c)/I®;-"J
[

an

on

creasing list of commodities, and
that many present excises should

(2

February 15, 1951

ex¬

both

must be increased again. Further,
it appears inevitable that excise

Refunding Mortgage Bonds, Series C, Due 1976
1

Dated

This

increasing the
receipts to ap¬

Income

individuals

possible

as

income.

current

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

Southern California Edison

temporary increase, in the rate of
•Address

completely

as

of

illustrate the critical nature of the

goods

an

met

out

an

The

dropped sharply.

always

be

developments will help to

increase

has

strength of the country it is im¬
perative
that
current
require¬
ments for military
expenditures

$35,000,000

cide to do, the savings banks have
a tremendous stake in preserving

eco¬

Importance of Saving.

Saving

is not

Stake of the Savings Banks

ability to provide for him¬
penditures increased
self, but also the source of fur¬
ther

financing during the coming years
be summed up briefly, "Pay
as
you
go!"
To maintain the

Since savings banks secure their
funds
largely from
individuals

the

his

announcement

de¬

government, the third
have considerable ef¬

they hope will participate in in¬
flationary increases.:

,

money

This

which

forms

they desire, or what they think
the integrity of the dollar. I shall
they have to consume, and save
the rest. For others, saving comes point out later some of the ways
in which we can work together to
first.
They set aside a predeter¬
maintain
that
integrity and
mined portion of their current in¬
come and spend the rest.
A large emerge from the uncertainties of
these years with new confidence
portion of all these categories of
in the future and with unimpaired
saving finds its way into savings
accounts.
Whatever the
motive strength in our nation and in our
v.; ■.
■:
for saving, it is based upon a rea¬ people. '
sonable degree of confidence that

our

can

ac¬

saving.
Some people are even
shifting the form of their
savings out of fixed interest types

and must determine their

amount of their current income.

for

use.

now

financial
desire

savings

to

output

more

counts and other similar forms of

expected
save

are

threatening

non¬

■ can

total

The first

in the rate of saving.

expanded

saying that

fect in suppressing price increases.
The ideal approach to government

on prices.
Increased
production can make more
goods available to private buy¬

price increases depends upon how
is the volume of national output.
The amount left over after the

our

point,

easier to meet governmental needs
for the defense
effort, of course,
but it also aids in
holding down

continued

shortages is one factor
which produces short-term effects

for

therefore,

Sound budgetary and fiscal pol¬
icies of

my

Greater

general price level rises.

Whether

need

output,

expanding

fense and for civilian

serv-

a,

of

help,

can

ernmental demands for goods and
services and would leave corre¬

production, sale,
,

The

divert

1950.

pending

the

increases'

second point. Reductions in those
expenditures would decrease gov¬

use

spending and
And sixth, we must promote
saving. Even if the proportion of
income
going
into
savings re¬ savings and direct them into the
I want to say a
mains unchanged, which is un¬ right channels.
little about each of these
topics.
likely, it will almost certainly

than

$10 billion from 1948 through
Scare buying because of im¬

over

of commodities and

use

ices.

of

the

the economic

or

per¬

their

several forces work out.

of

maintain

cannot

we

productive wealth

net saving

1947,

total

in

controls
and

major readjustment

a

$3.9 billion but it averaged more

dollar that I want to speak today,
because

after

income

sonal

of

produce

the dollar during
it is almost certain

the

to

ence

one-fourth

to

of

years,

methods

not be

may

eral, state, and local governments
should be pared to the bone, my

ing, it is easy to see the great controls and
voluntary coopera¬
primary economic task of progress of the sort that has made danger of further rapid increases
tive action in
restricting the ex¬
the nation at present is to increase this nation the wealthiest in the in
prices.
tension of credit.
our strength and that of our allies
world.
Despite our current high
If the citizens of this country
Fifth, we must make skillful but
until we can cope with all threat¬ levels of income and production, it
collectively anticipate further de¬
as
sparing use as possible of direct
ened dangers. is
certain
that
in
the
normal
we

rate

Productivity

It goes without

The

But

in¬

essential expenditures of the Fed¬

pay-as-

selective

of

inflation.

gov¬

must make full

rate

they must not be relied on
heavily in the battle against

too

expenditures.
must

that

even

other

production

total

our

we

annual

in

attained.

principal

must expand

on

force

and

we

Third,

added

and there is

years, however, and during pe¬
riods of expansion in the labor

I believe

six

of

one

governments, and
particularly our Federal Govern¬
ment, must reduce non-defense

annual rate of

more

take

each

months

invasion.

current levels of civilian

must

in

Second,

government

seven

the

national output of goods and serv¬
ices as rapidly as possible.

impact of direct
expenditures. has
still

defense

No

do

an

consumer

output per man-hour has
been only 2%
during the last 20*

job but

we

First,

The

hardly

quite clear.

equivalent ex¬
purchasing
a restraining
the general price level*

in

average

crease

suc¬

directions.

The

been

The

we

will

are

alone

steps

increase, and

accelerate.

far

so

to check inflation

together will do it.

that

aver¬

effect

of action which

courses

must take

more.

1949

without

pansion
power,

January 1951.

purchases.

and

to future

from the

unaffected

(6) promotion and directing of individual savings. Warns,
however, abnormal volume of savings may produce threat
"

will

crease

over

some

even

duced

fire.

in

the danger is that the rate of in¬

credit

of commodities and services;

use

risen

Prices continue to

(3) put government expenditures

controls to restrict credit expansion;

*

have

age to the middle of

econ¬

following steps to check inflation: (1) rapid ex¬
pansion of goods and services; (2) reduction of government
general and

increase

savings, then they

add

by January of this year.
prices of many basic com¬

about 5%

of

omist lists

(4)

total

to spend past
fuel to the

or

The rate of increase in consumers'

annual rate of consumer expenditures has increased from third quarter of 1949 more rapidly than rate

basis;

busi¬

as

accelerated,

prices has been somewhat slower,
as
is always true, but even here
there has already been an increase

After warning

pay-as-you-go

the

modities

Federal Reserve Bank of Boston

on

6%

has

1949 level

The

By D. HARRY ANGNEY*

non-defense expenditures;

another

wholesale prices to 15% above the

Manager Research and Statistics Department,

of individual income after taxes,

buying

bringing

And Inflation

*

risen

ness

THOMAS & COMPANY

37

The Commercial and Financial Chronicle
10

Thursday, February 22,1951

...

(818)

Mutual Funds

The Advantages of
of the

most

these days for dealers is

prospectus

and

upon

request

SECURITIES

NATIONAL

&

CORPORATION

RESEARCH

120 BROADWAY, NEW

*

**•

*

,

YORK 5, N. Y.

Management of

well the wide-open
for imaginative mutual funas selling, that we are quoting it
for the benefit of dealers who may not be receiving this service

agement of Money," and the topic illustrates so
field
here

"

now.

executive who is also

"An
asks by

'

-

substantial owner of the business

a

proposed Profit-

how much his benefits as a participant in a

his costs as a shareholder.. Nat¬
urally, every case is different for there are a number of factors
involved.
Assuming (1) his percentage of ownership is the same
as
the percentage his salary represents of total payroll of partici¬
pants, (2) his top personal tax bracket is 50%, (3) his retirement is
20 years away, (4) he will take his benefit at that time in a lump
Sharing Retirement Trust exceed

declare

from

■^^^"prospectus
your

investment

he

and

dealer

Trust were not established the Company would
the amount of the proposed contribution out as dividends
would invest his share of such dividends — it works out

than

PHILADELPHIA 2, PA

been

a

have, net after taxes, more
three times as much as a result of the Trust than if it had not
created, even without the excess profits tax.
'
f

roughly

or

if

(5)

and

sum,

he would

that at retirement

If

Profit-Sharing Trust Is Created

No

"Normal tax and surtax on top

distribution

for

Available
minus

$470.00

surtax)—

Income

265.00
265.00

—

period of 20 years ($265x3%x20
income tax paid on such income

over

employee-stockholder after
($265.00 plus $79.50)
—

20

to

Net

If

years

Net to

come

i

income

in

either

case,

0.00
600.00

the individual

1,200.00

comes

out

against
$855.50
"Considering the top rate (rather than the maximum over-all
'/A rate) of the new excess profits tax (77%) the result would be $149.50
with

if

$1,200

$344.50 if such

a

a

profit-sharing trust is created, as
trust is not created: a' net gain of

>

Prospectus from your locol Dealer, or

%

American Funds

Distributors, Inc.
650 S.

m

Spring St., Los Angeles 14, Cal.

^

if the trust is not created versus

$1,200.00; or eight times more as a

result of the trust.

"(Original

example,

herewith

Pension

Prentice-Hall

revised for new tax rates, from
Service, Sec. 3032.)"

Profit Sharing

and

31

were

Vicethe

of

name

Securities

Research

&

Corpora¬

tion, N. Y., will be a member of
the four-man panel which will
discuss

this

marks

vious

will

topic,

in

sets

Mutual

to

The

fective

join

Network

the

ers' will

sity,

Univer¬

Northwestern

of

Program
addition

Feb.

for

new

without

exchange

charge if they desire to.

Continued

on

page

this

the above,

listeners

Coast

the

on

following Saturday, March 3, at
4:30

p.m.* (PST)
Network.

the

over

Don

will

There

be

ropolitan
at

WNYC, New
Monday, March 5,
(EST).

area over

City,

6:00

on

p.m.

Shares

of American

ASSETS

734,060
029,474

a

Met¬

on
on

increased

Aviation Group Shares

Busi¬

from

Bank Group Shares

$34,-

Nov. 30, 1950, to $37,Jan. 31, 1950. Net asset

Insurance

to

of

share jumped from $3.89
$4.i4Mdurirfg the same period.

is

funds

E.

Margaret

Funds)

Investment

(Mutual

wholesaler

WOMAN

FIRST

mutual

Group Shares

Stock and Bond Group
Shares

value per

Of

Kennedy, who has established her
own

Distributed

Inc. and Selected Shares, Inc.

Dis¬
her lec¬

tures

to

women

investment

such

where

Group,

all

on

STREET

RECTOR

YORK

NEW

6,

Y.

N.

phases of
Prospectus may be obtained from
the above or local dealer.

constituted

planning

important

19

by

LTD.

HARE'S

She resigned recently from
tributors

Ltd.

Shares,

Institutional

the Margaret Ken¬

company,

nedy Co., 120 Broadway. She has
been designated Eastern division
distributor of Value Line Fund,

roots''

"grass

spadework for the industry.

AN OPENING seldom af¬

Shares,Inc.

National

forded

to

the

acquire

general distributorship of
Prospectus

upon

request

eystone

Distributorship
Opportunity..

long-established invest¬
is

ment fund

to

avail¬

now

properly qual¬

a

ified individual or organ¬
ization.

Lord, Abbett & Co.

Funds

New York

—

Chicago

—

Atlanta

—

the managers of the fund> state

Our clients,

Los Angeles

of the mutual,

excellent past

an

in

INVESTMENT FUNDS

The

present

ten

blue skied in 17 states; and has

management record. *

distributor

national

to

wishes

but

dealer,

investing their capital

that it is

open-end type; has between two and

millions of assets; is now

Certificates of Participation

a

able

Custodian

concentrate

will continue as
on

a

other interests.

attractive
or in¬
dividual that is prepared to create new outlets as well
as to develop the fund's current active
dealership in a

The

IN

to

BONDS
(Series B1-B2-B5-B4)

PREFERRED STOCKS

opportunity thus presented should prove

an

investment

experienced

number of

group

concern,

important sections of the country.

'

(Series K.1-K.2)

After

COMMON STOCKS

tact

(Series S1-S2-S3-S4)

Prospectus

Tlie

may

be ~obtained /rdTfi J

Prospectus

of Boston
50

trustees

of

strict confidence.

Keystone Company

may

the

fund.

Please

All replies will be held

X

f ?

•»

Department 38

be obtained from your local
or The Parker Corporation,

investment dealer
200

directly con¬
in
communicate by letter or wire.

logical screening principals may

A' Diversified ■Investment Company-

'

ALBERT FRANK-GUENTHER

Berkeley St., Boston 16, Mass.

LAW, INC

Advertising

Congress Street

Boston 9,

Massachusetts




IT-

F OUNDED

1925

52

33

will be rebroadcast for

American Business

t

ex¬

although they may

ones,

such

make

to

stock certificates

change existing

Director.
to

required

be

not

ef¬

Sharehold¬

1951.

16,

is

title

corporate

new

the

regularly for the "Re¬
viewing Stand" program, with
the listening audience estimated
at over 3,000,000 by Dr. Leighton

Common

Diversified

and

Fund.

of

stations

hook-up

Borin

million of

$38

represents pub¬

lic holdings in its principal offer¬
re-i ings—Diversified Investment
mutual Fund, Diversified Preferred Stock

tors, large and small.

WGN

of

excess

which $24 million

Stock

200

,

Funds, Inc., has as¬

Diversified

Fund

than

15-

the

of

title

corporate

safeguarding funds of all inves¬
More

more

a

as

his

and

relate

chosen

was

description than the pre¬

year-old investment company.

the part they play in

funds and

it was

Inc.,"

Funds,

by

annual

National

Committee

Policy

of

member

and

changed to

be

shareholders at their
meeting of Feb. 15. The

decided

new

Mr. Louis H. Whitehead,

will

STOCKS"
"Diversified

YORK

"NEW

NAME

THE

39% from

was up

Net assets on Jan.
than $88,000,000. •.

more

accurate

THE

compounding effect of in¬

The total

LEMS AND OPPORTUNITIES."

President

an

January, 1950.

1,600.00

____________

to

SMALL INVESTOR: HIS PROB¬

ness

344-50

?

employee-stockholder ($1,600 minus $400)
on

The

EST).

York
^

400.00

capital gains tax)

"Thus, without considering the

.

,

on top $1,000 of corporate income paid into
profit-sharing trust
UX'A
——
Increase on $1,000 if invested at 3% over 20 years
Total available for distribution after 20 years___Tax at time of distribution after 20 years (maxi¬

25%

1951, at
:(11:30 a.m.,
subject
is
"THE

CST

a.m.,

NET

—.,;V•

Profit-Sharing Trust Is Created

;v

,

_

OfsAlKiriaLy

79.50
79.50

_

"Tax

mum

sta¬

of

rebroadcast for New York

159.00

yrs.)

remaining after payment of income tax—_

Income

the

over

Network

Lee

530.00
(50%)

10:30

Pacific
v

;V;,.

($1,000

dividends

dividend

Illinois,

Mutual

WGN

program

Remainder to be invested at 3%

Individual

?

on

of

,

University,

•

—

Individual income tax
.

as

$450.00)

cording

by the Radio
Northwestern

sponsored

Department

In

$1,000 of corporate

(25% normal tax plus 22%

income

entire

the

to

tions, Sunday, Feb. 25,

Money," a regular service published by
Distributors Group,
is almost entirely devoted to helping dealers
by supplying them with statistics and investment ideas which pro¬
vide them with powerful sales arguments in the presentation of the
mutual funds idea to large prospective accounts.
So much interest has been created in one recent issue of "Man¬
"The

Corp.

gram

which funds are performing

the exploration and analysis of benefits to
in rather out-of-the-way

applications.

of National Securities & Research

is
the
forthcoming
"Reviewing Stand" radio pro¬

from mutual funds investments

be derived

National Funds ac¬
announcement by
Henry J. Simonson, Jr., President

interest

generally,

Profit-Sharing Trusts

valuable services

mu¬

Of

By ROBERT R. RICH

One
program

the history of

tual fund industry and investors

investment program
NAn Open InvestmFrOcpunt
of

$4,432,536

the best month in

made January

York, Pacific Coast to
Rebroadcast Chic. Program

Mutual Funds

NAT 10

Details

TOTALING

SALES

Radio;

on

New

131

Cedar Street, New

York 6, N. Y.

Tel. COrtlandt 7-5069

Volume

173

Number 4988

...

The Commercial

and

Financial

Chronicle

(819)
hold out for
years,

the Corporation will doubtless succeed in re¬
fair number of iron and steel experts with the aid of
whom it might be able to displace the
opponents of nationalization.

Steel Nationalization in Britain

cruiting

During the debate

By PAUL EINZIG
in

delay

Pointing out there is little doubt the British Labor Party's de¬
to proceed with steel nationalization is for
political
reasons in spite of changed
situation, Dr. Einzig holds final out¬
will be determined only after

Says Britain is handicapped in its
of fate of its

a

general election.

new

rearmament

actual

7

government spokesmen argued
to proceed with nationalization without

decision

by uncertainty

key industry.

material.

./

were

of

Feb. 7

mons on

Our

when, in spite of the support given by the Liberal
Party to the Opposition motion of censure, the

The

less, with taking over the industry according
schedule. During the course of the heated
debate

that

preceded

the

fateful

sides claimed that the two
situation

—

rearmament

new

vote,

their

large cities

and

the

public interest.

the

British, system
relative weight

the

influence

of

the

arguments

not

•
.

probably be

things of doubtful value,
Yet, there was one particular gov-

while,

many

e

n

r

m

e

project,

n

t

all

details

\

decision to proceed

/ith

nationalization

steel

in

readers

should

they

April

1, 1950,
152,340,000.

and
1,461,000
emigration of
us

was

there

have

been

far

the

as

fixing of prices and capital development schemes

As

a

the Socialist Party. While the nationalization of
public
services such as gas, electricity and transport, can be
justified on
course

economic

of

grounds, steel nationalization served primarily the pur¬
strengthening the Socialist Party. The reason why the

government is in such
under the

Iron

and

a

Steel

haste to apply the law—it
Act.to wait until the end

instead of taking over the nationalized firms
desire to appease the left wing of the
Party.
The "battle of steel"

government-owned

was

entitled

of this

Feb.

year

15—is

its

Iron

and

a

Steel

no means over.
Hence¬
trial of strength between

Corporation and the Iron

and Steel Federation which represents all iron and steel

producers,

both nationalized and

privately owned. Since the voting strength
meetings of the Federation is according to output, the govern¬
ment-owned firms control the Federation, so that in
theory it has
come under the control of the
Corporation. In practice, however,
the situation is not so simple. For the Corporation could
only
at

exercise its control

a

alized firms

were

the

lation increases.

51-6%

not
a

b 1

are

yet availe

How-

.

figures

ever,
Roger W. Babson
-

of the

;

for
and

the

States

most

for

country's larger cities have

followed

closely

and

zona

gain

by

Florida.

and

peace

safest* in

They
these

of

point

lost

population

during

..

,

and

Texas,

case, were
national' average,

the

.

larcf

0

mild

popu-

level

which, in each

below

e in a iar&e clly*
Numbers do not necessarily

represent true progress.

The first

consideration should be

is

economic

An-

...

•

T

°PP°rtanity.

This'increase

of population is not

*

"playboys/'

but from good substantial Northern people who are

retiring from work on pensions.
They make excellent citizens for
any. community.
"

in

the

states.

more

sparsely

settled

Readers should not forget

,

experts

-

economist*

or

if they

were

free of

figures.

They give you,
cost, elaborate surveys on
routes,
territories
problems.

and

other sales

are^released,

equipment
their

STelfmuch

sus

However, compiling cen-

figures is

big job and it will

a

in

than

more

the

hold

to come,

years

Not only in the above States, but
elsewhere throughout the nation.

they
on local merchandising conditions
and opportunities throughout the

nation.

own

will

•

States That Have Stopped
Growing

Nearly
to

be

half

of

the

exact—show

ma<3

it clear that our Communist
0ur

position

but

our

tion

as

yery

a

leading

existence

as

V

v

,

an

offer to sell

or a

a

that the large cities of the nation

population

rural sections for life and protec-

aver-

someday

be

begging

tion.

solicitation of an offer to buy these securities.

$12,000,000

complete solidarity among the direc¬

tors and senior officials of iron and steel firms not to

serve

in the

New

Corporation.

It is this solidarity which will enable the industry
pursue a policy of passive resistance against any undue inter¬
ference by its new masters.
Any attempt by the Corporation to
gain full control over the Federation, or to carry out extensive
to

changes in the industry which is disapproved of by the Federation,
•would be resisted. In theory the
Corporation has the remedy in
its own hands. In practice it could not
apply that remedy without
endangering steel production and rearmament.

First

toughness;

1,1951

.

'

,

due 1981
Due February 1,1981

Price 102.129% and accrued interest

The next few months will witness a most
interesting duel
between the two outstanding antagonists, Mr. Steve
Hardie, Chair¬
man of the Corporation, and Sir Andrew
Duncan, Chairman of the

Federation.-

England Power Company

Mortgage Bonds, Series D,

Dated February

Both are shrewd Scotsmen and have a
reputation for
Mr. Hardie is essentially dictatorial, and he will find

it difficult to restrain himself from

imposing his will on the indus¬
slowly, because
crisis. On the other hand, Sir An¬

try nominally under his control.
he

not afford to

can

drew Duncan,
wise to yield.
nounce

the

provoke

a

But he has to go

Prospectus may be obtained in any State in which this announcement is circulatedfrom only such
of the undersigned and other dealers as may lawfully offer these securities in such State.

too, will have to ascertain the extent to which it is
For the Socialists are hoping for an excuse to de¬

Federation

and

the

boards of

nationalized firms

for

"resisting the will of Parliament and the nation" and for "sabo¬
taging the industry." They expect this to be a popular electioneer¬
ing cry. And the ultimate fate of the industry will be determined
by the electorate at the next general election.
The

question is when the electorate will be called upon to
its verdict. The government is trying to defer it as long
as possible, and meanwhile Mr. Hardie will
be doing his utmost to
"scramble the eggs" by proceeding with the
integration of the
industry as far as he can in face of the resistance of the Federa¬
tion, so as to make it more difficult for the Conservatives to de¬
■

The

I
OTIS & CO.

<

HALSEY, STUART &, CO. INC.
THE ROBINSON-HUMPHREY COMPANY, INC.

(INCORPORATED)

THOMAS & COMPANY

R. L. DAY &. CO.

GREEN, ELLIS &, ANDERSON

pronounce

'

nationalize the
of

its

very

industry after their electoral victory. If, in spite
majority, the government should succeed to

narrow




MULLANEY, WELLS & COMPANY

WM.,E, POLLOCK & CO., INC.

HELLER, BRUCE &. CO.
February 21, 1951

na-

may

to resign, the

industry. It would take years
before they could be replaced.
The Corporation finds it difficult
even to find suitable men to fill vacant
posts on its own board and

a

It is not at all improbable

The offering is made only by the Prospectus.

■

power,

States—22

increases below the national

This announcement is not

ene-

mies will try to destroy not only

result would be utter chaos in the

executive, because there is

and

•

.

^"^"ven

census

on the part of those firms.
that, if all members of the boards of the nation¬

dismissed,

J

•

I maintain that*

coming from more economic opportunity exists

the Federation through the executives of
And for the time being at any rate it is not

to be

out

States—Ar-

pe0pje foolishly continue to want

States
a

greatest

1940

the

The reason for this apparent contradiction is that these six States
have few large cities.
Too many

California is up

from the

to

already been released.
They are
exPe ts> economists ana,
very significant.
Those who own
JeaderS in the conservation field,
their own business, * interests ip ■
.Undoubtedly, the national trend consider the rural States the hope
other businesses, or make their is
toward
greater increases
in 0f North America in thevears
living by selling, can . save time leisure time.
Firms engaged in °'
s have
and
money
by studying these the p r o d u c t i o n of recreation anefd* Recent events have made

position to enforce blind obedience
The position is

show

attention

war."

three

far

This gives
annual

Those

climate

year's

of

of

creases

net

a

possessing the advantage of

last

call

over

the nationalized firms.

in

the

ago.-

to

actually

births

and

10,000.

double

years

census

quotas,

is, however, by

forth it will continue in the form of
the

on

10

1

.

matter of fact, the Minister of Supply, Mr.
George
candidly admitted the object of steel nationalization..
Speaking during the debate on the Third Reading of the Iron and
Steel Bill, he declared: "We want this
industry." The "we" means

pose

about

decennial

Strauss,

of

of

for

the past 10 years while the other
three enjoyed only nominal in-

3,704,000

deaths

jobs

of

kansas, Nebraska and Oklahoma—

,

populaSince then

of

are

that

our

breakdowns

the government relinquished- a year or so
ago its control over steel allocation, but that could be restored by
a stroke of the
pen under existing legislation, without having to
nationalize the industry to that end.
...

,*

Complete

It is true,

concerned.

the

time

time

Population Increases

census.

changed situation, like its original decision to nationalize steel,
prompted by political and not economic considerations, The
industry is working efficiently; its output has reached a new
record in 1950; and it is in any case under government
control, as

in

as

Federal

the

-

Mean-

are

namely,

.

was

■:>

un-

On

has
mild

Circle," comprising the
States
of
Iowa,
Missouri, Ar-,
kansas,
Nebraska,
Kansas
and.
Oklahoma, as being "the richest

for

tion

plenty

of

"Magic

watch

will pro v.e
its
worth

spite of

continue

preliminary
summaries
released each month.

the

dertaken
in 1950, which
,

published.

California

advantage

The Rural States

many months before

are

there.

and

Many cannot understand why I

-

improbable that

,

ment's

out

double

everyone.

and protection.

,

never

.

the

During the past year, Uncle Sam
spent huge sums of money for

any

.

v

.

-

;

But, in any case, under
of rigid Party discipline,

votes in the House.. The only
Dr. Paul Einzig
hope for preventing nationalization was in the
possibility of a number of Socialists being kept
away by the prevailing wave of influenza. And germs appear to
be impartial in their political outlook.
\
."
a
The unbiased observer; ran have little doubt that the govern¬

ments

someday be begging rural sections for life

may

—

case.

clearly the wartime migra¬

tion to the West Coast to fill
jobs
in
the
huge defense establish¬

Population

safest in time of war, and concludes it is

both

factors in the

scarcity of raw
provide arguments in support of
They accused each other of pur¬
suing selfish Party aims to the detriment of
materials

gains in population shown
the Far Western States re¬

by

Stressing value of Census figures to national and local merchandizers, Mr. Babson discusses new estimates of population
in various areas. Calls attention to
"Magic Circle," compris¬
ing midwest states as being richest in time of peace, and

to

the fact

proportionately the number
they sent into the armed
during the second World

climate

that public opinion is turning against the La¬
bour Government, it is proceeding, neverthe¬

this

in

is due in part to

War was high.

By ROGER W. BABSON

Socialists managed to muster up a
majority of
ten votes. Although there is growing evidence"

anyway

showing

men

flect

defeated by the government in the House of Com¬

was

poor

'

States

forces

LONDON, Eng.—The last-minute attempt of the Conservative
Party to prevent the nationalization of the iron and steel industry
in Britain

27

sparsely populated

census

that

Five States register
losses for the

Many of these

their

and

;

,.

10-year period from

population

period.

the ground that

on

the

1940 to 1950.

any postponement would only
prolong the
existing state of uncertainty. In reality, the application of the Act
on Feb. 15 has not
put an end to that uncertainty, which will con¬
tinue until the next general election. So
during a period of inter¬
national tension Britain will remain
handicapped in its rearma¬
ment by the continued
uncertainty about the ultimate fate of the
key industry on which rearmament depends for its principal raw

cision

come

favor of the

Feb.

on

in

age

a

11

the

12

The Commercial and Financial Chronicle

(820)

enthusiasts for

A Second Look at Some

cially

the

Soviet.

French

the

in

Espe¬

language,

their

present

book after book has been appear¬

P. Morgan

Banker

warns

we

Studies

unwittingly helping Stalin

are

his

wage

psychological warfare by treating Russians as unsolvable rid¬
dles; by failing in our utterances to distinguish between the
and

rulers

people; by spreading myth that Russian people
a
better lot than now; by lumping them with

knew

never

Asiatics

epithet; and by assuming Russian people

as

trustful of foreigners.

dis¬

are

Concludes West by these fallacies is

reinforcing Soviet rulers' Iron Curtain.
Let

try and help in that im-

me

portant task of clearing the air of

misconceptions
ing

that

bedevil-

are

thinking about Russia. My

our

'

will

method
be

to

be-

lay

fore you a

se-

five

of

ries

propositions
explain
briefly.
My
first

observer, Russia over the past
three decades has hewed pretty
close to the line of hard, cold,

consistent policy.
not

i

is
all

in

c a n s

The

_

There is

no reason

learn about Russia.

universities

and

we

There

can't
to-

are

colleges,

cleus

all matters Russian.

the

that,

who have

large,
tragi-

why

number of

a

face

and

a

of first-class

would

never

be

our

nu-

a

authorities

on

Those of you

to

a

film

based

composer
was

on

awarded

the life of the

When the prize

Glinka.

the

even

Soviet

level
When

Nj^oigg

it

was

once

an indictment of
but 0n another

satire

a

a

on

spectator

Stalin.

possessed

the key to the double meaning,
the satire was transparent and
devastating.
There
factor

to

is

another

bear

in

deep-seated

mind.

It

is

a

explored the field

surprised

significant fact about the Russian
discover people that for centuries they have

to

Gordon

are

for Slavic matters. But this

for

costly

reason

less

no

now.

affairs,

in

all

utterances

our

between

Russian

the

rulers and the Russian

.

at the Bar,

as

us,

distinguish

Know Your Foe
In world

ing propaganda will be its docile
about Russia and in shaping our victims. They may or may not in
policies toward that country, to some sense be its victims, but

among

ignorance makes it

our

how rich

cally ignorant
about
Russia,

Wasson

.

In countries such

people.
ours, where

as

of all fashionable fal¬
concerning Russia is that

the Russian

better

lot

lose

when

people

never

knew

a

than

their present one.
sense
of proportion

all

we

compare

the seamy side

and

certainly not docile.

The human

.

.

_,

„

continue

1948

an

to

lurch

from

become

the

for

this

of

public
Genghis

The

irony

is that both pictures of Stalin

equally

false.

nothing

if

we

I

remind

are

•

**

Resentment of Russian Masses
But this does not belie the evidence that the Russian masses re-

are

merry

you

sent the yoke they carry.

We

are

of

here, but because

honest

with

characterizes much of

and it worked

American

judicial
there

well, at least by

standards.

reforms of

our

After

the

Alexander

II

trial by

was

was

seen

of the vast Russian empire by the

The normal foreigner

train.

next

The government

thrown in 1917

and the average Russian were not

ism.

conscious of police surveillance.

stitutional

It

in

was

that

was over¬

not

was

despot¬

a

substance

a

con¬

monarchy, though this

In the years

before the Revolu¬ term was not used. There was an
Russia was in the full opposition press, and opposition
and spiritual parties in the Duma or parliament.
rebirth.
As for material things, Survivals
of
hereditary
social
food and clothing were ordinarily stratification were
rapidly disap¬
cheap and abundant. The indus¬ pearing, and careers were open to
trial revolution, which began later talents.
Scholarships
for
poor
than in England and
the West, students in schools and universi¬
was at last well under way,
and ties were numerous and well ad¬
the national income was rising ministered. High achievement
by
tion of 1917,
of

flood

material

a

every

These exaggerations

field.

should not lead
of

ments

us

to under-esti-

scientific

the

mate

accomplish¬

Mendeleev, Mechnikov,

of

persons

modest

sciences and

was

origin

in

the

learning, in the gov¬
the armed forces,

and

ernment

The

common.

chief

last

of

staff of the

eral

Imperial Army, Gen¬
Denikin, was the son of a

man

who

had

such

cited.

There

Lords

in

was

Russia,

Debrett's

register.
or

of

constantly
books

exercised

executive

legal

no

social

value.

practical

functions, and
privileges of

It

is

ironic

an

such

titles,

and

legis¬

no

fact that many Russians

herited

like

the

or

The titled families

landed gentry

enjoyed

be

House

no

peerage

serf.

a

could

no

reference

consulted

lative

born

been

instances

Many

with in¬

aries

of

the

first-class

training that
in

was

scientific

then obtainable

Russia, for in many of our uni¬

never

them

had
an

Prince,

as

oratories

covered

Russian
been

trained

leaders

years,

ever

native land.
cite

scientists

among

us

have

for

30

since they fled their
Among these I might

Zvorikin

moshenko

corporations,

in

and

electronics,

Karelitz

in

Time¬

consider

economic asset until the

versities and in the research lab¬
our

to

days of their exile, when, arriving
in the West

of

occasion

to

Americans

refugees, they dis¬
delight that we

as

their

had

a

weakness

for

titles.
Much has been heard about how

political
to

exiles

were

transported

Siberia in the days of the last

Tsars.

slave

Today

labor

camps

of Russia hold millions, living in
engineering, Bakhmeteff
sub-human
conditions.
The po¬
hydraulics, Ipatieff in chemis¬
litical exiles before the Revolution
try, and Avinoff in zoology. The
Russian universities were on the never numbered more than 50,000
highest level of excellence, and at one time, and in 1914 were
here again many of the distin¬ about 15,000.
Moreover, for the
guished Russian professors driven most part they were not con¬
chanical
in

into

exile,

men

like Vinogradoff,
Vernad-

Rostovtzeff, Karpovich,
sky, have enriched the

faculties

demned

to

sued their

hard labor;
own

they

occupations

frontier, forbidden to leave

pur¬

on

the

a

de¬

Russia

in

1941—a

joy

that

was

you

the

is the

pulse for
Russia.

universal

education in with apparent ease.
In thus recalling

What they have done has

been to deprive

literacy of its vir¬
in one of his pro¬

facts

about

some

of

the

pre-Revolutionary

Russia, I wish to emphasize that
though we are counting on the tue. Tolstoy
I
am
not pretending to give a
friendly cooperation of at least a phetic utterances said of the dif¬
riddle, the mystery, they liked Hitler but because they good part of the Russian people, fusion of printed matter that it complete picture. Nor am I sug¬

ing about Russia.
Russia

self-government in cities and
since the 1870's

countryside

primeval forest and ducks on
pie bring their influence to bear was exceedingly high. One of the
the tundra. We know a great deal
on that country's policies.
That inspiring things about the Russia
about how these political exiles
^ay may weu be distant, and let of those days was the nationwide
enthusiasm for education. By 1914 lived, because many of them have
me add that even when it comes
told
us
the
story
themselves.
it will certainly not mean that illiteracy was already beginning
Normally
they
either
outlived
Russia will model herself on the to be a problem of the advanced
their
term
of
banishment
or
United States, for the Russians age-groups, for whom there had
escaped.
Escape
was
frequent.
must work out their problems ac- been no schools in childhood. It
Stalin was banished four times,
cording to their own genius. That is a mistake to suppose that the
and escaped all but the last time—
day will be brought measurably Soviet regime initiated the im¬

ourselves, soon stilled by the brutality of nearer if in all our thinking, in
fumbling the German forces. You may have a11 our planning including our tacour thinkheard about the numbers of Rus- tical planning, we talk and act as

must admit that such

with

the

the

sition-

beginning to learn about the ini-:
these remarks, certainly with no tial joy of liberation that
greeted
thought to make merry, for there Hitler's troops when they invaded

we

local

Pe°Ple have no means to give blurred. In my judgment we can- of Oxford and Harvard and Yale fined area, and their families
could join them. Some,"Tike Lenin,
overt expression to any dislike not hope for a fundamental im- and other universities. In fact the
tbey may
for the regime, provement in East-West relations quality of Russian education in composed revolutionary books.
Others, like Stalin, hunted fox in
Joe," ^uch less organize active oppo- unless and until the Russian peo- schools af all levels in those times

same

"inheritor

Khan and Tamerlane."

is

the

one

who was, he said, a decent fellow.
Two years afterwards "old Joe"

figure

that

view to the opposite. In
American in high position

declared that he liked "old

had

by peasants. It

suppose

,

the government is truly a projec- generate anti-toxins. I have talked
foe. Since we Western folk pride tion of the people's will, we can with some of the young Russian
ourselves on our intellectual vi- say fairly enough that we get the refugees who have lately come out
tality, out unfamiliarity with Rus- government we deserve. But we of Russia and it is breathtaking to
sia is a disconcerting
thing, in this who are not used to despots must see that the communist jargon and
year 1951. For 33 years and more be careful to remember that des- ideas seem to have taken no hold
we have been living in the same
P°ts are not always chosen by the on them at all.
world with Soviet Russia, and for peoples over whom they rule, and
Blurring of Distincton Between
all that time we have preferred to even when originally so chosen,
Regime and People
go on talking about her and guess- those tyrants often hold fast to
It is in our American tradition
ing,
rather
than
study,
her. the. rudder of state long after aduChurchill gave perfect expression lation has turned to fear and hate, to sympathize with the politically
to this situation when he said in
Russia there are of course mil- oppressed. In the specific case of
1940 that
Russia
was
a
riddle Rous of beneficiaries of the re- Russia, I remind you that from
wrapped in a mystery inside an
—those who constitute the 1917 down to about 1934, it was
enigma. What he said was well "apparatus" of the government— the custom in our country, in both
and truly
spoken, and his aphor- whose privileges and even lives official and unofficial circles, to
ism is almost as true today as it depend upon its survival.
It is distinguish between the Russian
was 10 years
ago, but this admis- a^s0 clear that in a country so regime and the Russian people,
sion that we are baffled is nothing thoroughly permeated by the State After the recognition of Russia
for us to boast about. Even now P°Rce as Russia is, the mass of this distinction seemed to become
extreme

to

nervous
about trials of
history, and drew at the
with him.
Anyone, time the world-wide attention that
whether foreign or Russian, could it deserved.
go down
to the railroad station
on
the spur of the moment and 1917 Government a Constitutional
Monarchy
buy a ticket and go to any part
one

no

being

animal revolts against indoctrina- Pavlov and others. We in this
tion in the long run, just as toxins country have been the benefici¬

it is well to study and know your

we

owned

was

mistake

a

brings me to my Russian people had no experience
proposition: which is that in self-government.
There was

are the sources of solid
lived
their own lives, nurtured
information about Russia and the their own hopes and ideals, and
Russians and the Soviet regime, always considered their governabout
Rus- about her history and culture.
I ment as a thing apart from them fast.
Russia's Better Days
sians, and about their rulers. This will go so far as to say this, that and never up to any good. We
ignorance is easily explained his- many of the big, general questions need have no fear: the profound
The intellectual and artistic life
torically. Until 1917 our country about Russia discussed every day inner contradictions of the so- of Russia in those
days was a
had only occasional contacts with
among us Americans and discussed called communist regime in Rus- stirring thing to see. I do not need
Eastern Europe. Our ancestors for often with considerable heat, are sia—the chasm
that separates its to remind you of the respect in
the most part came from Western not legitimate areas of dispute at humane
professions from its prac- which the whole world held Rus¬
Europe and our ideas and ways all, for the answers are an agreed tices—these things are clearer be¬ sian men of
letters, the Russian
come down to us from the Teumatter among informed people.
cause
nearer
to
the
perceptive theater and ballet, the Russian
tonic
and
Latin
peoples, from
*
*
*
Russian people than to us.
You composers and opera. In recent
Rome, and through Rome' from > §o much for
my first proposi- sometimes hear it said that any years the Soviet regime has made
Greece
and
Judaea.
There was
^on
j\jow for proposition two. It generation brought up from in- absurd chauvinistic claims for the
never any place in our education
0Ught to be an invariable rule fancy under the spell of a saturat- priority of^Russian scientists in
we

R.

Russia

is

This

worst

We

Thursday, February 22, 1951

jury, and con¬
of Russia
in the decades before
sidering the novelty of this insti¬
in Russia, and will suggest the the Revolution of 1917 with the
tution, it too worked well. Juries
possibilities favorable to our cause barbarities of the present des¬ of ordinary peasants in trials of
that must be latent in the Russian potism and its warfare
against notable significance showed time
people.
In any police state the human freedom in all its aspects. and again their independence of
Let me remind you of some of the
techniques by which a people ex¬
objectionable pressures. Some of
press their true feelings are apt traits of Russia between, say, 1870
you
may
have read about the
to escape us Americans, because and 1914.
Beilis case, when in 1913 a jury
we
do
not readily imagine
the
Fifty years ago any foreigner of Russian peasants withstood the
conditions under which they live. could normally enter Russia by
intrigues of bigots and rightly
There is needed a special training merely
presenting
a
passport. gave the Jewish defendant a clean
of the
perceptions to catch the Once he was there, he was on the acquittal of the infamous charge
signals.
Some years ago Soviet same footing as any Russian. That against him. For those who love
Russia awarded' the Stalin prize is to say, he could talk to anyone,
justice it was one of the great

rj,sar

day among us, thanks to the work

going forward at

humility

by

by

its face it was

D,1coi,

T

Learn About Russia

^

should

fact

same canof Britain

or

us

Polish

of France.
Our doings, our authorities had not noticed the
gyrations, must often seem strange double meaning that ran through
and unpredictable to the Kremlin, the whole length of the plot. On

and

proposition

of

said

lacies

or

them

this: We Amer-

be

the

Zionist, by a Swiss wom¬
former Spanish com¬
munist general, by others.
Their
burning recitals leave no doubt
about the extent of human misery

Chairman, Committee for the Promotion of Advanced
Slavic Cultural

descriptions of conditions in Rus¬
sia, written by non-Russians—by
an,

Co. Incorporated

&

third

a

By It. GORDON WASSON*

Vice-President, J.

native.

ing in recent years with first-hand

Popular Beliefs About Russia

lot," and cannot
imagine a better alter¬

therefore

...

I

would

question

raise

whether

sian troops that fought for Hitler
in Russia, certainly not because

we
are.
hoped to overthrow the Soviet re- and as though they can surely could become the mightiest engine gesting that the Russian people
please, that yomgkne^Therfc is.<-no-»denying.,.the,.P?upt on our sympathetic under- for the dissemination of ignorance, today as a whole have a clear
before
are
an
observer watching both existence of slave labor camps in standing of their dire tragedy,
and the Soviet rulers have under¬ knowledge" of- conditions
the Revolution. I am certainly not
countries from afar, and
taken to fulfill his premonition.
equally Russia, in which under the harsh*
* ■
♦
suggesting that it is possible to
detached from both. For such an .est conditions millions of Russians.
Serfdom was not abolished in
By now some of you may be

the

enigma,
Imagine, if

or

whether

you

set

*77

before

^

a a^

the

a

i*

jl

»

Sturdi'y

w

Forum
ticing Law institute, Feb. 17, 1951, at
the Hotel Commodore, New York
City,




back

the

hands

of

the

clock

are condemned to live and to die;'; objecting that I have overlooked Russia by the Soviet Revolution. and return to the dead
past; such
Neith«\ they nor their families-arrimportant fact, viz., that in the It was abolished in 1861, two years nostalgic phantasies have no place
nor their friends nor others who case of the Russian people, "they before we freed our slaves. By
fear such a fate are likely to be never knew anything better than
Continued on page 16
1914, 75% of the arable land of

Volume

173

Number 4983... The

Commercial

and

Financial

Chronicle

(821)
*r

Every

policy of The Home Insurance Company is

deeply

a

I

personal document.
Each provides
ished

shield of protection for

a

possessions—perhaps

And each bears the mark of

nearly

of the Home
and
fire

"family"

neighbors in
other

or

efficient, friendly

an

adversity

effective

these members
to

their clients

And when and if

way.

you'll find that this is

occurs,

ship of deeds—not words. Then
the promise of
your

business.

or

policyholder. In

coast to coast,

bringing protection

are

person's cher¬

car,

behalf of the

community from

every

or

Home Insurance representa¬

some

tive's interest and efforts in

some

home,

your

Home

your

policy—sees

that

to it

friend¬

a

carries out

man

fast and

you get

help.

This sincere, human

approach

to your insurance needs has

given The Home the neighborly characteristics for which it is
known.
your

It has made of it

community but is

a

which

company

of it—a

part

a

not

only

serves

1
&

of people

company

rather than statistics.

The Home, in its truest sense, is the
town

and

serves

you—your

who lives in

your

Home representative and his

com¬

man

panions in communities throughout the country. The

panying figures

are

neighbors in the

a

report

of their work for

accom¬

and

you

your

1950.

year

Sincerely,
i'b *.'

£f/ieet

>al<Mtce
ADMITTED

President
♦December 31,

ASSETS

1950

Cash in

Office, Banks and Trust Companies
f-United States Government Bonds

$ 38,777,419.93

108,301,862.62

....

Other Bonds and Stocks

Indemnity Company
Estate

.

6,878,161.00

5,293,635.24

Agents' Balances

♦

.

.

.

.

.

Uncollected

or

.

.

.

.

Total Admitted Assets.

.

.

.
.

.

•

.

V.

Reserve

for

.

.

$153,821,812.00
40,775,253.00
8,750,000.00

.

.

Taxes

Liabilities under Contracts with
War

Reinsurance
Other

.

.

5,417,599.74

$ 20,000,000.00

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

123,241,156.54

Surplus

Regards Policyholders

.

above

Association
have

been

December

valued

1950

in

to

are

deposited

accordance

with

Commissioners.

the

market

Assets

Policyholders would

85,799,756.96 Amortized Value and Cash 880,000.00

at

sheet

Insurance

adjusted
31,

Total Admitted

Title
Trust

Bank

of Columbus, Ga.
Boykin

&

Co.

C.

Wright

Lawyer
g:

Earl G.

Smith

B.

Leroy

Harrison

A.

Lincoln

i

President,

Lawyer

Adams

Champion

McDowell

Davis

of
Line

Dowling

George Gund

S.

Johnson

Henry

President,

President,

Trust Co. of
Wilmington, N. C.

t

John
Roger W. Babson

Co.

Chairman
Harold

H.

Helm

Bank

Robert B. Meyer

The

Cord

Franklin
&•:

Si

Inc.
Lou R.

&

Trust Co.

♦Deceased January

M.

President,

President,
Chemical

Elm

United States Lines Co.

of Board,

Babson's Reports,

Von

Manufacturers Trust
Company

Bank &
>

C.

President,

Peoples Savings

President,
Trust

J. Ross

Senior Partner,

Ivy Lee and T. J. Ross
Warren

W.

Cleveland

Company

Thomas

Railroad Co.

Railroad Co.
Robert

Insurance

President,
Atlantic Coast Line

Coast

Crandall

President,

Meyer Company

George A. Fuller Co.

18, 1951

basis

of

quotations

would

be

the

as

the

THE HOME

»

required by law. All securities
requirements

Assets

free

for all

i

and

rate

bonds

of

Liabilities

of

in

exchange.

and

stocks

8357,620,695.62 and the Surplus
be $142,704,282.54.

☆

i
Sj

National

the

i

Canada

|

Based

owned,
as

I

on

the

Regards

i

Home Office: 59 Maiden Lane, New York 8, N. Y.
FIRE

The Home




Madeira, Jr.

Committee,

Atlantic

..

1

K. Park

President,

$358,157,569.62

as

balance

of

Harbin

$143,241,156.54

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

♦NOTES: Bonds carried

been

$214,916,413.08

.

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

Total

have

.

E scott

Metropolitan Life

1,334,793.53
3,598,708.50

Liabilities

Capital
Surplus

the

1,218,246.31

.

..........

Total Liabilities Except Capital

in

.

Reserves

Dividends Declared

Land

&

City Investing Co.

Shipping Administration

I

Empire Trust Company

President

C.

President

$358,157,569.62

Henry C. Brunie

President,

Counsel

President,

Chairman

.

Louchin

First National Bank

Percy

Company

Executive
.

Vice

Guarantee

Frederick

Reserve for Unearned Premiums
Reserve for Losses and Loss Expenses

Ivan

Dime

McAneny

Harold

LIABILITIES

General

DeBost

Trustee,

3,320,264.23

.

A.

Vice President &

L.

George

Trust

.

.

Charles

Savings Bank

19,766,198.65

•

Clarke

Chairman,

Title

Premiums, Less Than 90 Days Due
Other Admitted Assets

♦William

Union

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

.

L.

Banker

175,820,027.95

Investment in The Home
Real

Directors
Lewis

AUTOMOBILE

•

Indemnity Company,

an

•

1

MARINE

affiliate, writes

Casualty Insurance/ Fidelity and Surety Bonds

'

*

.1
1
I

IV.eV'J

i.'i

{

13

14

The Commercial and Financial Chronicle

(822)

Continued

from

experienced market elements.
The government, through the
Federal Reserve Bank and/or the

"Don't Miss the

Salesma

Securities

Commission
"short"
the current

Exchange

Securities

Thursday, February 22, 1951

intelligent,"-less

less

weaker,

of

4

page

...

should reduce margins on

(which

includes

now

"the

have

investors"

stock

hundreds of mil¬

people owning

man¬

lions

of many institutions which
not hitherto been common

agers

in history, excepting

prices

market

sales

highest

the

at

shares

of

from

40%

to

By JOHN DUTTON

75%, in order to compensate for
raising the margin requirements
on
short-selling recently at the
same
time
that
margins were

1929

Advertising in the Retail Securities Business

early 1930.
These are the
commentator recently defines it) people whose purchases have been
(ARTICLE No. 3)
became greedier the higher the .responsible for market averages, raised on securities purchases.
It
market advanced, and more care¬ reaching the current peak.
In article 2 of this series, we portant—you have to make people
But is illogical, in attempting to conless in selection.
Thus, we now by the same token a change in trol a boom, to make it more suggested
that
qualified leads stop and read—financial advertishave a prostituted market, what their psychological attitude could difficult to sell Stocks than to buy could
be
secured
by
offering ing does not have to be undigniwith many of the 20 or 30 leading reverse the trend in a
marked stocks; but, that is just what the booklets, "reprints of timely ar- fied, but it shouldn't put you to
stocks each week definitely of in¬
Federal Reserve Bank did when tides
on
investment problems, sleep either!
way.
ferior quality.
it increased margin's for
the and information free to investors
There are some security dealers
one

as

and

The Government or Political

The

psychology of the market¬
now is

here,"

is

"Inflation

slogans

hurried

and

of

creates

and

selling

in

"just can't get themselves to sell"in

strong, enthusiastic market;
includes some of the

a

this

even

and

professionals

floor

traders.

is

here

in

inflation

Yes,

American

market

stock

the
hr

and

the board room,

but the rise since
May, 1947, or June, 1949, and
even
July, 1950, more than dis¬
inflation

or

for

time to

some

has

tnere

'For

Actually,

come.

little, if any, net

been

the

bull

market

proof, investors

are

advised to ascertain the difference
National

between

the

i.fay

1,

change

of

as

"

and: Jan. 1,^1951.
in amount and .in
percentage Is surprisingly small.
the change in the next six
months to year will continue to
be very small.
And, Wall Street
that inflation is

Should note

the

m

4

Bank

100%

a

paid-for
purchases.

so

selves

whether

been

as

s

cocks should

cf

financial

how
in

to

consult

issues

written
top of

of
1946
(May and June).
They should note also how few

and

what

after

were

the

each

should

such

not

be

difficult,

after

interesting research, for the

investor

to

decide what to

this period of

trading
difficult

in

do

extraordinarily high

volume

gyrations.

and

take

to

won't

which

topples

the

be

stopped

ripcnitp the

Despite the
business

firm

in

A

for

reason

this nation will have

refinancing
"E"

first

job

facturers

This

and,

in

other

and

'/war

investors

chest"-as

calls

accumulated

bull

only in panics

markets

in

this

for

use

weak mar¬

or very
;

There is

success¬

doubt in the

that

the

;

chological

angle

may

be

of

by stating that it is
auction
are

the

summed

ernment

a

fact of the

business Hhat when there

few buyers, prices tend to be

low; when the auction room is
crowded, bargains are rare.
The
New

York

Stock

Exchange

is

a

of thousands of interested persons

connected

tions

writ¬

government

are

by wire,

teletype,

telephones, etc., with millions of




orders,

loans.

on

record

low-profit gov¬
smaller margins

will

be

proposed
before

►•.to

budget;

the

resort

five

to

off

lopped

It is

ten

the

felt

government will

to

that
have

"politically distaste-

^.fi4l"^.9Uti-inflationaryv> measures,
the

and

intelligent

more

trust

managers,

speculators
from

the

with

a e

as

headlines

manv

Put^fhem

can.

as We

for

the

at the market at the first

leave

as
a

you

dajfor

two. " Then look them over and

^

from

securities"

to coast.

coast

The layout, position

and_type-

style is a^ysesth^etsa^eal

^Tr ObToletes^ee

^.^Writf t£

„obsolete

us

Watch y^r headlines

»

make

to number them in the them say,
Stop, Look and Lisorder of what they think might ten,"- keep the quality of your

ciates

Possibly direct mail high and once

be the most effective.

someone will come up with a have adopted a type-style, layout
idea than any you have and size for your advertising,

better

The headline is im- stick to it.

thought up.

Prompt Wire Service
f-

r

i

I,"

FOR BROKERS AND DEALERS
unwnmw nnv
To

LOS

ANGELES ;

•

Western

SPOKANE

*

Markets in

DENVER

•

t

-

SALT LAKE CITY

-

or

labor,

both." *

or

In view of the

foregoing, and of
speculative excesses in the

the

stock

and | commodity
of which border

some

tastic,
Miss

markets,

on

the fan¬

exhortation,
"Don't
Caboose," should be as

the

the

valuable

to

an

investor

the

as,

"Last Call for the Diner."
'A

V.*.v

'

V'

,•

•

vs.

*,-l

»

.

investors
take

or

their

the

sign of
well-

boomed stock market in the hands

J. A. HOGLE & CO.

Carlson to Staff

next

restriction, will li¬
quidate in the current strength or

and

jphtenstein

fear shortages of either

material

government

weakness,

Ri

operators,

large
will

recent,

f

advertisingofB.S.hicmenstein

plans.
Some even
decline in production

and many

Tighter controls
put

Some

a

raw

„

effect.

.

the

take

be,
~ A

defense

foresee

restric¬

to

as

..

can

what's going to happen in the

ican

move

be taken

this

world and the vagueness of Amer¬

prices and wages will be

on

cue

great
auction,
connected
with
ihousands of rooms, in which tens
ere

will

ures

billions

best

,

civilian business, and a larger
tax-bite. Among the uncertainties

probably
will be 100<% paid-for basis for
stock purchases.
Further meas¬

psy¬

current
up

next

ef-

how

of

illustration

As an illustration of now ei

fective

.

labor, costs, more

and will, stop the speculative
boom, and that it will be stopped
The

few

Slgnature

yQur

while.

a^er

attract thpeep, thaiSyou

substantially re¬
duced profit.
Among the cer¬
tainties are higher material and

1952.

no

mind

er's

a

never soia more man a iew

on

into

Perhaps the technical and
market

his

prospects,
•
"

j

:

an- eAxPe??e(^

-G

+

the

reelection

than

glance> they won>t

for

loQk

tQ

facturers foresee
.

done

be

,

of

output this year, American manu¬

a

Truman
Admin¬
istration is to have a change for

if

more

thousand copies have been in-

a

manu-

,

the

in

future;

must

job

fully

of the Street's most successful

kets.

to

rP<5iilt<3

178

1951

to

as

thn

of

the

when

mature

Xvev

savs.

bigger refinancing job next year.

one

reserve

months

not be as good as

may

recent

Rs

important

an

do

to

bonds

not-too-distant

soon.

cash

old

haye

begin to1 recognize
g

,

six

rpnortind

in

RnarH

stop¬

ping the speculative boom is that

reserves

professional

instalmsiai

an
an

People wil1
» adg gt

National'YndustriaiTConference lisif and ask Your office asso-

White House.

in the

government

book

phasis on the right titles. It has
been shown that by-the changing
of a
sales of some books

■

20-year

hnnk

astute

business

and ing power has been sudden. It is
Dealers little wonder, therefore, that the

1929

their

Dealers

life

lease of

the

a

hence

year

f

creased to as much as 50,000 cop99 Wall Street, New York
thp manuCity, which has been appearing
ies, yet, not a line of tne manu
j>
nosition on nage 3 in the
script
was
changed.
Put the in same position on page 6
"You" angle into it.
Try and "Chronicle" every week for many
rfnrk market's ebui- visualize what sort of a headline years.
The distinctive copy
stock markets ehnl
•
atfract thp noon^ that vou
its clever yet subdued humor has

lience

too

seems

n

publishers Place considerable em-

swollen inventories

'

can,

in

>

a manner

ex-

But if

wind

the

total

order

Election Day.

Republicans

Fair

and

stand,
liquidate at the market, and place

a

in

accounts1
accounts,

slower
slower

ment debt

under

1930, and gave, the New

speculative

Also, it should not be
to

straws

loans to carry
and
ana

Angle

can

suc¬

ceeding, substantial bear market.
It

etc.,

This. Administration

them¬

observe

to

h

advetaenrat
jiS i
fadt that

llne*
proven

..

the sharp increase in

are

its own
weight into the laps of the Ad¬

top

pessimistic

<

Economic

and

Financial

by the spring of 1952 the

it

until

(February and March), the
top of 1939 (September) and the

comments

that

boom

1937

were

further¬
interest in

selfish

a

-•

.

Financial

approaching $20,turn upward 000.000,000, and a rapidly mountenjoy somewhat of ing mortgage debt on not too
ing
muiigage- ucot
on
nut
lou
a
boomlet just before
Election, sound a loan basis. These are fiwarnings
of
the
first
1952, than to have a runaway nancial

stock

back

literature

■_/'

.

shrewd politically to allow, some¬
the time'
thing to happen which happened The reversal in corporation earnliquidate

not

or

advertising

.

.

.

many articles were
bullish vein at the

a

has

ministration before

reached

i

living,. is

Administration,

market,

if the Fed¬
shortly orders

Those investors who ask

s u c

Finally,1

once more and

until

basis for

of

stopping this boom, since it is bet¬
ter to have a good correction now

they tire of taking in each other's

especially

The

more,

Thus, investors and
speculators will have to toss them

washing,

where

.

stocks.

eral Reserve

cost

,

here

themselves

Iare

you

that lends; itself to ■ the
subject matter, it can be placed in
section this category. Use a good quality
assistance
is not of paper.
Keep the size small.
you have to do the Put a frame around your message

hire

is one thing.
.located
in a

•nfcqre excise faxes hidden between 3
for^a pamphlet is very im- permanjBnt} yet intangible, "goodm^tifacturing costs and retail portant.^ You can make or break
j^,, alu that can be built into
prices.
:
:
;
^
an
with the head- your,. advertising in this wayv

of the sh£rp

because

in !the

seeking the reason for the current
high costs of living.

family budget, however,
savings cannot. be accu¬

among

which,

increase

mulated further for the purchase

around

offerings, in turn, at the last sale.

and

to

that

perts>

investors should v re- available, or if
1929, which in turn had its re¬
member; .-that >Mr.
Truman: has* best job possible yourself, it is a throughxthe use of a single line
action in the panics of 1929, 1930,
asked Congress for higher taxes, different story.
Some of the best border—every picture looks bet^
1931 and 1932, and led to the col¬
retroactive to Jan. T, 1951.
The advertisements have been written tor in a frame..
Have your
lapse of confidence in bankers
December
tax
bill
made
taxes by men who
know their own printer help you select a typeand business and in the Repub¬
retroactive to July 1, 1950.
Con- business, and who write about it slze and style thaws, suitable for,
lican Party as a leader.
Thus,
gress will hear from the women- from the inside out.
After all, no your message. Make your double
government relishes neither boom
of the country and from retired one knows what you can do for returncard look meat and lmpresnor
panic.
As now constituted,
farmers, businessmen, professional people in the way of service any sive
it doesnt have to shout .to
the government has a responsi¬
people and salaried persons who better than you dor; So, if I were &e.t attention
the right headline
bility for the general welfare to
have, been pinched over the last going out to put my story before will keep it from going into
step down upon a boom.
The
six months by the terrific rises the people in my community,
I waste basket.
;
;
present
Administration .has
a
in commodity prices. Consequent- don't think I would let the fact After you have decided upon
double responsibility, since it also
ly, Congress may increase corpo- "bother me too much that I could- the size of your advertisements,
must .curtail the excesses which
ration income and excess profits n't hire experts
in advertising, type-style, layout, etc., don't
this boom
created because
this
taxes
further and personal and j'd make it short and put my change.
Do the same with your
Administration successfully' gen¬
capital gains taxes could be raised; story in plain language. Here are double return cards
and even
erated
the
incipience
of
the
even
the politically hot national a few ideas that may be helpful, your letters.
In this way you obrecovery in
1949. • What it^has sales tax
might be considered se9
tain the benefits of both associastarted it must finish,v for next
rjously for ,a time; and more and
cnoice of a neaaune, or a ^.Qn gnd repetition.} There is a
yeaf "it must .answer % the pub¬
lic

and that

cf

available

other

with

compete

_

1947,

'ine

Debt

to

ch^n^e

in
which
certain who do not believe that double
might be interested. After return postal cards should be
you
have decided to go ahead used
in advertising campaigns,
with-such a plan, and you have because they are usually assochosen your subject matter, the ^iated with highly promotional
way you present it will, to a advertising and the sale of such
large extent, determine the re-,things as powders, pills and the
suits obtained.
like.
It is true that unless a
of course, if you have the funds double return card is prepared in
subjects

on

groups

the

recent

any

that which lies ahead

mflatior^ since
started.

of

effects

the

counts

the bid? as the long holder

:

paralysis

a

1928

of

Great" Boom

the

eliminated, except the

be

right to sell below the last sale;
in other words, the right to "hit
is free
to
do'.
Give
flhe
"short"
a

to¬

thereby' failing to apply
necessary brakes.
This resulted

Many * people

ideas.

influence

its

lent

short-selling

against

regulations
should

money,

all

keep the public nervously glued
to
its investment or speculative
position

,

easing, instead of tightening,

ward

the

movements

.

and

rates

etc.,

the cheering and the jeering,
noise

The

-

Furthermore,- the

government through the Securities
and
Exchange Commission
should, relax the
excessive restrictions
on
short-selling.
All

government
or
political
•angle is more important than it
ters, news items, etc., and to share
-used to be, before regulation of
them generously with others; and
trading on the Exchanges came
at the same time mildly unfavor¬
into being, and since 1927 when
able news is
overlooked;
This
the
government
tinkered
with
tendency, together 1 with the en¬
Federal Reserve policy and money
thusiasm of the board room, the
.

seller.

"short"

Angle

the tendency to read
all bullish comments, market let¬

place

Strauss
way,

New

that

Hugh

with

Chas.

ESTABLISHED
Members

Bros.

Inc., 42 Broad¬
York City, announce
H. Carlson, formerly
E. Quincey & Co., is

and

50
Tel.:

other

BROADWAY

.WHitehall

3-6700

New

York

1915

Stock Exchange

Principal

Exchanges

NEW

YORK

5,

N.

Teletype

Y.
NY

1-1856
-—

•

now

assocaited

with

the

firm.

—

Volume

173

Number 4983

Commercial and FinancialThe
Chronicle

,..

(823)

Walter

Chrysler's original tool chest—on display in the Chrysler Automobile Salon, New York

The tools that money couldn't buy
Walter Chrysler made them himself. He was 17,
working in a railroad roundhouse. His mechanic's
fingers itched for a kit of tools of his own. So
young Walter got steel and made his own.
As he

shaped them, he shaped a dream as well.
special American kind of dream—freeranging imagination anchored to solid things
like common sense,
working a little harder, mak¬
ing things a little better. And asking no odds of
It

was

a

anyone.
.

ing when he

success

in railroad¬

led him to study the
Why couldn't a man
known—nimbler, safer,

was young. It
automobiles of the day.

build better

high-compression engines, 4-wheel hy¬

draulic brakes, all-steel bodies,

new

ways

cars

than any

comfortable, handsomer?

So, in 1924, Walter Chrysler introduced the
first Chrysler car. What ne did
changed the
whole pattern of American
motoring. He changed

of dis¬

tributing weight for better riding .... . many
originations the entire automobile industry
eventually followed.
• *,
;
As
cars,

Chrysler Corporation continues

to

improve

ting that the
tribute

to

he founded should pay
Chrysler and his creative genius.

company

Walter

days?

house. It

long after he had asked me to
work with him. He
brought the tools back from
Kansas. A few of them needed
fixing and he
asked me to fix them; It was a
compliment I
have never
forgotten.
v
:
was

a

merely material things; he inspired
to
carry on his splendid ideals.

zeal

Chrysler Corporation i9 still young enough to
his inspiration. • He wished this
company
always to be a producer of fine automobiles of
great

value.

And those of

us

who

were

with him believe that the

De Soto

and

new

privileged to work
Plymouth, Dodge,

Chrysler automobiles live

up

to

his tradition.

It is

tradition

a

uniquely American—to live
finding better ways
people want.

and work with the idea of
to

make what

,

The
tools

qualities Mr. Chrysler put into his own
still mark the
great organization he founded.

Fine Automobiles of Great Value




not

with

feel

I remember when he found them in his mother's

C H RYS LER
Airtemp Cooling, Heating, Refrigeration

He built
men

and originate important advances, it is fit--

And the tools of his earlier mechanic's

Jt led Walter Chrysler to

more

it with

Chrysler Marine & Industrial Engines

Dodge Job-Rated Trucks

Chairman

of the Board

CORPORATI ON
PLYMOUTH

Oilrte Powdered Metal Products

•

DODGE

•

DE SOTO

Mopar Parts & Accessories

•

CHRYSLER
Cycleweld

15

16

The Commercial and Financial Chronicle

(824)

Continued

News About Banks

from

that is a familiar occu¬
pational disease of bureaucracies,
and
to which a bureaucracy is
especially
susceptible when it
no responsibility to the peo¬

A Second Look at Some

owes

ple that it purports to serve.

CONSOLIDATIONS
NEW BRANCHES

NEW OFFICERS,

CAPITALIZATIONS

West

President and

Director of the New York Central

Maintenance

and

Manufacturers Trust.
ije

System has
elected

*

*

Public

The

of

Trustee

a

Department of
-

,

nounced

factions

of living in appraising

Ind ustr ial

Feb., 15 the following

on

promotions at the 5th Avenue and

Savings

Bank

42nd

of

York

ders,

New

it

was

nounced

Feb.

Cashier

Assistant

ad¬

Vice-Presi¬

Assistant

to

vanced

by

Mad¬

T.

Street Office; Henry
San¬
Vice-President, elevated to
head of that Office: Joseph

Zurhellen,

on

14

John

the

an¬

dent of the

dent; James Clifford, Chief Clerk
and J. Bradford, Wilson, Credit
Supervisor advanced to Assistant

bank. In addi-

Cashiers.

Presi-

den,

tion

to

Presidency
New

and

York

jorie

director

of

executive officer and

of railroad

number

a

oil

colors

water

J. Louis
by Marwill
begin

by

Daingerfield
1st

March

the

for

at the Rockefeller Center office of

River

the

&

Rockefeller Plaza bank

Co., Inc.

appointed

of

Vice-President

a

Chemical Bank & Trust Company
of New York

according to

nouncement by

an an¬

N. Baxter Jackson,
Durham, a native

Mr.

Chairman.

Savings

The

of

Bank

at its 50th Street and
*

been

has

Durham

A.

East

New York,

*

*

*

Kenneth

month

entire

transportation companies. He
is also a director of J. P. Morgan

and

paintings

and sculpture

Lundean,

also
an

of

Metzman

Uustav

Central, Mr.
as

*

exhibition

An

of

Metzman
serves

#

#

the

*

*

broad association
textile industry. Upon

has

the

with

a

with the Textile

associated

came

Banking

be¬

he

college,

graduation from

Company of New York

representative
headquarters in Charlotte,

City

as

with

N.

and Lee Uni¬

of Washington

southern

C.

Subsequently he became a
Vice-President of the Davenport

Hosiery Mills in Chattanooga and
President

later

Rollins

the

of

of
Des
Moines,
he has b'een Presi¬
Snowdon, Inc. of Osceola,
Iowa, manufacturers of textiles.
At the Chemical Bank, he will be
Hosiery

Mills

Iowa. Recently
dent of

associated

W.

Howard

with

Mc-

G. Dewitt,
Daniel A.

Call, Jr. and William
Vice-Presidents,
and

Finlayson, Assistant Vice-Presi¬
dent, in the handling of the gen¬
eral

business of

the

southeastern states,

substantial

in the

bank

including the
in

business

textile

those states.
*

Irving

*

*

of New
York has announced the election
Company

Trust

of Harold L. Nelson
ant

as

Assist¬

an

Secretary of the Company. Mr.
heads up the Company's

Nelson

Brokers
ment

at

Loans-Securities

Wall

One

Depart¬
Head¬

Street

quarters.
*

*

of

Board

Bowery

Trustees

Savings

of

Bank

York, announced

on

of

Feb.

The

New

13 that

W.

John

Larsen, Assistant Vicewas appointed Assistant
Vice-President and Deputy Con¬
troller, and that H. Wendell Phil¬

President,

lips

appointed Deputy

was

Banking

Department

to

open

a

banking office in Bedford, N. Y.

the

Deputy Auditor.
*

Roeder

pointed

*

New

Feb.

by

President.
and

it

York
15

have

Assistant

Manufacturers

been

ap¬

Secretaries

Trust

of

Company of

announced

was

in

the

C. Von Elm,
Cockey, Meyer
were

Assistant

Personal

Loan

Department prior to their present

promotions. Mr. Roeder had been
Purchasing Agent
of
Brooklyn
Trust Company for about 16 years
prior to the merger of that
pany

into

Manufacturers

last October.

company.

ing of the

office, which will

new

He

will

be associated with the

com¬

Trust

continue to

Purchasing

l




their well-

being, then the Russians may be
said
to
have
once
known, not
decades ago, one of those
epochs in history when
the human spirit takes wings and

many

stirring

is

people

gifted

a

lifted

by

up

and

a

year ago, on a

professional

national hook-up,
commentator an¬

lizations of

Asia," and he said they

China,

were

India,

Arabia,

and

What purpose is served by

consisting

tion

of $5

value

par

shares

of

of
105,000
stock of the

each

50,000

and

of

stock

common

of

a

is

immense

an

land

mass

the

who

sians,

Slavs

are

East-

arid

Their ancestors were
living on the banks of the Vistula,
in what
is
now
Poland, when
Europeans.

value of $10 each, to $500,000

Tacitus was writing his history in
consisting of 50,000 shares of com¬ 98 A.D., and already they were a
mon stock of the par value of $10.
sedentary
peasant
people.
The
each. A previous item in the mat¬ folklore and
proverbs of the Rus¬

par

ter appeared

in

issue of Nov.

our

sians

of

part

are

the

common

23, page 2000.

heritage of those peoples, includ¬
sjs
*
*
ing ourselves, who are grouped
The New York State Banking together under the designation of
Department reports that approval Indo-European. For the Chinese
was
given to the Mount Vernon a Russian is a European white
Trust
Company, of Mt. Vernon, man speaking a European lan¬
N.

Y.

26

Jan.

on

to

certificate

a

of reduction of capital

$1,050,000,
shares

of

stock from

consisting

of 300,000
preferred stock of the

value of $2.50 each and 150,000
stock of the par

common

value of $2 each, to $700,000, con¬

sisting

of

ferred

$2.50

160,000

stock

each

stock

common

of $10

the

of

and

of

pre¬

value of
shares of
par
value

par

30,000
the

each.
*

The

of

shares

#

*

placing of the Flushing Na¬

tional

Bank,

Flushing,

of

N.

Y.

voluntary liquidation Jan. 15,
following its absorption by the
Bankers

Trust

Company

York in December

was

of

New

noted in the

Bulletin, Jan. 22 of the
Office of the Comptroller of the
Currency. The quarters of the
weekly

Flushing bank

are

now

operated

who has aggressively over¬
Let us
not forget this.

guage,
run

a

large part of Asia.

The Russian language
to

English

branch of the Bankers Trust.

a

Details of the plans for the taking
over

of

the

bank,

capital of 500,000,

which
were

had

Dec. 7

issue,
*

page
*

and Latin.

intellectual

country

adventure,
and
have
been

short, there is
remark

language
Nor

is

served

to

increase

the

capital of

the Oneida National Bank & Trust
Co.

of

Utica, N. Y., effective Jan.

23, from $600,000 to $800,000.

the

the

that

Russian

the

Russians

that

peculiar

gift

for

Their difficulties

great

In

truth in the oft

difficult.

true

a

no

the

impossibly

is

it

possess
guages.

$200,000 has

dark

thinking, and in this

"Asia¬

I have stressed this false

tic"

Russians

designation for the
the

because

of

use

that

term

is

unworthy efforts
many of us make to exorcise
Russian
incubus
by
what

typical

of

the

We think

killers.

can

we

conjure

the spectre by uttering the
magic fword "Asiatic"
or
"Ori¬
away

ental."

?■"

In this talk I

have drawn your

number of popular
concerning
Russia.
I

attention to
fallacies

a

have

future.

for the long

Our Help to

I

the Russian Regime

going to recapitulate

now

am

propositions in reverse order,
as I do so, I draw your atten¬
tion to a curious fact.
In every
instance it is advantageous for the
Soviet regime that we should per¬
sist in error.
Thus, firstly, it is
in their interest that we should
mistakenly consider the Russian
my

and

people distrustful of foreigners
and viciously disposed toward us,
for this widens the gulf between
us

and

our

it

ondly,
to

potential friends. Sec¬
only be gratifying

can

that we

Soviet authorities

the

persist in thinking the Rus¬
language too difficult to mas¬

should
sian

indolence we
linguistic wall to

ter, because by our
thus preserve a

from the Russian peo¬
«
*
*
ple. It cannot help but please the
As an offshoot of what I have Kremlin when we cast the Russian
just been discussing, I will now people into outer darkness by er¬
state my fifth and last proposi¬ roneously
lumping
them
with
tion: viz., that it is a mistake to races as culturally remote from
say the Russian people have al¬ us as
the Mongols and Hindus.
ways distrusted and disliked for¬ Third, the Soviet rulers will sure¬
eigners.
Those who
hold that ly be gratified if we persist in
xenophobia is a deep-seated trait extenuating their ferocious be¬
of the Russians are misinterpret¬ havior toward their own people
separate

ing, in my judgment, the record.
case with two

They support their
kinds

evidence.

of

they

First,

by

our

us

mistaken assumption that
the Soviet rulers

Fourth,

better.

point to the utterances of certain

can

careless thinking

ably the Slavophiles, among whom
it

fashionable

was

the

West

to

down

run

Slavic

the

exalt

and

heritage.' But these highly articu¬
late intellectuals were expressing
a

philosophic

sophisticated

posi¬

the think¬

tion far removed from

anything

the Russians never knew

Russians in the 19th century, not¬

a

our

would

lan¬

are

quite

ordi¬
narily meet only those who have
as

ours,

learned
A stock dividend of

is cousin
Scratch

richer by your knowledge of
Russian world thus acquired.

a

2195.

in Russia, evidence
of west¬
there.

names

blood that was absorbed

when by

only be the gainers

and careless ex¬

soli¬
the
it rules—a solidarity that

pression we imply an inner

darity between the regime and

people

neither the regime nor

the Russian

people feel and that can only lead
us into grievous mistakes of pol¬
icy as,we gradually succeed in
communicating with the Russians.

lastly, the Soviet rulers
have no reason to de¬

Fifth and

certainly

plore what must seem to them our
invincible
ignorance
concerning

In all these
will observe that we
of the West by our own negligence
ure hours to unproductive avoca¬
couth behavior toward foreigners
are
weaving an extra lining to
tions such as cross-word puzzles of
Russian officials. This strange reeniorce the Iron Curtain that
—if, I say, you had turned your
behavior is not a Soviet invention. the
Soviet rulers have lowered
energies to the Russian language
Students digging in the archives around their dominions.
instead, you would have opened
When
you
hear people talk
to yourselves a world of dazzling can show you that Russian officials

given in

s't

for
centuries

ing of the masses. It is noteworthy
word, and more often
that these eminent Russians dis¬
than not you find a familiar root.
played no prejudice against for¬
For us Americans to learn any
eigners in their personal relations;
language
other
than
our
own
quite the contrary. Secondly, those
seems
a
big undertaking. But it
who call the Russians xenophobes
is a question of degree. If all of
you who have devoted your leis¬ point to the bizarre, not to say un¬

as
our

many

struggle

Russian

heard
as

are

of this continuous stream

ern

naturally left its impress on their

Russians

its; where there have flourished many
Bulletin announces that, noble civilizations aS widely dif¬
approval was given to the New ferent as Moslem, Buddhist, and
Rochelle
Trust
Co.
of
New Chinese/not to speak of the cradle
Rochelle, N. Y., to a certificate of of Christianity. "Asiatic" is doubly
reduction
of capital stock from wrong when applied to the Rus¬
preferred

those

in

survival

The

invaders.

"Asiatics" that
"Asi¬ the
epithet, not a descrip¬ might be called, in medical par¬
people or. a civilization. lance^ verbal "analgesics," or pain¬

the

Banking Department in

of

Asiatic

desperate

an

Weekly

shares

oncoming

when they are not Asiatics?

Under date of Jan. 30 the New,. Asia

$1,025,000

There

where.

Russians'

merated what he called "the civi¬

atic" is

York

Western

them every¬
foreign

welcome that awaited

themselves in
family
philosophical and politi¬

They have soaked

political institutions and habits of
way the Rus¬
sian people were influenced
by
member
that
the
Russians
are
Asia, but not so much by amalga¬
Asiatics. Some few weeks ago in mation as by the profound effects
a letter published in the New York
brought about by their struggles
"Times" a college professor enu¬ to reject the invaders.

calling

if

admire universal education.

to

us

c

into suitable

%

their

though

'

Building. Alterations are planned
to convert the present store area
th

world, and especially toward for¬
with the West, even
eigners. At least from the time of
Christian tradition
Peter the Great, Russia absorbed
descended
from
Greece
rather
a steady flow
of foreigners, wel¬
than Rome.
Over the past 250
coming them, learning from them,
years the
Russians have looked
and generously bestowing honor
more
and more to the West for
and advancement on them.
The
their cultural influences. Obvious¬
diaries of foreigners who lived in
ly their technology comes entirely
Russia reflect the warmth of the
from the West. They learned from
Europe

ern

I

hope.

Russian

the

people, as distinct from the offi¬
cials, are perhaps the most warm¬
hearted
and
hospitable in the

presented
my
successive
propositions as clearly and per¬
our policies today.
sense, to
assert that Stalin is a suasively as I could, because it is
*
*
*
reincarnation of Genghis Khan or my profound belief that they are
It
is true
that the true'and that they offer the only
And now I come to my fourth Tamerlane.
proposition: Let us all be satis¬ Russians many centuries ago and premises on which all approaches
to the Russian problem must be
fied to call the Russians Russians. over the course of centuries were
Here is what I mean.
Less than in the front line of battle against based if we are to build on rock*

Russia.

banking quarters.

For a thousand years this
East¬

tianity.

tie has united®the Slavs and

wish also to cal thinking. The Russian revo¬
Marxism
point out that the Russian people lutionaries took their
from
the
West, not from
the
gave earnest to the world at that
A
study
of
Oriental
time
of their
potentialities for Orient.
good, and it is in our interest as thought, no matter of what school,
well as theirs that we build on will not help you to understand
erroneous,
in any
those potentialities as we shape Russia. 'It is
faith

Bedford-Court

in the

situated

be

on

Henry

Messrs.

Ostermeyer all

Managers

trust

in
*

Charles E. Cockey, Henry
G.
Meyer, Robert W. Ostermeyer and
Albert

of the

Board

No date has been set for the open¬

Con¬

troller. Mr. Phillips was formerly

to the standard

as

pitched to indicate the discovery
Plains, N. Y. has received of an earth-shaking truth, that the
permission from the Federal Re¬ Russian question would be clear
serve
Bank and the New York to us all, if only we would re¬

shares of

The

the

nounced to his listeners, in a voice

White

par

*

are

County Trust Company of

Chattanooga, Tenn.; a. graduate, according to an announcement by
of McCallie School, Chattanooga Andrew Wilson, Jr., Chairman of
versity,

well

as

a

quarters.

of

and

highly

most

in the

values, if we give weight to
the
aspirations of the Russian
people and their spiritual satis¬

an¬

Trust Company of New York

the Emigrant

prize

we

real

and

Bank

National

that

if the values

that

Gustav Metzman,

What I do suggest is

in real life.

that

is

truth

The

Popular Beliefs About Russia

Bankers

and

ETC.

REVISED

been

1951

Thursday, February 22,

arrogance

12

page

...

English,

into the

erroneous

are

all good

but

as we

we
easily slip
notion that they

linguists.

tThe Russians have shared with
the

great

heritage

suspicious
through

of

and

the

right

rude,

centures

at

and

back

least

the time of Queen Elizabeth.
what

we

these

Russian

must

remember
officials

is

to

But
that

behave

in

the Russian language

them

hear

have

toward their Russian

their

are

conduct

not

compatriots.

xenophobes.

themselves

,

a

code

whose

tinuity weathered

according

of

the

Chris¬ merely

Soviet
an

tough

even

to

con¬

the shock

revolution.

rulers

then

They stincts,

the habits of the Russian bureauc¬

It

extreme example of

is

take

an

mental

"Asiatics"
anything

known

that the behavior of
expresses

I

and

that the

such

their

in¬

suggest that you

exception,

note

embrace

and

never

and

is, or

that the Russians

say

really nothing but

and

al¬

hated foreigners, or how dif¬

ficult

are

the Russians have

how

about
ways

better,

They

Russian.

things

exactly the same unpleasant way

racy,

\ Shared Christianity With Us
us

have been hard to deal with,

all

matters you

make

a

people who

mistaken

notions,

give voice to them are, all un¬

wittingly, waging Stalin's psycho¬

the logical warfare for him.

Volume

173

Number 4988

...

The Commercial and Financial

Chronicle

(825)

12,428,000 MORE HORSEPOWER
(about

Produced

much power

as

9 Boulder

as

Dams)

by
That's

a lot

of

power! Where does it

How is it used? How is it

come

from?

paid for?

12,428,000 horsepower is the total in all the Interna¬
tional trucks, Farmall tractors, International crawler
tractors and

in

engines, and other

produced by this

Power in tractors permits

farms to

1950

100

person

person on

a

little

more

today's

seven persons,

than enough for just

' T;

years ago.

Power in bulldozers

•

each

produce food and fibre for almost

compared with only
one

equipment

power

in 1950.

company

produces

new

highways, airports,

housing and industrial developments, "snakes" out of

for

the Northwest forests

vide lumber for

single logs big enough to

complete

a

Power in motor trucks

the

'r^r*

-

new

pro¬

house.

brings farm produce to the city,

factory products to the farm, and transports goods
back and forth
These

across

only

are

the whole nation.

of the jobs done by the 12,428,000

some

horsepower turned out by International Harvester

Progress

in 1950.

New IH

products—trucks, tractors, and engines—go

right to work in the nation's service. They produce

Sis

more

they

and still

pay

With

more

Security

only

seven per

maintained

as

free

long

of

harness power

The best hope for a




the United States

production. Our
increase

will be

purposes,

can

fully

making it

an

living.

peaceful world is
and

more

stronger every day!

a

strong

production make it

I

Pay for Themselves in Use

A

INTERNATIONAL

HARVESTER

Builders of farm equipment for easier, more
trucks for better transport

and

security

our production.

develop and increase such tre¬

for constructive

instrument for better

IH Products

area,

for production. Only they

America. More power

America

cent of the world's population

as we

men can

mendous power

use.

of its land

has half the world's

6nly

things the nation needs. And

for themselves in

and five per cent
now

of the

earthmoving

.

.

.

.

.

.

industrial

profitable farming...

power

for road-building

refrigeration for better preservation of food.

17

.18

The Commercial and Financial Chronicle

(826)

Let Us Not Lose the Wai

Publishing

Business economist

flict

Company

designed to meet differing all-out

was

Predicts direct controls put

needs.

In

eign

the

very

aid

most

and
what

of

will

increased production.

either

nature of

it

defense
is

abroad.

billions

the

of

Communist

That

system. As a
part of that

far

as

installation

for

a

imagine
that
niost of those

Keezer

M.

.

such development.

no

other

The

might

lose

scene and, so
tell, is likely to do so
long time to come.
Has
War III, with Russia, ac¬
can

tually started? Or are we in for
a long series of small wars
(10%
wars, someone has called them)
around the edges of the Russian

with continuous' alarms
general war?

Empire,
of

by which we'
struggle agqinst

system remodelled in¬
ternally along
collectivist
and
ultimately Communist lines. That
might, I assume, be accomplished,
our

or at any rate, facilitated by
column
activity, at which

Communists

World

III

War

Started

Not

My assumption is that World
War III has, not started, at least
continuous

Or

fifth, is based, in part, on my observa¬
the tion that at present we have a

seem

we

,

combinations

Various

t

mili¬

of

in

Pittsburgh produces

tary forces, subversion and stum-

than

b|ihg are, of 'course, possible, and

Russian Empire.

indeed

the

probable

in; the

struggle

with Russian communism.

that of losing much of this strug¬

gle

is

on

the home front by

a proc¬

ess—a

rather inadvertent

process

in

produced

Russians

occurs

The possibility on which I in¬
tend to concentrate, however, is

to

must be

are,

either.
the

Also, it

.

directly

their drive for
without

in

any

themselves.

adventures

military
I

should

,

avoid

losing

struggle

our

communism

usually humiliating

in

with

this

un¬

While

not

seeable

Little

Too

Attention

to

-

Domestic Collectivism
If

this

limited

justification
provide
are

that

so

I

sure

I

can

it. ; Military operations
dangerous and dramatic

they

command

almost

not

expect

World

of

at

time in the fore¬
envisage a return
resembling interna¬

any

future

anything

tional peace and tranquillity.

approach needs

am

do

I

War III to start right away, I also
do

way.

uni¬

On

the

contrary, I anticipate
that
through her satellites Russia will
seek to sap our strength progres¬
sively by small wars and alarums
of great wars.

versal attention and concern.

The
subversive activities of Commun¬
ist agents have been well

enough

T

assume

that

our

response

to

advertised

so that we, or at least
these efforts, and the only sensible
government agents, have their response I think we can make, will
potentialities more or less con¬ be (1) a large and rapidly accel¬
tinuously in mind. But, so far as erated program of military prep¬
can tell,
very little systematic
attention is being paid to thie dull
and undramatic possibility that

aration for

a

fight to the

finish

with Russia, if necessary; and (2)

a large program of economic aid
shall lose much of our strug¬ to our friends
abroad, so long as
gle with. Communist Russia right we have some left upon which to
here on the home front by putting bestow it.
*
firmly in place collectivist ar¬
When the shooting started in
rangements conducive to the ul¬
Korea our

we

.

Federal

timate

success

of

a

Communist

regime.

JLet
that I
rabble

Government

spending at an nnnual rate of
about $17 billion for defense and
was

hasten to assure you foreign economic aid- The., rate
not warming up for a has now been
stepped up to some¬
rousing contention that thing like $20 billion per year.

me
am

President Truman and his politi¬
cal co-workers are "a lot of Reds"

By

the

first

anniversary, of

„our,

Korean adventure the annual rate
of expenditure
promises. to be.

*An address by Dr. Keezer before In¬
.somewhere
between $25 billion
stitute on Business and Economic Prob*
and $30 billion. By the end of the
lems, Pittsburgh, Pa., Jan. 31, 1951.




fair

to

the

inflation

competition

successful

is

operation

and

some

which

maintained

of

over

a

ahead.

defense

our

effort,

we

as

ate

Thus, in
find our¬

sea) of government
designed to thwart it.
How to escape
relatively intact
from that miserable- position is a
problem of staggering magnitude.
It is that problem with which I
am
presently concerned.
mean

V.

t'x V.;«

•
4

I

So Clever

personally do not share what

seems

that

to

our

be the widespread view
Russian antagonists are

diabolically clever fellows. I am
supported in this' skepticism by
the fact that, in trying to play
both ends against the middle, the
Russians only seem to havq suc^
ceeded in having most of World
War II land right in their, home¬
land, where in devastation and
„

loss of life

they were preeminent.
Also I suspect that the final ver¬

dict

will

be

that

the

attack

on

South Korea which they promoted
ill-conceived from the Rus¬

was

sian point of view because it woke
us

up.

comparable
set

were

it would (1) either cre¬
revolution, in the literal

a

of the term, by

largely elim¬
of the national

inating the share
income

going to

owners,

as

rent,

profits, return to farmers, etc., or
(2) a more likely alternative, it
would pour a lot
on

of high test fuel

the fires of price inflation.

Concentration
The

However, those who think

the Russians

are extremely clever
might find support for their view
in the timing of the promotion of

in

Metals

'

coping effec¬
tively with inflation, as well as
making a general orderly mobil¬
problem

ization

long

controls

Kremlin Not

a

wages

standara for the next

proper

sense

that

tion and the deep blue sea (and 1

...

a

real

in

four years

it

selves between the devil of infla¬

literally

If, however,

increase

Otherwise,
be

the
inflation
ruinously violent. Tax:

controls, credit controls/and con¬
trols by allocations and priorities,all have

hold

place in the struggle to;
within
tolerably

a

inflation

limits.
most

And while
those

of

I

am

who

sure

that

them.vastly underrate the enforcement'
difficulties
and wage

involved, direct price
controls may also have-

constructive

some

A

urge

place.

n

Program of Controls

But to

meet

tw-o

is

conditions,

neither

of

fulfilled.

now

First, it
must be built on a general design
which, among other things, relies
on slippery and complicated con¬
trols only after the more simple
effective

and

controls

have

been

of

our

of

resources

for

de¬

in

an

or arsenal state for

armory

many years—at least

decade and

a

perhaps much longer.
Though less stressed than the
first, this second shortcoming of
our

of controls

program

seems

to

likely to prove the more
deadly. Though not notably agreed
on much else, our leaders seem to
me

be

unanimous

in the view that,
must be prepared to
carry a heavy load of military ex¬
penditures for "years and years."
That is General Marshall's phrase.
But, in the line of controls, we

at

best,

we

almost

are

slavishly following the

World War II model.

designed

was

to

That model

meet

the

prob¬
For

fense, is also greatly complicated

lems imposed by all-out war.

by the fact that military expend.

general result.

battery of them^into

play.
would

national

total

our

which
of

whole

—a

production, fully exploited. Second, it must be
to war-making than we now plan tempered to the probability that
to divert in the years immediately we are going to be forced to live

period of time, the process, of try¬
ing to check inflation carf "Have
same

increased

rates

wnile tne cost of liv¬

ing increased only about half that
much.)
At the same time *we
were diverting a far larger share

oppressive regulations,

are

(Money

deadly

upon

economic, let alone po¬
litical, success it is necessary to
bring Government controls de¬
signed to stem inflationary forces

which

15%.

far toward scut¬
traditional economic sys¬

Violent

tem.

handling

of

gree

have a chance of being
tolerably effective the program of
controls must, it
seems
to me,

about 30%

course, go

our

already

economy

an

on

of

War II, the real hourly wages of
industrial workers went up about

infla¬

contained

'

chance

a

by reference to the
problem of making satisfactory
wage adjustments.
During World

,

the

makes

illustrated

dol¬

pur great defense program/ which
the Russians touched off by the

Our Sensible Response

our

I

tling

successfully

en¬

they would hesitate a long
of adopting measures of our
time to cast off from a line which,
own designing which progressive¬
for them, seems, to be proving a
ly make oven-our-system alopg.
collectivist lines. My concern is very good thing.' I shall revert to
with what needs to be done to this point.
Russian

of

can,

Russians

pleased with the progress

they are making in
world
domination

gaging

the

I do not believe

that

me

steel
entire

more

think

-r

is

sure

military opera¬
tion, and will not start for a few
the
years, at least.
This assumptiori
a

as

As

13%.

business

civilian

have

To

this problem with a tolerable de¬

quite fully employed with civilian
business can oe rather strikingly

tionary gap widens, as it will rap¬
idly-in the months ahead, the
inflationary pressure will he fur¬
ther magnified. Unless this pres¬

■

singularly vast preponderance of industrial
might attain the strength over the U. S. S. R. I am
same end largely by a process of
not unmindful that a single steel
fumbling and stumbling.
•
company with headquarters here

gifted.

than

more

for World
full employ¬

prepare

..

gram

system dependfe. If, however, the
inflation is contained by cumber¬

way
our

Russian Communism would be to,
have

I

World
Dexter

present, ineluding the speaker, who had hap¬
pened to survive the armed war¬
fare would be liquidated. I antici¬
pate

economic

domestic

I

dominates ' the

now

in

juncture

same

we

who

look.

with

The significance of the fact that
are piling a great defense pro¬

it

be

But

both

difficult than

more

Virtually

on

if SO.

program,

produced for

to

11.

ment

successfully

the

at

rush

is

force

labor

better, and so is our
plant.
But the prob¬

coping

was

our

for¬

our

,

a

Our

of

lem

really want to convert the lars paid to producers of war
country to communism. I regard /goods remains in this country to
be used in bidding for the supply
any such contention as completely
munism. One is to be knocked out pathological. But, in any event, I of civilian goods or, in the lingo
shall not be concerned at all with developed in Washington during
completely on
personalities or politics, as such, World War II, to swell the in¬
the battle¬
but
with
institutional
arrange¬ flationary gap.
field. That
ments which, on our home front,
Thus far our defense program
would pave
will go far to make or break us has not gone fast enough or far
the way for a
in our struggle with Communist enough to create a very large in¬
set of Russian
Russia.
flationary gap. But even so, we
Commissars to
come
in and
In order to talk with any clar¬ have already had what may prop¬
make
a
ity, let alone wisdom, about the erly be characterized as a tre¬
price inflation.
Since
economic future of our country it mendous
phy sica 1 ly
the
shooting
started
in .Korea
is necessary
triumphant
to make some as¬
wholesale
prices have gone up
installation of
sumption about the military out¬

take it, two general
ways by which we might lose our
struggle against Russian Com¬
There are, I

II.

industrial

shipped abroad or
blown up—a process (that is, the
blowing up) which I also devoutly
hope will continue to take place

effective wage-fixing program; (3) time
and review of, all direct price control arrangements;
and (4)

War

bigger and

War

war

tionary gap; (2) an
limits on,

lies

R.)

inflation is far

inflation fid will end

on as

S.
us,

off

major importance.

shambles; and advocates (1) tax program to close infla¬

in

S.

year.

through inadvertent conversion of our system to
collectivism. Decries slavish following of World War IPs con¬

which

U.

ahead of

much

are

we

a

general range of $50-60 billion a
Please note that all figures
are in current prices.
That is of

on

home front

trols program,

the

years

time

technically to swing
big war production pro¬
than we were before World

gram

with

I would
expect expenditures for the mil¬
itary and foreign aid to level off
for a time at somewhere in the

of danger of losing the struggle

warns

better
into

some

Director, Department of Economics,
McGraw-Hill

running at an annual
$45-55 billion.
If I am

correct
in
my
assumption that
World War III (as an all-out con¬

KEEZER*

Experts in produc¬
and I believe them,

tion tell me,
that at this

be

of

rate

On the Home Front
By DEXTER MERRIAM

will

it

production.

the official estimate is that

year

Thursday, February 22,1951

...

its

itures

will
in

trated

be

heavily

the field

concen¬

of metalwork¬

attain the annual rate
expenditure of about $50 bil¬
lion a year for national security
by the end of 1951, which is offi¬
cially anticipated, somewhere in
the neighborhood of $30 billion
of it will be going for what is
generally i cataloged as military
hardware.
That
($30 billion) is*
about half of the entire present
production of our metalworking
industries.. This production can be
stepped up some.
The steel in¬
dustry, for example, is planning
to expand its ingot producing ca¬
pacity by something over 4 mil¬
lion tons by the end of this year,
and
there
are
possibilities
of
channeling more labor into the
metalworking field. But there are
also some very severe limitations
on a rapid step-up in the metal¬
working
industry. - The
severe
shortage of copper (and a num¬
ing.

If

we

of

ber

is

other

of

non-ferrous

metals)

when military re¬
added to high pri¬
ority requirements for essential
industrialJ plant
expansion
and
Thus,

one.

quirements

are

parts, there may well be
nothing in the metal¬
working line left for civilians by
spare

little

or

the end of the year.

effectiveness

it

relied

compulsions of
this twilight

on

which

heavily
patriotism

zone

between

small
war
and
something else
clearly does not engender. And—

of crucial importance—the

World

War II system of controls was, in
the nature of all-out war, designed
minister

to

vulsion

of

to

an

economic

relatively short

con¬

dura¬

tion.

Many of the World War II
relatively small scars
our
economic system simply

controls left
on,

because
for

they were applied only
relatively short time. Kept

a

for

intact

have

decade they would
devastating.
Perhaps

a

been

mention of the shambles to which

gasoline rationing

was reduced in
after having been
quite effective during the touchand-go days of the war, will suf¬

its latter days,

fice to make the point.
Brave

The

of

controls which

ploits its
be

can

About

Talk

lack

more

general

systematically ex¬
effective tools first

illustrated

taxation.

Taxes

design of

by the case of

There is general agree¬

ment among competent
on

authorities
only safe
defense progfam

the subject that the

way

such

to finance
as

that

a

we

have ahead of

us

is

primarily on a payras-you-go
basis.
Also' there is substantial

In spite, of the fact that acute agreement that if the program is
held to an annual expenditure of
shortage of metalworking produc¬
$50-$60 billion it is feasible to fi¬
In
terms
of
the
inflationary tion for civilian consumers (auto¬
nance virtually all of it from cur¬
problems which it precipitates, mobiles, appliances, etc.) is clearly
rent taxation.
this- program
could scarcely be in the offing, we face the para¬
In recent weeks there has been
mofe inconveniently timed for us. doxical prospect of having some
It comes at a time when our econ¬ unemployment in this field. This an increasing amount
of brave
omy is fully occupied with civil¬ prospect arises from
sharp cut¬ talk about much heavier taxes,

North Korean

attack.

ian* business, and thus peculiarly backs of supplies of scarce metals
susceptible to inflationary pres¬ so that they can be diverted to
sure.

In this

regard

our

position

war

production and war stock¬
These cutbacks threaten to

stands in notable contrast,to that
before World War II. As late as

piles.

mid-1941

products

we

had 6 million

unem¬

leave

some

makers

without

of

the

civilian

requisite

and increases

spread

tire body politic.

over

Such

a

the en¬
spread¬

ing would/of course, be necessary
to increase the Federal tax reve¬

by any' large amount. Per¬
haps something will come of this

nues

production at talk. I devoutly hope so because
they sail lack war I share the view that the only
where-^ before
generating heavy orders. Any unemployment of this hopeful fiscal, apppoaqh, ,to our do-,
inflationary pressure.
*
type promises to be quite tem¬ fense problem, as at present for¬
In this connection, it
is,. I be-- porary but its very existence will mulated, is on a pay-as-you-go
lieve, important to make a disT complicate tfye, problem of creat¬ basis or at least a pay-most-of-ittinction
between
our
technical ing " general public understanding as-you-go basis.
.capacity to carry, out war produc¬ that we have Jan inflationary prob¬
But, in contrast to the brave
tion effectively*- <and
the infla¬ lem of tremendou»*proportions on talk, we have a record of perform¬
ance in taxing during this emertionary problems created by such our hands.
ployed and
which

a

could

great deal of slack

materials to sustain

be

a

taken

else¬

up

,

,

time when

Volume

173

Number 4983...The Commercial

and Financial

Chronicle

(827)
This

gency.

that

suggests
will

be

record

(in the

term) bias
of

policy
late; it
positively subver¬

of

far

too

of

sense

the

safeguarding

as

traditional system of busi¬

our

ness

literal

so

merely

taxing

our

little and

too

also suggests a
sive

not

arrangements

which

deceptive in its initial
of

being

a

is

rather

sources
(through
otherwise) we are

appearance

pleasantly soft touch.

put

a

lid

it

on

taxation

in

and

trying to

now

the

form

of

direct price and wage control. Of

The Lid of Price-Wage Control

course,

Because we have not coped ef¬
fectively with price inflation at its

credit control also has

an

important role to play in stem¬

enterprise is concerned. Here,
my primary reference

ming

inflation, and I think the
Federal Reserve Board is
entitled
a bow for
making a

to

relatively

effectiveness is concerned, and a
secondary role to direct wage and

price

brave effort to activate that role.

control, so far as political
impact is concerned. At any rate

But

there

it

is, I believe,

role

a

secondary to taxation,

quite

far

so

is

no

chance

to

Continued

as

explore it

on

course,

is to the
was

profits tax which

excess

passed by

overwhelming

ma¬

jorities at the last session of Con¬
gress.

In the present state of economic
enlightenment in our country the
political case for an excess profits
tax
is
obviously overwhelming.
The
very
name
"excess profits

A

tax" makes it

an act of superlative
political courage even to question
it. Who in his right mind wants

to be placed in the position of
running on a platform of support
excess
profits?
It
is
hard

Report to

our

Eight and One-half Million

of

enough politically to be suspected
of sympathy for any profits at all.
The moral appeal of an excess
profits tax is also very powerful.
With
American
boys dying in
Korea, why should American in¬

dustry have

chance to make in¬

a

creased

profits out of the business
of supplying them with weapons?
In simple terms of equity there is
no
satisfactory answer, just as
there is no satisfactory fulfillment
of the ideal of

spreading the sac¬
equally.
What

rifices

of

squares

FINANCIAL CONDITION

-

DECEMBER

31, 1950

the account with the boys

who

war

home from World War

came

II, and

Korea, with

now

and legs?

ASSETS

arms

no

The

Ominous

Excess

Profits

The fact

profits tax is

tial

wrecker

try.

In

indus¬

addition

managerial

to

waste

Short

has
of

trial

been
funds

extrava¬

plant

the
for

and

Railroads

.......

Industrials

cor¬

.......

.

..

.

..........

porate profits. To be sure, the cur¬
rate

rent

tion

—

of

77 %

—

is

lower

World War II rate.

than

But

of

in

will, of

inflation

as

it

much

a

than
the

The

Mortgage loans
Real

depth

That

calculation

take

gives

It

on

real estate

W.

changes in
policy valuation standards

—

402,703,409

...

60,293,037

Company's
82,086,395

only $3.3 bil¬

45,000,000

Retirement Annuities and

Accrued expenses
items
Accrued

rents

due and accrued

23,416,195

taxes

63,338,804

reserve

8,565,000

for Group

Contingency

reserve

for

5,548,000

fluctuation in

Cash in banks and offices

for

Total

finance

36,882,781

$2,959,942,982

defense

Unassigned Funds

security values
(Surplus)
...

Total

industrial plant and equipment

are valued in conformity with the laws
of the several States,
prescribed by the National Association of Insurance Commissioners.

46,450,000
211,667,760

$2,959,942,982

plants, but also for ac¬
celerated depreciation allowances
into place after

20,892,798

...........

Insurance

other assets...................

facilities. The Federal government
has not only made provision both

put

5,500,000

...»

..

and sundry

payable in 1951...

Contingency

Premiums due and deferred and

suffer for want of corporate funds
to
finance
suitable
production

on

.

Special Surplus Funds

will be remarked, of course,
defense program need not

to

Insurance

Disability Claims.

our

loans

.

changes in
policy valuation standards

—

policies
Interest and

government

24,165,007
35,155,633

paid in advance......

Reserve for ultimate

properties)
on

of

Reserve for ultimate

75,633,224

(home office, housing

Loans and liens

that

lion per year.

that

estate

and other

ominous character

initial

tax would

145,999,746

...........

guaranteed

70,366,522

increase

course,

increases.

more

the

or

43,132,484
process

payment

409,866,467

Common

industrial

new

plant and equipment.
of the bite

...........i.

Preferred

191,687,620
policy¬

holders in 1951

Policy benefits in

174,785,241

adequate program

an

investment

deposit

on

866,609,974

the

if main¬

tained for a decade, it has the
potentiality of taking a deeply
damaging bite of corporate funds

required for

left

Dividends payable to

Premiums

Stocks

profits collec¬

excess

31,968,231
100,425,703

Public utilities

indus¬

equipment,

27,955,626
..

divisions

principal

new

term

States and other civil

gance, it strikes at what in recent
years
source

premiums is established by law
to mature all
policy benefits ... $2,322,178,680
Policy proceeds and dividends

$533,611,373

Dominion of Canada

encouraging

and

$2,145,222,615

Long term

poten¬

American

of

a

Reserve which with future

U. S. Government

remains, however, that

excess

notes.,'

Tax

'

the

LIABILITIES AND SURPLUS FUNDS

Nothing, obviously.

Bonds and

All securities

certification

and

that it is needed for defense
pro-?
duction. It should be noted, how¬

as

Securities carried

at

$492,332 in the above statement

deposited for

ever, that these arrangements give
the

purposes

Total

surplus to policyholders including special

are

surplus funds.. .$263,665,760

required by law.

Federaj|gpgovernment decisive

discretion
of

the

in

shaping

a key part
of investment in

program

DIRECTORS

industrial plant and equipment.
Thus it does not take either
very
much imagination or very much

Elwyn G. Preston

Albert M. Creighton

Daniel L. Marsh

Thomas D. Cabot

skepticism to envisage

Charles L.

Joseph E. O'Connell

Byron K. Elliott

Merrill Griswold

Charles F. Adams

Paul F. Clark

John M. Hancock

Samuel Pinanski

Guy W. Cox

James V. Toner

Ralph Lowell

Philip H.TheopoId

Carl P. Dennett

William M. Rand

Charles E.

Olen E. Anderson

Sidney W. Winslow, Jr.

Edward Dane

Karl T.

ment

in which

porate profits

a

a

squeeze

on

develop¬
on

cor¬

side and

one

an

expansion of government control
of

investment

and
act

in

equipment
as

vise

a

direction of

industrial

on

by

plant

the other will

which

Ayling

Spencer, Jr.

Compton

private

industry will be

com¬

pressed. Over

a few years such a
development might be of relative¬
ly slight significance. But over the

long pull, for which
must

we

be

we

prepared

to

are

told

carry

a

greatly enlarged load of defense
expenditure, it can be of major
consequence.

I view with

thusiasm
ness

with

leaders

template
of

In

a

this

which

seem

to

most
me

to

busi¬

bountiful dispensation
loans and certifi¬

providing for accelerated de¬

preciation.

I

fident that

it is

am

reasonably
another




INSURANCE

BOSTON, MASSACHUSETTS

COMPANY
.

-

.

con¬

government

cates

MUTUALi LIFE

connection,
dismay the en¬

some

con¬

of those

A

COPY

OF

THE

COMPANYS

COMPLETE

19

REPORT

WILL

BE

SENT

ON

REQUEST

page

20

The Commercial and Finomcial Chronicle
20

...

(828):

Thursday, February 22, 1951
.,

\

Managing the National Debt
not been managed at all, but
Mr. Parkinson urges Treasury to refund some
short-term maturities into long-term obligations. Says at

allowed to drift,
of its

be

could

In the current discussion

of the

phrase "management of the debt."
other phases glibly tossed

to

user

it

mean.

The

simple

debt

has

not

investment of the people's

"man¬

been

allowed

control
by

only

with

exercised
either

the

Treasury
the

I.

T.

3 with

Federal

Reserve Board has been

(1) peg¬
ging of the price of the market¬

the

advantages

not

The

large

balance

cash

"E"

and

(A)

tillion of
end

other

bonds

eemable

t

savings bonds,

\

/

of

maturing,

between

1950.

This

or

re-

and

the

operation

re¬

1946

billion

debt

the

at

the

end

of

long-term

1950.

by

the

economy

rate;

but

that

nancing
lower

jrom

19

page

here

cussion to inordinate length.

marketable

without

extending

continue to inflate the money sup-,

it

that

we

should turn to direct price

being reduced "the short- ply and to decrease the purchas¬ control and hence
direct,wage
term debt and the special obliga¬
ing value of the dollar. Let no-j control, without which price con¬
tions sold to the Social Security
body be deceived. The money trol becomes a particularly de¬
i nd
like funds and the -"E" and
supply in this country is now $177; structive form of class legislation.
other savings bonds were being
billion; it was $152 billion at the, But; unlike many people, I would
increased. To put it more simply,
end of 1945; it was $170 billion expect these direct controls to re¬
was

the short-term debt

increas¬

was

ing.

This increase is the
result of the Treasury's "manage¬

one

-0 *

Indeed, during the whole period
Treasury issued no long-term

•

the

to meet .any of its maturities

I aper
or

other

that

in

other

needs.

addition

savings

which

The

the

to

on

was

"E"

obligations,

due

are

result

and

all

of

demand,

year ago.

ment"'and
sistence

in

a

dollar

resulting

increased costs to all of

us

in,

includ¬

the ing the Treasury.

Treasury faces maturities during

Let

less

than

something

the

and.

decreasing purchasing* Board.

the

of

value

in

the

slightly

only

which

shambles

particularly of .its per-* might be expected without them.
short-term financing, I am a veteran of both -the OPA

and the result, of this large money,

supply is

sult

National

.

ties

such

As

of

price

making

control

well

work

Labor

War
I '« have

of the hellish

awareness

<

some

difficul¬

and. wage
when it

even

be specific.

In the budget had the support of the fear and
for the pending fiscal year there patriotism engendered by all-out
is provision for the purchase of war. Now, when we have neither,
billion of callable bonds; If the
about $20 billion of supplies and I am no less than amazed by the
easy-going "management" of the armament
and, in the proposed large number of people who ap¬
past few years is continued, all of
budget for the next fiscal year plaud the idea of general price
us

the calendar year of 1951 of
nearly
£40 billion and an additional $12

this $52 billion will turn
up at the
end
of
the year in short-term

obligations.
When
time

to

chase

of

estimated

will

than

years

there is provision for

there

during

refund

be

a

the

better

about

cost

similar
billion.

$40
of

these

during each of these fiscal years

past

few

will be $15 billion more than

ma¬

would

turities this vast short-term debt?
If there had been
any

"manage¬

The

supplies

longer

into

pur¬

have

cost

in

1940.

they
The

Treasury has brought a high cost
of

living down upon all of us in¬

ment" of the

debt, not even to say cluding itself by its effort to ob¬
intelligent management, some part tain low cost borrowed money.
of this debt could and would have What is
$500 million savings in
been turned into
longer term obli¬ interest on its bonds compared
gations. That's what every private with $15 billion of extra cost ii
business did with its debt
during
the same period if it
could, and
(hat's what all fundamental,

prin-

<

its

essential to soundness.
Now it is almost a "must" that

the

as

Treasury

fhort-term

fund

some

maturities

term obligations.

into

of

be issued

and

,

'

Francis Frost to Be

LOS

ANGELES, Calif.—Francis

an




full
of bootleg grog that the experi¬
ence
of national prohibition was
lost

these

among

on

were

so

them.

There

are

of course,

some areas,

price control can be ex¬
pected to work tolerably well.
Broadly speaking they
areas

tial

large

where prices are,

instance,

are those
in the ini¬

administered

instead

concerns,

changes

from

in

ly in these

on

March 1.

Mr. Frost is resi¬

dent manager of the firm's office

of

day

areas

to

market.

the

by

being
day
Steel

where price

at 510 West Sixth Street.

normally

setting prices. If it

con¬

exercised in
that in

appears

general area there is likely
to be absence of- restraint, in set¬
this

ting prices, a method of' dealing
with it was suggested to me the
other day by a

controller.

opposed to fixing

some!

involved in the

bling at all from side to side.

fully occupied with confer¬

so

that

they could never get
time off to arrange to
raise their prices.
ences

enough

that technique nor any

Neither

other

be

can

well

in

clothing,

expected

markets

which

work

to
food

for

i

and

extremely

are

diverse and volatile. And,

you

as

He

the early days

World War II price
remarked

that

in

of price control the
price of pig iron was held down

'

importance of having defi¬
nite time limits on provisions. for;
direct controls seems to me to beThe

.

nature of
by which we areconfronted, and our experience in,
casting off from World War II

underlined both by the
the

emergency

price controls. The emergency, we
are told, may last 10, 15, 20 years.;,
If

system of government price

a

controls, and what it can be con-,

expected to be a very
should survive along
the emergency it would, I

fidently
messy

with

one,

confident, go most of the way
know, the cost of food and cloth¬
ing constitutes almost two-thirds to plow under our traditional en¬
of the typical wage earner's cost terprise system. Capacity to make
of living, if, as seems highly prob¬ the kind of judgments which must
am

control

able,

of

food

and

cloth¬

prices
is
ejftremely
loose,
these prices will, of course, exert
ing

irresistible
rates

wage
costs.

upward

pressure

on

hence industrial
the meantime, the

and

in
prices of industrial products are
rather tightly controlled, as they
can

If,

be, the end result may be a
on profits
and the ca¬

squeeze

pacity to purchase new plant and

be made to

almost

be
The

run

that system would

completely

corroded.

government would be doing
job.
4

most of the
;

At the same time, experience of

recent memory

would greatly re¬

political decision to cast off
from price controls even if the
economics of the case were to in¬
dicate that such action was long
overdue. This is, in large part, the
tard

a

of

equipment
which
will
further
speed the process of government
financing and hence control of in¬

fault

dustrial expansion.

certain

business

leaders-

surances

In

spite of all these aches and

pains of direct price control, and

where

restraint

having

by Mr. Parkinson dis¬
tributed by the Continental Press Syndi¬
cate, Brightwaters, N. Y.

the

trol is least needed because of the

long-

It has been sug¬

statement

of

some

to

prices, automobile prices, cigarette
prices, for example, fall in this
general category. But is it precise¬

Co.

*A

led

am

to date.

a maturity of 35 D. Frost, Jr., will be admitted to
interest coupon of
partnership
in
the New York
Z%; that such bonds be ineligible Stock
Exchange firm of Shields &
for commercial banks; and that
years

whether

wonder

elders

I

responsive

its

gested that 'defense bonds" should

ceilings.

wage

purchases?,,That's what "man¬
agement of the debt" has done up

iples of public finance have long

required

and

as

has been noted by

completely stable wage spiral. It

dis-r, pretty. effectively by keeping the
heads of the companies producing

our

With a surging inflation on our
obligations; hands, it is more or less inevitable

Government

of

presumably

keeps on going up with no wob¬

On the Home Front

short-term

ings

tive direction to "stabilize" wages,>

undertaking to "stabilize" wages,'
quite possible to have a

is

But

.

of

that it is

rate

chiefly due to the fact that the
paper is sold to
the
commercial banks; and their hold¬

-

of taxation.

of those officially

its

of

lower

That's
unless

by nourishing the^
essentially pay-as-

importance

them. It

long-term bonds and has justified
the continuance of short-terip fi-|

duced the net debt from $269 bil¬
lion in the middle of 1946 to $256

while

(B)

payable by the Treasury on that'

^he Treasury to retire Co¬

worse

effective,
wage control as a companion piece
for effective price control is ob¬
scured by our World War II ex¬
perience. It is apparently also ob-;
scured somewhat by the legisla¬
crucial

Let Us Not Lose the Wai

nabled

c

-

into'

As I have already indicated, the

resulting from the excess sale of $25 billion would be approxi¬
Continued
Victory Bonds in December of mately $500 million.
1945—and large amounts taken by
The Secretary of the Treasury
i he Treasury from the Social Se¬
has
frequently emphasized this
curity arid like funds/and the Spile added cost to the Treasury of!
of

an

program

you-go

and the additional cost in interest

Treasury in the middle of 1946—

up

horse with

the

the

in

follow

we

taxation.

of

it will be

But

bad.

only to

ourselves

have got the
price controls ahead

horse

the

of

that increase
minor compared

public welfare- but to the
Treasury itself.
If the Treasury
able portion of the debt and (2) had, during each of the last five;
the maintenance of a large and years, refinanced $5 billion of its
increasing money supply, both of maturing short-term paper with a
which were politically popular be¬ 3% long-term bond, it would have<
cause
they avoided temporarily put $25 billion of that short-term
the pains of deflation.
* ' 3 paper on ihe shelf, so to speak;

,

said

spot where we

cart of direct

the cost to the Treasury

in cost would be

Parkinson

*

about taxation.-

point
worked

have

the

refinancing

of its borrowings, but

or

the

covers

and

3% paper would

long-term

increase

price
v

I think what I have already

low rate paper

the short-term

of

,

emer¬

'

We

true that such

It is

The

drift.

to

controls.

trustees.

simply

been

including
'

controls,

gency

savings

institutions

thrift

their

by

aged" at all. It
has

administrative structure of

financial, fiscal and monetary con¬
ditions which would follow such

the

is

truth

1

review of all direct
price control arrangements.
(4) Plans for increased produc-*
tion which are built right into the
dependent

the Treasury's burden of

ease

.

(3) Definite time limits on and
specific
arrangements
for
in-

financing recurring maturities, but
a far greater result would be the
restoration of confidence in future

to

in-1

by

program

creased labor costs.

be gradually

result would

The

control

price

vate trusts.

discussion,
it means only
its

being opened by the defense]
production program.
(2)
A wage fixing program,
tightly enough constructed to pre-;
vent the lid being blown off the]

Can't, Turn to Page 29

pri¬

companies, savings banks and

pub¬

lic

what

If You

the life insurance

annually with

r

now

lion of such bonds

Like

i

.

A tax program which will

(1)

.

close most of the inflationary gapr

they be sold to non-bank inves¬
tors. At ldast $4 billion or $5 bil¬
could be placed

of in¬

wants

lowing conditions:

new

flation there is frequent use

about in

Guess Who?

3%, 35-year bank ineligible bonds
placed annually with life insurance companies,
savings banks and private trusts.
of

i

price control on any considerable,
scale is not going to prove an eco¬
nomic curse in disguise I submit i
it must be surrounded by the fol- .

THEN AND NOW

Claiming Federal debt has

least $4 billion

.

some¬

portions. But if the resort to direct

Life Assurance Society of U. S.

President, The Equitable

reached

has

weeks

recent

t

thing approaching runaway pro-

PARKINSON*

By THOMAS L

t.

ing and thus check a rush to convert dollars into goods which in

innumerable
is

no

way

time

to

others

which

mention,

I

there
see

no

to avoid trying it—as a tem¬

expedient. As major
why we have reached a
wretched
pass,
I would
assign
both failure to adopt an adequate

porary

reasons

of taxation, and the vast
outpouring in Washington about
the imminence of price control.
Each new threat of a price freeze
has hatched a new crop of price

program

In

seeking to hasten the

OPA

end of

price control they gave as¬
that this would at most

than a temporary
which would be
quickly obliterated by increased
production. The assurances proved
false. Neither those who, for sub¬
versive
reasons,' would
like to

mean

no

rise' in

more

prices

keep us tangled up in price con¬
trol indefinitely, or those whose

professional careers depend on the
continuation of price control are
going to let that historical fact
forgotten.
*

be;

connection, probably the
prevent con¬
and wage increases to get into a trols from outliving their useful¬
relatively comfortable position to ness is to have people who have
ieft other and much more inviting,
meet it.
!
!
jobs administer them. That means,
Necessary Conditions
in part, having the business com¬
Perhaps what seems to me to be munity cooperate vigorously in
the extreme gullibility of much of staffing the control agencies. But
our population about the probable
Washington is a beguiling place.
effectiveness of direct price con¬ In a season I have seen highly indi¬
trol will prove a national asset vidualistic businessmen converted
of an odd sort. It may temporarily into ardent advocates of national
create the illusion that it is work¬

In this

best informal way to

regulation of almost

everything.

173

Volume

Number

4983...The

Commercial and Financial Chronicle

(829)
;So the

only relatively safe
the

prevent

in

put

controls

place

from

to

way

being

now

becoming

chronic is to have time limits set
fwhen

they are imposed, with the
provision of a careful independent
review as a pre-requisite for ex¬
tension—again for a fixed period
with another, independent review,
i
I am aware, of course, that the
"Defense Production Act of 1950,"
under which price and wage con¬
trol is

being instituted is itself an
'act of limited duration and must
come

up

»However,

for renewal before long.
the considerations in¬

volved in deciding about a general
renewal

bound

are

to

be

very

general. A time, limit for the act
a
whole, or major sections of
it, is no substitute for .time limits
on
specific control arrangements
such as those governing various

as

kinds of prices and wage^;.

the attention it deserves from the

people

running the controls un¬
they are under formal pres¬

less
sure

to provide it.

This, it

occurs

tive system. In general I
accept
the necessity of the
controls. But
if they are left in
place for the
protracted

to me, could be provided by mak¬

which

ing,

be

the price control agency
periodic demonstration to

say,

give

a

defense

to

prepared

dent

that

us

face; I

shall

we

Nominat'g Comm.
To Receive Suggestions

emergency

leaders tell

our

NYSE

must

we

be

never

The

confi¬

am

the

able

New

independent agency of review
that its rules
are
doing every¬
thing possible to promote the in¬

to return to anything
remotely re-" will

creased

petitive

an

production

eliminate
rules.

that

would

the

necessity for the
At. least, that would add

intellectual dimension to price
control without which it may well
an

subject
to

slow
The

our

traditional

enterprise

strangulation.
lifeblood

of

that

in

place

deadly

in

enemy

being put
Washington * is the
of a fairly competi¬
now

traditional and bril¬

our

liantly successful

system of

com¬

3:15
of

York

hold

an

Governors'

of

Stock

Exchange
meeting at

'open

March

p.m.

Committee

in

6

Room

the

on

Board

the

sixth

enterpriser

In
fact,
I. floor of the Exchange for the pur¬
shall have moved so far pose of
receiving suggestions for
in the direction of the
collectivist the positions to be filled at the
think

we

system

favored

Communists

Scored
cause

system,
which also gives, it its social jus¬
tification, is fair competition. The
system of, controls

sembling

Nominating

a
on

by

that

the

they

Russian

will

home front; I would

like very much to thwart them in

this sector,
discussion

thing 1 to
served

as

has

that

elsewhere.

If

contributed
end

it

scheduled

have

May

major triumph for their
our

election

annual

the

tions

this

unable

to

make

may

attend
sugges¬

either by letter or personal
at

appearance

have

its purpose.

Those

meetings *of

the

Committee scheduled for March 8,

some¬

will

14.

meeting

for

12, 15 and 21.
be

arranged

Peterson,

Positions to be filled
man

nine

existence

is

jincreased
?into
of

the

Gratuity Fund, and nine mem¬
Nominating Committee.

bers of the

Members of

ing Committee

controls.

We

have, of

course,

direct

to

problems

J.

Denman,

Hammill

&

Co.;

nick,

Dominick

II,

John C.

addressed

Roth

&

increased

by

peculiarly
of

limited

non-ferrous

where

the

Tarly

But

and

backs

series

a

for

controls

and

better

sample,

it,

years

of

use

by

our

we

go

can

long

a

\save

of

The

650j000

handling.
-World"

least

tech¬

editors

of

man

of

years

in

materials

The editors of "Textile
that

could

20%

equipment

be

by

Editors

indicate

same

of

Gas

by

modern,

modern

of

man¬

in

It

field

If antiquemachine

way.

eliminated

pliers

metalworking industry the editors
.of

"American

Machinist"

calcu¬

This

working

industries could be in¬
more than 10% with¬
adding
anything
to
the

creased
out

•

by

amount of labor involved.

possibilities

through

24 hours

potentiality to solve
.our shortage problems in
what, in
the last analysis, is the only con¬
structive

to

service to

enormous

gas

for

our

year...

served

-

...

in

in gas

Southwest sup¬

underground

coming

endeavor

American industry, and add up to
an

our

greater usage

Similar

right

run

customers

in enlargement of

...

including

late that the output of our metal-

natural

a.record-breaking

was

purchased from

the

from

more

people.

number of

in

of service—

was one

providing

increase

their

of 1950 in the Columbia

System

more

Industries"

similar

a

made

were

The story

per

Studies made by

"Food

of

that

be

output

increased

use

and

agerial methods.

tools

a

that

labor

estimate

hour

could

is

general
equipment would

modern

'unnecessary

the

more

Here

McGraw-Hill

estimate

over

man

of

means

magazines.

"Factory"

the

put

to

production.

editors

nical

"at

particu-

we

if

a small sample, of some
possibilities envisaged by

the

the

•

of

production

are

our

facilities,

storage.

year, we expect even

of

gas

and

we

shall

I

provide the best possible

our customers...

a

day!

*Full details

are in the Annual
Report
oj The Columbia Gas System, Inc.,

way.

120 East 41st Street, New York 17, N. Y.
More

/

and

To be
all

Better

sure,

the

be

added

draft

—available upon request.

in order to provide
equipment

necessary

would

Production!

necessary
on

to

scarce

make

it
an

materials

which

might temporarily compli¬
shortages
of
them.
It
is
equally obvious that the poten¬
cate

tialities for salvation by increased

production

cannot

overnight.

But

every

assurance

effort is

be

realized

given
that this defense
we

are

GAS IS

overnight affair. Over
the long pull ahead the poten¬
tialities for salvation by more and
better
production
can
become
no

realities if

ing it
In
are

we

concentrate

on

hav¬

judgment, however, we
likely to get such concen¬

my

not

unless

..directed

to

duction

a

effective

the

make

seems

to

controllers

increased

continuous

are

pro¬

standard

performance

The whole

part.

sweep

demonstrate

on

of

their

COLUMBIA

GAS
SYSTEM

of history
that

run¬

ning other people and their busi¬
ness

QUICKER

so.

tration

is

engaging activity
usually ends up by
being quite attractive, too. Hence,
I doubt if the potentialities of in¬
creased
production to eliminate
which

a

The Columbia Gas

very

also

the necessities of controls will get




CHARLESTON GROUP: United Fuel Gas

Company, Atlantic Seaboard Corporation, Amere Gas

Sons; Emil J. Roth, E. J.

Appointments may and Charles H.
Wisner, Wisner &
Edwin B. DeClairville.

through

toward eliminating the need

way

of

metals

Domi-

Dominick;

Gude; Winmill & Co.; George H.

COLUMBIA GAS SYSTEM

fields

some

shortages

acute.

.minds
over

in

&

Walker, Jr., G. H. Walker & Co.;

pro¬

duction. They vary from indusJtry to industry, and unhappily are

Shearson,

Bayard

Co.; James G. Tremaine,

IH THE

controls

Nominat¬

Henderson, Chas. F. Hen¬

derson &

and ahead to '51

.

Robert B. Ber-

Chairman; Walter F. Blaine,
Goldman, Sachs & Co., Secretary;

ease

which

to

indirect

and

looking back at 1950

1951

are

William

right

structure

potentialities

shortage

are

built

the

man,

this
for

plans

administrative

enormous

both

during

have

•

production

the

the

to

Ex¬

Chair¬

the Board of
Governors;
Governors; two Trustees of

tional economic system controlled
of

the

are

of

By far the most important safe¬
against having our tradi¬

emergency

of

change.

guard
out

Secretary

21

System

Utilities Company, Virginia Gas Distribution
Corporation,
Virginia Gas Transmission Corporation, Big Marsh Oil Company, Central Kentucky Natural Gas
Company; COLUMBUS GROUP: The Ohio Fuel Gas Company;
PITTSBURGH GROUP: The Manufacturers
Light and Heat Company, Binghamton Gas Works, Cumberland and
Allegheny Gas Company, Eastern Pipe
line Company, Home Gas Company, The Keystone Gas
Company, Inc., Natural Gas Company of West Virginia,- OIL GROUP: The Preston Oil
Company.

22

The Commercial and Financial Chronicle

(830)

...

Thursday, February 22, 1951

We Offer

TRADING MARKETS

Primary Markets

BETTINGER

Boston & Maine R. R.

ENAMEL

New $5

(A Massachusetts Corporation)
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Per

Orders
your

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$3.50

Price

own

executed

Common

DAYTON IIAIGNEY & CO

dealer

NATIONAL CO.

INCORPORATED

OREGON PORTLAND CEMENT
75

or

CARIBBEAN SUGAR

(When issued)

GEAR GRINDING MACHINE

by

investment

Phone

BOSTON HERALD TRAVELER

Pfd. (When issued)

Share

the undersigned

or

RIVERSIDE CEMENT

7% Prior Pfd.

CORPORATION

FEDERAL STREET, BOSTON

write

SENECA FALLS MACHINE

Teletype BS 596

31

Milk

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Tel,

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JACKSON & COMPANY, Inc.

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Telephone:

NEW

FOUNDED 1851

27 State Street

Bell

Exchanges

Trading markets in

NU*«
.Issues

11

1865

Members New York and Boston Stock

New Bedford
-UoI,

■

*

BS 338

CHICAGO

Branches:

Newport

t

Providence

*

Springfield

Volume

173

Number 4988... The Commercial and

Financial

Chronicle

Boston Securities Traders Association

Burt

Whitcomb, Harriman Ripley & Co., Incorporated, Boston; Wilfred B. Perham, Coburn

Middlebrook,

Incorporated,

Boston;

Arthur

E.

Engdahl,

Goldman,

Henry Tabb, Townsend, Dabney A Tyson; Leo Newman, J. Arthur
Warner A
Co., Boston; Curtis Bates, Draper, Sears A Co.

Gordon

Lowell

Hanlon, Gordon
Phelps A Co.,

Sachs

Calvin

&

Co.,

Clayton,

Corp.; Alfred Zuccaro, First Boston Corp.; Joe
Carey, Albert H. Week Co., New York City




Jim

Duffy,

Paine,

Webber,
Saunders,

Clayton

The Commercial A

B. Hanlon A Co.; Jack Shea, Shea A Company; Fred Harson,
Providence, R. I.; A. G. Woglom, A. G. Woglom A Co., Inc.

Warren, First Boston
Bill

&

Boston

Securities

Corp.;

Hal

Murphy,
City

Financial Chronicle, New York

Fraser,

Rinaldi, Lerner & Co.;

Roland

Jim

Jackson

&

Dominion

Curtis;

Frank

Securities

Breen,

Corporation,

New

York

Atherton

&

Co.;

Walter

City

John D'Arcy, F. L. Putnam
A

Co., Inc.;

A Co., Inc.; A1 Moore, J. Arthur Warner
Tim Murphy, Chace, Whiteside, Warren A Sears, Inc.

Wetherbee, Kidder, Peabody A Co.; Walter Swift,
Tucker, Anthony <ft Co.; Cliff Barrus, Barrett A

McCormick,

Schirmer,

A. C. Allyn & Co., Boston;
Tucker, Anthony & Co.; Ray

Kidder, Peabody & Co.; Fred
Company, Providence, R. I.

Russell Dean, Mixter A
Murray, Tucker, Anthony

Company;
& Co.

Bob

Carr,

Ingalls,
.

24

The Commercial and Financial Chronicle

(832)

...

Thursday, February 22, 1951

Twenty-seventh Annual Dinner

J.

Russell

York City;

T.

Edmund

Baldwin,

Ed

Potter, Arthur W. Wood Company; Walter Bradley, B. W. Pizzini A Co., Inc.; New
Rodney Kent, J. Arthur Warner A Co., Inc.; W. Henry Lahti, Matthew Lahti A Co., Inc.

Williams, Hooper-Kimball, Inc.;
White 'A Co.; Eugene R. Hussey,

Howard S. Harris,
First Boston Corp.

Ed Powers, Hodgdon A Co.; Irving C. LeBeau, May A Gannon,
Herman

J.

Keller, Hodgdon A Co.

Inc.;

Jack

Wise,

Hobbs A Seaver, Inc.; A1 Crosby, F. S.
Harrington, H. D. Knox A Co., Inc.

Frederick

G. Gorman, Harold C. White, and Frank
Securities Division, State of Masachusetts

f

Mass.;
Boston

Moseley

A

Co.;

Frank

Carr, Hayden, Stone A Co.; Dayton Haigney, Dayton Haigney
A Co., Inc.; Jerry Ingalls, Adams A Peck

Carroll Williams, Laird, Bissell A Meeds, New York City; Jim Kelly, Tifft Brothers, Springfield,
Bob divert, Tifft Brothers, Hartford, Conn.; Barney Bernard, Schirmer, Atherton A Co.,




Hurley,

A1

J.

Daley,

Joe

Havey,

Abe
H.

Herald; Bill Thompson, Ralph F. Cany and
Carr, all of Ralph F. Carr A Co., Inc.

Boston

Robert

Strauss, Strauss Bros. Inc., New York City; Giles Montanye,
M. Byllesby and Company, Incorporated, New York City;
Bill Kumtn, Dunne A Co., New York City

LeLand, Geyer A Co., Inc. Boston; John Butler, Geyer A Co., Inc., New York City;
Troster, Singer A Co., New York City; Wilfred N. Day, Chas. A. Day A Co.,

Bert Pike,
Inc.

Volume 173

Number 498S

..

The

Commercial and Financial Chronicle

Held February

Harry Crockett, Coffin A Burr, Incorporated; Robert Weeks, Jr., Coffin A Burr,
Jim Lynch, Shea A Company; John
Gilbert, H. P. Wood A Co.

Beacham, Josephthal A Co.; Forrest Emery, F. S. Emery
Co., Inc.; Stanley Sporrong, Burgess A Leith

Earl S.

A

Dudley, Jr., E. S. Dudley A Co., Inc.; Manchester, N. H.;
Frenkel, Gersten A Frenkel, New York City;
Jack Hunt, Stroud A Company, Inc., Philadelphia

Lester

incorporated;

*

V

Dougherty, Asiel A Co., New York City; George Payson,
M. Payson
A Co., Portland, Maine;
Peter Burnett,
G. H. Walker A Co., Providence, R. I.

H.

Speed Hughes, J. Arthur Warner A Co., Inc.; Frank Mulligan, Joseph McManus
New York City; Bill Lippman, Akin-Lambert Co., Inc., Los
Angeles;
Les Barbier, G. A. Saxton A Co., Inc., New York City




Francis R. Cogghill, White, Weld A Co.,
Boston; Bert F. Burbank, White, Weld A Co., New York City;
Bacon, White, Weld A Co., New York City; Harry R. Walker, White, Weld A
Co., Boston

Preston

B. S. Halliwill, F. S. Moseley A Co.; J. A. Julian, National Shawmut
'
Bank; Arthur P. Tower, J. Arthur Warner A Co., Inc.

John

25

9th, at the Parker House

'*

h

Bill

(833)

A

Co.,

"

Wilfred N. Day, Chas. A. Day A Co., Inc.; Jim
Morrison, Townsend,
Dabney A
Tyson; Andrew Raymond, First Boston Corporation

Irv

Maxfield,
Stroud

A

Cohu

A

Company,

Carl K. Ross

New York City; Tom O'Rourke,
Inc., Philadelphia; Carl K. Ross,
Co., Inc., Portland, Maine

Co.,
A

ur
Murphy, A. C. Allyn and Company, Inc.; Commissioner Richard McEntire, Securities
Exchange Commission, Washington, D. C.; Phil)p E. Kendrick, Regional Administrator,
Securities A
Exchange Commission, Boston; Commissioner Paul R. Rowen,
r
Securities A Exchange Commission, Washington, D. C.
>

26

The Commercial and Financial Chronicle

(834)

Record Attendance

Jim

Duffy,

Paine,

Webber, Jackson A Curtis; Bill Burke, May A Gannon, Inc.;
Co., Inc.; Frank Breen, Schirmer, Atherton A Co.

Ed

.v,

Ed

Hunter, Hunter A Co., New York City; Walter
Connolly, Jr., Walter J. Connolly A Co., Inc.; Wilfred
Conary, J. Arthur Warner A Co., Inc.

Palmer, Estabrook A Co.; Ben
Dayton Haigney A Co., Inc.

Bailey,

J.

Lawrence,

John

Jack Fant, Penington, Colket dk Co., Philadelphia;
Bill May, May A Gannon, Inc.

Sam Gronick, Garfield A Co., New York City; Richard Barnes, A. M. Kidder & Co., New York City;




Maguire,

May

Courts

A

A Gannon, Inc.; Warren Donovan, Dayton Haigney A Co., Inc.; Jim Jones,
City; James B. Maguire, J. B. Maguire A Co., Inc.

Co., New York

Lou Walker, National Quotation Bureau, New York City;
John Hudson, Thayer, Baker & Co., Philadelphia;
P. Fred Fox, P. F. Fox A Co., New York City

Bill Salisbury, Union Securities Corporation, New York City;
George Kilner, Brown, Lisle A Marshall, Providence, R. L;
Victor Dugal, J. B. Maguire A Co., Inc.

Ralph Dimpel, Seligman, Lubetkin & Co., New York City; John Tirrell, Star Printing Co.,
Boston; Jack Donnelly, Salomon Bros. A Hutzler, Boston

Thursday, February 22,1951

by Members and Guests

Minot, Kendall A

"Duke"

...

Ed

Powers, Hodgdon A Co.; Sumner Wolley,
Coffin A Burr, Incorporated

Paul

Monroe,

Ed

Hines, Perrin, West A Winslow, Inc.; Ralph
Dimpel, Seligman, Lubetkin A Co., New York City

Hunnewell A Co.; Joe Gannon,
Sullivan, F. L. Putnam &

John

May A Gannon,
Co., Inc.

Inc.;

Volume

173

Number 4988...The Commercial

and

Financial

Chronicle

*

(835)

27

^
•a

We

White, Weld

prepared

report

a

on

There

25,000 UNLISTED SECURITIES

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The Commercial and Financial
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28

The Commercial and Financial Chronicle

(836)

Treasury has the option of calling.

Federal Reserve Should Exercise

a

Naturally, unless the Treasury can

serve

refund these securities at

bank

is reduced by higher re¬
requirements the effect is to

Thursday, February 22, 1951

...

ask for

is

It

additional $6V2 billion.

an

improbable

that

the

Presi¬

lower

a

apply an additional tax against dent will obtain the full amount
the banking system to fight in¬ of taxes he has requested.
Neverfflation, a sacrifice not required of theless, through a combination of
industry, business, or labor.
higher taxes and a curtailment of
crease on the $41.8 billion of fixed
Because the conflict in the phil¬
unnecessary
expenditures the
maturities would amount to $209 osophy of debt management be¬
budget can be balanced so that
million.
In
1952, there are no tween the Federal Reserve Board we should not be faced with the
fixed maturities but there are $17 and the Treasury was being prom¬ inflation of bank credit
through
billion bonds callable. There again inently aired in the press, the deficit
financing.
rate, they will not be called.

Its

So
in 1951
we
are
only concerned
with fixed maturities. A %% in¬

Statutory Powers
By JAMES C. MORRISON*

Vice-President, First Boston Corporation

Mr. Morrison reviews controversy between Treasury and Fed¬
eral Reserve, and contends the best answer to problem of

will not exercise its

the Treasury

maintaining fixed interest rates, while avoiding inflation, is to

option to refund

allow Federal Reserve

sues

over

powers

Says this would increase public confi¬
government securities, while higher interest rates

in

would lead to

investment of savings

more

bond

business,

there

it

insurance

service

debt

lion securities which

in

com¬

1951

or

forced to buy long-

was

bonds from

term

1952

will mature in

the

safe

1953.

side

allowed

to

tal

these institutions sold government

be

bonds to the Federal Reserve Sys¬

the

than faces them today.

gazers

You

picked

timely subject but
you have given me a very diffi¬
cult
assignment.
The confusion
arises

a

from

the

running

conflict

between the

Treasury Department
and
the
Federal
Reserve
Sys¬
tem in the matters of the philoso¬
phy and economics of debt man¬
agement
late

credit

and

control.

last week there

as

was

in order to take up other in¬

tem

vestments, additional money was
into the credit stream.

pumped

Simultaneously, the rapid
sion

of

caused

commercial

expan¬

bank

loans

selling by the commercial

banks to the Reserve System.

The point of view of the Federal

As

spar¬

Whenever

Reserve

be

may

summarized

by

additional

an

total

debt

would

years

be

be

on

they
add

the

end

$255

So

cost

of

three

of

million

on

the

public marketable portion of

the

debt.

tile

the

If

total

amount

of

between

bodies and

no

fiscal

two

predict to¬

can

borrow

to

ernment

these

one

and

the

following

also

were

refunded

at

flexible rates
be

forced

to

that it would not

so

support the govern¬

ment bond market at fixed

prices.

Immediately after the outbreak
in

the

Korea,

known

that

possible

Board

let

it

be

they believed it im¬

to

superimpose

heavy

a

defense program upon an

already

out

tem.

inflation,
controls were placed

unless proper

the

Federal

Reserve

Sys¬

i.

.

/

:

■

"As long as the Federal Reserve
bank credit and the money is required to buy government
supply. In order to curb the ex¬ securities at the will of the market
pansion of bank credit and the for the purpose of defending a

credit

supply, they applied such

their
its

measures

as

within

were

statutory powers. Through
market operations, the

open

Federal
one

forced

in the
Treasury rate to a level
higher. This was to be

year

about

reflected

have

higher rates for all
borrowing. They also

credit and

;

credit.

consumer

in

stopping

the

had

little

expansion

of bank credit and the money
sup-

ply.

The

is

reason

in which

that

the

area

the Reserve System has
to operate is too lim¬

been forced

ited to be
effective. Ever since
World War II the Reserve
System
has continued
to
support longterm 2V2%
ever

bonds above par when¬

the pressure of

ened

that

maintains

bonds

place

at

in

As

rate;

"This

policy

be

take

rate

is

the movement of

such

that

price de¬

outstanding

securities

sufficient to discourage
prospective lenders from selling

loans,

securities in

order

to

make

unless the rate is raised

or

sufficiently to discourage the bor¬
rower, a change in interest rates
is not effective.

At the

same

time that the Board

attempting, by means of a
change in short-term rates,, to
amount

of

inflationary

*An address by Mr. Morrison
tbe Association
of
American
New York City, Feb.

entire

tion

the

of

Federal

Reserve

tem,

ac¬

Sys¬

engine of inflation."

an

On

the

Railways,

14, 1951.




meeting,

government's credit

After the

The

the

other

side

the

of

fence

has favored

a

policy of low inter¬

est rates and it appears to be their

intention

present

to

continue

to

finance at these low rates in spite
of the possible effect upon
our

The Secretary
recently stated

economy.

Treasury

of

the

that

for

for

an

additional

$1.5

higher interest rates at

when

for

a

time

appropriations

huge

needed

billion

are

the

defense

The present

debt of the Treas¬

is approximately $260 billion.
The figure of $1V2 billion used by
the Secretary is a little over %%
increase on the entire debt. How¬
it

debt

should

matures

years.

be

that

noted

over

the

our

next

22

Thus it would only be after

refunding

the

entire

debt

over

this period of time that the addi¬

tional

interest

cost

his figure of $1V2

would

reach

billion.

Using his figure of % %

over

the

there
ury

are

years, let's see what
actually cost. This year
$41.8 billion U. S. Treas¬

public

marketable

to

be

refunded.

and

There

securities

will have
are

also

$12 billion of securities which the

However,

Federal

consented

Reserve

to

astonished

was

statement.

Board

at

President's

the

the

At

had

Treas¬

the

support

time, he

same

in fact,

given level and,

any

Thirdly,
credit

reference
rates

made

was

interest

to

level

rates

desired

the

less flexible

the

still

Federal
be

to

the

Whether

we

its

of

pattern

Reserve
relin¬

will

Board

balance

on

quish its authority and abide by
the Treasury's wishes because of

not

have

under

While

rigid

controls

ful

'

if

,

problem

largely

supply

money

Federal

has

the

by

to

further

prevent

the money

of

this

final

in

word

determining

ing to

that prominent mem¬
like
Senator

see

of

bers

our

Federal

Congress

bring into bal¬
for

credit

and

the supply of money.
1

The

out

at

recently struck
critics of Treasury policy

"who would have the government
make it possible for the banks to
even

bigger profits at

a

time

further

without

tern

damage in

inflationary

I believe

our economy.

it could be done under the follow¬

ing conditions: First, balance the

estimate is
that the cash budget for the cur¬
The

budget.

present

rent fiscal year
will

Secretary

low interest rate pat¬

a

be

in

ending June 30th

balance

deficit

financing
quired before then.

and' that

will

I strongly feel that the
lies

in

The budget

penditures

asked

the defense mobilization."

to

approximately

$13

billion

by

Naturally, higher interest rates the surplus in Treasury Trust ac¬
to
add
to
bank
earnings. counts.
There
could
be
a
substantial
However,
the
Federal
Reserve
Board recently increased reserve saving through cuts in non-de¬
requirements by 2%, and member fense
spending.
Elimination
of
tend

banks

have

approximately unnecessary projects and curtail¬
20% of their deposits tied up in ment of others would carry us
required reserves at the Federal much further toward a balanced
now

Reserve Banks and

receive

no

return.

that

on

It

which they
is

possible
permit the

budget.
to

The

make

Congress may
Federal to sterilize additional de¬

necessary

posits through the process of rais¬
ing reserve requirements to even

should

upped

there

If requirements
would

offset to interest

be

a

are

further

earnings. During
inflationary periods higher inter¬
est rates and higher reserve re¬
quirements go hand in hand in
the fight to control additions to

the money stream.

the

amount

of

mands

far

as

sary

taxpayer

whatever

for

is

to meet the heavy de¬
defense. In return, he

expect the curtailment, as

possible, of items unneces¬

to the defense program. Be¬
$4 and $6* billion could be

pared from the budget if an hon¬
est effort is made by Congress.

woulcj. leave

of between

President

us

with

a

has

The

has

indicated

he

at

be

far
without

point

a

Sys¬

could

not

and

solvency of our in¬

destroying

or

confidence

level

govern¬

Reserve

levels

present

affecting the

of

this

in

in

U;

S.

public

Government

Securities.

fact,

believe

I

along

that

direct

lines

these

would

have the added result

of

ing public

in govern¬
important

to

confidence

securities.

ment

siphon

.is

as.'much

increas¬

purchasing

possible from the public

power

as

in

form

the

It

of

savings. The sav¬
ings will not be invested freely in
Government
dividual

ceive

that

for

put in he will re¬
the government at a

from

later

date

his

feels

dollar

every

the

bonds unless the in¬

purchaser

same

a

dollar

representing

purchasing

plus

power

interest.

Named Directors
Announcement

by

F.

the

G.

Board

Company,
four

new

has

been

made

Kingsley,
of

Chairman of
Mercantile Stores,

Inc. of the
directors:

election of
Robert

B.

Whitney of J. P. Morgan & Com¬
pany Inc., Gerrish H. Milliken, Jr.
of Deering, Milliken & Company,

deficit Inc., Morgan A. Casey, Treasurer

$7 and $9 billion.

already asked for
additional $10 billion in taxes

Actually, when an
earnings assets of and

the

to

believe

stitutions

are

tween

This

selling

to

involve

price

the

of

accomplished
from

permitted
flexibility

of

This could

the

I

willing

sacrifices

policy

bonds

action
as

industry, business and labor receipts estimated at $55 billion,
to forego
part of the leaving a deficit of $16^2 billion.
profits they would realize from The cash deficit will be reduced
is

be

lowering

tem.

Specifically, the

powers.

retard

ment

if

an¬

no

1951-52 calls for ex¬
of $71V2 billion, with

year

the
to

:

best

allowing the Federal
to
exercise its

interest rates.

re¬

proposed by the President for the
fiscal

Exercise

System

statutory

In

be

Should

Reserve

Statutory Powers

It is interest¬

monetary policies.

maintain

is necessary to
ance
the demand

to

increase.

a

it

additions

decide who is to have the

follow

However,

insti¬

from

supply, or to put it an¬
how to eliminate the

should

loans.

purchases

its

bonds

government

in

since Au¬

tutions. The problem today is how

Board

additional

credit

to

the

to

billion

$3J/2

of

traceable

gust

created

been

addition

Reserve

way,

and

make the final decisions.

make

ap¬

required.

.

The

portfolios to retard selling and
If
either through Presidential
thereby slow up the amount of
pressure or lack of action by Con¬
new credit being made available.
gress the Treasury's policy is to
At
the
same
time, other rates
prevail, let us see if we could
would
rise sufficiently to deter

government securities for
the purpose of obtaining funds to

be

strait-jacket
is not neces-

a

the economy if it

other

should

a

doubt¬

am

extent

sary?

of

-

proper

would

Besides, why place
on

the

applied, I

the

within

live

if

controls

cause

Congress

-

were

to

In

budget must be

pattern

the

drastic

as

pattern.

could

we

rate

be

to

the

event

they

by

government
investing

from

fixed

a

balanced.

from the administration

ately

per¬

institutions, the essential controls

plied

resolved.

be

a

purchasing

bonds

of

pattern

by the Treasury, or

or

by
is

Board

fixed

the

more

desired

whether

of

question

have

if the

But

to

were

policy of flexi¬
bility in interest rates to a degree
sufficient to
avert the necessity

either

Question Still to Be Resolved
The

Board

mitted to follow

as

will

interest rates.

of

Reserve

would

all.

at

tinue

Reserve

of

for

system

and

swer

to stop all sell¬

banking

the

of any of our institutions,
Douglas of Illinois believe that
.the same time would cre¬ the Federal
Reserve Board should
ate sufficient losses in securities

marginal borrowers.

dis¬

demands

the

if

upon

no

at

the

is

recently announced have already
been weakened by a growing list
of exceptions.

but

of

it

the controls

note that

vency

higher levels.

next several

it would

market

over

non-banking institutions con¬
at the present rate, tighter
restrictions on building, non-es¬
ury's policy of debt management
sential plant expansion, and in¬
and had agreed to maintain the
creasing inventories
must
be
price of government securities at
applied.
the present price level.
Under such a program we prob¬
This was soon disputed by Gov¬
ably could maintain the present
ernor
Eccles, who stated that he
the

program

ury

ever

The

still could be supported at a price
which would not affect the sol¬

it make
would be politically impossible to
when
ask

no

of long-term bonds should be com¬

ing

Department, since
beginning of World War II,

Now,

has suggested that the support

withdrawn.

turbing to

ities should be reviewed immedi¬

rise in the interest level.

pletely

maintained.

press re¬
statement issued by a

a

controls

and prices must be rigidly

wages

White House

a

lease and

pressure

It isn't necessary

Treasury

which will mature
before

by billions of dol¬

lars.

some

Treasury's Policy

^

Was

the

the

makes

banking system, through the

the

can

short-term

clines create losses in

such

in unlimited amounts.

reserves

long as it and when economies in the budget
long-term are essential.

increase that

Unless

can

selling threat¬

support of
the ~2xk%

the

limited.
rates

level.
a

amount of

limit

stand

the

Actually the change of V\ of 1%
in short-term rates has
effect

.

Treasury, it must
ready to create new bank

increased

margin and re¬
serve requirements and have im¬
posed
restrictions
on
mortgage
I

tablished by the

in

of

types

fixed pattern of interest rates es¬

change

a

fense program

one

upon

money

the

during the emergency.

Secretary has stated that
remains to be seen.
The Reserve
the portfolios of the nation's banks
funds which provide the basis for
Board was created by Congress as
and insurance companies are ad¬
a six-fold expansion in our money
an
independent agency and it is
supply. The one way to stop access justed to a maximum long-term charged with the responsibility,
to Federal Reserve funds is $y" 24/2% rate and that problems re¬
amqng others, of maintaining an
withdrawing Federal Reserve sub- lating even to the solvency of such adequate
monetary
and
credit
institutions might arise from any
port from the government securi¬
policy. In my opinion, the con¬
ties market, and penalizing bor¬ substantial price decline in fixed flict between our fiscal author¬
income securities resulting from a
rowing
by
the member
banks
from

a run-away

in

dence

would increase the cost of the de¬

inflated peacetime economy with¬

causing

He asked for their

the

Secondly,

the

the

cooperation in maintaining confi¬

J/2%

a

quotations

tion, which is the banking system.
during the emergency at existing
"Under our present powers the
levels. The Federal Reserve Sys¬
only way to do this is by denying
tem, on the other hand, advocates banks access to Federal Reserve

of

to

Committee

special issues and
released the Board's memorandum
of all the savings bonds and notes
of the meeting with the President.
which are redeemable on demand
In the memorandum, no mention
but mature over the next 12 years
was made of supporting prices at

Governor Eccles' testimony before

refund

members

and

Treasury

from higher rate, the additional amount
would be approximately $510 mil¬
day whose theories will prevail. the Joint Committee on the Eco¬ lion per year. This is, of course,
an unlikely development.
On the outcome will depend the nomic Report in January:
Even if the cost is about $500
future behavior of the government
"To prevent inflation we must
market.
million, it would appear to be a
stop the overall growth in credit
relatively cheap price to pay if it
What are these two conflicting and the money supply whether
helps prevent an inflation which
theories?
The Treasury Depart¬ it be for financing government
could cost all of us billions of dol¬
ment's opinion is that the present or private deficit spending.
The lars in
higher living costs. In ad¬
pattern of interest rates should be supply of money must be con¬
frozen in order to permit the gov¬ trolled at the source of its crea¬ dition, a further price inflation
ring

Board

saving they Treasury spokesman indicated that

That would

in

the

at

1951

$46 million.

increase

service

in

mature and

Vz% to that amount.

support prices.

House.

assume

were

con¬

White

1952.

So to

let's

panies, savings banks, and others

more

Market

callable

were

at their

time when

a

Open

in

refunded

not

are

at an interest

fusion confronted the market crys¬

never was

interest

an

Again, in 1953, there are no fixed
maturities.
However, if $9.1 bil¬

in government bonds.

Says flexibility in interest rates might avert necessity of Fed¬
purchasing bonds from investment institutions.

In the years I have been in the loans,

is

recently called the Re¬

serve

So there would be no in¬
in

crease

eral Reserve

government

there

unless

saving.

market.

money

dence

System to exercise its statutory

President

is¬

the callable

will

later

of

Mercantile

Inc.

Vice.

and
-

Stores

A.

Stores
D.

President

Company,
Churbuck,
a

of

Company, Inc.

Mercantile

j

Volume

173

Number 4988..

laicandehT.
remmoC Financial Chronicle

(837)

Our

DM You GUESS?

Reporter

The Creators
I honor the

who

man

Or

washing

revamping

window

a

Although the struggle for the control of the
money markets
to have abated
slightly, that is "open mouthwise," there is
apparent solution of these differences yet in the wind.
This
means the government
market, which is the important pawn in the
game, is still being affected by these indecisions.
This makes for

Be exalted his station

or

floor,

a

indecisive

humble his lot,

'

:

:■

Be deserves from us all our sincere admiration—

of

of

source

our

our

/

nation.

wealth,
'

-

20.

page

priee movements on not important volume. It is not
entirely a professional affair because investors have been
appear¬
ing on both sides of the market in the taps as well as the
eligibles.
The defensive dribbling down-tone is due to the
appearance again
of large non-bank investors as
sellers of Treasury obligations.

ever more,

If he gives to his job the best he has got
He's-the

on

no

scrubbing

or.

industry to produce

an

Here's the 1951 version
of (he two angels
appearing

seems

And isn't ashamed to take pride in his work!
Whether

Governments

on

By JOHN T. CHIPPENDALE, JR.

refuses to shirk

29

the

and

*

Federal has been and still seems to be a
selective and somewhat
reluctant taker of the issues which these
institutions are getting
rid of. On the other hand, not a few of
these bonds have found
homes in pension funds and trust
funds.
There have been no real market leaders
because there is no
definite trend discernible at this time. It
seems as though the cau¬
tious uncertain and
limping market we have been having will con¬
tinue to be with us for a while at
least.
-

strength
'

*•

.

."—William Garfield Lightbowne

Barney Nieman

Harry L. Zeeman, Jr.

-

Sales
The

Sees

market continues to move in a restricted
enlarged volume. Price changes, although
minor, have been mainly on the defensive
side, because of renewed
liquidation by the life insurance companies and the
savings banks.

Independent Banking Threatened

range

Carl K.

Dellmuth, Secretary of Pennsylvania Bankers Associa¬
tion, warns if present trend of government interference con¬
tinues,, most bank operations in the future will become abso¬
lutely uniform by law.

.University of Penn-.
*
"V - ' "

in

.

Philadelphia
Feb.

on

Feb.
K.

and

1

Carl

2.

dividual

These institutions

ury obligations.
ward

of expression,
superior quality"^of
private, independent banking over

other

the

concepts,

that

Dellmuth,

of

warn-

ed

of,

threat

which may weaken

the*

in,

iri-

to

attack

or

"The

objectives

will

dependent

reach

collective

cent

in

"Nevertheless,
ture firm in

government
bahk

K.

Carl

of

opera-

tions.

Dellmuth

take

of

than

the

have occurred to each of us,"
remarked, "that the

that

the belief that inde¬

banking

will

be

few of the

framework

of

to

way

the

that

sense

in

some

obligations will be made by

long

from

swap

the

results

some

about

this

have

to

type of clinic

worry

The commercial
the

as

because

centrally conceived directives will

provide the formulae for most of
activities.

our

associations,
pose,

can

very

existence.
"To

Likewise

for want
-

-

the

easily

be

pur¬

of

out

universal

Proceeds

from

There

seems

that

bonds

pose

sale

of

issued

in

connection

a

of

wisdom

status

taking

has

quo

of

whether

resulted

of

or

powers
because
of

these

same

by independent banking?
"Whatever the

the

from

additional

government
abdication

ask

to

a

by
an

powers
_

in Southern

California, principally
Angeles County.
Among
the larger cities served are
Long
Beach, Santa Monica and San Ber¬
nardino.

be,
it becomes abundantly clear that
unless we stem the tide of forces
~

bearing down
the independent

now

of

answer

tem in

on

the

for

(Special to The Financial Chronicle)

banking

sys¬

we must prepare
that inevitable day




HOLLYWOOD,
A.

Wilcox is

Francis
wood

I.

du

Beach

now

Fla.—Raymond
associated

Pont

Hotel.

&

the

New

York

Stock Exchange and
leading Exchanges, will ad¬
mit Francis M. Fitzpatrick, Rus¬
sell C.
Graef, Myron D. Stein,
and George B. Hyslop to partner^
ship on March 1. Mr. Fitzpatrick

other

will make his headquarters in the
firm's
Montreal
office, 276 St.

James
is

Street, West, of which he
manager.
Mr. Steiri,

resident

resident

office,

of
Griswold

the

manager

600

Detroit

Street,

will

continue to make his headquarters
in that city.
'

with

in

the market for not-

these

switches from

are

con¬

It is be¬
bank

desirous of salting

little publicity is being given to

issue

into

the

Vies.

It

seems

as

Kidder, Peabody Co.
Admit

Tamlyn

Arthur
the

C.

New

it

to

^

Partner

Tamlyn will acquire
Stock
Exchange

York

Griswold and will be admitted to

partnership in Kidder, Peabody &
Co., 17 Wall Street, members of
the

New

and

other

York

Stock
Exchange
leading Exchanges, on

March 1.

being obtained from this suggested

as a

whole,

that way at

desire

as

membership of Alexander Brown

Brinton

the quiet side

are on

There

has

as

been

far
and

least

reserve

temporarily.

to sell shorts for any

now

require¬

Likewise,
other

&

Admit

to

Co.,

Wall

1

Street,

New

York

City, members of the

New

York

Stock

Exchange,

will

admit Gerard S. Smith, a member
of the

Feb.
tive

Exchange, to partnership

23.
as

Mr.

has been

Smith

on
ac¬

individual floor broker.

an

pur¬

being used for loans, and not

are

and

uncertainty of daily quotations
this

does

and

not

appear

to

be

far

as

as

loans

While activity appears to be close to

nevertheless

a

STATE

buying by investors in the

some

longer eligibles,

U. S. TREASURY

distressing to the

and

this

as

seems

to

be

coming

and

There have been scale
well

as

the

'56/58s and

MUNICIPAE

'56/59s.

Despite the defensive
very

bids.

few of these bonds
The

of the eligibles market-wise,

appearance
are

SECURITIES

in for sale when buyers appear with

recently offered 13/4S, although still under the protec¬

tive wing of Federal, continue to

move

smaller banks the principal takers.
and down as far

as

quotes

are

into strong hands, with the

The partials are being run up

concerned, without real significance

"*

as

to trend

or

activity.

Rennemo With

Los

With Francis I. du Pont

what's left

America,

ourselves

may

of

purchases of the September 1967/72s

with

mated population of 2,800,000 in
portions of Central California and
in

in

of this business has been

largely from the out-of-town institutions.

government

fractionally true is it not the part

banks,

no

there is

intermediate

the expansion program.

-

a

bank
now

than to get reserves, which

minimum

the

is
dominating
our
The bonds will be redeemable
banking lives at an ever increas¬ at the option of the
company at
ing rate. Implied in- this point of prices
ranging
from
104.34%,
view is the feeling among bankers
through Feb. 14, 1952, to 100%.
that government is taking some¬
Southern California Edison Co.
thing from us. While this may be provides electricity to an esti¬

are

deposit banks at this time.

substantial growth of its business,
and in part to retire bank loan
notes

keep

There is not the

the

by

-some

Money is not plentiful and the larger

should

concerned

are

expansion

necessary

as

Admit Four Partners
A. M. Kidder & Co., 1 Wall St.,
New York City, members of the

to buy longer governments.

at

naming

extensive

made

program

agreement

the

sizable

as

large demand for the shorts, especially Treas¬

a

there seems to be

bonds will be used, in part, in the

company's

.

foregoing I would like

to add this footnote.

to

a

pass

-

competitive
bidding,
price of 100.859999%.

bankers

of

the

bills.

ury

101.34% and accrued interest. The
awarded

been

longer end of the list is concerned.

ments

was

been

\

A. M. Kidder Go. to

Brinton

still is nonetheless

group

also

Commercial Banks Inactive

Edison Co,2%%Bds.

won't

not

Harry L. Zeeman, Jr., Carl "

exchange.

Offers So. California

we

to have the

buying of the 1967/72s but

concerns that

the

though

admit, however, that
American banking, during the last
three and a half decades, has felt
the weight of government control
to a degree not experienced dur¬
ing the entire previous history of
Halsey, Stuart & Co. Inc. yester¬
this country. If the present trend
continues it can be predicted with day (Feb. 21) offered $35,000,000
Southern
California
Edison
Co.
some accuracy that most bank op¬
erations in the future will become 27/s% first and refunding mort¬
absolutely uniform by law. In that gage bonds, series C, due 1976, at
event

has

more

More than

Halsey, Stuart Group

"One must

some

have

quarters that

,

pened to us—as yet.

Central Banks

seem

and the proceeds have been invested in the Vies.

hasn't" hap¬

it

securities

down the premium.

t

in

on

keep¬

are

premium taxable eligibles let out recently by these

carried
lieved

the

There is also

these

that

ones

bank-eligible issues. Switching is also
being done by fire and casualty companies within the
tap group
itself as well as from the
longer bank bonds. There have been a

simplify
bank kind of private, competitive econ¬
operations is to surrender our last omy which has made America the
vestige of independence and yield most productive nation in world
to the temptation of having the history. In the judgment of many,
government make all of our bank¬ this challenge represents the most
ing
decisions from one central pressing bank operations problem
point. The idea is only fantastic of all"
easiest

within

the

are

concerned, although
passing interest in the other near-

a

too large amounts of the Vies and
the result of shifting from

cerns,

on

in

Charitable institutions

the

Mr. Dellmuth

the unfavor¬

on

(B)

Marks & Co. Inc., 50 Broad Street,

New York 4, N. Y.

earlier maturities.

the fu¬

living.

it

volume

than

more

eligible tap bonds.

This conviction must
thought provide the incentive for seeing to

the

once

face

we

is not all

Pension funds and trust accounts

there appears to be

care¬

pendent banking is best suited to
the traditional America^ pattern

,f,

' *

k

"More

it

involving

enough of these for¬

ing the ineligibles from depending too heavily

the utmost of team work.

of

domination

action

are

'for support and stable market action.
The 1959/62s
greatest attraction as far as these buyers are

To

ful thought, determined action and

re¬

years

our

though there

as

side, because there have been and still

tions.

from without.
easy.

banking aris¬
ing from the
trend

us

job will not be

seems

are important buyers
Federal in there taking certain
issues on a scale basis
doing spot buying when weakness appears in
specific obliga¬

or

from with¬

us

It

commitments, which

aside from

are

Asso¬

ciation,

may

able

dedicating ourselves to the
complete rejection of any endeavor

the

letting out the tap bonds in order to
give them higher income than the Treas¬

.

Pennsylvania Bankers Association

Secretary

the

still

Nonetheless, the restricted market

the

in

we

are

are taken up
as time goes along, to
-result in sales of government
obligations for quite some time yet.
•It had been expected in some
quarters that the selling of govern¬
ment obligations by non-bank
investors would be drying up in
the not too distant future because of the
new regulations and con¬
trols. These ideas, it seems, have now been
revised, and it is be¬
lieved that liquidation of Treasuries will
continue in fairly sizable
amounts by these large institutions for some months
to come.

freedom

in

and

somewhat

on

meet commitments that

j In his concluding - remarks to. when all banks in this country
the Bank Operations Clinic of the. will.be
operated by government
Pennsylvania Bankers Association, rather than by private initiative.
held at the
"It is because we believe in in¬

sylvania

by Non-Bank Investors Continue

government

(A) Barney Nieman, Carl Marks
& Co. Inc., 50 Broad Street, New
York 4, N. Y.
,

Toronto Bond Traders

Stone & Webster
PHILADELPHIA, Pa.—Stone &
Webster
announces
nemo

has

Securities
that

Corporation

Thomas

J.

Ren¬

become associated with

the sales department of the firm's

Philadelphia
Building. He

-

office,
was

Packard

formerly

asso¬

To Hold Annual Dinner
TORONTO,
ronto

will

Bond

hold

Traders

its

dinner at the
on

Friday,

Canada —The

9.

Derek

G.

Simpson, Midland Securities Lim¬

Co., Holly¬ ciated with the New York office ited, is President of the Associa¬
of

Harris, Hall & Company, Inc.

tion.

8c Co.

Association

eighteenth annual
King Edward Hotel

March

Aubrey G. Lanston

To¬

INCORPORATED

15

Broad

Street

45 Milk Street

NEW YORK 5

BOSTON 9

WHitehall 3-1200

HAncock 6-6463

J/

30

(838)

■The Commercial and Financial Chronicle

;

Continued

Utility Securities

American Power &

the Commission's Rule U44

Light Co.

impose price controls and at
the same time keep pouring out

we

(C) announcing that it was consider-

more

ities.

It had been rumored for

some

time that American

was

a

sale would

probably be facilitated by

a

breaks

would

to

sale

prevent

3 to about $24-$26

per;• American share, and as American also has
approximating $3 a share, break-up value for the
be estimated at $27-$29
compared with the recent)."*
.

,
.

t

now

serve

them.

The

sale

described in American's notice

,

ployees

of

under the

Washington

to

which,

plan

the

will

also

provide

SEC) for payments to

together with

amounts

l deemed

at call prices.

and

stock

be

no

stockholders.

commitment has been made to

purchase its interest in the Washington company, it believes that
there

are

reasonable

prospects

It asserts that the SEC has

of

.

a sale to

of the

transaction.

public bodies" and part of the notice is devoted to

taining this poin't of view.
ings

of completion

jurisdiction "to deal with the merits

no

sus¬

The Commission has announced hear¬

Feb. 20 and 26 to consider the
matter, chiefly to receive
statements relative to the question of its
over

the

transaction.

Repercussions to American's

;

is

strong

local

opposition

to

announcement indicate that there

this

proposed sale.
The Spokane
charges that American is attempting "to
the river" and
"trying to put over on this city a public

Chamber of Commerce
•

sell

us

down

ownership deal directed by commissioners not

^ane-

•

•

make it
votes

.

■

■

even

on

whether

a

PUD

can

acquire private

utility properties.

It is also reported
by the New York "Times" that six United States
Senators from
Washington, Idaho and Oregon held a

meeting

to discuss the sale.
In American

'

s

and

other representatives of the SEC

I
notice to the SEC it

was

stated that American's

investment in Washington, plus its
equity in surplus earnings, is
over
$68,350,000, and that the reproduction cost of the
property,
less depreciation, is over $96,500,000 after
providing for retirement
^ bonds, preferred stock and all net liabilities. Tt set
forth that 1950

earnings, after adjustment for
non-recurring benefits
creased Federal taxes at

>
•

that

of the countries which have

undergone runaway inflation have
so

a

47%

and

for

in¬

rate, would approximate $2,608,000,
that future earnings might be benefited by the
proposed conctruction of the Cabinet
Gorge Plant, if this could be debt-financed.




when

party

a

in

power

the price level was rising;
prices falling, there have
only two occasions when

with

been

failed

they

They fix

at it longer.

been

have

prices, ration and subsidize agri¬
cultural commodities pretty well
across

board; they have had

the

do

work.

to make the
will have a

this
We

to

system
similar

experience if we stay with it long
If we won't let the price

enough.
system

function

shall have to

we

rascals step in and do the jobs that the
price system formerly did for us.

the

"turn

to

than we do, for they

better

out."

summarize, I doubt that the
of inflation are suffi¬

In

first act of the national

the

Price

melodrama,

is

Freeze

the

fair-haired hero who would save

villian, Infla¬

Little Nell from the

tion. But in Act II he must request

of

aid

the

character,

low

that

Rationing, and in the last act the
two of them must beg the help of
that

ugly fellow, Subsidies. If the
all this and still

audience knows

to be

is

a

wants to pay

to see the show, well

threat.

grave

in

matter

a

munists

which

the

past masters,

are

in

spite

of

system

a

of

to

to
Philadelphia, the egg trade
recognizes the call for more eggs

Inflation

Much

relative

corn,
the us. Then we get in trouble, and
recognizes the consumer's need to ration and subsidize. But
request for more pork, and he this time we feel the full impact,
responds accordingly. If the price of the program and are likely to
of eggs rises in New York relative
kick it out. This cycle took about

farmer

Can We

in New York
the

can

a

coun¬

and

diverts eggs

high-priced outlet.
with

sumer,

her

The

market

An Alternative

to

con¬

basket

under OPA.

four and a half years

to

Luckily there are alternatives
all this—taxes, which mop up

her arm, chooses goods on the
basis of price. If steak is high she
on

buying power, and credit controls,
There are three differ¬
which prevent the creation of new
psychological level,
buys hamburger, and if both are money.
These take the upward
the political level, and the eco¬
high she buys beans. One hundred pressure off the price level. If we
nomic
level,
each
successively
fifty million people vote on these had the courage to apply these
higher than the former.
prices. Everybody serves on the remedies in sufficient degree we
The psychological level is the
committee that determines mar¬ could halt
inflation, and at the
one at which people start to com¬
ket prices, and serves without pay.
same time let the prices of indi¬
plain about the rising prices. This
What happens when we hold vidual
commodities fluctuate
is a very low level; an increase
these
prices below the market freely. We would not merely post¬
of a few cents a pound in the
level?
pone inflation to some later date
price of beef.
First, the consumer recognizes and we could preserve our free¬
The political level is somewhat
The advantages of pay-asthis as an encouragement to in¬ dom.
higher; it is the level at which
we-go
are
enormous,
but there
crease consumption, and cleans off
the complaint about rising prices
must be a great deal of education
the shelves.
becomes sufficiently great so that
before we're ready to take that
Second, the farmer recognizes
the Congress will do something
course.
about it. Maybe a rise of 10% in this as a sign to reduce production.

try stand?
ent levels:

•

a

the

year's time will bring about this

Finally,

there

is

the

economic

level, the level at which the coun¬
try's production is really harmed.
I

So

shortage develops, and the
supply must be rationed.

a

scant

reaction.

don't know

where this level

is,

This

not have been contem¬

may

plated at the time the ceiling price
was set, but given time it follows
as

the

night follows the day.

it is fantastically high.
The
doubling of our price level during

Finally,
with
artificially
low
prices, production continues to lag

the

and subsidies must be resorted to.

war

not

a

was

handicap.

prosperous

paying her
level in
as

high

age

After

World

I, Finland's price level

times

10

aid to production,

an

and

prewar,

enough

she

was

continue

debt. China's price

war

1948

to

was

was

5

million times

in 1937, and the aver¬
level of living was much the

same

as

as

Ceiling
of

the

are
an

rationing
and
three-legged

economy

which

en¬

deavors

changes:
Transfer of the

Exchange mem¬

bership of George H. Flinn, Jr., to
Andrew Baird

will

by the Exchange

for

or

three.

length of time on
but needs all
Our World War II experi¬
any

two

legs,

serves

In 1942

as

an

illustration.

attempt

an

was

made to

prices rise and the costs lag; they
like inflation.

potatoes but'failed to issue ration

only

the

potato

industry

with

leg of the stool—price
OPA fixed a low price for

be considered

March 1.

on

Transfer of the Exchange mem¬

bership
Baker,
will

Albert

to

considered

be

one

tickets

or

subsidize

production.

change

on

Transfer of the

Exchange

Levy
the

economics.

These

Lumber

is

Interest

commodity for
attempted us¬ linger in
ing only two legs of the stool— land will
which

control

a

was

the

Ex¬

mem¬

bership of the late Frank E. King

encouraged
to to Theodore
There is one Consumers were
use
potatoes too rapidly and the
which
suffers
sidered
by
spring
there
was
a
during inflation—those of fixed following
March 1.
salaries. Unfortunately, this group potato famine.

editors, radio
Congressmen, and

by

G,

Deuble

H.

March 1.

group

newspaper

William

late

the

of

Jr.,

important

commentators,
professors of

March 1.

Transfer of the Exchange mem¬

they like inflation.

includes

considered

be

on

ingston to Elliott D. Fox, Jr., will

one

fixing.

plentiful;

Stock Exchange

stand

of people differently, as everyone
knows.
Farmers find that their

Laborers find that

The New York

bership of the late Gerald M. Liv¬

control

Wages rise and jobs are

Exchange
Weekly Firm Changes

to hold prices below the
equilibrium level. A stool will not

ence

before.

Inflation affects different classes

prices,

subsidies
stool

New York Stock

has announced the following firm

but

War

living in Spo-

-A- bill is reported pending in the
Washington Legislature to
mandatory for cities of the size of Spokane to hold
popular

recently with the Chairman

,

interest

on

jurisdiction

maintain

increases

of

matter

a

How much inflation

re-

cash, U. S. Treasuries not in excess of $5,000,000 prin¬
cipal amount and bonds of public bodies not
exceeding $15,000,000
principal amount, would go to American, which would take
steps
own

nation

Stand?

will include

American states that, while

of our history as a

years

dangers

cause.

is

many

available

would

all

In

people are afraid that un¬

em¬

The balance of the purchase price, which

to distribute the proceeds to its

It

How

the company's stock.

or

$6 preferred

160

time.

nation, there have been only two
occasions when the people failed

To

seated

(as

company's retirement plan, would total about $2,700,000.

Washington's 3bonds

rising

from

them

ceiling prices.

American's notice did not disclose the details of the
negotia¬
tions with the PUDs and
municipalities, but indicated that the sale

might embrace either the physical assets

the

election

at

understand

they

England

In

this

Com¬ know that he can't have artifici¬
and it ally low prices which he consid¬
long as its productive plant is doubtful if we can out-regulate
ers
desirable
without rationing
was
intact.
The only examples Stalin.
When we fix prices we
and subsidies which he considers
of runaway inflation that I know elect economic
weapons in which undesirable.
It is a package sale.
of occurred in countries ravaged our
adversaries excel.
We do not know this, hence our
by war, torn by revolution, or
Prices
serve
three
functions. enthusiasm for
price control. The
devastated by some great disaster.
They tell us what to produce, they first effect of price control is to
At times of defeat, revolution and
guide commodities through the permit us to buy at a low price,
disaster, runaway inflations have channels of trade, and they tell
which we all like. This continues
accrued, but here again inflation the consumer what and how much
so long as the momentum of our
was
a
symptom of a more deep to consume. If the price of hogs
past production pattern will carry

done

Evidently the purchasers hope to pacify the municipalities by
permitting them to acquire those parts of the company's property
which

behavior

him.

so

.

market price around 21.

holding them down now

I know of no record of any

Light if it can be consummated. American's
on existing tax laws, American would
receive net proceeds which, after reflecting
every reasonably conceivable liability and adjustment of price and all costs incident to
the transaction, would be not less than
$56,000,000. On the other
3 liand, it is believed that the net proceeds to American might rea¬
sonably be as much as $61,000,000." These amounts would be equal

now

if

fall

must

that underwent runaway inflation

of

notice states that "based

can

of

government thought good for

the

ex¬

own

of the reaction
the people to inflation is their

A good measure

which

price the amount of sugar

What, then, and good. But they had best not
period of many
too
loudly or too early
of the appropriateness of the rem¬ cheer
tions of Austria, Russia, Hungary,
Price
Freeze
makes
an
edy which has been proposed—a when
China, Italy, Germany, Greece, freezing of prices? Let us remem¬ entry.
and our own Revolutionary War. ber that
regimentation of prices
The American citizen needs to

:

stock

they

covering a
years—the infla¬

The sale would be highly favorable for common stockholders

net cash assets

th^t

assurance

no

flations in many lands

of American Power &

;

to live in

their

from

and

them

to

in¬

find

They

harmful

ciently great to cause us to scrap
the price system and go in for
less we have price ceilings, prices
price
ceilings.
Admittedly, the
will
"go through the roof" or country is rather slow in lining
"go out the top" and we would up behind me on this point.
have runaway inflation such as
The Functions of Price
Germany experienced in 1923 and
like
Greece
had
during World
Suppose, for the sake of argu¬
War II.
I have studied many in¬
ment, that we concede inflation

Washington Water
a PUD. Moreover, the state utility
commission in Washington also has had ideas on the subject.

•

are

inflation.

of

generalize
perience.

to

now,

keep

Some

Power's property in that state to

•

gates

fear to open the

Runaway Inflation?

There has been considerable opposition to the proposed sale
because of various cross-currents of opinion or policy in the area
; eerved by Washington. There has been some feeling by municipal¬
ities that the PUDs should not be allowed to monopolize the acqui¬
sitions of private utility properties. The State of Idaho
recently

designed

evils

flation

later.

'

law

that

ance

Guy C. Myers
(of 32 Wall Street, New York City) who managed the sale of
Nebraska utilities to public power agencies in that state some years
&go, and who attempted to arrange a unit sale of Puget Sound
about five years
ago, was still the "mastermind" behind pending
deals, but his name has not appeared in connection with Ameri¬
can's proposed sale of Washington Water Power.

a

flood

may

Neither is there any assur¬

later.

It has been generally assumed in the Street that

passed

is

rise

prices

l>een anxious to avail themselves of its application.

•

We

There

recent decision

•

'

the

the

or

In¬
dam

when

regimentation.

(long delayed)
upholding the Constitutionality of a law which permits a number
of PUDs (and presumably municipalities) to "club together" iii
purchasing the property of a private utility company. This question has been an issue in Washington politics for a great many
] years and litigation has delayed application of the 1949 law. Both
American Power & Light and Puget Sound Power & Light have

•

price control.

gates, and so continue

•

f

power we

larger and larger in¬

comes

opened.

of the Supreme Court of the State of Washington

1

buying

more

a

dam of

flation

•

Such

up

ening

templating such a sale, in preference to disposing of the stock
through investment bankers (as was done with Pacific Power &
1
Light) or by distribution to American stockholders.
By sale to
public agencies considerably more could be realized because of
the ability of such agencies to issue and sell tax-free bonds and
\ &lso to operate the property free of Federal income taxes,
;

•

for

commodity

a

was

which

for much of the furore about the

flationary lake behind the weak¬

con-

•

t

and

build

municipal-

or

In other words, if

World War II.

} ing sale of its most important asset, the entire equity interest in
Washington Water Power, to public utility districts

Sugar

price fixing, rationing and
subsidies were all in operation.
in holding down prices we will people talk and write all out of The
consumer
therefore had a
have inflation later, when we take proportion to their numbers
or reasonable
degree of certainty that
off controls.
This occurred after importance, and are responsible
he would be able to buy at low

]
American Power & Light on Feb. 15 filed an 11-page notice
| and a number of annexed statements with the SEC, as required by

•

sidies to stimulate

Fallacies oi Price Control

By OWEN ELY

»

fixing and rationing. Sub¬
production were

price

from page 6

lacking and lumber was scarce.

Public

;

Thursday, February 22,1951

...

of

the

Rotan,
cease

will

be

con¬

Exchange

late

E.

Mosle

on

E.

&

Feb. 28.

on

MelMore-

Volume

173

Number 4983...The Commercial

and

Financial

Chronicle

(839)

31

'

lilt;

Continued from first page

Let

ever, military men are generally
in agreement that the Soviet Un¬

ion, with its 200 Red Army divi¬
could roll all the way to

Chiang Kai-shek Open

sions,
the

English Channel

unless

Let

and

the

other

apply ourselves tonight
to examining the situation we are
now, (in.
Here briefly is what we

flict

more

see:".,./

ple.

free

nations

were

But

us

r

disarming. That is Fact Number 3.
No

armed

might

the

and

tactics

the

managed
tion

to

from

Soviet

Union

its

expand

170

million

States

of

almost without

muni'st

peacetime

half

Asia

is

of

and

con¬

half

and

threatens
both

on

Fact

physically

Europe

the

hapd, devoid of the guile and im¬
morality which the communists
practice, have failed to produce
the political weapons
necessary to
match

the

unprincipled tactics of

the Soviet Union.

True, ECA has

been

weapon,

has

devised

had

as

some

a

and it

but it has

success,

not been enough
by any means.
Our counter-propaganda, a politi¬

cal weapon so effectively used by
the Soviet .Union, has been
long

'on quantity and pitifully short on
quality. Our programs of techni¬

assistance

cal

and

capital

loans

and have not proved too effective.

selves

have permitted

we

our¬

to

be

completely out-ma¬

neuvered

in

the

employment

of

the

com¬

re¬

are

United

is

in¬

States

everywhere.

at

last

being

and construc¬
aircraft carrier has

groups,

super

finally been started all

again.

over

nations

present time,
the

world

muster

stop

Number
;

That

weapons.

Fact

is

2.

the

last

five years increasing its
might, the free- countries,
and particularly the United
States,
have been busily engaged in re¬
ducing their military strength. In
Our

country, the record must

own

Show

that
the
Republican 80th
Congress passed laws directing the

President

build

the

Air

to

groups,

the

of

United

Force

States to

to

up

70

strengthen the Marine

out of the

being taken

mothballs.

ask you—could it be that the

I

80th

Congress

was

right after all?
We

nation

learned

ago

that

suddenly launch

can

rearmament

no

huge

a

without

program

throwing its entire economy badly
out of joint.
Because that is a
fact, the

Administration found it

to seek, and Congress
imposition of wartime

necessary

to vote, the

economic controls.

So, once more
is plagued by arbitrary

America
controls

administered by political

favorites and White House errand

boys.

Once

with

burdened

more we are

bureaucratic

red

tape, high

prices and shortages.
think

I

what I

I

be

can

plans.

These plans called for the

armed services to be

by the President's

reduced, and
directive

own

advance

in

Two

nations

in

Europe

looking in. Yugoslavia,
satellite, has broken with
the Soviet Union, and Tito casts
former

an

occasional

the

friendly

Western

glance

of

the

for

Had the

directives and policies of the Re¬
publican 80th Congress been fol¬
lowed

strongest military powers

exists

might

have

been

now

averted.

Now, let us examine what we
are doing
today from a practical
standpoint.
We

appear
to have solidified
position along the Han River
in the vicinity of the 38th parallel

our

in Korea. That theater

occupies

proximately 200,000 of

our

ap¬

troops,

On

base of operations.

a

Formosa

to

the

south,

the

That

briefly is the practical sit¬
go from

we

Apparently it is the aim of the
Administration in Washington, as
it has been for the past five
years,
to put our eggs in the
European
can

this
more

members

of

the

community.
to

Tito.

with

We

We

the

North

sending food

are

in

are

Atlantic

consultation

governments of Western

Europe and their military leaders.

$4 million already had

.been spent, was ordered "halted

by

the White House in 1949.

the

Generalissimo

fighting forces.
Truman

ment

Military Assistance Program
;

Resolution, laid the groundwork
for the Military Assistance Pro¬
gram,

and the 80th Congress also

voted

funds

protests to send
communist

of Generalissimo

The

to the anti-

arms

Chinese

Government

Chiang Kai-shek.

Military Assistance Program

commenced,
but
nately the military aid

was

unfortu¬

that the
Administration permitted to reach
the anti-communist Chinese Gov¬
ernment of the Generalissimo

far short of what

fact,

it

that

pitifully

was

is

all.

not

was

fuzzy-minded,

was

needed—in

small.

Because

pinko

we

officials

of

the

atomic

bombs.

To

satellites
years

in

program

sum

the

and
up,

erations

secrets

hydrogen

the last five

enormous

armament

while the United States




by

the

sea

to

op¬

Generalissimo's

forces

on

vent

capacity of the
European nations to fall into
munist
have

control.

a

It

is

that

program

free
com¬

essential

to

this

meets

communist

tinue

But

I

protest

with

every

of

which

over-all

any

strategy

virtually ignores the focal

point of

trouble

our

today—Asia.
And I might add that Republicans
in countless numbers, myself in¬
cluded, have been protesting such

policy, such

Reds.

nese

bands

con¬

the

Chi¬

on

Approximately 1.5 mil¬

lion anti-communist Chinese guer¬

rillas
In

French

called
army,

composed

Chinese
force.

Indo-China,

"volunteer"

Reds,

The

In

the

erations

substantially

engages

a

constant

of Burma,
istan
In

viet
are

and

of

approxi¬

men oper¬

the

Chinese

threat

to

the

the op¬

Reds

are

security

Malaya, Indonesia, Pak¬
i«
"i
'

India.

Europe'the<forces of the So¬
Union

and

its

puppet

states

comparatively quiescent. How¬

figures dramatically
extremely heavy

the

further

fact

that

each

at

revenue

as

On

the

This

the

1%

equivalent to $2.31

of

its

long-term

by

gross

level

share before

a

funds

reserve

and

$1.06 a
for
such

allowing
this, $1.50

of

paid in dividends.
top

on

of

the

traffic

Western

is

share

a

This year

favorable

railroad

general

picture,

expected

North

to

benefit

materially from the all rail
ment

of

iron

down

and

ore

usually

drops

portions.
and

for

ings

traffic

negligible

pro¬

this

too

jump in

the

closed

are

ore

background,
leverage, it would

high

appear
a

to

move¬

during

iron

With

the

not

when

fantastic

common

to

share

look
earn¬

this

year
to the
$12 - $15
With such potential earn¬

cient of the major
carriers, meas¬
ured
by the pre-tax

range.

profit.

siderable

margin

There

are

for

reasons

showing,

and

of

number

a

this

of

unsatisfactory
least

at

to

a

mounting

rial

and

fuel

and

wages

costs

middle

20s.

con¬

obviously hard pressed to ab¬

sorb

ings the stock obviously has con¬
speculative
appeal ! in
the

mate¬

except

Bertram

Seligman With

Straus & Blosser in N,Y.

when

traffic

is
at
very
high levels.
Also, there is little cushion to off¬
set

traffic

declines

when

they
'

.,

One weakness is the
of.

importance
business, and par¬

passenger

ticularly the short haul commuter
traffic.

This

is very expensive to

handle, and

as

a

practical matter

impossible to get rid of.
the road
of

low

Secondly,
large amount

a

density branch line mile¬
is true that considerable

It

age.

operates

sions

these lines but it is

its

reached

were

mistration

a

by the AdWashington to give

in

blessings to the Chinese

munists

as

Orient,

as

ally,

the

com¬

political force in the

a

opposed

to

established

great

our

government

in

abandoning

of

some

a slow
process
and much still remains to be done.

Bertram

Straus

Seligman

&

Finally, the road has an unusu¬
Blosser, members of
ally short haul on much of its the New York and Midwest Stock
freight
traffic.
Thus,
terminal Exchanges, announce the opening
costs
impose an unduly
heavy of an office at 30 Pine Street, New
burden.

of the Republic of China.

Obviously, terminal ex¬ York City, in charge of Bertram
just as,heavy if a ship¬ Seligman. Mr. Seligman was for¬
moves
50
miles
as
if
it merly
with Townsend, Graff &

penses are

Aid to Nationalist China

How
that

Americans

many

ment

recall

moved

200

15, 1945, President
Truman publicly announced to the
world that unless the Republic of

four times

disappear.

Dec.

on

admitted

Chinese

government,

would

be

How

cut off and that General
was

sent

that

the

to

to

American

off?

cut

Reds

China

to

troops of

aid

many
was

Marshall

make

sure

Generalissimo

Chiang Kai-shek stopped their at¬
tacks

the Chinese Reds?

on

How

Americans recall the pro¬
tests against this
policy made by
such outstanding
experts as Gen¬
many

people

recall

declared

that

General

failure to

our

help the Republic of China may
be "the single greatest blunder in
the history of the United States."

miles

and

produced

During periods of boom traffic
these

ern

basic

tend

management has been

aggressive
to

weaknesses

the

still

been

going

to

measures

extent

difficulties.
have

to

minimize

possible

Among

the

basic

these

steps

dieselization, which is
and,

on,

mentioned

as

abandonment of unprof¬
itable mileage.
With these for¬
ward looking steps, and with the
prospects of a peak level of rail¬
traffic

road

there

come,

for

is

some

every

years

reason

to
for

anticipating a sharp upturn in
earnings over the near and inter¬
mediate
In

terms.

of

the
Asia

over

anti-com¬
once,

China! Are

going to make that

same

and
we

mistake

twice?
%

•'

America

has

in

says \ye are

suffered

Korea.

Mr.

50,000
Truman

going to stay in Korea.

What is the strategy.
Are we going to leave

and

West

in

gage

Dean

with

Orman

securities

a

peak

World

earnings

1942.

This

was

War

II

reached

were

before

in

and

when

the

business.

Harker Co. Admits
ANGELES, Calif.—George
has been admitted to part¬
nership in Harker & Co., 210 West
Knox

Seventh
Los

charges of the old company.
1942

common

fore

sinking

share

and

Street,

members

some

has

been

with the

think

the

off them

pressure

can

200.000

planner
be

taken

by deploying other hun-

Continued

on

page

the
Mr.

firm for

time.

earnings, be¬
other

Specialists in

In

reserve

reached $25.88.
Even in
1945, when the tax benefits of the
old capitalization were no
longer

RAILROAD

effective, these earnings remained
above $13 a share.
fell
rapidly,

Postwar, they
amounting to only

SECURITIES
Selected

Situations
r

♦

at
-

all

32

year,

In the following

1949, the company

severely
dented

affected
winter

by

storms

was very
unprece¬

Timet
'

„

*

%

$1.94 in 1947 and then recovering

master

of

Angeles Stock Exchange.

reorganiza¬
still

to $4.26 in 1948.

„

at
en¬

company

American boys stranded in Korea?
some

to

LOS

period

Or

does

offices

Avenue

funds,

'

,

527

Knox

the

had the tax benefit of the higher

forces

PUEBLO, Colo.—Robert J. Dean
and Willard B. Felton have formed

Felton

above,

We

munist

(Special to The Financial Chronicle)

taking

tion

the Reds took

Felton and Dean

Also, the North West¬

Stop and think.
abandoned

Co., and prior thereto with Ward
& Co.

much revenue.

as

j

h

c

o

t/wRqfii

25 Broad Street

a t i

1

.

-

$).

o

New York 4, N. Y.

Telephone BOwling Green 3-6400
Members Nat'l Assn. Securities Dealers, Inc.

and

less

<

is

Federal income taxes.
Last year
the company earned $2.49 a share
of
common
before sinking
and

months the Great Lakes

basis

of

1950

*

levr

highlighted

progress has been made in recent

casualties

area.

erratic,

years

so-

French

a

French have

balance of Asia,
of

a

communist

been

to 1943 when the first secret deci¬

engaged in these sorties.

are

however,
earnings.

strategy, for years.
Our protests date all the
way back

many

raids

have,
have

re¬

at my command the formu¬

mainland, anti- MacArthur

guerrilla

make

to

has
been
quite
liberal with dividends. Dividends

come.

problem.

against the Chinese Reds,
inactivating the 800,000 troops eral Wedemeyer, Patrick J. Hur¬
ley, and William C. Bullitt? How
the Island.

On the Chinese

reorganization,

is

thus

in.

Russia and its

have spent
an

Formosa

mately 150,000 fighting

was

the

Fleet to

ating in that

ion

steal

sending

But

security setup, the Soviet Un¬
to

27, 1950,

had

our

able

we

June
were

on

that

announce¬

prevent any more air and

Administration

over

official

Korea

on

the Seventh

The Republican 80th Congress,
by passage of the Vandenberg

In fact, President

in his

declared

his

and

ing this
manage¬
ment, since consummation of the

must

Everyone knows that we
not, if we can possibly pre¬
it, allow the resources and

Americans recall that the aid

which

Reflect¬

Europe.

must

we

effective aid program for

an

back

signed to oblivion, and construc¬
tion of the super aircraft carrier,

strong.
condition, the

on

siderable extent many of them
ap¬
pear of a premanent nature. With
this low profit
margin, the road

Everyone knows that
have

its

on

dividends

investment standing of the road's
securities.
Consistently for many
years (except for the war period)
it has been one of the least effi¬

of

government, the Adminis¬
tration in Washington refuses to

con¬

commensurate

be put on the
Europe. We are at
moment
sending more and
military
supplies
to
the

troops should

Continent

simo's

virtually

was

It is felt, also, that if such
a
sharp spurt in earnings does
eventuate, as it did in World War
II, it will be accompanied by

record there is little basis for en¬
thusiasm
as
to the fundamental

told

are

China

Corps

gains.

that Ameri¬

We

offi¬

we

period to come its earn¬
ings could well show spectacular

is

erage

Out

cially recognize is the Generalis¬

that

definite

$5

the

was

Force

China

in¬

an

the

on

leverage in the stock.

funds.

gov¬

of

for

illustrate

nancial status is

Chiang Kai-shek, still
out, together with its anti-

800,000 troops.

face

we

above

munist though the Franco regime
is.

eralissimo

communist army of

that

economy

The

after

public of China, headed by Gen¬
holds

of Chicago & North West¬
feeling that in the defense

earned

was

share

a

•'

-

common

$1.50

other

lation

the world crisis which

the

than

preferred.

the

source

us, and

at

have
spec¬

equity.
The road's debt
burden is quite small and its fi¬

of sabotaged, the
Korean conflict might never have
controls'and

stock

interest

junior

instead

wartime

ulative

in Europe today, remains isolated
from the free nations, anti-com¬

Despite the fact that the only

held to 48 groups, the

at

Spain,' the
guardian of the Pyrenees and one
powers.

ernment

was

on

are

the outside

a

Chicago & North Western
Many railroad analysts
been looking with renewed

ern,

countermanding the action of the
Republican 80th Congress, the Air
Marine

to

Conti¬

productive

pardoned

about to say:

am

recognized government of the Re¬

other

Soviet

basket.

long

tion by the construction of a
super
aircraft carrier. But
unfortunately
had

not

here?

The Navy is

own.

with Japan as

Administration-

could

than 60 divisions

its

Corps, and to broaden naval avia¬

the

combined

uation. Just where do

Finally, while Russia has spent sky-high taxes might not be with

armed

rearmament

undertaken by the
of Europe.
At the

the free nations of

more

a

the South

nental Europe.

happened,

political'

were

The Army is being expanded. The
Marine Corps is coming back into

have operated in dubious fashion

'In short,

70

a

Republican

The free countries, on the other

the

So, we

nations

Force

to

tion of

to

free

Air

built

That

1.

that

might.

cost

the

The

of

other

continents."

Number

creased

words,

human

fact

arming—rearming at greatly

so-called

over

armed

and

to

has increased its

now

and

shot, Com-

a

five

five-fold

beings' and

halves

in

years

domination

trols

firing

Russia

the

conspiracy is essentially a
conspiracy employing deception

has

people

to

has

munist

domina¬

800 million people. In other

than the American peo¬

world

credible policies which the United
States and other free nations have

followed,

con¬

despite its terrific cost,
finally awakened the
and
certainly the United

Korea

$infpe the end of World War II,
dueprincipally to the use of
infiltration, and due also to the in¬

regrets the Korean

one

miraculous

a

program

free

qualifications into practical action.

the West

on

and to the Pyrenees on

Second Front in Asia

u;

.

32

The Commercial and Financial Chronicle

(840)

Continued

from

page

but

31

wherever

Kai-shek Open

the

The

of

Soviet

a

sweep

across

Europe, why, may I ask, do we not

employ the 800,000 anti-Communist Chinese troops on Formosa?

State

must

we

"This

Department

tion of

master

Kremlin

the

in

their

on

eye

which

the

"Daily

William

Worker."

American experts to

Z.

a

Department claimed without a single GI being forced
to antago¬ to place a foot on the soil of the
nize the Chinese Reds and bring Chinese mainland?
Certainly, if the Soviet Union
them into the conflict!
can
employ its puppet states to
Well, the Generalissimo's troops
State

Our

that

are

did not want

we

still

have

against their
will, then the United States can

fight its

Formosa, but our boys

on

fighting

been

Chinese

the

call

Reds since last November.

even

friends

its

on

only willing

Department's reason¬

The State

wars

who

are

not

begging for the

but

cept

our

How

out

We wonder if

guerrillas
can
against superior forces?

out

long

bottoms

will

rust

it

out

defense mobilization program.

—United Labor

in Asia.
think 1,500,000

running

long do you

How

our

American citizen."

anti-Communist
hold

whole series of

State Department!
is

Time

crisis in

a

quickly resolved if America's
is to move ahead with the
speed which our national skills, techniques and re¬
sources make
possible.
"The crisis has developed because the men who
are
in control of the mobilization
program have
ignored the necessity for 'equality of sacrifice' by
all the people. Only
through such equality of sacri¬
fice can we fully and
effectively win the voluntary
cooperation and the intense will to win of every

desire

the

now

mobilization program

war

train
the
Generalissimo's
question whatsoever help
Shipments of national front."
and the eager¬ officers and men.
food—a
critical item in
Asia—
Hitler in "Mein Kampf" stated
ness of the Generalissimo and his
troops to join in battle against the would be a prime necessity.
emphatically that Asia was the
Chinese Reds. When the Korean
key to the world situation. Tojo
A Second Front in China
knew that Asia was the key to the
conflict broke out, the Generalis¬
What kind of logic is it that lets world situation.
simo, within a week, offered to
Military strate¬
our
soldiers die in Korea when,
transport
immediately
33,000
gists of many governments have
by shipping the proper supplies declared the same thing time and
troops from Formosa to Korea.
to
the
Generalissimo, a second time again.
We turned him down cold,
front could be opened in China
Almost everybody knows it ex¬
Why?
There is no

about

before

be
of

can¬

interpreted merely as a protest
unfair and unworkable wage formula

"That crisis must be

in China is the
key of all problems on the inter¬
2, 1945: "The

an

is

minated in

Foster, the head of the Communist
landing barges, and PT boats.
Party in the United States, wrote
In addition, it would be desir¬ in the
"Daily Worker" on Dec.
able to have

Our decision here

isolated incident.

being imposed. That formula cul¬
shocking developments
which we find insupportable.
"These developments add up to nothing less than

quarter of a century.
anyone has to do is to read
the writings of Lenin, Stalin, or

All

provided amphibious craft,

States

an

against

a

for

of representatives of labor
Wage Stabilization Board] is not a ques¬

not and must not be

planners
had

have

Asia

[withdrawal

from the

Russia Wants Asia

American forces in that area. For such pur¬
poses, the Generalissimo already
boys to the scene in Europe?
If we really want to take the has assembled miscellaneous craft,
but his operations would be much
pressure off our forces in Korea,
successful
if
the
United
and if we want to diminish the more
threat

that

you

Acheson.

of

thousands

of

Sacrifice for the Other Fellow

clean
from
top to bottom, starting with Dean
to

out

Second Front in Asia
dreds

so-called

next

"police action" may occur, then I
say

Let Chiang

the

Thursday, February 22, 1951

...

people

some

Policy Committee.

"equality of sacrifice" does not to

mean

for the other fellow.

sacrifice

the

Chiang Kai-

shek's small navy? How long
it be before his guns, tanks,

will
and
completely outmoded?
will it be before the

N. Y. Curb

Thomas

Exchange

ler,

Morris

elected

as

and

E.

J. Mul-

Schryver, were
trustees of the gratuity

Muller

&

longer valid today, if opportunity.
planes are
fund for three year terms.
Certainly, we want a united and How long
valid.
Standing committees appointed
Europe.
Cer¬ Chinese Reds have perfected their
What could
be sounder logic, militarily-strong
John J. Mann, vice chairman of
by Mr. Truslow to direct the ad¬
both strategically and militarily, tainly, we are willing to provide defenses to such an extent as to the
board
of
governors
of the ministration of the
exchange for
than to allow the anti-Communist equipment and possibly some of make a second front impossible? New York Curb
Exchange for the the year have also been approved.
forces
of the Generalissimo
on the manpower necessary to achieve
No, time is not on our side. If past year, was elected chairman of Committee chairmen named in¬
Formosa to participate in the war that goal.
we permit the State Department's
clude: executive committee, Mr.
But let us not place
all our bankrupt policies to prevail, time
against the Chinese Reds? Why
Mann; committee on securities,
eggs in the European basket. Let will
not let them open a second front
have
run
out
completely,
Benjamin H. VanKeegan; commit¬
us remember that we have friends
in Asia?
while more thousands of Ameri¬
tee on outside supervision, Robert
Let us consider the possibilities: in Asia and that we are fighting can boys die on foreign soil.
C. VanTuyl; committee on floor
First, there is good reason to a war in Asia at this very moment.
The people of Greece will never
transactions, Mr. Kershaw; com¬
If it is right for American boys
believe
that
the Chinese
Reds
forget that the shipment of 50
mittee
on
finance,
Edward
C.
could
not
support a two-front to fight Chinese Reds in Korea, of
our Navy's Helldiver bombers
Werle; committee on admissions,
war.
They have neither the rail¬ what can be wrong with Ameri¬ was their salvation back in 1946.
Edward A. O'Brien; committee on
roads nor the highways nor the can help to the anti-Communist
Those
50
planes, together with
arbitration,
Thomas
F.
Fagan;
transportation to supply a force Chinese fighting the Reds on their
only three American military men
committee
on
public
relations,
fighting in Korea and another on own soil?
to train Greek fliers, and a mere
Harold J. Brown; committee on
What are we in Korea for? To
the Chinese mainland, where pre¬
handful of mechanics to teach the
business conduct, Andrew Baird;
sumably the troops of the Gen¬ win or to lose?
Greeks
to
service
the
planes,
realty committee, Carl F. Cushing.
If we are in Korea to win, then
eralissimo would infiltrate if we
turned the tide against the Com¬
we should do everything possible
The
board
of
governors
ap¬
gave them the necessary material
munist forces in Greece.
to bring that victory about.
If
aid.
proved
the
reappointment
of
Certainly, if we could afford to
John J. Mann
Charles J. Kershaw George
Rowland Collins, Dean,
Second, there is excellent rea¬ we are not in Korea to win, then
gamble in Greece and achieve
New York University School of
son to believe that if the General¬ this Administration should be in¬
such wonderful results, we can af¬ the board at the annual election,
issimo's
800,000
fighting
men dicted for the murder of thou¬
Commerce, Accounts and Finance
ford to take a chance on Formosa. Francis Adams Truslow, president and
sands of American boys.
the
reached the mainland of China
university's
Graduate
of the exchange, announced.
Mr. School of Business Administra¬
Some
A little can go a long way if it
persons
may
ask: If a
tomorrow, they would double the
second front in Asia can be opened is
Mann, a member of the nation's tion; Edward F. Barrett, presi¬
size of their army within six to
effectively applied. Successful
ing

it

is

no

ever

was

eight

the

by

weeks

anti-Communist

fighting

already

of at very small cost to ourselves
forces and without employing American
Reds
in troops, why haven't our generals

addition

guerrila

the

Third, the opening up of
ond

front

it?

done

South China.
the

on

Chinese

a sec¬

The

answer

is that

do have

we

main¬

military people who favor the em¬
by the forces of the estab¬ ployment of the anti-Communist
lished government of China, oper¬ forces of the
Republic of China.
ating from Formosa, would not There is good reason to believe
only take the pressure off our that General MacArthur favors
forces in Korea, but would re¬ such an
operation. There is good
duce the pressure on the French reason to
believe that there are
land

in

Indo-China

nist

threat

Indonesia,
Europe.

the

and

in

Commu¬

people in the Pentagon who favor

Burma,

Pakistan,

Malaya,
India—and

such

an

oneration.

Why hasn't
opened?

The

a

second front been

reason

is

that

the

Fourth,

according to respon¬ State Department is
preventing it,
military opinion—yes, right the same State Department crowd
in our own Pentagon—the estab¬ that
cut off aid to the Govern¬

sible

lishment

of

second

a

front

on

ment of China back in
1946, thus
allowing China to' fall into Com¬
Chiang Kai-shek munist hands. Can anyone expect
is not only feasible and practical the
State
Department to admit
with aid from us, but it would five
years
too late that it was
be the cheapest operation that we
wrong?
Can

China's

mainland

by

the

armies

of Generalissimo

could

anyone

promote

dollars

and

in

the

terms

of

State

manpower.

Department

The forces of the Generalissimo
are
are

boys are now
mostly battle-tested, and they Chinese Reds?

as

well trained

Reds.

Their

as

needs

the Chinese

to

expect

the

accept

the

to

blame for the fact that American

make

being

killed

by

securities market dent of Long Island
Lighting
succeeds
Mortimer Company,
and
Benjamin
H.
Landsberg, who had served as
Namm, chairman of Namm's, Inc.,
chairman since February, 1950.
The true measure is how effec¬
as
public governors of the Curb
Charles J. Kershaw, a regular
tively those dollars, those men and
Exchange.
those planes are employed. Nor is member of the New York Curb
Curb
Exchange
officers
ap¬
the measure of good government Exchange since 1940 and a gov¬
pointed
by
the
board
include
since
March,
1945,
was
its
multitude
of
controls
and ernor
Charles E. McGowan, vice presi¬
elected
vice
chairman
of
the
edicts, or the scarcities and hard¬
dent and
secretary; Christopher
board for the ensuing year at the
ship it imposes, or the lavishness
Hengeveld, Jr., vice president and
of its spending and the harshness 41st annual organization meeting
treasurer; Martin J. Keena, vice
of
the
board,
succeeding
Mr.
of its taxes.
president, and Joseph R. Mayer,
Mann.
/
Don't you think it is about time
assistant treasurer and director of
Mr.
Kershaw, who was em¬
the department of finance. Arthur
Washington learned that?
•
ployed by the Guaranty Trust A.
Bellone was appointed director
Yes, in this crisis, we need Company in 1926, began his Wall
of the office of floor transactions;
leadership and sound policies as Street career in 1931 when he en¬
Edwin
J.
O'Meara, director of
we have never needed
them be¬ tered the employ of Reynolds &
floor supervision; H. Vernon Lee,
fore.
As Americans, everyone of
Company. He became a partner in
Jr., director of the department of
us
must act in the full meaning
that
firm
in
December,
1940,
admissions and outside
supervi¬
of good citizenship. We must look
acquiring his Curb membership
sion; Bernard H. Maas, director of
to the year of 1952 for deliver¬ a few
days later.
Mr. Kershaw
the department of securities; John
ance.
It is up to every American
has served on many of the Curb's
J.
Sheehan, director of the de¬
to help obtain this leadership by
standing
committees
and
was
promoting widespread discussion formerly chairman of the commit¬ partment of public relations and
Wilmont H. Goodrich, director of
of the issues and the most care¬
tee on admissions.
the building department.
ful selection
of political candi¬
O. F. Browning, Jr.. and Sterl¬
measured
in
millions of foof
soldiers, and thousands of planes.

policies,

are

not

billions of dollars,

dates

in both parties.

Each of

us

now

operation successful
fall mainly in the categories of am¬

par¬

his
Formosa to participate. Why? Be¬
simple principles and his frugal¬
munition, transportation, planes, cause it would mean that the State
ity. Let us remember that it was
tanks, and food. The Generalis¬
Department would finally have to the clear,
high-principled think¬
simo has planes and tanks, but he
admit that we should have sup¬
ing of Lincoln that saved this
would need more. The Generalis¬
ported Generalissimo Chiang Kai- Union, and let us realize that
simo has a navy, but it needs
shek all along.
without clarity of thought, with¬
replacement parts and servicing
(ni**
■*
st*£+*.•**
***
T
"
>
If we want to
develop a true out actions based on fundamental
Whether the second front would
global strategy that will wipe out principles, without the moral val¬
be opened up by an invasion of
the Communist threat
of world ues that he embraced, we cannot
^

-

.

the mainland

be built
mando

up

raids

or

by

,

"

■

whether it would
a

and

series of

night

com¬

strength

of

the

Chinese




*

Red

since

1933,

ing Nordhouse were
A

governors

bridge
H.
Elmore,
Charles
S.
Arthur C. Brett, Goodbody
Goldy, and Hugh W. Jackson have
R. Dyer, Dates &
joined, the
staff
of
Francis
I.
Dyer; Thomas H. Hockstader, L.
du Pont & Co., 121 Southeast Sec¬
F. Rothschild & Co., and Joseph
& Co.;
&

Co.;- James

F.

Reilly.
Elected

class ,R
Dean

ond Avenue.

to

three year terms as

Mathew

governors...were

Hall, L. A. Mathey

With F. 1. du Pont Co.
'

(Special to The Financial Chronicle^ 1

& Co.;

j'

FT.

LAUDERDALE, Fla.—Frank
John F. McLaughlin, McLaughlin, C.
Byrne,
Robert
C.
Caswell,
E. Hudson, Rumsey N.
Reuss & Co.; Alexander R. Piper, George
Trezie, and Eugene L. Ward are
Jr., Paine, Webber, Jackson & now with Francis I. du Pont &
.

domination, if
that

landings Asia

would depend on the number and

largest

second

elected Class F. I. du Pont Adds to Staff
of the exchange for
(Special to The Financial Chronicle)
one year terms.
Class A governors
of this day
MIAMI, Fla. — Mrs. L. Blanche
elected to three year terms in¬
Lincoln, let cluded: Andrew Baird, Josephthal Bowen, Wendell J. Brown, El-

help; each of us should
ticipate to the utmost.
can

No, the State Department, as
As we near the end
constituted, is never going to of tribute to Abraham
permit
a
single
soldier
from us borrow from his wisdom,

a

second-front

Elects Mann, Kershaw

a

will

we want

save

at the

strategy

Europe

a

strategy

and

save

save

We

the

world we

have

same

more

live

than

in.

an

oppor¬

time, if we want tunity. We have a duty. God grant
that will help save us the wisdom and the strength to

American lives not only in
Korea,

perform it.

Curtis

and

Robert

C.

VanTuyl, Co. in their recently opened office

Shearson. Hammill & Co.

at

113 Southeast Second Street.

Volume

173

Number 4983... The

Commercial

and

Financial

Chronicle

(841)

A.

level

the year.
It is possible
supply of Canadian dol¬
might shortly be increased
as a result of
liquidation of specu¬
lative
holdings
held
for
six
of

that

the

lars

Canadian Securities

months

By WILLIAM J. McKAY
Canadian

figures

international

for

1950

trade

the
$6 billion level for the first time
in

history.

The

the year was

surpassed

actual

total

for

$6,331,300,000 which

with

$5,783,700,000 for
Exports showed an increase

compares

1949.

the year of about $100 millions

on

but

imports

surged

all-time

to

peak of $3,174,300,000 which
resents

advance

an

rep¬

the

over

pre¬

vious year of approximately $400
millions. The higher import total
caused

was

conditions

the

principally

in

the

relaxation

by

boom

Dominion

of

import

restric¬

natural
time

The

rise

and

was

States.

the

Although

United

imports

the

In

products of

farms

addition

fish¬

and

Canada's

portant invisible export item, the
U.

S.

be

an

from

in contrast to the

tourist-traffic, is proving to
increasing source of foreign

Canada's

ago

deficit

problem,
with

a

the

undergone

this country

major
situation

Canadian

growing

capacity to
world

supply

demand

for

iron-ore will ultimately constitute
leading export item. Alberta oil

a

wieldly
trade

applies to Cana¬
natural-gas, the development

of which is

with

the

balance

British

of

Com¬

attention

now

receiving belated

the part of the

on

provincial

authorities.

prairie

Another

the

mining

vast

and

Allard

smelting

Lake

the

of

ilmenite

de¬

monwealth

countries, which posed posits.
The
end-products
embarrassing problem of ex¬ nium-oxide
and
pig-iron
change conversion, has also dis¬ shortly make an
important

tita¬

an

Thus

appeared.

in

a

remarkably

short space of time the imbalance
trade

States

both

and

the

with

the

Sterling

United

area

has

been largely corrected.

tribution
trade,

Canadian

con¬

export
is

also

likely to be greatly expanded in
the
as

countries

of

replaced for the first

to

will

Canadian production of the

strategic metal aluminum

Although during 1950 Canada's
customary surplus in trade with all
was

also

of

course

result

a

boost

the

of

current

700

few

next

years

present

plans to
production

annual

million

pounds

to

to

be

have

so

far been

rejected, there is

little doubt that rearmament exi¬

wealth has been caused mainly by

gencies

sterling area restrictions on im¬
ports from hard-currency sources.

reconsideration of the matter.

In

situations

view of the

situation

of

placed

on

present favorable

the

the

reserves

British

exchange
impediments
now
dollar
imports
are

will,

Over

and

Canada

vestment

of

Underlying

On

possible

to

look

continuance

exports

to

of

this

rearmament
an

Canada

forward

rising
country

needs

to

trend

a

as

U.

stimulate

the

of

Canada's

vast

wealth

offers

now

the

in

ing
ing

description.
placement
of

Dominion

security

conservative
sound

a

currency.

therefore

of

capable

and

improv¬

It is hardly surpris¬
that
responsible

of

are now

making

parity with

and

possibly

a

bond

trustee

of

the

of

excess

market

than

sales.

but

to

George

The

Canadian

the

Fund,

that

announced

by the death

weaker

steadily

Corporation

of Richard

trustee

ONE

OF

which

THE

CANADA
SECURITIES

Approved
be

can

List,

the

at

Shares

interests

is

an

of which
the share¬

by

time. Additions

any

to

removals from the list may be
made by a majority vote of the

directors.

Shareholders

must

informed by mail of such
and

in

the

to

such

of

List

It

30

is

days

after

believed

the Approved List is

that

At

when

advisable,

action

prompt

when

the

seems

delay

tailed by the mechanism of

seeking

are

for

you.

incorporated

on

an

of

incorporation

which would permit the
company
to invest up to 5% of total
at

market

assets,
in securities of

value,

companies

not

the

on

Approved

List.

The proposal would provide
that any purchases of this nature
be

must

authorized

by at least

a

majority of the directors, and that
within three
rities

months, if the

secu¬

then held

are

&Co.

Me miters:
The Toronto Stock

by the Fund,
companies must

prescribed

List in

American




330

Bay St. Toronto, Canada
Brantford

Sudbury

Windsor

Brampton

from New York

away

$1 billion in deposits at the
following tabulation.

Trust

(San

Capital Funds

Loans & Discount**

1950

1949

1950

1949

$

$

$

$

1,018,097
937,432
47,447
39,942
462,424
374,738
6,191,706 5,775,110 394,822 305,845 3,256,954 2,804,523
Cleveland Trust
1,154,364 1,058,373
60,003
52,317
386,508
288,518
Continental Illinois National 2,378,443 2,348,174 183,128 175,890
511,417
361,653
First National (Boston)
1,432,030 1,376,695 113,348 110,436
622,168
456,329
First National (Chicago)— 2,404,787 2,278,611 164,023
154,291
953.330
790,957
Mellon
National
(Pittsb'gh) 1,496,587 1,217,154 209,895 198,439
428,671
353,628
National Bank of Detroit— 1,487,070 1,293,841
66,408
64,122
317,353
253,247
Security First Nat'l (Los A.) 1,702,042 1,602,888
97,802
91,599
435,177
380,894)
Bank

of

Fran.)

America

The above figures also

show

the capital funds and the loans

discounts of the various banks.

and

Deposits were higher in all
change during the year was the American
Trust reaching the billion dollar mark.
The

cases.

notable

one

Obviously the sharp expansion in loan volume was one of the
major factors which contributed to the gain in earnings. The loan
totals

were higher by from
15% to 40%, with most of the nine
institutions showing gains of 20% to 30%. Funds for the larger
loan volume were provided from a number of sources.

Holdings of U. S. Government securities
time

same

lower

requirements

reserve

reduced.

were

and

larger

At the

deposits

in¬

creased the loanable funds.

The increase in
resulted

deposits and the prospects for future gains in
several banks acquiring additional capital

in

through the sale of stock.

Bank of America and American Trust

Thus while operating income showed substantial
net

Registrations

earnings

share

per

the

on

increased

number

improvement,
shares

of

out¬

standing declined.

This is shown in the following comparison oH
share results for the past two years. Also shown are the cur¬

per

indicated

rent

dividend

rate, the book value

share and the

per

1950 price range for the nine institutions.
Operating
Current
•—Earnings— Div.

Book

1950

Value

Price Range

1950

American
Bank

of

Trust

(San

Francisco)

America

Cleveland

Trust

Continental

PerSh.

$6.53

$2.40

$67.04

2.17

2.52

1.60

47.61

45.78

10.00
4.00

National

(Boston)

(Chicago)

National

$49 to

National

Bank

of

Security

First

16.45

31%

22

372

300

97>/2

85to

4.23

National

;

Detroit—..

(Los

market

...

Angeles)

for

bank

3.92

2.25

50.94

14.31

(Pittsburgh).

the

$57

12.48

8.00

218.70

253

205

19.04

18.67

11.00

349.24

320

270

4.43

3.82

2.00

44.27

42%

34to

8.33

8.10

3.25

81.50

74

63

537/»

45

{

shares

being broadened through
pension funds, savings banks and liberalized insurance and trustee
investments, these institutions should enjoy a wider market for
their securities. Although New York bank shares will continue to
have wide acceptance, bank stocks outside of New
York, because
of past and prospective growth, may enjoy increasing popularity.

filed

with the

Securities and Ex¬

change Commission 20,000 shares
be

to

sold

8%.

at net asset value plus

Underwriter and

manager is

investment

Russell, Berg & Co.

BEVERLY

HILLS,

Calif.

Three Join Staff of
—

William Barnes, James B. Broadbelt

and

been
dell

Albert

added

to

&

Reed,
Boulevard.

H.

the

Inc.,

Moore

staff

of

A. M. Kidder in Miami.

,

have

Wad¬

8943 Wilshire

(Special

and

Calif.,

the Securities and

Exchange Com¬

mission covering 5,700 units, Sin¬

Payment
units,

The

E,

Plan,

series

U,

Accumulative

10-year

With Harland Allen

Feb. 16

registration statement with

a

(Special to The Financial Chronicle)

LA JOLLA, Calif.—George C.
Layman is with Harland Allen

Associates of Chicago.

First

&

Street.

office

Daniel

was

which

participating

14:

F.

firm

Rice

was

Miami

the

&

Co.,

Brouillet

Miss

Breakdown

Head

Keystone

certificates

to

Kenya

the

Office:

26,

London,

of

Breakdown

Government in

Colony and Uganda
Bishopsgate,
E. C.

of:

Govt. Bond Portfolios

of INDIA, LIMITED
Bankers

Feb.

of

also associated.

NATIONAL BANK

ments, filed Jan. 26, became fully

Funds

M.

and

following registration state¬

on

McNichol

Mr.

manager

of

have

A.

Co., 209-211 Southeast

formerly
with

Husen

with

Plan,

No underwriter.

Custodian

Van

M.

associated

Incorpo¬

on

Financial Chronicle)

Fla. — Constance
52.
Herbert T. McNichol

Harold

become
Kidder

Securities

The

to

MIAMI,
Brouillet,

of:

Sources of Gross Income

Branches in

350,000

series

India, Burma, Ceylon, Kenya
Colony, Kericho, Kenya, and Aden

B1

and

aggregating
B2

$10,080,000;

aggregating

150,000

$4,249,500;

Subscribed

Paid-up

50,000

series KT aggregating $1,The

497,500;

300,000

series

S2

aggre¬

gating $5,655,000, and 200,000
ries S3 aggregating $3,712,000.

se¬

i

Zanzibar

Capital

Capital
Fund

.£4,000,000

£2,000,000

£2,500,000

Members New York Stock

Trusteeships and Executorships

New

York

Curb

Exchange
Exchange

120

BROADWAY, NEW YORK 5. N. Y.

(L.

A.

Telephone:

Bank conducts every description of
banking and exchange business

also undertaken

p

Laird, Bissell & Meeds
Members

Bell

BArclay 7-3500

Teletype—NY

Gibbs,

1-1248-49

Manager Trading Dept.)

Specialists

in

|

Low

101.74

National

{

High

400.02

6.89

—

First

With

Rate

National—..—7.36

...

Illinois

First

Mellon

1949

$6.49

_

(Special to The Financial Chronicle)

15,

.

two of the institutions which sold additional shares last year,

were

Reserve

Hamilton

areas

the

and

manner

Mutual Fund of Boston, Feb.

series

of Canada

Boston 9, Mass.

institutions

$

v

Waddell & Reed Add
Investment

participation,

Exchange

The Investment Dealers'' Association

Fifty Congress Street

these

1949

amendment to

certificate

the

April 3,

effective

Y.

favored

over

1950

approval at the annual meet¬

ing

series

oss

have

billion.

The nine banks which had

en¬

adding

companies to the List may prove
costly. For this reason the direc¬

agreement.

or
quotations
industrial, mining or
security, consult us.

-MLilner, jR.

of $1

business

times, however, opportunities

arise

7,750

any

help

which

continued to be evident and helped in the

end of last year are shown in the

stabilizing

a

conservative feature.

For information

can

trends

are widely scattered from Massachusetts to
California and show variations in deposits from the
$1,018,000,000
of the American Trust of San Francisco to the
$6,192,000,000 of the
largest bank in the country, Bank of America.

companies added

until

notice.

and

be

changes,

investments may be made

no

securities

on

We

The

These institutions

of

through

copy

a

obtained

holder

in

ways

American

or

gle

SERVICE

1-1045

Citizens

numerous

Selected

to protect
shareholders

its

filed

oil

levels.

number of years

a

Mr.

Osborn,

the

of

seeks

rated, Oakland,

A. E. Ames & Co.

record

away

of

Savings Bank of Fall River, Mass.

of

forged ahead to reach its highest

CANADIAN STOCKS

the most

shareholders notified.

liquidating

dollar

However, it was particu¬
from the money center of New York,,
part the earnings of banks in these cities were at

larly true of the banks
For

000's Omitted

Chairman

al¬

corporate-arbitrage
at 7%-6%
but

was

banks throughout the country.
This gain in income was widespread.

Total Deposits

Putnam,

was

continued

offset

generally favorable banking conditions which prevailed
during 1950 were reflected in improved earnings for commercial

shareholders.

the company or
be added to the Approved

purchases

internals

rate

NY

are

$47,500,000 with 16,000

Insurance

New York 5, N.

a

Putnam

Fund, whose total net assets
in

This Week—Bank Stocks
The

excess

elected

was

George

JOHNSON

progressed to such an extent that at the end of 1950, there
were nine banks outside of New York
City that had deposits in

FORD, former Treas¬

Technology, today

E.

has

of Massachusetts Institute of

urer

H.

favorable showing.
The rapid growth of banks in the

complete absence of busi¬

Dominion

By

for

Mutual Funds
HORACE S.

the

the

WORTH 4-2400

the

the

in the external section of the

more

Two Wall Street

to

resistance

over

premium

a

S. dollar.

ness

Municipal

the

Canadian officials

most

Provincial

is

governmental

During the week there

Government

an

in¬

the confident prediction
that it
will not be long before the Cana¬
dian dollar will attain

U.

CANADIAN BONDS

for

S.
to

oils

some leeway and
they contemplate rec¬
specific,
ommending to the shareholders,

of

increasing degree the exploita¬

tion

funds

policies and
is

The

therefore

these

any

and

in

semi-free

a

metal.

Continued from page 10

tors

every

fundamental

purchases

already in course.
the positive side also it

compel

obviously widening field

traditional
in fact

ultimately

above

likely to be progressively lifted;
negotiations for the resumption of
are

the

showed

2,500

by a small deficit million pounds.
Although
pro¬
millions, this would appear posals to supply this country with
only a temporary circum¬ part of the increased pmductlon

stance. The recent abrupt decline
in exports to the British Common¬

for

ru¬

downward trend.

time since 1931
of $17

revived of

were

market

as

former

this also

Similarly new Canadian industry has
just
previously
un- been
established
in
Quebec for

favorable

exception of the golds

mors

were

scale;

has

balance

Stocks

mostly lower with

capable of sufficient expansion to
permit eventual export on a large

eliminated.

Dominion's

the

and

Ford would fill the
vacancy caused

dian

now

months.

summer

irregular

In the next few years moreover

the

economic

unfavorable

virtually

large

revolutionary change

a

the

the

chronically

in trade with

constituted

the

revenue.

production, following the comple¬
tion of projected pipe-lines and
34% advance of
storage
facilities
will
also
be

exports. Whereas only a few years

purposes, but the

not be as large as
anticipated in view of the prob¬
ability of an accentuation of the
rising trend of the dollar during

only 9%

was

tax

im¬

country were also higher the

percentage increase

of

as

industrial requirements will be
striking enormously expanded.
Labrador

the

to

exports

for

such

wood-pulp,
lumber,
precious metals, asbes¬

Dominion's

eries.

ac¬

an

demand

exports

tos, gypsum, and
the

salient feature of the trade

in

the

Canadian

newsprint,
base

ever-expanding

is creating

economy
centuation
of

the

At

resources.

the

S.

normal

for

Bank and Insurance Stocks

volume might

the

returns however

this

U.

and

tions.
'

virgin
same

33

Bank Stocks

?4

(842)11

Continued

jrom first

day or two before directed that the labor members of the
Wage Stabilization Board resign because labor was not
ready to accept a so-called wage stabilization decision
on

Feb. 14.

I

The power and some of the significance
ence of this, labor's Politburo,
may be briefly

of the exist¬
indicated by
a
Washington dispatch appearing late last week from the
pen of the labor specialist of the New York "Times." Says
•

Mr. Stark:

"Labor's rebellion against the wage policy adopted
by the industry and public members of the Wage Stabil¬
ization Board has dramatized the power, significance and
authority of labor's comparatively new 'general staff.'
"Fourteen top leaders of the American Federation of
Labor, the Congress of Industrial Organizations, the Inter¬
national Association of Machinists and the Railway Labor

things will look better
material front. I also
want to remind you that Ameri¬
can
businessmen show great in¬

of the

situation?

"These leaders formed the United Labor
<

mittee last December to act

-

".

Labor

Policy Com¬

V

.

"Once this

..

drafted
rent

policy

control.

now

was

waste of

done the members met

on wages, prices, manpower, taxation and
All decisions were unanimous. This more

than

anything else brought the AFL and the CIO closer
anything that has happened since their historic split
in 1936. Every aspect of the United Labor
Policy Com¬
mittee's work is geared for quick decisions
during the
.

emergency.
"The driving power behind the united committee was
primary determination to save labor's social gains, to
have a voice
in^defense policy decisions and in their admin¬
istration. With this goal in mind the
big labor federations
and organizations were prepared to hand on to the
'general
staff unusual powers."

the

In the face of all
say

this, labor leaders have the hardihood
to the American public: "Let no one doubt that

labor is
be

willing to bear its share of sacrifice."

One must

excused for

wondering what sacrifice union officials
are
prepared to have their membership shoulder. Deter¬
mination not to bear
any which may stem from a rise in
the cost of living greater than in
wage rates is clear not
only from the pronunciamento of the automobile workers,

the

substantial amounts from overtime work, and will almost
as

certainly result in a good deal of "upgrading" and the
like, it would appear that in some instances at least the
unions are
demanding that their members be permitted
to gain
something from rearmament. They complain that
credit control and the
higher taxes in effect and in pros¬
pect may compel at least some wage earners to reduce
consumption—which may be true but which may not be
true if labor continues to

Some

But, of
of

the unions

—

endorse them

—

gain the concessions it demands.

Things to Complain About

course,

whatever

and we,

we

for

may

our

think of the demands

to be admitted that at certain

the rest of

us

has

a

case.

points labor
were

as

well

as

all

to concentrate

their attacks upon removal of some of
the
obviously unrea¬
sonable and unfair favoritism rather
than upon demands
for
equality of favoritism, it is certain that a great many
now inclined to look
coldly upon the leaders of organized
labor would be
.

standing by their side in the fight.
0ne of the most obvious of the just complaints of the

unions, and of all the rest of us, for that
matter, is the
tender care with which the
farmer is dealt with. There is
I

absolutely
regarded

no more reason

why the agriculturist should be

sui generis than there is that the
wage earner,
merely because he belongs to a
politically powerful union,
should receive
special consideration.
Truckling to the
farmer began
many decades ago. It was nourished
by ah
as




first^page^

of this

No

one

the

was

year

employment

uary

ever

million.

at 2%
We

:

that

know

more

many-

people are going to be needed for
the
military
services
and -for

production.
In
round
5 million more
people' will be needed for these
purposes by the end of this year.
The normal annual growth in the
labor force of 600,000 or ,700,000
and some reduction in unemploy¬

1

v..* v■

*

•• •

r

-

■';•'!V

will

will

also,

part

increased

be

some

■retirement to work.

1 x-*'«*i

These
of

working

than

take

by

needs,

will

have
out

essential

jobs

of -the

however,
be

to

of

some

less

some

require¬
not be' too

meet

to

should

This

ments.

sources

all

means,

shifts

extensive

foresee

work

before.

care

any

there

and

more

as

go

will-not

i

these

of

into 'the, factories and
older > persons - cbme .out of

women
;•.

meet

The labor force, of course,

needs.

.

L

•

..

numbers, perhaps

ment

A 1

program

can

ever

week

will

be

in*

the

mentioned.

The

economic-

of the President's

report

Council of Eco¬

nomic Advisers speaks of an in¬
crease
of around 7%
during the
overly optimistic to
assume
that this shifting process present calendar year. I consider
this on the optimistic side but it
will go along without any major
errors
or
pain.
I am sure that may work out that way.
The gross national product stood
there will be difficulties with spot
ian

It

output which will take place.

would

be

shifts.

reverse

The

of

number

construction,

in

workers

for

ex¬

ample, is IV4 million higher than
five
is

As

ago.

years

cut

now

back,

construction

will be made available.
there

are

Similarly,
million

10

about

now

workers

many

engaged in trade com¬
with
eight million
five
unemployment and very irregular at an annual rate of over $300 pared
flows of raw materials. But if you billion at the beginning of 1951. years ago. Some reductions ought
in physical to be possible here without too
expect the worst, I believe that An increase of 5%
:
would
bring
it
to much disruption.
you will be very pleasantly sur¬ production
Perhaps the worst pinch in-the
prised. A pessimist will harp on around $320 billion at the yearthe

difficulties

and

overlook

smoother

the

the

and

it

spotty troubles. It is
all a matter of perspective. I am
an optimist myself and
expect the
transition problems to be short¬
lived and fairly easy to take.
With those few remarks I would

(2)

Shortages of

comes

to

learn

that

country

is

materials

this

this

Korean

on

to

War

situation

when the military stepped up
will really be rolling. It shortages.

program
is

move

given to

rate

no

forecasts

one

of

to make

accu¬

things to

of

low

on

raw

was

fact

be¬

before the

even

out

broke

the

shock

a

great industrial

running
but

coming apparent

to

materials

raw

somewhat

as

sition

the

raise

timetable

and

of

our

I believe that the situation may

be

stated

true

Patterns of Development

of

all

is true of
I

have

possible
out

to

broad

been

working on some In some
of development
creased

patterns
the

end

materials,

raw

raw

materials

cases,

our

of

raw

as

you

the

nonferrous

a

class.

have

using a from the
peaks reached
brush, of course, to paint the the 20s. This is true of

I would like to give
13 major conclusions for 1951:

but it

not in¬
material facilities

we

to

increase

to

ease

in certain

will be

of skilled

classes

We need

labor.

training facilities

our

this problem

much

as

possible.

as

,.

On the whole I do not view the

labor

the

with

bottleneck

degree of seriousness

as

bottleneck.

materials

same

the raw
shall

We

probably find that the labor sup¬
needs,

fairly .. adequate >-■ for ? cur
short of full-scale war in

which

the

ply

is

way

be

pinch would again
We

have far

in drawing

on

more

Tee-

people than we
supplies

have in drawing on short
of

materials.

raw

I also want to mention

of

matter

It should

week.

sible

increasing

certainly be

increase

to

again the'
the work

the

pos¬

week

work

by from two to four or five hours;
industries

the

in

which

are

back

pinched.. Some industries worked
in. as much 50 hours a week at the;

some

of

1951,

picture.

situation

labor

extreme.

quite simply. As a na¬
but I think it is appropriate and tion we have been
increasing our
useful to weave'a pattern of what
ability to consume faster than our
may happen on the basis of what ability to produce or import raw
seem to be sensible assumptions.
materials.
This, of course, ds not
come,

persons

will represent a severe bottleneck.
It

like to leave the problem of tran¬

difficulties

would

increases

even

of

area

Price

end.

further, perhaps to some¬
thing above $330 billion (annual
remarkably rate).

spots. An optimist will
point to the large area of smooth

part, certainly do not

If the unions

:&3£

in military output and the
decreases in certain kinds of civil¬

and whatever

may be the disgust with
which the ordinary American citizen must read of some
of the Politburo
type of tactics now all too common, it has

.

:v:; 4.-.'-v.

". j.k *r"

creases

small

earn

highest Jan¬
reached.
Unemployment in January stood
this

The
difficult,
speaking' in
general
growing
terms, because many of the nonall of the repercussions, but some
steadily longer and I hope that the
of the handwriting on the wall is unit output per worker will be manufacturing industries have in¬
creased
their
employment' tre¬
pretty clear.
rising in spite of the various obvi¬
mendously in recent years and
There is, of course, the immedi¬ ous difficulties.
The increase in output may be presumably would not be pinched
ate problem of getting the right
too
greatly if there were some
even
kind
of
larger than the 5% I have
mesh
between
enormous.

transition

certainly afford opportunity to

from

implications

are

ations

almost

million

59

What's Ahead in 1951?

union, but from various other indications of policy, in¬
cluding the retirement of the labor representatives from
the Wage Stabilization Board. Since
urgent defense oper¬
will

l

.vaWV.y

than

to

* X

—i-—:————v

.

frequently and
Continued

num¬

people employed and the
figure for January of

of

ber

like sort,

'.

the

setting new records in

military

4 their members.
--—i

We have been

larly skilled labor.

on non-deserving veterans and much
which makes extraordinarily heavy
taxes
unavoidable,>Wf^wish that4he union leaders would
fight against all thim^ather.^than:' seek'Sp^cial favors for

———~

;

;

.

.

(3) The labor force will consti¬
tute another bottleneck, particu¬

,

a

will

1951.

public funds

of

more

made

unparalleled strides. The four¬
teen members adopted rules, named officers, drew up a
budget, engaged quarters, printed stationery and took all
steps to insure an efficiently functioning organization, - •
.

that

itable

other things about which"
the unions, along with all the others of
us, can justly com¬
plain — waste, inefficiency, needless regulations, gross

of defense mobili¬
1 v

However, it seems inev¬
raw material difficul¬
be a limiting factor in

erally.
ties

There are, of course, many

-

liaison between labor and

as

the government on problems arising out
zation and wage-price stabilization.

genuity in using substitutes and
stretching short supplies gen¬

hope to prevent fur¬
living if farmers are
not only to be permitted but aided and abetted in
raising
their prices. Of all the favorites
during World War II, the
farmers were, perhaps, the most favored.
Why should not
the union leaders make a
vigorous and open fight on this

tripartite labor board to send their resignations to

raw

in

the fact is, of course, that we can not

President Truman.

year

the

on

ther drastic increases in the cost of

Executives Association directed the three labor members

am

the

not called

or

im¬

supplies in many cases and
hopeful that by the end of

prove

long-term history of farm subsidies
by that name—real cultivation of
the farm vote began with the New Deal and
grew to star¬
tling proportions during World War II. The evil is still
very much with us, a half-decade or more after V-J Day,
and more than a half-year after we were
plunged into an¬
other "emergency" which could
develop into real trouble.
If there has been any major
appeal to the farming com¬
munity to share in the universal sacrifice often mentioned
in the abstract, we can not recall it at the
moment, and
—whether

considerable pinch in 1951.

great search is going on to

A

But whatever the

Labor's Politburo

likely to

difficulties are

These
cause a

the Farmer!

And

of certain

shortages in the case
industrial chemicals.

unwillingness of the remainder of the community to fore¬
go special favors it received in the form of import duties
to keep out competition and to hold
prices up. Then as
now, there were all too many who found it more to their
liking to grant concessions to the farmers than to give up
their own favors in order that all might be on an even
footing.

page

See It
We

As

reached

22,1951

The Commercial and Financial Chronicle ...Thursday, February

metals,

notably

peak during the war and I think
that

a

few hours

more

now

would

lead, and zinc. In others be both feasible and very helpful.!
have increased capacity in re¬ It also seems to me that it wouldc
duction of goods and services will
cent years but not enough to sat¬ be desirable to change the law re-'
be up about 5% by the end of the
isfy demands. Steel capacity, for quiring premium pay after j 40 f
copper,

(1) The physical volume of

This

year.

includes

of

all

kinds

included

serv¬

in

the

government
tional

we

manufactur¬

ing, mining, agriculture, and
ices

pro¬

figures on gross na¬
product. I do not mean to

example, has been enlarged
than one-fourth in the last
but

manufacturing

suggest that all kinds of produc¬
tion will be higher, but the total

this

period.

for

country—allowing for in¬

has

been

in

the last

the

creases
creases

in

some

groups

others

—

will

and

de¬

be

up

about 5%.

This
factors.

increase

More

reflects

people

several

will

be

output

whole has almost doubled

Aluminum

multiplied

more

decade,
as

a

during

capacity

fourfold

in

decade, but civilian use of

aluminum is being cut back onethird

plies.

because

There

of

are

inadequate sup¬

also some severe

of

hours

pression
patible

work.

That

was

a

de-f

idea which is - incom-r J
with today's inflationary

environment.

The

(4)
will

be

I
Federal

government;

taking about one-sixth of^

the national product at the end
the year.
year,

tenth.

At the beginning of

ofl

the|

ratio was about oneIn other words the Federal

the

government

is

going to increase|
production pie.

its take of the total

v'

V""'

■

Volume

Number 4988...The

173

from, about 10% to abouHMHfcrSiut

this way, the increase seems mod¬
erate enough, but, of course, each

percentage point that the govern¬
takes put

ment

fortunate

that

increase

increase

will be able to

we

total

this period

lot more pres¬
production. It is

a

civilian

sure, on

during

production

because otherwise the

in

the

would be much

government ratio
higher than I have

indicated.
The
will

picture at the end of 1951
sharply with the

contrast

v

situation

War II.
; World
the war, the Fed¬
eral government, took about 45%
during

At the peak of
of the gross

national product com¬
pared to the 16% which seems
probable for the end of this year.
Of
course,
the 16% ratio may
move
still higher next year, but
,

it

will

not

the

near

unless

move

of
full-scale

anywhere

up

World

high

War

II

breaks out.

Commercial, and Financial Chronicle

slightly. ...Civilian supplies of This

raises
the
question
of not provide a permanent solution, turn out
to have been the year of
will be whether the dikes will be thick so the fundamental pressures may the worst
pinch.
»
sharply as we all know, enough. Also, it should be noted be growing even though prices do
We may have to look forward to
Some other categories will rise, that the greater willingness to buy not reflect this
by rising. This is a military program of $50-$60
The net result will be a small re- will lead to greater demand for the reason it is so
important to billion a year indefinitely.
It
duction in the aggregate for civil- higher price lines and less readopt adequate budgetary methods is well to remember, however,
ian use.
sistance to substitutes.
to
counteract
inflation
by
re¬ that we have an enormous facility
ducing nonessential government for economic growth. Our tech¬
thp
(10)
Residential construction
expenditures to the point where it nical "know-how" all along the
business and State and local gov- win be off sharply. The residenJr. ilftl rJm phnnf *ial housing boom is about over really hurts, and by increasing line is so great that we can im¬
taxes,
particularly
those
taxes prove and enlarge our productive
the same in the aggregate at the even thou§h the melody lingers
which help to restrain spending
capacity in a most remarkable
vear end
The boom is beinS squeezed and to
year-ena as at tne beginning of on*
as at
oegmning oi
several directions all at
encourage saving.
way. The decade of the 1940s was
the year.
Because of somewhat *rom sev e al directions ail at
Controls may be a useful crutch our biggest period of industrial
higher prices, the total volume of
and an absolutely
We have started
essential one growth so far.
physical units will be
slightly
at times, but there is an old bit the 1950s at a still higher rate. As
of philosophy to the effect that a we grow, we can carry a large
restraints were started as early
(7) National income wdl be up ag jag^.
summer> but there was a crutch may also keep you from military
program
with less and
less strain.
Some of the controls
c?nsJ^eraw
® biggest part big backlog of projects which got getting well.
very

goods

some

and services

cut very

SvHnalf

thl

SEE* -srsBssM

*

..

the

of

.

,

_

increase

to

going

As the

summers.

con~

national

gross

product rises, national income will
rise too.
The increase will reflect
both

real

a

output and

increase

under

wire

the

and

still

m

increase

war

the

level.

price

(5) Federal taxes will be up
sharply, but not enough to avoid

The burden of taxes

Now

let

summarize

me

these

uation in 1951:

<j.be pr0p0secj defense
gram

will add

some

be dropped from time to time.

can

Summary

construction

residential

year

are

By the end of

up.

be running very materially
points regarding the economic sit¬
physical below the first
part of the year,

in

further

a

in

being finshed

housing proprojects,
Most of the increase; in national but a
sharp cut in residential
mcome will go to individuals aiid
housing starts seems inevitable,
a
deficit
and
sizable
Treasury
very little of it will go to corporaborrowing.
The
President
has tions.
Corporate profits before tax - (11)
Business
investment in
asked for a $10 billion tax bill as
will be pinched in several ways Plant and equipment will hit a
a first step to avoid the estimated
and will probably not share pro- new high early this year and then
$16%
billion
deficit for
fiscal
portionately in the gain in na- turn downward under the pinch of
1952.
A second-step bill for the;
tional income. They may even de- controls and shortages of imporremaining $6% billion is contem¬ cline if * inventory profits do not tant materials. Early surveys inplated. ■
^
continue at the recent extraordi- dicated that 1951 would see the
I am in no position to predict
narily high levels.
.
highest volume of business ina

35

(843)

can

be

less¬

ened—not

by lowering the dollar
collections, but because taxes will
be levied against a growing na¬
tional income.

(1) The physical volume of

new

pro¬

duction of goods and services will
be up

about 5% by the end of the

year.

future.
tion

As

materials

raw

will represent a severe bottleneck.

(3) The labor force will consti¬
another

bottleneck, particu¬

will

we

v

the

is

to the
produc¬

only improve

situation

show

key

increase

we

will not

we

immediate

Shortages of

(2)

tute

Production

our

at

our

home, but

enemies

and

skeptical friends abroad how
strong we really are.
our

.

„

the ultimate outcome of these par¬

ticular

It

proposals.

does

seem

vestment in plant and equipment
ever-reuehed. Subsequent develof opments indicate that business de-

(8) Consumers will pay more in
taxes, will save more, but will also

perfectly clear, however, that we
spend more. The total income
are a long
way from actually hav¬
individuals will be up ■ somethiiig-^es. j0. e*Pal?d
be thwarted
ing them adopted. It will prob-.
ably- take months for the first-step
bill :to be completed,., and then I
£
...
•
projects henceforth will
annual rate in tua neighborhood nf Un,T^ T.
the rtaiahunrunnfi of business J,—r
would guess that it will have-been
$260 billion. 'Personal taxes will
tn
compromised'tor a smaller figure
be
up
by-some
indeterminate '
y
" contribute stethan $10 ' billion.
The proposed
amount and probably will run in PS
'
second-step bill may be expected
the " magnitude
of' $30
billion
to have the same fate and perhaps
of comse
(annual rate). Income after taxes
0rtant industrial
even
more
so—i.e., it may take
will: therefore be running at an
even more months to get adopted
if itris pushed through at all this
these tests' Prolccts lor business
year., and it is likely also to be
excess

^nntriW^

(^ c0 4
|

< '

S

t0^including

^aw
IfthLdonot rS

mlterials

proximately—'o/conshterably^n
of the rate at the

compromised

downward

to

a

smaller

of the year.

figure.
Everything con¬
will have
sidered, I would hazard the guess
that

will not find the

we

bills this

year

raising

new

tax

than

more

$10 or $12 billion.
As a matter of fact, I would be

[inclined to feel that $12 billion of
(new taxes would be a pretty sat¬
isfactory

achievement.

True
it
budget defi¬
cit of $16% billion, but the differ¬

would not match the

would be about made up by

ence
la

surplus of

trust

ernment

words,

in the gov¬

revenues

In

funds.

other

more

coming in
spending or

money

used either for

increase" their ^avlng^sh'arpdy
the

der

stress

of

various

urt-

^tors,;

lack
of
durable
goods for
and the patriotic
appeals to save in a period of national
emergency.
Savings may
run up to 9 or 10% of income after
taxes compared with the current
figure of about 6%;
including

the
sale

Expenditures by
rise

also

consolidated

the

to be

beginning

Consumers, therpfore,

will

consumers

somewhat

budget
trust fund picture would be ing shortages.
purchased by

notwithstand-

The physical units
will be
[approximately balanced.
What I have just said ignores practically unchanged in the aggregate from the beginning of the
[the question of lags between the year, but prices will be somewhat
enactment of new taxes and the
raising the
total
dollar
actual cash payments to the Treas¬ higher
>
ury.- Taxes enacted this year are figure for consumer spending.
and

consumers

...

„

/n.

not

going

paid

rri_

(9)

in full for

The compositi n ofco spending will be sharply

„

j^f^fnot bfpermhfed'to be
SrtekL
graeral
rate
"ndem*™ as .a
as

orocLand

a

/eneral

when

larly skilled labor.
(4)
The Federal

Lester F. Gannon With
W. T. Bonn & Go.

(5) Federal taxes will be up
sharply, but not enough to avoid
a
deficit
and
sizable
Treasury
borrowing.
(6) The civilian portion of gross
national product will be reduced

slightly.
(7) National income will be

very

»

up

considerably with the biggest part
of
the
increase
going "to
con¬
sumers.

(8) Consumers will pay more in

taxes, will
spend

save more,

but will also

more.

composition

(9)r, The
sumer

will

spending

of

be

con¬

sharply

altered in favor of soft goods and

services.

hese

government

will be taking about one-sixth of
the national product at the end of
the year.

Lester F. Gannon

.

Residential
construction
Lester F. Gannon, who for many
to
buri- will be off sharply.
years was with W. H. Bonn & Co.,
(11)
Business
investment
in
Inc., 120 Broadway, New York
plant and equipment will hit a
the 'nd of the vear
City, has rejoined them as Man¬
new high early this year and then
me end ot the year'
(12) Inventories will level off. turn downward under the pinch of ager of their Trading Department.
We have been in the midst of a controls and shortages of impor¬
great inventory boom along with tant materials.
several other coincident booms,
(12) Inventories will level off.
The sharp rise in bank credit in
(13) Inflationary pressures will
(10)

KSf

Firm Name Now Dallas

the last six months is due primarto .^be
increase in business inventories.
Some of this
simply reflects higher prices. But
business men have also been trymg to build their stocks to get
ready for a period of rising de^a"d in the face of many shortf.?68,'
inve"tary rise is not
.

likely to

much further for several reasons: (i) some inventories
go

continue to rise but

con¬

trol.
I

DALLAS, Tex.—The firm
of

would

like

word about the
I

Union Securities Go.

prices will be

kept under reasonably good

have

with

close

to

a

longer-run future.

concentrated

today

on

the

Dallas

Union

Trust

name

Com¬

Dallas National Bank Build¬
has been changed to Dallas

pany,

ing,

Union

Securities

Company.

what's ahead in 1951—the year of

transition. Beyond that, the future
is very uncertain.

No

one

John Speed Elliott

knows

how long or

how far the military
Elliott died Feb. 12
ahead.
program may have to go.
Accordingly, curner
If we at the age of 61. Mr. Elliott, who
are getting gQ
lgrge ^ there is
can avoid all-out war, and I think
borrowing
would
be altered in favor of soft go ds and
recently conducted a personal in¬
apprehension over the possibility
As
curtailments
of
our
necessary during the interim even services.
present programs are in the vestment business from offices in
scl;rsn""1 w
oi being overextended; (2) the
if the budget were being balanced metals get into
full swing the
right direction to accomplish this, New York City, in the past was a
gupplieg
caseg
pinch of supplies in some cases
consumers
durable
then I wonder if it is too opti¬ member of W. A. Harriman & Co.,
supply
of
consumers
durable means
I theoretically by new taxes.
^
wm
be
^3^
bard ^o
mistic to suggest that 1951 will Inc., and August Belmont & Co.
; Predicts New
to

be

time

some

John Speed

Treasury

0fbeing overextended"

,

f°-rtlS'ctSL!C

TreasuJX-

frigerators,

Borrowing

Taking all these things into

con¬

sideration, the Treasury is going
to

have- to borrow

toward
that

the

connection

that

of

end

I

I

think

a

sizable-sum

the

year.

would

like

In
to

the

Treasufy
shodld have two goals in mind in
doing its borrowing: 1st, to en¬
courage saving by the people, and
say

?S ^tomoi A-®' r ~ build inventories further; and (3)
appliances,

electrical

effec^ 0f price controls will
will
drop
sharply.
Som
re(juce
speculative
buying.
It
pinch is already being felt but the ghould bePnoted that much %{ the
full impact of the reduced
^gcent
increase
in
inventories
will not be felt for some timevtByi
jna^es good sense from the point
the end of the year I expect convjew
pubbc policy. It was
sumer spending on durable-goods
i0gjcai
use our productive fato be reduced by about one-quar^ to the utmos^t endin the

etc.,

2nd,- to encourage the investment
of

sup^y

one-third from the level at

ter

to

the

beginning of the

At
soft

the

year.

military

savings in government securi¬
steadily as consumers endeavor to
ties.* The first objective is more
find
substitute

diversion

of

them

second. I be-

■

■

spending to replace the shrinking
supply of durable goods. Manu-

case

Jin

the yast war.

Ihave

.been

Savings bonds

standing still

.more.-or

[less; in recent months, but I be(lieve that large amounts of savings
lbonds

can

be sold if big campaigns

|are parried

Ibe growing larger and larger

|time

passes.

as

of cotton and wool.

The cot-

ton problem will be eased materi-

ally by the end of the year if the
new cotton crop is large, but there
is no improvement in sight for the
wool

on. It must be remem¬

bered that the ability to save will

their

for

shortage.
.
^

.

#

Soft Goods Prices Will Rise

All of this

means

that there will

Quate to prevent this. However, I
expect that the* network of phyg-

ical controls will be reasonably
effective for the most part, so
prices will not rise very much,
This may seem inconsistent with
the idea that inflationary pressures

will

be

growing.

The

ex-

planation lies partly in the matter

be
natural upward
pressure
on of timing. Controls will work for
(6.) The civilian portion of gross prices in the soft goods area even a limited period in sterilizing inInational product will be reduced though price controls are in effect,
flationary pressures, but they do




Notes

(J?) Inflationary^pressures will

continue to rise but prices will be
kept under reasonably food confro*. Aggregate demand will be
llieve that "extensive sales cam¬
rising faster than aggregate suppaigns by the Treasury are needed facturers will attempt to tap the ply this year which means that
to sell savings bonds.
Such cam¬
growing market for soft goods inflationary
pressures
will be
paigns should be limited to indi¬ even though shortages are a prob- growing. Counter-inflationary
viduals and should not include big
lem here too, particularly in the measures are not likely to be adeinstitutional investors as was done
outlets

(important than the

NSTA

to

uses.

time

spending on
goods and services will rise
same

substantiai

SECURITY

TRADERS

ASSOCIATION

The

Security Traders
Bowling League standings

Association
as

OF

of

of Feb. 16

NEW

New

are

as

YORK

York

(STANY)

follows:
Won Lost

Team—

Donadio

(Capt.), Demaye, O'Connor, Whiting, Workmeister 7
Greenberg (Capt.), Sullivan, Stein, Wechler, Siegel
5
Bean (Capt.), Kaiser, Growney, Gronick, Rappa_____
5
Buria (Capt.), Manson, King, Voccoli, G. Montanyne
; 5
Mewing (Capt.),-.Klein*. Flanagan, Manney, Ghegan-_.
.5
Leone (Capt.), Krasowich, Nieman, Pollack, Gavin—.
,
5
Goodman (Capt.), Casper, Valentine, M. Meyer, H. Frankel
4
Krisam (Capt.), Bradley, Montanyne, Weissman, Gannon..
4
Serlen (Capt.), Gersten, Gold, Krumholz, Young
:
4
Hunter (Capt.), Lytle, Reid, Kruge, Swenson........_____
4
Kumm (Capt.), Weseman, Tisch, Strauss, Jacobs
4
H. Meyer (Capt.), Smith, Farrell, A. Frankel, LaPato—__
2
On

February

of that meet will

20

we

2
4
4

4
4
4
5
5
5
5
5

7

will be in Philadelphia and the results

be published next week.

^

(844)

Confirmpd from
Ksvnunueu

j

I

•

:

..

\

y

.»■:

which

¥ AvtHlVtfY

MivHUlIlM

Iff

III
mk

§

«

HATAYICA FfUlft AltllT1
I/vIvIliJV JiVViftVllftJ
perhaps of some inventory loans
and total busi- will help to offset further in-

responding cutbacks in loans for
xionwar

purposes,

in 1942, while

loans declined

ness

loans

for

mounted

purposes

war

•

••

+ '

''

i

;

r

expansion in industrial production sell governments in order to fi- 2V2% rate on long-term governB

DallK

other

working capital and
during the first

for

creases

purposes

was

necessary

to meet the

nance

an

increase

in

loans

and

existing shortages. There was no would make the institutional insignificant use of bank credit for vestors less eager to expand their
speculative business purposes, and holdings of mortgages or corporate
the big postwar inflation came securities by disposing of governlargely to a halt in 1948 without a ment bonds. Some people also
credit crisis.
argue that higher interest rates
The
sharp increase in prices would encourage the purchase of
after the outbreak of the Korean government securities and help
\yar was a war-scare phenomenon fight the growing fear of inflawhich no amount of credit con- tion.
trols could have prevented. The
The Treasury nas nut been immost striking price rises, especially pressed by these arguments. Its

today re- half of the year. The latter half
the condi- of the year may bring a seasonal jn raw materials, can be explained view is that higher interest rates
tions in 1941-42 than at the begin- rise in loans but by that time ai- hy the expectation of reduced sup- are not effective in curbing inflaning of the defense effort in 1939. rect controls over the economy plies in the face of a greatly aug- tion, but that they do increase the
At the start of our accelerated deare
likely to be fairly general, mented military program.
Large carrying cost on the public debt
Our situation

rapidly.

eembles

closely

more

in 1950, industrial These will help restrain loan ad- holdings of liquid assets and high
vances and together with rising levels of personal income enabled
or
idle ma- defense output will have the gen- consumers to go on a buying spree,
chines.
This portends substantial eral effect of curbing loans for anci this was reflected in a sharp
cutbacksi* in civilian production in non-defense purposes.
rise jn business orders. The barthe not very distant future. On the
However, even though present rage of news releases from Washfinancial side, the working capital
pr0spects are against any large ington forecasting price control in
position of American industry to- and sustained rise in business the near future certainly did not
fense

program

production was near capacity; we
had

idle

few

men

considerably

rfav -is

perienced

a rise

favor-

more

of more than 30/o

business loans since mid-1950.

in

Thursday, February 22, 1951

...

^

1

7

vaae

y

u

1

,

'/

■

The Commercial and Financial Chronicle

'

•

i
;

;1

*

.

msi

adds to the

no.

Kncinocc

fmm

micincr

and complicate its financing program. On Jan. 18, 1951, the Secretary of the Treasury announced
that refunding and new money issues would continue to» be issued

of interest rates
based on a 2lk% rate on long-term

on

a

,

pattern

government bonds.
tion

of

thic

Hictum

The applicato

creHit

Here

again

mod-

a

erate policy could have avoided
some of the controversy.
It
should be possible to make

gov-

ernment bonds more attractive to
institutional investors by offering them limited amounts of secarrying

curities

rates

coupon

higher than the present 2\2%
maximum, but with maturities
sufficiently long to keep the rates
in line with the present pattern
of yields. Since this would not
involve an across-the-board rise
in interest rates, the net increase
in the carrying cost of the public
debt would be small,
a

moderate

would

also

point

give

due

of

view

-

recognition

limitations of credit policy,
would
recognize that infla-

to the

it

tionary

forces

deep-rooted

are

anci powerful and that the contribution of credit policy must be
marginal.
past experience dem-

nol-

lusion that fractional changes in

inflationary pressures were a contributing factor.

bonds.

ment

*.

iu.j.

*—

strictive

force

measures,

very

a

Although data are not available, interest rates can be effective in much higher level of interest
Government policy will have an
a substantial portion of the sharp fighting
inflation must be dis- rates than prevails today, and inimportant bearing on how the reBusiness Loans and Inflation
rise in business loans in the latter pelled from our minds.
cur credit liquidation, unemployquirements of the defense proPerhaps the major differences half of 1950 presumably reflected
Despite attempts to reconcile ment
and
loss
of ' production,
gram will be financed. In the pres- 0f opinion regarding the inflation- inventory
accumulation. But to the conflicting positions, includ- Also, changes in interest rates
ent defense effort, as in World ary effects of business loans re- assign to this factor major or even ing
a
conference between the will not contribute to a more deWar II, the V loan program is volve around matters of relative significant
responsibility
for President and the Federal Re- sirable utilization of labor and
available
in
order
to
provide importance and emphasis. Even higher prices seems unrealistic, serve Open Market Committee, materials
in
the
economy
of
working capital to businesses en- under normal conditions, there is All the experience of recent years there are many signs that the basic scarcity with which we are faced,
gaged in defense production. At a ciose similarity in the move- strongly indicates that business difference of convictions still re- Higher interest rates will not retheir peak, V loans c o m p r l s e d ments
of
business
inventories, loans can hardly be regarded as a mains.
It is a foregone conclu- strain less urgent types of resiabout
two-thirds
of
estimated commodity
prices and business really significant inflationary fac- sion that we have not heard the dential or commercial building or
loans for war purposes but less loans. When
business is rising, tor.
final word on this subject. Con- channel scarce materials and inthan 30% of the total commercial business inventories tend to grow
The underlying inflationary gressional hearings will be held at dustrial machinery into projects
and
industrial
loans of insured and
parf- 0f the increase is fi- forces will most likely continue which the conflicting points of that
are
more
desirable under
commercial banks. In World War nanced
by bank borrowings. A to prevail. They are deeply rooted view will doubtless be discussed, present circumstances. To achieve
in

our

econ0my.

.

II

furthermore, the working capi-

tal

of

requirements

defense

tractors were reduced

Darttal

con-

by the gov-

Astailar

Davments

Seditious ifandhng of
ui

ex-

defense payueiuiise pay

peumous nariuiuig

fectottoUmeIn'anTeSeS
u
V
V ? y evem;
tors'must be °me^ eilhe^by
j.

the

rise in business loans increases the
m0ney

supply

rowers

with

and provides borfunds

rising

a

defense budget, the
The Middle Course—It is most
realism in our unfortunate that this
controtaxation
policy, the versy has been so persistent, espe-

and

fiscal

they may compete for scarce ma- need to expand our productive daily since there are many points
terl? s' J£ liberalof inventories in capacity to the utmost, the in the on which all parties really agree
lending policies levels of personal income rising and there is a middle course of
enable hoarding
5

Lne doubt that their effect

,

which

with

in

lack of economic

is

f,r'.e.es' and thus may be cal'ed 'n~ power of the labor unions and the There is'no difference of opinbanks ot by the government
"ationary.
agricultural bloc. These forces are ion as to the necessity of mamTn
the 11
tremens,,*
0n the other hand' » would be J™"* ??? p0,werfuI to be checked ta>nlnS orderly conditions in the
defence
inaccurate to assign to business by credit policy.
government securities markets
firanrpd ?ar<?p?v thrnnfh
loaris major responsibility for the
This does not mean that we may and of preventing gyrations in
Tnpnt
fund*
Rncine-« annarcntiv
inflationary conditions that have ignore the problems of lending Pr*?es *)f. government securities
intend*to rplv
hPavSv fmnn Prevailed in the economy over the and credit policy in a period of which might - undermine public
nHvStP finan?ini thi« timp tak- Past decade. For years we have inflation. Bank lending standards confidence.
Hovyever, orderly
ir,p advflntaup nf the accplcraf^d
witnessed an over-emphasis upon need to be tightened, and not re- conditions can
be maintained
denreriatinn nprmiffpd nndpr
the credit aspects of inflation, and laxed, to the end that bank credit without going to the extremity of
tifirafps
nf
necpssitv
Npvprthp" particularly upon the alleged con- will not add to the abundance of preventing any fluctuations in-the
fess' the volume of nlaS fSanrl tribution of bank lending to in- inflationary pressures already in prices of government securities or
ine 'done through the rnmmprrial flationary pressures. The postwar existence.
But credit policy de- of forestalling any changes m the
banks in 1951 may be relatively
yearf Pr°v,ide an interesting ex- signed to restrain bank lending
a

mnrr

ppr-

Fairly

restrictive

for

certificates

limit

the

nolioies

in passing

size

on

and

of

mnv

reauests

thee

mav

plant

some

pro-

grams. Shortages of materials and
machinery will delay others, and

Admittedly,

have

been

continuing to play their important

times in the past when bank credit role in meeting the credit needs
has contributed to speculative ex- of American business. How to atcesses and inflation in the prices tain these objectives is a major
securities, real estate and com- problem facing the financial commodities. But our postwar infla- munity.

financeli
rials and machinery in short sup-

there

bf the^bu^Tf S

The

Controversy

credlti it originated in basic forces

the

permeating our entire economy.
Reserve
reduce
ihe
will
The inflationary pressures re- federal Reserve to reduce the
available from reinvested profits fleeted the general shortages and amount of available bank reserves
and non cash expenses, and this scarcities following the end of the through
open-market sales ol
will reduce the need for outside war; the large and widely dis- Government securities or increases
financing. Furthermore, borrow- tributed liquid assets which arose ln. reserve requirements and to
ers may be able to raise
capital out of the financing of World War false the c?st ot bank reserves by
through offerings on the securities " and which contributed to high increases in the rediscount rate,
markets or by direct placement
Postwar consumer spending; the The use of these devices is gen-

ply.'

for

Also,

business corporations
have large amounts of funds

longer

interest

maturities
not

cost

higher than

and

at

an

inflationary policies of the Gov-

appreciably

ernment in its agricultural price

loans

support programs and its loan and

term

on

from

banks

guarantee
„„

i„

n

n

ooerations

notahlv

in

rnntitimpr

.

Business

loans may show

some

increase during the year, but the
and

the

foan,
iitow
u

k

ISrtte
likilv
a

t

ion

lit
oi

fn

hf

tn

arising out of World
der these

War II.

conditions, to have

Unpre-

d°
k?"
dca e thet ebb aic ow of public
I™ the credlt of the
•

The recent record
rate policy, moderately emplojed,

de ense effort. Liq-




loans and

faults and deficiencies.

Nor is it likely that a rise of Interest rates would by itself stop
inflation

thp

induce

nwrhnln^v

buy more
restrain

or

from trying to spend
their money while goods are still
consumers

available and before quality goes
down and prices go up. A realistic
tax policy embodying reductions
jn mass buying power, a substantial cut in nondefense government
spending, and an honest effort to
appiy direct controls on the basis
0f economic realities rather than
political expediency—in short, a
straightforward,
realistic
and
sincere program of coping with

inflation-is the only way to stem

future of the dollar,

New Instruments for Credit
Control
The limitations inherent in the

q£

use

rate

interest

mS yields on Government securi-

The Current Differences — For
many years, the Federal Reserve
has been limited in its use of these
instruments by the desires of the
Treasury to maintain a good
market for its obligations and a
low level of interest rates.
In
August, 1950, however, with the
post-Korea inflationary boom in
full swing, the Federal Reserve
went counter to the wishes of the
Treasury and permitted an increase in the yields on short-term
Treasury obligations.
Tn
serve

this

artinn

thp

Fpripral

Rp.

received widespread support

price rise; in fact, such a policy ment obligations would make the
might well have slowed down the commercial banks less anxious to

first

policy

^ur^g The
era^staWllty'ln The^o'vernment
lel^ities marklt lit It wl^hle

served only to cal1 renewed attention to the basic Problem insecurities market yet it was able
j
d
j
trying
to apply reto pursue a mildly restrictive trictive crediyt measures without
credit policy and to obtain some a
. w
sh0rt-term
increase in short-term interest
;;er®menet Securities. In order

rates. It is impossible to prove fov
. h hdilemma several
the erfectiveness of this postwar 0 °p
^ d
t
credit policy by recourse to bank- p™p"-a "
e
ing statistics. But . does seem 1™,/^ ^1? coSroh Pe -

bankers;

it

served

these

is

keep

Features of the Special Reserve

before bankers the necessity of
exercising prudence and care m
lending policies; and it helped to
emphasize the importance ot
}iquidlty and spliced matunUes in
the management of bank investment Portfolios.

Plan-Under this plan, the Open
Market Committee would be empowered to require commercial
banks to hold against their deposits, in addition to cash reserves, special reserves in the
form of short-term government
obligations or cash items.
The
requirements would apply to ah
banks accepting demand deposits, including non-insured as well
as insured commercial banks. By
increasing these special reserve

cial

to

If the Federal Reserve System
is to continue to exercise this influence upon credit conditions, it
must have some freedom of action in interest rates, especially
in short-term rates. Whether a
further increase in short-term in- requirements, .the. .monetary.^ guterest rates is actually desirable thorities
could
freeze large
or feasible at the present time is amounts of government,securities
a <luestion that may properly be in the banks, prevent them from

°r
-b"Si^setho cSteld thal a Jeft for determination by the
It?"S Xou.ld have,had ,«i<> sig" jtigher level of interest rates and Federal Reserve System.
cosely re- nificant effect on the postwar ibwer support prices for governOne of the crucial points in

commodity

must depend
with all their

erally reflected in a tightening of fair to state that the postwar
the° best-known of
fbe money market and a rise in credit policy did contribute to a .
■ , reserve Dian
short-term interest rates, includ- feeling of caution among commer- me speudl reseive v a i.

^

of housing.'Also, there
Atl Tht lnaaZL ml? ^"1°?
were persistent shortages of some
ifit
k
basia raw materials. Finally, full
formidable
nrnhiem
irf iqri6!3 employment, together with the inthp rasp if
^ i
V
creased power of labor unions and
tate pfedit the nrndl?^ ^
the support of the Government,
indi^atpV that thi i«S no\
led to repeated rounds of large
Hoi It hand ThP
wa§e increases and other addion ctnrk pvpharurp cniultiii
•
tions to industrial costs.
imnnrtant fnH
rtn hf
J
Thus the Price inflation which
bv iwtivpipd^fipinie
ri 1 followed the breakdown of price
Iniltural lnan^
f
7 controls in 1946 was largely an
S^nrrpasp ?n vSpw S L ^fi, inevitable adjustment to the
*»nlarfrpd nrndnHinn cmoit
higher money supply "-and vastly
P "uucuon goais.
increased holdings of liquid assets
(innrlusinn

we

must not prevent the banks from cnanges in tne market piices ot ibe growing fear concerning the

ample of this economic myopia.

appiied

be

purposes

direct controls,

on

.ls Ut|Je fa<=e of a declining volume of con- action to which most men of mod- skeptical investors to
to raise sumer goods, and the political erate
views
could
subscribe, onvernment securities

the

modest

these

the
the

recent discussion has been
question of maintaining the

these
Federal

securities ' to

Reserve
.

banks
■
'

in

the

order

.

support an increase m loans,
and.

thus

presumably

place

an

Volume

173

Number 4988 ...The

Commercial

and

Financial

Chronicle

(845)
effective ceiling on the aggregate

cerns

volume

a

of

Such

bank

loans.

that have

plan would appeal to the
Treasury since it would provide
a large and
dependable market for

tionships and

short-term

with

a

obligations on which
Treasury would be able to set
very low rates of interest. Thus,
the
plan would make it even
the

easier

banks has the
volume

the
in

of

deposits

supply

money

effect

same

bank

bank loans.

an

as

enlist the

To

the

on

and on
increase
sup¬

single

a

ket

or

position

a

the open mar¬

on

to make

or

not in

are

to sell securities

direct placements

institutional

investors.

One

result would

probably be a drive
expand the functions of gov¬

to

ernment

It

for the

Treasury to do its
financing through the banking
system.
Financing
a
Treasury
deficit
through the commercial

only

limited number of banking rela¬

is

lending agencies.
likely that the regi¬

also

mentation

lending
plan

of

via

commercial

the

special

would

direct

reserve

be

and

bank

accompanied, or
shortly followed, by control over
financing by means of securities
issues

least

that

has

in

placements.

been

other

the

At

experi¬

countries

particular

situation

^a(e-aer7S1

"( fiV!dUal
statistics on

will

involve

into

practice;

it

require broad-gauged

may

^d|?ient ky ke bankers to do

a

?/', .r w

capital

,e

,

issues or

bank

new things, to ask
nt"'v Questions, to use new standards in passing on loan
applica-

never

thinkine

more

good

of

necessary

the

nation

good of banking

37

were

for

and

the

for

the

For assuredly if

e0vldlncPerOVconceiVv?byivCthrnS ti0nS" have to me,an their loans tinue to
-bankers commercial banking
conceivably the plan may b" "7
police
enjov the flexibility
S I relatively trlTvllZfTf
relatively laige voiume of
lun customers
make^itsMaximum conPFhm
offending established the risk of needs
it

a

tribution

to

great

our

economic

Sank SsC1We°LnIofwVsn ^ S?d cr^d" r'sks if tbe funds ^ort, many people must
^roductionf tremendous plant
re(lul«d f°r essential pur-; vinced of the sincerity

be

programs,
and full employment
without some reliance upon out-

banks in the firm

S1MuIhwilfl0obbviouslydepend

responsibility, self-discipline and ficult

the

seriousness

with

which

on

community undertakes
responsibility or holding down
financing, whether by bank
loans, new issues, or direct place¬
the

port of member banks it is stated

ence

special

capital issues committees and sim¬
ilar
devices
were
employed to
supplement the controls over the

ments.

their

run

yedrs that lie ahead.

/,

■
-

Continued from page 9

'

new

further increase

pur_

pose and earnestness of intent of
convictions that the banking profession in the difmust

the

financial

that the alternative to the

Finally, bankers

con!

o£

ing

reserve

in

plan is

required

which

a

cash

reserves

on

would

be

earnings

no

realized.
The

of

special reserve plan is one
number of similar and related

a

proposals

advanced

This

in

recent

particular

plan was
proposed by the Federal Reserve
years.

commercial
the

Board in

December, 1947; several

members of

the

Federal

Reserve

Board have presented it for con¬
sideration
in
public
addresses
since then;
and newspaper ac¬

special

in

not

receive

1947, but

with

the

serious

it fits

current

in

life

trend

toward

the

based
to

special

those

very

control

bank lending

is

similar

underlying other

of

ures

plan

reserve

principles

on

meas¬

commercial

over

adopted by several

Also,

advocates of the

plan would require
institutions (e. g.,

insurance

Program for Voluntary Credit :
Controls

to

study the 1947 proposal
embodying a line of thought of

as

which

have not

we

end.1

yet heard the

■

another
of

of the Plan

credit

under

This

inflationary

is

the

plan would depend upon
the specific provisions of the par¬
ticular plan adopted and upon the
reserve

in

manner

which

it

is

condi¬
for

program

adminis¬

'

Some Conclusions for Policy
In these

with

the

Federal

Reserve

Board.

to

Representatives of the commercial
banks, investment bankers and
life insurance companies were in¬
a

formulating

program of credit control suited

first

time

that

these

diverse

groups have

met

venture. It is

tangible evidence of

in

inflation

cuts

such

spread

policy during

across

institu¬

tional

lines

segments

and

of

includes

the

■V'

munity.

broad

financial

com¬

/«..'

y

of

the

financial

for

such

power

of

need

the

thorities.

To

but

by

would

the

be

no

expansion

an

in

the' monetary

the

extent

quirements for bank

au¬

that

credit

re¬

will

rise further, this plan would have
a
number of extremely undesir¬
able effects.

./:/;1

//It:/;-/',l .-"■>/

/•././

Like any plan for credit control

involving the use of reserve re¬
quirements, the special reserve
plan would have harsh and
effects

even

the

on

un¬

banks.

It

would penalize those banks which
have been most active in the very
function they are designed to per¬

form, namely, meeting the credit
needs of the business community.
consideration would be given

No
to

the

acceptance

mem¬

fraternity

agree

con¬

types of loans which should and

should not be made. This involves

establishing

a

classification under

which certain types of loans would
be classified as
necessary or desir¬
able

or

would

noninflationary.

These

probably include loans for

defense production; loans for the
production, processing and orderly

distribution

of

essential

goods;
loans for additions to working cap¬
ital necessitated by higher wages
or
prices; temproary loans to se¬
curity dealers in the normal con¬
duct of their
sponse

business; loans in

re¬

to previous commitments;

loans

or

guaranteed,

credit

of

major tools
policy.

analysis, how-

our

ever, is that business loans

minor

re¬

of the

one

as

The thesis of

importance

are

insured

or

authorized by a government agency.
Other classes of loans would be re¬

credit

measures

are

relatively

a

ineffective protection
against the evils of inflation. But
to rely upon

harsh and restrictive

controls

disadvantage

really

only

has

the

directing attenfrom the things that

away

with

not

of

to

need

done

be

to

cope

inflation, but also involves

the very real risk of
hindering
business enterprise in the fulfillment of its all-important goal—
the expansion of -nvA/iiirt+iam
production.

.

moral

for

credit

noted

briefly.

If the

plan were so effective as
to prevent any substantial number
of

commercial

banks from meet¬

ing the real credit requirements of
their

customers, the result would
concerted
attempts to make

be

available

funds

sources.

from

other

Large business borrowers

doubtless

would

find

for

speculative

or

speculative

to

our

trvinff
xiying

problem

does

mechanicallv
mecnanicany

economic

not

lie

in

freeze
ireeze

tn
xo

an
an

statistic, whether it be

bank loans,

bank deposits

or

the

commercial

same

the

time reduce

credit

grave

purposes

of resale instead of

Having arrived at
ment

on

a

basis of

some

for
use.

agree¬

classifying

ap¬

or

or
on

plications for loans, the next prob¬
lem

is

to

available

it

make

to

the

the

information

financial

com¬

minimum

a

to

promote
speculative exThe present analysis raises

accumulation

cesses.

to

available

inflationary

inventories

or

doubts

as

to

the necessity

desirability of new, elaborate
highly restrictive strait-jackets
bank lending operations.

In this situation the commercial
bankers have many high respon¬
sibilities.
One of the most im¬

possible
munity, to develop some technique portant is to promote an under¬
to the for
interpreting the standards and standing of the nature of our in¬
securities markets or to institu¬
applying them to the special situ¬ flation problem and the necessity
tional
investors directly.
Small ations as
they arise, and to enlist of tough and realistic fiscal^ wage
business, however, would be hit the
cooperation of all parties in a and tax policies in order to master
harder.1 The effects of a drying up
real effort to
their

shift

to

bank

of

<f

financing

credit

serious in the

would

case

a

see

the

obtafri adherence to

the plan.

con¬

It

discussion

proposal and
uary,

most

! L

1 For details of the

and

be

of smaller

a

of

special
the

reserve

reasons

for

plan
the

treatment of its operation

"Federal

Reserve

Bulletin," Jan¬

1948, pp. 14-23.




is

impossible

to

guess

how

effective this policy will be.
Any
lending standards of necessity will
have to be couched in general

terms

and

their application to

a

of Series E, F, and G bonds, and
also increased acceptance of
gov-

ernment

securities

by

savings

banks, savings and loan associarecently to cur- tions, insurance companies, and
tail inflationary forces.
As you other such lenders. To the extent
know, it has increased the redis- that individuals and savings incount rate, increased reserve re- stitutions go along with the proquirements, stiffened margin gram, and to the extent that we
requirements on the purchase of pay-as-we-go, we can avoid the
securities and through open mar- use; of inflationary commercialket operations has allowed rates hank credit/ in the financing of
to rise slightly. Chairman McCabe government expenditures/s\£h e/
of the Board of Governors of the mere process of buying governFederal
Reserve
System
has merjt^securities at this time is one
also requested the cooperation of of the strongest actions to proall member banks
in screening /ect the purchasing power of savcarefully requests for credit and/ fogs. T.he savings banks
in holding down increases in busi- their part
by channeling
portion of

ness loans«

can

a

government securities.

All these devices for the control

do

largo
savings into

consumer

_■

,

of credit have the same general
Dangers of Abnormal Volume
purpose with regard to price inVolume «
nation.
They seek to minimize
the; creation of new purchasing
tiie same. time> an abnormal
power through the banking sys- volume of savings may add up to
tern — purchasing
power
which a volume of liquid assets so large
would enter the market place as ;° profrl<;e ,ail
^ si
and bid for scarce materials and similar xo that at the end of World
services. In an economy such as
ar.,
that large volume ox
ours which has been built on the }^U1<1 ?ss<lts Pro.vldes
a1c01?sta?J
use of credit, it is just as impor- thr(;aj to tae pric„e level> should
tant to prevent excessive credit confidence in the future purchasexpansion at a time such as this
L0;. hviW,
as it is to siphon off surplus conbrings us back to
,,

,

..

income through increased

sumer

^oatly. That

norm3l

VOlUHlG

Of

tax^on.

saving,

"Vf
tnO

as

Hppicinn*

Without

in

Bankers

also

tnority upon tne decisions
actions of free men, direct
pvtremelv

/di;in-ster

difficult

.

,

.

controls,

priorities

and

similar

ana
conto

ditlicult to

.

Price

direct

.

controls
allocations,
and
wage

limitations

should

&

which I have

discussed

imnnrtanrp

Wp

rrmst

ls °J great importance, we musx
work together to protect the value
of the dollar We must aid in expanding national output. We must
restrai° over-spending through an
a(jequate
level
of
taxation,
,

,

.

,

,,

,

too heavily as through sound financing methods
a means of controlling inflation, of the Federal Government, and
Their principal value is in guar- through restraint upon the excesanteeing that necessary materials
give granting 0f credit
We must
and
services
are
available
as

not be relied

needed for
effort.
Our

upon

our

defense

common

during

World

direct Controls

the

primary means of combating inflation./ We know now, even more
than we knew then, that our taxes
were not high enough.
The price
and wage controls of the wartime
period gave us an improper sense
of security. They held down the
upon

encourage savings m an appropri¬

ate

experience

War II demonstrated conclusively,
I believe, that we cannot rely

have

a

responsi-

as

0f

more

careful lend-

ing. This will not be easy to put

inflation

until

controls

removed in 1946.

iL^oS^Iooperative11^!

forts to foster

.

program

volume

some

f

11C

and

This

forms.

sacrifices
hnt

T

in

appropriate

involves

program
on

fhink

the part of all
vrm

will

a^rp«

of us' but 1 think yOU Wl11 agre°
those sacrifices

Wldl me

are

necessary,

Uhlmann & Latshaw

Open N. Y. Branch

cost of conducting the war, but
they did not prevent inflation.
uhlmann & Latshaw, Kansas
anU-inila- They simply postponed the impact City, "Mo., members of the New

it.
thesd, no
tion program can succeed.
.

_

..

_

expansion of real estate holdings
or
plant facilities or speculative
of

fo¬

be maintained if still heavier
taxes and controls are to be
avoided. We need increased sales

_

other

investments

including

from

The Federal Reserve
System has
taken other steps

..

purchases,

be

borrowing

t^se ot

should

re¬

man-

by

j*

^

banks,
and
among
lenders, that will insure
tirement of securities held by the
public; loans for the purchase of adequate credit to meet the needs
of American business and at the
existing companies or plants; loans
or

and

met

dividuals and institutions other
than commercial banks. It is imperative that the rate of savings

Waives of

imii

acquisition

in

materials

P°wer in^° defense production.

as unnessary

clude loans for

aid

indiverting

be

;
.
best means of paying for defense
policy is
general approach to or war.
pay_as-yOU-go method
fairly obvious. Policy must be the control of price inflation is leaves '
hangover
formulated on the basis of a real- the use of certain direct controls
w_run obiectives of savistic appraisal of the economics upon the economy. These controls
™run o
sav^
and politics of
inflation, must re- minimize or replace market forces
to those of
fleet an understanding of the im- m determining prices
allocating stdutions arei similar to
portant paiL bank loans olav in materials, and
distributing fin- rft® *caerai Reserve bystem ana,
puiidiu wart
p y ~r ichpH fxnnHc qinpp tbpv ?(>t
facilitating production, and must iahed goods, bince they set n<siHp indeed, are similar to those of the
aside
>
ronomv
The sunnort of
recognize the disadvantages of ex- the established rules of the mar.y*«...
pp_._
xreme
treme or rigid action
ket and impose *
governmental au- savings baaka £or the general
rigia acnon. The answer
ine
*
_

The

differences which
regional conditions, bank
capital
positions,
and
require¬
ments for liquidity. The detailed
effects would be extremely farreaching.
There
are,
however,
some general consequences which
great

exist in

they

price

AvnonctAw

and inflation¬ money supply. Rather, the objec¬
tive should be to foster and main¬
ary,
unless modified by special
tain a xciiuiiig policy among the
(X
lending uuttuy ctuiuiiif mc
circumstances. These would in¬

garded

effect mpon

slraininS

of

in

explaining
current inflationary movements of
prices,; and that the 'available

would

there

and

factors

modest and

There is little doubt that
bers

lending
causal

as

of anti-inflation

joint

a

bank

controls

inflationary conditions. This is straints

the

to

lessened,

dealing
complex,

are

most

explaining changes in economic
conditions and prices. Today this
is reflected in the fairly wide-

for bank credit are likely to taper
off, then the impact of the plan
be

the

of

overrate

credit

tion

token

we

in

ditions. One of the practical prob¬
lems is to get some agreement as

same

policy

some

bank lending

of

areas

credit

and

ing policy under inflationary

on

and

new

measures of control over
the money and securities markets.

the aggregate demands
for private credit. If the demands

depend

for

powerful

credit

Furthermore, much would

g°°ds and houses based upon easy
credl1*
BfoR market pres®ure °n the pnces ?f appliances,
lurn!ture, automobiles, building
materials, and many other comniodities. Along with their renecessary

agitation

voluntary credit controls initiated difficult and deceptive problems
December, 1950, at the behest of economics. There is a tendency

of

,

,

creases,

in principle with the desir¬
ability of a more restrictive lend¬

tered.

-

"

And Inflation
,

^

difficult times. Only thus can
they

in

—

The possible effects of the special

or

community have an opportunity and an obligation to
police themselves against relaxation of lending standards in these

approach to the problem
the expansion of

tions.

an

Possible Effects

regulations to be promulgated. The members of the fi-

restraining

the fact that credit

•„

to the letter of the state-

as

ments

Recent months have witnessed

to

vised

support to the general spirit
intention of the program as

and

forestall

businessmen

well-ad¬

ous

will

nancial

vited to cooperate in

be

hoped that the
give their
sincere, wholehearted and vigor¬
involved

tion of their
assets in govern¬
ment securities in order to
prevent
them from selling in a market

supported at pegged prices by the
Federal Reserve.

Consumers' Expenditures

It is to be

groups

companies, savings
banks, and savings and loan asso¬
ciations) to hold a certain propor¬

other countries during World War
II and still in effect. Bankers and
would

of

some

well

nicely

so

future. While differing in de¬

tail,

ardent

reserve

attention

regimentation of the economy that
some effort
may well be made to
bring about its adoption in the
near

banks.

other financial

counts suggest that it is now being
restudied in Washington. The plan
did

most

where

were

York Stock Exchange, have opened

a

branch

^ final P°int refers to savin«s" 'Street> New
If

arW

the

deficits

defense

do

period,

occur

they

during management

should Govern.

office

at

14

Wall

York/i/y' under/ha
of William J. Mc~

The Commercial and Financial Chronicle

38

Thursday, February 22, 1951

...

(846)

secret

no

that

are

we

of

some

Tomorrow's
Markets
Waller

the

Whyte

postponed indefinitely. What
would happen to our already stocks that haven't moved up
have to move back.
bent economy? You see I can won't

By WALTER WHYTE=

least

week or so with
is,
something the doctor de¬
virus infection. A

as a

couple of years ago the same
thing

was

a

for

time

a

away

%

*

stifle

to

to your

[The

to buy

anxious

you're

the

to

urge

Hold on
while longer.

Continued from page

a

do

account.

You may accept this conclusion
are
the dangers of the but then
question the justifica¬
yield spread narrowing be¬ tion of figuring the pension lia¬
cause of lower dividends, since the
bility of the company, using com¬
raising of the other side of the mon stocks at book value as an
equation appears remote? The re¬ offset. It must be admitted that
strictions on production of nor¬ from an ultraconservative
point
What

wide

mal

with

those

those

what was

see

making it click.
realized

I

things,
the rosy

wasn't

there

number

a

of

chiefly that, despite
forecasts, the market

a

one-way

street. If
ahead its

was a new era

tribution

of

our

the various industries is
desirable. Even the securi¬
ties of the less favored companies
among
very

day pf glory, as evi¬

their

have

by the resurrection of the
railroad bond and stock. market

ing that had previously es¬
caped me, though none of this

pointed to imminent declines.
*

al¬

of you

ready know, a program restricted
to senior securities precludes in¬
vestment in a number of compa¬
industries

which

have

almost

volatility

the

of

that

available

attractive

the

fact

lessons

investing

that

not an exact science. If you

the

correct

nies

and

been

successfully developed with¬ jority of

decisions

cases, you are

in

stocks

on

funds

in

funds

pension

arguing with the
fact that the buyers today are
better heeled than those of a
no

few years ago.

Stock is being
the market by

taken out of

open-end
trusts.
The big lure for the
first class is the escape from

individuals and the

dollars; the second is aggres¬

com¬

selling by well organized

bonds

the

of

Executed

Orders

CALLS

•

on

Pacific Coast Exchanges

Schwabacher & Co.
Members

Per 100 Shares Plus Tax

Std. Oil, N. J.@104%Aug
Phillips Petrol. @80%May
Sinclair Oil ..@37%Aug
Sunray Oil
@20 | Aug
U. S. Steel....@45%May
Westinghouse @37%Aug
Studebaker
@33%Apr
Rev. Cop. & Br.@30y2Mar
Anaconda
...@43%Apr

23 $750.00
7 450.00

Exchange
(Associate)
Francisco Stock Exchange
Stock

New

York

York

Curb Exchange

San

Chicago Board of

is

ma¬

considered

14 Wall

Street' "''"New York 6,K Y. '

COrtlandt 7-43 50
*•

Private Wires to

San

Am. Tel &
«

i-ltt

Principal Offices

Barbara




a

3 V\ %

long

return

on

a

period of time, such as
is large and in the ver¬

425.00

a

30 years,

26

312.50

nacular, "it

13

325.00

of the material

7

212.50

in

30

162.50

high

14

262.50

raise

Tel@154VgMay 11

387.50

i

/

grade
some

With

THOMAS, HAAB & BOTTS

pace

Members Put & Calls Brokers & Dealers

Association, Inc.

Broadway, N. Y. 4, Tel. B0 9-8470

ain't hay." In view
saving, the spread

the yields

mental

50

to 3V2%

substantial amount of money over

Subject to prior sale or price change

Monterey—Oakland—Sacramento
Fresno—Santa Rosa

by the interested parties.
between a 2^2%

300.00

Teletype NY 1-928

Francisco—Santa

and

between bonds

common

stocks

are

to

the

increasing

life insur¬

the
and

1930's,
in

not

even
though their market
considerably less. While this

value

confined- to

was

the matter of degree.

I might add

of

the

*

and

govern¬

the accelerating
rearmament, and the

to question.

open

Another

in

dogma

stocks

common

company

the

the

is

of demands for cash

being

that stocks have to be

of

use

possibility
so great

sold, again

probably at the wrong time.; At
least

during the early

years

of

a

fund, the contributions by the 'em¬
ployer

exceed

the

outgo

so

that

if the cash is received the trustee
can

merely

the cash flow to

use

meet the benefit payments.

If the

of the company fails

contribution
to

a balanced investment
should
include
some

appear,

program,

short-term bonds which could be

liquidated.

,

Among

the

which

questions

have been passed on to me is the

desirability of using the stock of
company in its own pension

the

fund. The instruments in

department

include

permit such

a

trustees

of

a

some

The Federal Tax

do not prevent the
qualified trust from

in

investing

trust

which

purchase and

which forbid it.

Regulations

our

some

any

securities 'that

permitted by the trust agree¬
ment. However, these regulation
are

require that when trust funds are
in

invested

securities

the

of; the

employer, "full disclosure must be
made

the

of

reasons

for such

an

arrangement and of the conditions
under

which

made."

are

done if

If the stock is

is

and

such

investment

Therefore, it

b

can

it is considered desirable

readily marketabl

considered

by the truste

to be attractive in the

purchase of

a

market, th
nominal unit is jus

If the company is anxiou
to have a large vpart of the pen

tified.

sion

fund

invested

in

its

ow

not sure that fund
ing the plan with a trustee is th
soundest procedure. Provided th
that the actuaries use book value
company
is
large
and
strcn
so
as
to level out the company
contributions. This allows the em¬ enough so that the employees wil
not lose confidence in the pensio
ployer to avoid paying less when
plan in the absence of an inde
stocks are high and profits are
pendent trustee, the managemen
usually large and then paying
more
when the reverse is true. might consider setting aside fund
on the balance sheet as a speeia
In
other words,
if in the case
reserve
fpr pensions. The cas]
above, the company uses the book
paid into the fund would be.kep
value method, it is not liable for

stock,

in

does

interesting questions.

controls,

as

In

better

committee

sion

as

difference

The

15

.

Trade

sirable

15

..

New

•

ap¬

carried at amortized

were

special

Pacific Coast
Securities

the

value
was

stocks where there * markdf, the directors or the pen¬

major companies has any risk in common
is no "top" price

have

secured

amply

default

being forced to raise capital successful. All of us make mis¬
borrowing money or selling takes, even those who confine deterioration of the dollar, and
preferred
stock.
One
example their investments to bonds, and finally, to increase the yield of
which has been especially kind to the presence of a nice profit in the fund and thereby reduce the
investors in
recent years is the a stock is very comforting. While cost of pensions to the employer.
insurance field. Another
is the bonds can be purchased at a dis¬ There are always two sides to a
banks.
Even
in
the
industrial count with the hope of a profit, question and this important prob¬
classification, the stronger compa¬ this procedure at least currenily lem is no exception.
nies have tended to eliminate debt means stepping down the ladder
One
of
the
real
dangers
of
While we know this
and preferred stocks or to refund of quality.
adopting a program for common
them privately. In some groups, has been done successfully, we
stocks is that at a bad time in the
such as the automobile, only one have preferred to concentrate our*
senior securities outstanding.

companies.

ance

in the case of <
will exert great pressure on the
bonds.
Some of you may have
sales organizations.
A war
Many of us worship the word heard the difference between an trustee, or the trustee himself may
contract today sends scores "growth" when considering in¬ optimist and a pessimist. The op¬ decide to abandon the whole idea
as being silly, take the losses, and
vestments. In watching the results
timist looks at a pail of water and
of
eager
buyers into the of our handiwork over the
put the money in bonds or take
years, while the
pessimist comments that
market to buy the stock of the
out an insurance policy.
In the
all companies have their problems
the pail is half empty. I guess that
war beneficiary.
This in turn but those with a strong underlying observations about common stocks past, suggestions for such changes
takes still more stock out of growth trend seem to have over¬ frequently are determined by the in investment policy often seem
to
have
been
advanced at the
come the obstacles somewhat more
same basic state of mind.
the market and brings higher
worst possible time to sell.
Any
successfully. In other words, longOne of the greatest dangers fac¬
prices.
/
term
investment
in
pension trustee going into com¬
companies
❖
*
*
ing the supervisor of a large in¬
mon
stocks should arm himself
with this characteristic has been
vestment
account
today is
the
In recent months this eager¬ profitable.
Taking
the
broader steady deterioration in the value now against such pitfalls and stale
a definite policy of using low lev¬
ness to
get aboard has been point of view for the moment, an of the dollar. This country ap¬ els of the market to average down
account should participate in the
pears to be committed to a policy
fed by stock splits.
The big profits from new products and
his holdings of common stocks and
of spending more than it receives
reason
for splits, according other technological improvements
to build up the proportion of these
in good times as well as bad, in
items.
■'
to official statements, was a emanating from the research lab¬ says that the pail is half full,
oratories of the country.
While
One of the greatest doubts con¬
peace as well as war.
While I do
desire to "get wider public many companies, which can be
not submit the proposition that cerning this program is the posi¬
classified in this category, have to
tion of the trustee when the stocks
participation."
I've always offer senior securities to provide common slocks are the perfect are
selling at a substantial dis¬
solution, I am sure that no one
translated that into, "Let's get greater manufacturing facilities,
here will suggest bonds as a sub¬ count from the book value, which
these do net really allow the se¬
I should expect would be accom¬
stitute for this purpose. With this
some buyers in so we can get
curity holder to benefit from the specter on the horizon, some com¬ panied by a business depression.
out." Maybe that's too cyni¬ growth. Some participation in the
The officers of the company are
mon stocks are justified solely as
worried about keeping it out of
cal, but I'm interested in the profits can be secured by purchas¬ a hedge against inflation.
the red or cutting losses and they
ing convertible bonds or preferred
I have left to the last the most
answers not the reasons.
stocks but frequently this privilege
see
their pension fund shrinking
attractive
reason
for
common
cover! up some weakness in the
in value.
In the first place,- it
stocks at the present time, namely,
should be remembered that pen¬
security itself. In addition, if the
the greater yield and the attend¬
investment is successful, the pre¬
sion funds can be appraised at
ant lower
contributions
to
the
mium at which the security sells
book or market when being valued
pension plan by the employer. No for
actuarial purposes. In the case
investment
program
should
be
of the pension plans with which
based
solely on the amount of we are
connected, we have found
income deemed necessary or de¬
««

sive

still

term liabilities such

by

There's

but

unsound

diversification here that I am one of those who
among industries, to participate in believe that if conditions return
"growth" companies, to offset, at to the 1932 level again, a new form
least at times, the mistakes made of society will emerge and the
in part of the investments, to move value of the relics of the
past,
in the direction of offsetting the such as bonds and stocks, will be
provide

make

the

does

company

be decreased, but prime bonds, with the insurance
period of years it seems to * companies heading in the direc¬
me that income should mode than
tion
of
heavier
stock
comrpitequal that on prime bonds, which ments, some liberalization of this
are the
principal alternative in¬ procedure may be made when* the
vestment opportunity.,
next pinch on surplus comes. Like
To
summarize,
the
principal so many arguments in this world,
reasons
for
utilizing
common the real solution probably lies in

commitment.

included

trusty to
However,
the
have the right to

a

My training in this field of en¬
has

add

pension

whole.

stocks may

appreciation possibilities available
on
the common stock make that
more

groups

high grade bonds. In

on

mon

point, and frequently at the
beginning, the greater yield and

deavor

same

words, the yields on

over

to
At

stock.

common

o.her

some

the

the

before World War
At the present time, the yield
a
list of high grade common

stocks is somewhat over twice that

out

*

*

,

As many

since June.

its

commitments increases

denced

path wasn't so clearly defined
as
some
people seemed to
feel. I saw evidences of sell¬

Inflation

in

existed

companies

on

Hedge for Pension Fnnds

*

*

*

should'

company

the

to
it

earnings on stocks in the Dow- proval of the tax authorities. Fur¬
and
Moody's
.Industrial
thermore, we have seen a special
averages
indicate that there is approach
used
in
valuing 'the
now
a
greater margin of safety assets
of
companies with
long
than

as

make

Jones

5

Common Stocks

view, the

enough

of

plenty of chances to go over
the market and

to

but the dividends as a percentage

are

II.

gave

seem

corporations. The use of postpone its contribution so that
averages is frequently dangerous the fund would become
actuarially

of

a

burden

of

many

me

room

tax

point to lower earnings for a great

the

of

heavier

the

presented as
of the author only.]
They

the lower profit mar¬

lines,

gins on government business, and

this

in

expressed

the
plan still remain qualified
provided the limit set by the Bu¬

holders of corporate bonds reau of Internal Revenue is Aiot
lighten their position, there ap¬ exceeded. Therefore, the use of
stocks
does
not
prove
pears little hope for higher earn-, common
ings from the bond section of the more costly than any other plan.

necessarily at any

not

coincide

time

%

cash
view8

Chronicle.

If

Another

method.

one

is

one

article

from under you.

bid for sym¬

pathy it is merely to tell you
that being confined to a bed¬

in

go hog-wild
that may fall

don't

market

That's

other

or

large

and that get in at this stage.

answer

one

simply called the

This isn't

flu.

But I have

have the answers.
at

past

scribed

questions even if I don't

ask

I've been tied to a bed for

the

would happen if in past advances isn't a guar¬
didn't come; or was antee of future advance. But
if
a
break* does
come
the

war

the

Unless

companies

insurance

the

dered what

SayS
=5

then

stocks,

rather remote.

pears

take a look at
lethargic issues
arming, preparing and stock¬
piling today for a possible which have done nothing up
war
with Russia.
I've won¬ to now. Refusal to participate
It's

any

larger

any

other

trust

was

contribution than
year

or

than

if

in

we are

the

company

additional

and invested

i

working capital and/o

the plant.,,Normally the ,rpte of,re

composed solely of bonds,

turn

on

such

an

investment

'.ex

substantial margin th
need for substantial funds by the
yield on the common stock.. Th
contract had been used to meet
disadvantages of such a prograr
Treasury, any radical removal of
controls over the
bond market the pension liability. The annual are that only the actual funds dis
accompanied by higher yields ap¬ rontrihntion ran he nostnoned and bursed to the pensioners are al
of

our

or

even

if

an

insurance company

ceeds

by

a

Volume

Number 4988,.. The Commercial

173

and

Financial

Chronicle

(847)
lowable

tax deductions and with

as

of

reserve

no

marketable

Continued from page 4

invest¬

ihe

index represents the sum
total of the price
per pound
foods in general
use, and its chief function is to show
the
general trend of food prices at the wholesale level.

of 31

ments

available, the company must
provide funds for the pension pay¬
ments in bad times

times.
tors

The

be

must

well

as

balance

of

as

The State of Trade and

good

these

fac¬

determined

shifting production from

by

available in the market.

Ano.her question that has been
the

Increasing the limits of

is the advantages to

propounded

must

holding com¬
mon
stocks.
we hope, the
.yield of the account is above that
invested solely in bonds, the cost
of the pension plan will be less.
Another point of more long range
significance is that if the account
grows
in value over the years,
again as we hope, an excess of
from
If, as

employer

market value

benefits

sheet

their

on

using his mill

Uncertainty as to possible ceiling price action on various farm
commodities resulted in a slowing down of sales of
grain futures

last week.

essential programs.

tion

in

by good export demand, curtailed receipts from the
country and

that these programs will take about

May.

Wheat prices

a

-

harm than good.

is

made

settlement
also sold

said to

like wage rates, from

-

They involve longrange
considerations which are
not to be strictly limited, as are .
wage rates, by 'present conditions'
or
even
immediately foreseeable;*
conditions. "Once installed,
theybecome more or less permanent,
particularly - pensions."
Experts {
tell us that around $14,000 is nec¬
toyyear.

Steel

Institute

announced

this week

week's

operating rate is equivalent to 1,989,000 tons of
ingots and castings for the entire industry, compared to
1,969,000 a week ago.
A month ago the rate was 100.9% and
production yielded 2,017,000 tons; a year ago it stood at
88.8% of
the old capacity and amounted to 1,692,000 tons.

a

month for

its companies.

try and
such

see

about

sources

our

of the output reported for the

I hate to

■

trend and would worry

a

in the future.

bond

a

worker

a

issues

of equity

equity must be invested in the
enterprise. If pension funds use
some
common
stocks,
the well
established

and

companies have

continuing

for years

of

source

a

The

large

0.8%

stocks might be used

common

this type

year

has
a

-.

of account?

said

I

As

as

conference

this

at

to

pension,

over

which

Auto

we.

have full investment discretion in

This

stocks.

common

has

since that time

continued

do not overlook the

and

strike

general

a

126,279 cars,

or

we

stock

market whenever cash is added to

at

below the comparable period

18.1%

Output Rebounds Sharply Following End of
Rail

below

should

show,

over

years, a better
and
principal

output

and

cars

6,910

Strike

cars

for

the

current

a year ago.

week

was

made

of

up

We

have

through

lived

with

an

common

stpeks fof a great many years and
sometimes
to

us

done

and
us

remarks

the

have

sometimes

wrong.

will

reasons

30,546 trucks built in the United States and
and 2,710 trucks built in Canada.

they

our

you

a

total of

have

of

solution of the

you

will,

the

capital

risk."




is

a

week

totaled 9,620

week ago and 7,604 units

units compared

a year

with

ago.

'

„

at

interest.

Both

and

cocoa

'livestock

markets

some

coffee closed at

basis.

Grind¬

the

easing of
lower in light
lagging manu¬
levels slightly

week

a.

with

ago

/.T*

'

prices
4

■

featured by further advances in lambs

were

to new historical highs and

seasonal peaks for hogs.

new

Cattle prices were mostly steady to slightly higher.
Activity in domestic cotton markets remained at a standstill
as

traders

order

as

market

awaited a workable solution of the price regulation
applied to the raw staple.
Trading in the Boston wool
likewise suspended during the week.
f

was

Trade

Lifted

Volume

By

The

nation's

period ended

Weather, Anticipated
Birthday Holiday

Good

Taxes and Lincoln's

consumers
spent slightly more money in the
Wednesday of last week than during the prior

on

week.

Contributing factors were the general letup of unfavorable
weather, the observance of Lincoln's Birthday throughout much
of the country, and the anticipation of federal excise taxes. Over¬
all retail dollar volume was noticeably above the level for the
comparable week last year, Dun & Bradstreet, Inc., reports in its
current summary of trade.
'
!
Shoppers for apparel increased their purchases somewhat last
week; dollar sales were slightly above those for the similar 1950
period. Widespread promotions of Spring fashions evoked a gen¬
erally favorable response. Much interest was stimulated for Spring
suits, rainwear, sport clothing and accessories. There was no appre¬
ciable change in the demand for dresses. Winter coats for men and
boys were increasingly requested.
.

While

there

was

decline

a

in

the

sale

of

such

items

food

as

meat, confectionery and delicacies, the start of the Lenten season
brought about a compensating demand for sea-food, dairy prod¬
ucts, and eggs.

Total retail dollar volume in the

week

ended

Bradstreet.,

and

Feb.

Inc.,

15

industrial

failures

from

in

reports.

191

declined

to

165

a year

ago,

reflect¬

the

the

preceding week, Dun &
This decrease brought casualties con¬

that year.

New England and Pacific Coast

South,

its

Dun

& Bradstreet wholesale food

four-month

upward

movement to

price

High

index extended

stand at $7.25 on Feb. 13, J
previous level of $7.21.
Not since the '
week of Oct. 10, last, has the index shown a
drop. The current
figure is 23.7% higher than the year-ago index of $5.86, and 21.6%
above the pre-Korea level of $5.96.
It is now only 1.5% below
the all-time high of $7.36 recorded on July
13, 1948.
a

rise of 4

cents

over

Midwest,

and

Southwest

a

the

Wednesday

on

year ago

by the fol¬

+7 to +11; East +9 to +13;
to
+16 and Northwest

+12

+ 11 to +15.
Wholesale ordering

the level of the week
was

substantially

in the week

before.

above

the

level

almost unchanged from

was

The total
for

dollar volume of

the

similar

week

orders

in

1950.

While the number of

buyers attending various wholesale centers
increased very slightly last week, it was somewhat below the level
a

year ago.

on a country-wide basis, as taken from
Reserve Board's index for the week ended Feb. 10,
1951, advanced 15% from the like period of last year.
This com¬
pared with an increase of 3% in the previous week and 19% for

the Federal

the four weeks ended Feb.

10, 1951.

ment store sales

an

Promotional

registered
sales

and

For the year to date depart¬

advance of 24%.

good

weather

the

week aided retail sales volume in New York.

Wholesale Food Price Index 1.5% Within Ail-Time
The

period ended

estimated to be from 11 to 15% above a year ago.

Department store sales

in

siderably below the 1950 and 1949 levels when 218 and 180 oc¬
curred respectively.
In comparison with prewar 1939, failures
were
down 44% from the total of 293
je.corded in, the „similar,
of

was

Regional estimates varied from the levels of

of

Business Failures Show Substantial Drop

good

some

output in the

Commercial

I hope that these

give

for

been

quotation of Justice Putnam—"Do
what

Canadian

week

they

showed

■

134,301

of

in¬
vestment
program
restricted to
fixed-income obligations.

can

Oats

Total dollar volume was moderately above
ing upward price adjustments in certain lines.

„

For the United States alone, total output was
164,847 units,
highest point since last November, against last week's revised
total of 106,315 units, and in the like week of the last
year 166,134.

combined income
performance than

obtained

be

period

a

week.

lowing percentages:

Total

10,298 units

stocks

common

last

the

115,967 (revised) units and 123,712 units

which

includes

corn

ceilings set by the OPS.
Trading in lard was slower than
holding firm.

the

.

close to

of last week

pension fund. We believe that
under
present uncertain condi¬
tions,
an
investment
program

the

quiet
for many months.
The yellow cereal
prices since early 1948 with current levels
the anticipated ceilings. The market received
very

smallest

Combined motor vehicle production in the United States and
Canada the past week, according to "Ward's Automotive
Reports,"
totaled 174,467 units, compared with the
previous week's total of

been

common

increase

of 4,347 cars, or
1950 when loadings were
bituminous coal mines, but a
an

1949.

•

my bank
invest about 30% of.

trust

represented

a

the policy of

ago,
been

of

of

total

the corresponding week in

by

decrease

in
;

above

reduced

we turn to
shouldn't this
another reason why

idealistic questions,
be included

week's

;

money

If

to come.

to Rail Strike

Loadings of revenue freight for the week ended Feb. 10, 1951,
during which railroad operations were curtailed by labor troubles,
totaled 573,163 "cars, according to the Association of American
Railroads, representing a decrease of 77,961 cars, or 12% below
the preceding week.

new

additional

sound,

are

Carloadings Show Further Curtailment Due

capital

To insure that

corresponding period two years ago.

of the

result

a

was

best

'*

pension of $100 retiring at ;
Electric Output Continues Lower Trend From Record Peak
age 65.
If the pension liabilities
of a major part of all employees
The amount of electrical
energy distributed by the electric
were funded, the volume of pen- ~
light and power industry for the week ended Feb. 17, 1951, was
sion
trust
would
be
colossal. 1 estimated
6,905,223,000 kwh., according to the Edison Electric
Carrying this theorizing one step
Institute.
.'.. --V'..:"vfurther and assuming that only
The current total was 52,061,000 kwh. lower than that of the
bonds could be purchased, it would
previous week, 973,872,000 kwh., or 16.4% above the total output
create the need for a tremendous
for the week ended Feb. 18,
1950, and 1,254,944,000 kwh. in excess
addition in the debt of this counto fund

essary

facturer

point.

steel

as

corn

Domestic flour bookings remained on a limited
ing operations were resumed at many mills with
the rail tie-up.
Cocoa prices again moved slightly
trading, reflecting a lack of speculative demand and

the operating rate of steel companies
having 93% of the
steelmaking capacity for the entire industry will be
99.5% of
capacity for the week beginning Feb. 19, 1951, based on the indus¬
try's increased capacity of Jan, 1, compared to a rate of
98.5% a

This

be

the

Cash

reported

that

week ago, or a rise of one

at

expected

are

switchmen's strike.

independent
strength but moved largely in sympathy with wheat and corn.
The volume of sales of grain futures on the
Chicago Board of
Trade last week aggregated 198,415,000
bushels, or a daily average
of about 33,000,000 bushels, the latter
comparing with 45,000,000
bushels the previous week, and with
28,000,000 bushels in the
corresponding week last year.

.

year

the

buyers of cash

.

American Iron and

level in three years, aided

considerable support from the removal of
hedges against export
sales with Mexico and a number of
European countries

same

cannot vary,

of

with receipts the

for

The

the highest

Larger receipts of all grains

million tons of steel during

■

more

reached

continued lack of moisture in the
dry sections of the Winter wheat
belt.

The National Production

permanent depreciahuman 'machine,' in

the

the

grain prices continued, however,
held to comparatively narrow

were

Canada, oil-country goods and well-head equipment
the petroleum
industry, maritime ship program, ocean going
ship repair, drums and pails. Still under consideration are
heavy
power equipment, power plants and
highways.
It is estimated

Just putting the CMP label on a
plan will neither guarantee
way as provision
priorities nor guide production. To be effective, CMP will have":
depreciation and in- ~ to
be preceded by long and careful
planning, detailed screening
surance
of plant and machinery.
of material requests from all
types of consumers, and a selective
This obligation should be among
build-up of administrative people. It has none of the magic of
the first
charges on revenues."
Aladdin's lamp; it requires careful organization and hard
work
Later on, the report stated that
by many people, concludes the "Iron Age."
v\
"social
insurance
and
pensions
much

The upward trend of

although day-to-day changes

Authority seems determined to install
* its new controlled materials
plan on steel, copper and aluminum
cial insurance and pensions should
on
July 1—ready or not.
Unless a lot of detail work is done
be considered a part of normal
between now and then
they will not be ready, this trade paper
business costs to take care of tem¬
asserts.
CMP in name
only, or prematurely installed, could do
and

&

limits.

Industry Board appointed by the
President in 1949 found that "So-

porary

Dun

Monday, Feb. 12, the Office of Price Stabilization removed
price ceilings from all farm products
selling below parity, such
as
poultry, eggs, milk, sugar and certain grains.
Specific' price
ceilings were set for soybeans, green coffee and cocoa
beans,
while a rollback of
prices was announced for crude cottonseed
oil and other vegetable oils.

on

example, the increase to 20% on carbon
hot-rolled sheets, means that the hot-rolled

the U. S. and

Steel

The

hands.

the

last year.

for

tremendous social "hot po¬

a

tato"

held

existing allocation programs the following are
slated to start in May: Merchant
vessels, barges, locomotives for

The managers of pension trusts
have

into

foods

On

In addition to

spiraling cost of living.

a

forced to roll plate

and

Bradstreet daily wholesale
commodity price index at peak levels during the
past week.
The
index closed at a new all-time
high of 329.38 on Feb. 13, compar¬
ing with 326.37 a week ago, and with 249.20 on the
corresponding
date

for rolling plates is diverting at
37% of his sheet capacity to DO orders.
This does not
include tonnage he must
provide for essential civilian programs,

sheet

purchasing

the

on

products

manufacturer—especially if
now

V

High

Although a number of trading markets remained
inactive
pending clarification of the price freeze
order, strength in farm

warehouses, and non-integrated mills. During the second
quarter
some mills will be
channeling more than 50% of thejr hot-rolled

of the pensions in the face

power

of

for

17%

producer

Commodity Price Index Registers New.
Record

least

provide additional
the employees and

maintain

Wholesale

defense (DO) orders which steel mills

accept is also hitting the small

plates and
-

be available to

help

Industry

war

his steel has been
coming from mills
sheet or strip mills.
For

book value will

over

to

peace

goods.
Some of the major
contracts that already have been
placed will require as much as
18 months for
tooling up before assembly line production can
begin. This explains, this trade authority
states, why the machine
tool industry is
staggering under an ever increasing backlog of
orders, while many small manufacturers face production curtail¬
ment.
Many of them cannot weather such a long storm.

ihe
management. Generally speaking,
the odds are probably against the
use
of the company's own secu¬
rities except as just another item
when

39

gain of 20% was recorded the past week

early

As

over

a

part

of last

consequence, a

the similar period

of 1950.

According to the Federal Reserve Board's index, department

J1 -store sales in New York City for
advanced
week

an

the weekly period to Feb. 10, 1951,
19% from the like period of last year. In the preceding
increase of 5% (revised) was registered above the similar

week of 1950.

of 17%

was

For the four weeks ended Feb. 10, 1951, an increase
over that of a year ago, and for the year to

recorded

date, volume advanced 22% from the like period of last

year.

40

The Commercial and Financial Chronicle

(848)

The following

Indications of Current

latest week

week

Business Activity

or

statistical tabulations

or

on

steel

Indicated

BteeMngot?

and castings (net

—Feb..25

tons)—.

Previous

Month

that date,

Week

Ago

condensate output

(BUREAU

2,017,000

short

(in

1,692,000

Crude°runsatS*stills"—daily

(bblsJ

—Feb. 10

\°0

IS^oU? a°ndPdlstUlate i^JUOT^'fbbls.)

£%

©^ks^t'renneriesTat'buUc termrnaisnnyran^lt and in pipVllnes—-

F.b. 10

and unfinished gasoline (bbls.)
(bbls.) at-------------------

Finished

Kerosene

at

5,938,500

5,761,510
6,370,000

Feb

10

—*eb. iO

5,362,000

20,069,000

2,559,000
9,420,000

2,843,000

2,652,000

2,327,000

9,785,000

10,062,000

6,741.000

9,561,000

9,786,000

8,693,000

133,134,000

129,700,000

121,209,000

14,693,000

15,634,000

18,027,000

129,362,000
17,120,000

20,815,000

56,776,000

64,557,000

40,206,00

41,675,000

Mixed

of

Revenue

CONSTRUCTION

ENGINEERING

4HVIL

—~~
Feb. 10
(number of cars)*—Feb. 10

freight loaded (number of cars)
freight received from connections

Revenue

cum

RECORD:

573,163

651,124

783,025

593,632

692,543

Feb

U.

1 ^

™
;

Feb. 15

Federal

$555,701,000

$391,606,000

473,513,000

242,146,000

82,188,000

149,460,000

lignite (tons)—
Pennsylvania anthracite (tons)

73,431,000

50,495,000

21,648,000

8,757,000

98,965,000

13,315,000

coke

Beehive

3*460,000

•

■

Feb. 10
reo- iU

(tons)

oil

(bbls.

42

of

*9,415,000

11,820,000

859,000

952,000

5,000

7,000

30,000

(bbls.)

13,992,000

15,809,000

13,036,000

12,737,000

11,965,000

8,051,000

214,446,000
5,264,000

*214,092,000

196,086,000

*13,054,000

14,449,000

products

(bbls.)

imports

16,251,000

(bbls.)

:

consumption—domestic

*156,100

158,600

stocks

(bbls.>

TRUCKING

14,235,000

and export

:

._

ASSOCIATION

—

of December:
of

Volume

motor

of

carriers

9^7

(tons)

*257

*257

3,410,019

reporting—

freight transported

*3,399,326

2,680,092

INSTITUTE, INC.—Month of

January:
Slab

701,000

129,500

170,550,000
156,285,000

176,725,000

(bbls.)

AMERICAN ZINC

2,592,000

866,000

*199.372,000
182,896,000
*16,469,000

gal¬

(bbls.)—

output

imports

Number

34,963,000

33,371,000

112,973

220,184

output

oil

Indicated

85,084,000

94,143,000

90,871

INSTITUTE—Month

production

crude

zinc

smelter

output, all grades

(tons of

lbs.)

Shipments

BUREAU OF MINES):

135,190

therms)

3,740,600
3,407,443

gasoline output

2,000

COAL OUTPUT (U. S.
Bituminous coal and

(M

3,489,502

3,236,074
162,557

Benzel

$120,047,000

162,322,000

29,101

202,375

each)

Increase—all

$256,465,000

41,161

14,192

4,316,493

539,748

60,772,000

10

G2,276

Natural

568,816

533,534

65,897

Month

For

192,981,000

domestic

Month

J™. 15

S. construction
construction —
Public construction —
State and municipal
Total

Ago

November:

^AMERICAN

Private

Year

4,654,058

PETROLEUM

lons

ENGINEERING NEWS-

—

Month

16,636

end of Dec.

—

j.M therms)
sales (M therms)

gas

sales

gas

Domestic

52,865,000

December-

(short tens)

sales

gas

AMERICAN

60,602,000

*40,371,000

of

(M therms)

gas

Refined

RAILROADS:

OF AMERICAN

Previous

MINES):

ASSOCIATION

Manufactured

17,887,000

53,065,000

GAS

Natural

Crude

ASSOCIATION

of that date:

December

Total

4,951,250

6,395,000
19,981,000

Total

Feb. 10

oil (bbls.) at

oil, and distillate fuel
Residual fuel oil (bbls.) at
Gas,

5,861,250

116,338,000

9,714,000

1Q

(bbls.)

output

Gasoline

average

^

OF

tons)Month

Stock of aluminum

of

—daily average (bbls. of 42

are as

Production of primary aluminum in the U. S.

1,969,000

1,989,000

either for the

are

Latest
ALUMINUM

88.8

INSTITUTE:

PETROLEUM

oil and

Crude

of quotations,

cases

Ago

100.9

98.5

99.5

AMERICAN
AWFRICAN

in

or,

Year

Week

Feb. 25

production and other figures for the

cover

Month

Latest

INSTITUTE.
operations (percent of capacity)
AND STEEL

AMERICAN IRON

Thursday, February 22, 1951

Dates shown in first column

month available.

month ended

...

80,912
of

69,948

*72,342

69,020

10,212

*8,884

82,037

72,770

74,795

52,941

50,950,000

46,526,000

30,082,000

4,229,000

3,360.000

2,914,000

690,900

*625,900

124,300

6,606,464

*6,243,970

5,637,800

5,980,557

5,666,213

5,553,300

625,907

*577,757

84,500

1,106,208

lbs.):
(tons)

2,000

*79,995

70,848

1,102,453

1,716,600

146.2

(tons

144.9

137.0

3,900

Stocks

at

Unfilled

end

of

orders

COAL OUTPUT

period
end

at

of

(BUREAU

period

(tons)

OF MINES)—Month

of January:

DEPARTMENT

INDEX—FEDERAL RESERVE sys"

STORE SALES

Bituminous

Feb. 10

238

305

*234

273

coal

and

lignite

Pennsylvania

anthracite

Beehive

AVERAGE=100

TEM—11)35-30

(net

COKE

INSTITUTE:
(in 000 kwh.)

KOISON ELECTRIC

output

Electric

ieo. 17

6,908,818

6,957,284

6,905,223

coke

(BUREAU

Production

5,931,351

Oven

DUN & BRAD-

INDUSTRIAL)

(COMMERCIAL AND

FAILURES

Oven coke

*eD. lo

INC.

STREET

191

165

FAIRCHILD

„

PUBLICATION

Finished steel (per lb.)———

——Feb. lo

;

Feb. 13
Feb. 13

(per gross tor.)—
Scrap steel (per gross ton)
Pig iron

FEB.

4.131c

3.837c

$52.69

$52.69

$52.69

$46.38

Piece

$43.00

$47.75

$46.75

$27.25

OF

Men's

4.131c

4.131c

Composite

Electrolytic copper—
Domestic

reiinery

Feb. 14

(East St. Louis)

24.425c
175.000c

74.500c

17.000c

17.000c

17.000c

12.000c

16.800c'

16.800c

16.800c

11.800c

Feb.14

17.500c

17.500c

17.500c

9.750c

—

at

U.

S.

Average

children's

Cotton

Railroad Group
«...
Public Utilities Group
Industrials Group

S.

U.

——

—

Government

Average

'*■

101.55

103.54
116.41

Corsets

and

119.82

120.02

119.82

121.46

118.80

119.00

120.02

Underwear

115.43

115.43

116.02

110.34

109.97

108.70

112.93

112.93

112.75

111.62

115.63

115.82

116.02

117.40

Underwear

119.20

119.20

119.00

120.43

Shirts

Railroad

Public

Industrials Group

MOODY'S

Hosiery

PAPERBOARD

received

Production

2.71

2.70

2.65

2.88

2.85

3.16

3.15

3.17

3.24

3.01

532.5

and

3.02

3.08

Floor coverings

2.86

2.85

2.78

Radios

2.69

2.69

2.63

Feb. 10
at

237,247

240,200

241,472

209,827

Feb. 10
Feb. 10

(tons)

104

103

106

761,828

(VACUUM

365,243

746,287

Factory sales
METAL

OIL, PAINT AND DRUG REPORTER PRICE INDEX—1926-36
Feb. 16

Month of

(BUREAU

120.9

151.5

152.4

152.9

Copper

DEALERS

AND

SPECIALISTS

ON

THE

N.

Y.

NEW

Feb.
.

3

48,568

44,711

41,954

33,790

3

1,467,109

1,316,015

1,271,860

3

$66,494,809

$60,156,890

$52,861,134

$39,840,155

Feb.

3

43,360

39,461

36,895

35,523

415

317

36,480

35,206

Odd-lot purchases by dealers (customers' sales)—
Number of orders—Customers' total sales
Customers'

short

sales

Feb.

3

330

Customers'

other

sales

Feb.

3

43,030

39,197

*

NEW

Feb.

3

1,258,027

1,123.561

1,075,006

Customers'

short

sales

Feb.

3

12,610

10,531

15,981

Customers'

other

sales

Feb.

3

1,113,030
$46,131,138

$41,367,877

value

167,850

35,377

33,868

3,626,503

55,127

54,604

2,761,679
41,687

£20,089,000

£13,524,000

£10,995,000

$1,411,125

*$1,357,729

$901,211

GREAT BRITAIN-

carrying

extended

hand and in

Jan.

of

debit

accounts—

balances

—

114,104

listed

337,440

324,140

298,860

3

337~440

324~140

298^860

307,570

3

548,210

522,200

469,420

340,560

Feb.

3

Feb.

Feb.

Other sales

3

Month

309,059

947,966

*890.288

669,388

99,339,824

93.607.269

77,940.210

bonds

116,164,521

115,951,939

178,396

210,921

128,020,569
94,413

665,423

698,226

543,041

other collateral

.

CEMENT (BUREAU OF MINES)—

PORTLAND

purchases by dealers—

46,434

399,013

shares

Member borrowings on

307,570

Feb.

120,670

404,297

—

banks in U. S—

free credit balances—

Market value of listed
value

margin

net

customers

to

Total of customers'

Market

of

omitted):

firms

of customers'

on

of Jan.—

EXCHANGE—As

Member borrowings on U. S. Govt, issues

Round-lot sales by dealers—
Number of shares—Total sales
Short sales

Round-lot

62,565

208.065

3,723,054
—

81,957

199,818

36,175

BANK, LTD.—Month

STOCK

(000's

Cash

$35,505,730

sales

YORK

Credit

987,806

3

1,245,417
$51,166,009

1,059,025

Feb.

Dollar

.81,712
:

tons)

CAPITAL ISSUES IN

Total

11,036

total

249,150

metals in the

(in fine ounces)

Member

998,842

shares—Customers'

288,756

—

(in short tons)

MIDLAND

31

264

of

MINES)

OF

1,014,752

value

Number

133.1

January:

short tons)

(in

(in short

Zinc

,_Feb.

_

Number of shares

Dollar

135.1

STAND¬

(in fine ounces)

Silver

STOCK

Feb.

of orders-

138.8

COMMISSION:

EXCHANGE

Odd-lot sales by dealers (customers' purchases)—
Number

147.3

December:

Gold

STOCK TRANSACTIONS FOR THE ODD-LOT ACCOUNT OF ODDLOT

of

117.7

133.3

128.3

States:

Lead

EXCHANGE—SECURITIES

156.4

122.8

MANU¬

CLEANER

ASSN.)—Month

OUTPUT

United
„

—

(number of units)-;

Mine production of recoverable

AVERAGE=100

182.6

119.1

93

748,012

SIZE

146.4

282,305

.

CLEANERS

VACUUM

FACTURERS

201,511

262,530

143.9

154.2

135.8

appliances

China

356.5

154.1

147.9

—

—

household

130.4

122.5

135.1

—

Luggage
Electrical

168.0

131.8

123.1

—

•_

177.9

184.2

.

2.69

130.9

wear—

—

2.87

ASSOCIATION:

Percentage of activity

children's

127.4

132.9

155.7

Furniture

Infants'

127.4

123.0

Shoes

345,524

129.5

327.8

134.0

overalls

Underwear

2.88

226,546

152.3

132.8

155.8

2.71
2.88

Feb. 10

139.5

161.1

133.3

...

2.58

526.6

140.5

144.6

132.4

2.83

(tons)

Unfilled orders (tons)

—

2.24

2.85
2.66

532.9

133.2

179.5

2.38

2.65

ARD

Orders

;

;

including

HOUSEHOLD

NATIONAL

neckwear

and

2.85

INDEX

134.6

146.5

145.6

Hats and caps

3.01

141.8
135.9

147.8

,

„

2.40

1

COMMODITY

142.8

-

—

apparel—

2.40

;

130.8

163.6

j,

_

2.66

Group

102.8
141.8

140.2

136.4

—

Feb. 20

Group

Utilities

106.4
143.6

141.2

:

Shoes

110.15

brassieres

Furs

118.80

Feb. 20
Feb. 20
Feb. 20

Baa

167.1
143.0

144.1

Aprons and housedresses

116.02

Feb. 20
Feb. 20

!

189.2
159.4

107.0

101.33

2.85

-

A

145.2

164.3

comfortables

116.02

Feb. 20

Aa

138.9

358.2

.

101.26

Men's

149.2

193.4
and

Feb. 20
Feb. 20

—

————————

114.0

114.8

apparel—

115.43

Feb. 20

Bonds

——-—,

129.4

.145.6

115.2

Sheets

Clothing

corporate

Aaa

134.6

158.1

160.9

116.02

BOND YIELD DAILY AVERAGES:

MOODY'S

!

goods

Domestics—

Feb. 20
Feb. 20
Feb. 20

—1

130.2

151.0
wash

Feb. 20
Feb. 20

A

127.7
138.6

135.0

135.4

Woolens

Feb. 20

Feb. 20

136.1
143.1

159.8

wear

furnishings

Hosiery

Bonds

Aaa

Baa

___

goods—

Blankets

AVERAGES:

Feb. 20
corporate ————————————Feb. 20

Government

__

apparel

Women's

MOODY'S BOND PRICES DAILY

„

——:

Rayon and silks

18.425c

182.500c

Feb. 14

Dead
Zinc

24.425c

183,000c

Feb. 14

(New

24.425c

Feb. 14

at

York) at
(St. Louis) at

Bead

24.200c

24.200c

Feb.14

York)

(New

tin

at—

at

refinery

Export
Straits

Piece

18.200c

24.200c

137.7
144.3
135.8

—.

and

*Home

•

■

index

apparel

Infant

(E. & M. J. QUOTATIONS):

PRICES

METAL

PRICE

(COPYRIGHTED

1):

goods

Women's

_

(net tons)

RETAIL

—1935-39=100

AS
_

Dec.:

—

tons)

INDEX

COMPOSITE PRICES:

*aON AGE

of

tons)

(net

stocks at end of month

218

167

tons)—:

(net

coke

tons)

tons)-—

—^

MINES)—Month

OF

(net

coke

Beehive

(net

(net

tons)

of

December:

PRICES

NEW

SERIES

20,226,000

16,967,000

12,477,000

19,791,000

11,628,000

Stocks

WHOLESALE

19,116,000

Shipment from mills (barrels)

13,021,000

6,380,000

14,706,000

Production

Number of shares—

U.

(at

(barrels).
end

of mcnth—barrels)

Capacity used

S. DEPT. OF LABOR—

—

87%

.

95%

78%

1926=100:
TREASURY MARKET TRANSACTIONS IN

152.8

178.7

*182.3

Feb.13

183.3

Feb.13

203.4

Feb. 13

195.5 '

Feb. 13

271.1

Feb.13

190.1

Feb.13

277.5

Feb.13

Farm products

Livestock
Foods

170.7

*170.2

168.9

145.9

181.1

*181.1

179.7

138.3

As

General

Feb.13
Feb. 13

190.7

r

183.9

,*•».

161>t.

263.9

249.5

202.7

*188.8

182.1

261.6

215.4

136.2

136.1

131.4

188.9

188.7

RECT
,

„

188.3

GUARANTEED

AND

SECURITIES

OF U. S. A.-r-Month o,f January:

^

^

$6,577,800

156.3

*274.4

.

137.5

Feb. 13

'

159.4

191.5

200.3
"

Grains

DI¬

Net

$36,780,600

UNITED

GROSS

DEBT

DIRECT

$256,731,304

4,453,643

4.232,414

5,048,918

$251,688,999

STATES

$6,956,000

$256,142,642

purchases

$252,498,890

$251,843,487

AND

GUARANTEED— (000's omitted):
of

January

31

$256,892,405

168.6

fund

balance

•

Feb.13

flncludes 509,000 barrels of foreign crude runs.




226.5

223.9

192.6

Feb.13

♦Revised .figure,

226.7

146.8

*145.5

144.9

115.2

Net

debt

Computed annual rate
♦Revised.

tDecrease—All stock (bbls.).

2.224%

2.209%

2.205%

JTliis report will hereafter be discontinued.

.Volume 173

Number 4988... The

Commercial and Financial Chronicle

(849)

Securities

Now in

Alhambra

Gold Mines
Corp., Hollywood, Calif.
80,000 shares of common stock. Price—At
par ($1 per share).
Underwriter—None. Proceeds—For
further development of mine and for
working capital.

Nov.

1

filed

Alliance Tire

&

Rubber

Co., Ltd.

Feb. 1 filed 28,770 shares of class A
five Israeli pounds). Price—$50.40
fered

as

stock (par

per share (to be of¬
speculation). Underwriter—None. Proceeds—

a

To construct and
equip a modern tire and rubber plant
in the State of Israel Business—Plans manufacture
of
tires and other rubber products.
•

Allied

Feb.

19

Laboratories, Inc.

filed

Price—To

50,000

be

standing shares

(3/13)

shares of

related

to

the

stock (no par).
price for the out¬

common

market

the Midwest Stock Exchange. Under¬
Sachs & Co., New York. Proceeds—

on

writer—Goldman,

For expansion program and
working capital. Meeting—
Stockholders will vote March 13 on
authorizing 100,000
additional shares of
•

American

Dairy

Products Corp., N. Y. (3/12)
Feb, 16 filed 300,000 shares of
preferred stock (par $4)
and 300,000 shares of common stock
(par 10 cents) to be
offered in units of one share of preferred and one share
of common stock.
Price—$5 per unit. Underwriters—
Emanuel, Deetjen & Co. and Barrett Herrick & Co., Inc.,
both

of New

York.

Proceeds—To acquire plant,

Research

&

Feb.

1

filed

tions

be

may

share.

•

stock

(par $1).

Underwriters—None, but subscrip¬

obtained

by Estabrook & Co., Harriman
Ripley & Co., Inc. and Clark, Dodge & Co., New York,
and other members of the NASD. Proceeds—To make
in¬
vestments in certain enterprises.

18

filed

& Telegraph Co.
exceeding $420,000,000 12-year 3%%

not

convertible debentures due March 19, 1963

pected to be in

ex¬

$410,000,000) being offered to
Jan. 29, 1951 on basis of $100 of

stockholders of record

debentures for each

(amount

of

excess

shares

seven

to expire on March 19,1951.
vertible into capital stock

of

stock

held; rights

The debentures will be

con¬

beginning June 1, 1951, at $138

share, payable by surrender of $100 of debentures
and payment of $38 in cash. Price—At 100% of
principal
amount.
Underwriter—None.
Proceeds—For advances
per

to

subsidiary and associated companies and for general

corporate purposes.

Statement effective Jan. 24.

and

employees may be salesmen.
Proceeds—To
develop and expand agricultural, industrial and commer¬
cial enterprises in

Israel.

Statement effective Jan. 9.

Argo Oil Corp., Denver, Colo.
/.'
Dec. 18 (letter of notification) 5,750 shares of
capital
stock (par $5).
Price—At the market (approximately
$17.37% per share). Underwriter—Carl H. Pforzheimer
& Co., New York,
Proceeds—To A. E. Johnson, Presi¬
dent, the selling stockholder. Office—1100 First National
Bank

Building, Denver, Colo.

Armco

Jan.

30

Steel

filed

Corp.

maximum

a

shares

of

shares

of

class

two

A

shares each

$104

of class A

and

class B stock.

unit.-Underwriter—None.

per

Price

29

Illinois

filed

offered
for

Office

Camp Bowie Boulevard, Ft. Worth, Texas.

Central

to

each

Electric & Gas Co.'

80,000 shares of

stockholders

common

shares

seven

held

at

rate

of

(par $15)
one

share

Feb.

on

19, 1951, with an
oversubscription privilege; rights to expire March 8.
Price—$20 per share. Dealer-Managers—Stone & Web¬
ster Securities Corp. and Allen &
Co., both of New York.
Proceeds—For construction program.
Central
25

Illinois

Light Co.
100,000 shares of common

filed

common

(no par)

of

common stockholders of record Feb. 13
share for each eight shares
held, with an

one

Central
Jan. 25

Louisiana

filed 250,297

Inc.

common

(par $10)

and 21,480 shares of 4.5%
preferred stock (par $100), of
which the preferred stock and
214,800 shares are to be
offered in exchange for shares of common stock of Gulf
Public Service Co.,
Inc., on basis of 4/10ths of a share

of common and

l/25th of

share.

common

share of preferred for each

a

The

remaining 35,497 common
are reserved for
possible future issuance and sale
by the company to holders of common stock then out¬
standing. Underwriter—None. Purpose—To acquire not
less than 429,600 shares (80%) of Gulf common
stock.
Central

Feb. 9

,stock

Oklahoma

Oil

& Co., New York.
Proceeds—To drill oil well
acquire oil properties. Office—Braniff Building,
Oklahoma City, Okla. Offering—Made on Feb. 17.

and to

Chanslor
6

&

Lyon-Palace Corp.,

San

Francisco

(letter

of notification) 11,111 shares of capital
(par $5). Price—At market (estimated at $9 per
share).
Underwriter—Hooker & Fay, San Francisco,
Calif.
Proceeds—To six selling stockholders.
Office—
730 Polk Street, San
Francisco, Calif.
stock

Cinecolor

stock

Corp., Burbank, Calif.
(letter of notification) 75,000 shares of

9

(par $1). Price—$4

per

common

share. Underwriters—Kerr

Wykoff & Co. and Fairman & Co., Los Angeles, Calif.
Edward D. Jones and Dempsey-Tegeler &
Co., St. Louis,
Mo.; and Standard Investment Co. of California and Leo

for

each

share held; rights to expire on
Price—To be supplied by amendment.
Underwriters—Smith, Barney & Co. and W. E. Hutton &
Co.
Proceeds—For expansion program and additional
working capital.

1951.

Atlantic Oil
Nov.

Corp., Tulsa, Okla.
(letter of notification) 48,046 shares of capital

13

stock.

Corp., Tulsa, Okla.

and

Underwriter—Con¬
Proceeds—To purchase oil

properties.

gas

B.

&

H.

lative

notification) 19,397 shares of 6%

preferred

common

stock

preferred and

stock

(par

$10)

and

58,940

cumu¬

shares

(par 50 cents) to be sold in units of
one common share.

and 50 cents per share for
Woolfolk & Shober,

Price—$10.50

common

stock.

per

one

Underwriter—

Inc., New Orleans, La.

Proceeds—
Office—513 Carondelet Bldg., New

For

working capital.
Orleans 12, La.

1

Baldwin-Lima-Hamilton
to

8

be

filed

486,312

issued

Western

Co.

Baldwin

for

in

common

stock

basis

stock

(par $13)
exchange for 303,945 shares of Austin-

common
one

on

of

Austin-Western share.

1%

shares

of

Underwriter—

Borderi

Co.

corporate purposes.
Brown

Co., Berlin, N. H.

Jan. 25 filed 144,151 shares of $5 cumulative convertible
preference stock (no par) and 144,151 shares of $3 cumu¬
lative second preference stock (no
par), together with
voting trust certificates representing the
same, to be of¬
in

exchange for

144,151

shares

convertible preferred stock on basis of
class of preference stock for each

solicit

color

process.

Office—2800

West

Olive

Ave.,

/',/

Circle Wire

&

Cable

Corp.

Nov. 27 filed 200,000 shares of common stock

(par $5).
per share.
Underwriter—Van Alstyne Noel
Corp., New York. Proceeds—To four selling stockholders.
•

Commonwealth Telephone
(3/7)

Feb. 20

by
&

amendment.
Curtis

York.

of

S6

one

cumulative

share of each

share of $6 preferred

Underwriter—None, but Georgeson
exchanges.




Co.,

Madison Wis.

(letter of notification)

lative preferred stock
and

10,000 shares of $5 cumu¬
(par $100). Price—To be supplied

Underwriter—Paine,

Stone

&

Webster

Webber,

Securities

Jackson

Corp., New

Proceeds—For construction.

bonds, series F, due Feb. 1, 1981.
Underwriter—To be
determined by competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.; The First
Boston, Corp. Proceeds—To repay bank loans. Bids—To
received

N. Y., up to

(3/7)

$60,000,000 of 30-year 2%% debentures due
1981. Price—To be supplied by amendment. Underwriter
•—Morgan Stanley & Co., New York. Proceeds—To retire
$45,800,000 outstanding promissory notes and for general

stock.

three

Burbank, Calif.

be

Feb. 15 filed

fered

to

Consolidated Edison Co. of N. Y., Inc. (2/27)
Jan. 24 filed $60,000,000 of first and
refunding mortgage

Corp.

shares of

None.
•

MacLaughlin Securities Co., Pasadena, Calif. Proceeds
—To convert equipment from two-color
printing process,

of

unit

&

Co.

will

Chicago^

III.

filed

$5 per share and to public at $6.25 per share.
writer—None. Proceeds—For investments.
•

Cutter

Feb.

Laboratories, Berkley, Calif.

filed

16

70,100

shares of

Under¬

(3/14-15)]

stock

(par $1).
supplied by amendment. Underwriter—
Blyth & Co., Inc., New York. Proceeds — For expansion
and other corporate purposes.
Business — Distribution
Price

To

—

•

be

biologicafs and pharmaceutical specialties.

Delaware Research

Feb.

12

stock.

common

&

Development Corp.
30,000 shares of capital
share). Underwriter —

(letter of notification)

Price

None.

—

At

Proceeds—To

working capital.

($10

par

per

purchase

Address—P.

capital

O.

Box

assets

for

and

110, New Castle,

Delaware.

Duggan's Distillers Products Corp.
27 (letter of notification) 340,000 shares of com¬
stock (par 10c). Price—75 cents per share. Under¬
writer—Olds & Co., Jersey City, N. J. Proceeds—To pay
balance of purchase price for building ($20,000) and for
working capital.

mon

•

•

Duro-Test Corp.,

Feb.

12

(letter

No. Bergen, N. J.
of notification) not in excess

shares of

common

ployees.

Price—Not

of

•

stock
to

(par $1)
exceed

Proceeds—To

of 7,500

to be offered to

$7

share.

per

reimburse

em¬

Under¬

company

for

shares.

Electronic Computer Corp.,

Brooklyn, N. Y.
2 (letter of notification)
90,000 shares of class B
non-voting common stock (par $1). Price—$3 per share.
Feb.

Underwriters—Pioneer

Enterprises, Inc., Bluefield, W.
Va., and G. H. Hecht of Washington 5, D. C. Proceeds
provide working capital.

—To

Emerson
Dec.

29

filed

Electric

Manufacturing Co.
shares

57,846

stock,

series A
(par
stock prior to Jan. 1,

of cumulative preferred
convertible into common
1961, to be offered initially for

$50),

by common stockholders at rate of one
preferred for each eight common shares held.
Underwriters—Smith, Barney & Co. and Van Alstyne

share

of

Noel

Corp., of New York; and Newhard, Cook & Co.,
Louis, Mo. Proceeds—$1,015,565 to retire outstanding
preferred stock; $450,000 for new plant in Bedford,
Ind.; approximately $350,000 to reimburse the company's
treasury for cash funds used in the purchase of its St.
Louis plant from the U. S. Government in
September,
1950; and the balance for additional working capital.
St.

7%

Statement withdrawn Feb.

Facsimile

&

13.

Electronics

Corp.

Dec. 29 filed 400,000 shares of class A convertible stock

(par $1) and 1,000,000 shares of common stock (par 25
cents) to be reserved for conversion.
Price—$2.50 per
share for class A stock, with an

underwriting commission
Underwriter—Graham, Ross & Co.,

of 50 cents per share.

Inc., New York.
Proceeds—To repay indebtedness to
RFC, and the balance to develop and produce fascimile
transmission equipment and for materials.
Registration
statement withdrawn

on

Feb.

16.

G.

Price—$15

Incorporated, New Orleans, La.

Jan. 8 (letter of

Feb.

Bell, Witherspoon & Co., Inc., Harbison & Henderson
Holton, Hull & Co. Pacific Co. of California Edgerton,

Price—At par ($5 per share).

tinental

Corp., Chicago,

of

subscription

Corp.

(letter of notification) 299,970 shares of common
(par 10 cents). Price—$1 per share. Underwriter

—Israel

Feb.

23

Co.

132,182 shares of common stock (par $5),
of which 4,818 shares are to be offered to stockholders
and 127,364 shares to public. Price r— To stockholders at

shares

fifth

14,

Oct.

cost

stock

&

share

N'oyes & Co. and Swift, Henke
Proceeds—To selling stockholder.

writer—None.

Electric Co.,

shares of

stock (par $10) to be offered for subscription
by common
stockholders of record Feb. 26, 1951, on the basis of oneMarch

David
111.

Oct.
stock

oversubscription privilege subject to subscription rights
of employees to expire on Feb. 28.
Rights to stockholders
to expire on March
2, 1951.
Price—$32.25 per share.
Underwriters—Union Securities Corp.; Lehman
Brothers;
White, Weld & Co.; and A. C. Allyn & Co., Inc. Proceeds
—For expansion program. Statement
effective Feb. 13.

Gulf

stock

and sale of

stock

common

5

—

Proceeds—To retire

indebtedness and for general
operation of airline.
—6109

& Sexton Co.,
Chicago, III.
(letter of notification) 1,000 shares of common
(par $5). Price—$5.50 per share. Underwriters-

Feb.

Culver

9

Feb.

884,000

Underwriter—None, but George-

voting common stock (par $1) and
2,000 shares of class B non-voting common stock
(par
$1) to be offered in units of one preferred share and

•

(2/26)
of

basis of two shares for each Brew¬

on

Airlines, Inc., Ft. Worth, Tex.
(letter of notification>! 1,000 shares of 5% cumu¬
lative non-convertible
preferred stock (par $100), 2,000

•

Ampal-American Palestine Trading Corp., N. Y.
Dec. 8 filed $5,000,000 of 15-year 4%
sinking fund bonds,
series A, due 1966. Price—At 100. Underwriter—Direc¬
tors

(no

par)
exchange for Brewing Corp. of Amer¬

stock

ADDITIONS

Cribben
stock

common

Central

Feb.

American Telephone
Jan.

of

Co., New York, will solicit exchanges.

at rate
common

shares

INDICATES

SINCE PREVIOUS ISSUE

Breweries, Ltd.
61,220

being offered to

Development Corp.,

106,420 shares of

per

&

son

Jan.

Boston, Mass.
Price—$25

filed

common

to pay

indebtedness and for working capital.
American

ica

Jan.

stock.

common

8

be offered in

ing Corp. share held.

(Israeli)

common

Canadian
Feb.
to

•

Registration

41

27

stock

(letter of notification) 28,000 shares of common
Price—At market (estimated at

(par 50 cents).

$1.25 per share).
Underwriter—De Pasquale Co., New
York, and J. Howard O'Connor, Pelham, N. Y. Proceeds
—To selling stockholders.
General
Feb.

5

filed

American

90,748

Oil

shares

Co.

of

of Texas

stock

(par $5).
UnderwriterProceeds—For work¬
ing capital and to acquire and develop oil and gas prop¬
erties.
Expected late this month.
Price—To

be

supplied

by

common

amendment.

Sanders & Newsom, Dallas, Texas.

•

Gladys Stevens, Inc., Boston, Mass.
13
(letter of notification) 475 shares of class A
voting stock (par $20) and 1,000 shares of non-voting
class B stock (par $20).
Price—At par. Underwriter—
None.
Proceeds
For expansion.
Office — 476 Stuart
Street, Boston, Mass.
Feb.

—

Continued

on

page

by company at 4 Irving Place, New York,
11 a.m. (EST) on Feb. 27.

Consolidated Textile Co.,
Dec.

Fleetwood-Airflow, Inc., Wilkes-Barre, Pa.
Jan. 22

filed

a

maximum

Inc.,

New York

of

500,000 shares of capital
stock (par 10 cents), to be offered in
exchange for an
unspecified number of shares of common stock of Bates

Manufacturing Co.
(Consolidated now owns 51,400
shares, or approximately 13% of the 391,500 outstanding
Bates shares).
Exchange Rate — To be supplied by
amendment.

Underwriter—None.

Cosmopolitan Hotel Co. of Dallas, Tex.
Dec. 13 filed $1,500,000 of 2% debentures due 1965.

—At face value.

Underwriter—None.

chase debentures of Statler Dallas

Price

Proceeds—To pur¬

Co., Inc., which

com¬

will construct Dallas hotel. Business—A non-profit
corporation under sponsorship of Dallas Chamber of
pany

Commerce to

secure

construction of hotel.

New York

Boston

Philadelphia

Pittsburgh

San Francisco

Private Wires to all

offices

Chicago

Cleveland

42

42

(850)

The Commercial and Financial

Continued from page 41
Dec.

28

Distilleries

Co.

NEW ISSUE CALENDAR

filed

159,142 shares of class B common stock
Price — To be filed by amendment. Under¬

(par $1).

& Co., New York.
Proceeds—
capital and general corporate purposes.
Offering—Deferred indefinitely.

Warren

working

Gulf

February 24, 1951
Superior District Power Co
Shropshire Syndicate, Ltd

Co., Dallas, Tex.
Jan. 10 (letter of notification)
10,000 shares of common
stock (par $10), to be offered to
present stockholders on
the basis of

ital.

Hamilton
Oct.

2

working
1771, Dallas, Tex.

Box

of

lines

of

insurance,

Idaho

including automobile casualty
Financing indefinitely delayed.

Maryland Mines Corp.,

California

San

Avenue,

Corp

Distributors, Inc.__
Fruit &

Gas

Transmission

par

($1 per share).

and

purposes

Jamaica

Feb.

the

and

;
Borden

pur¬

for

record Feb.

122,812 shares of

subscription

by

15 at rate of

one

held; rights to expire
be

offered

on

stock

Allied

Dairy Products Corp

Feb.

15.

Statement

——-Preferred

15

filed 200,000

Price—To

shares of

of
Detroit

/

Southern

effective

Price—At

Monongahela

(letter

of

*i"g?1b"rg Cotton Oil
Jan. 29

($100

new

share).

per

construction.

be

stockholders

Price—$45

Proceeds —To

equipment and for expansion
on

Kittanning, Pa.




per

convert

program.

March 1.

(Chas.)

-Bonds

—

tical

Feb.

19

stock.

products.

•

•

Inc., Philadelphia,

La

(letter of notification) 30,000 shares of common
par
($10 per share).
Underwriter—

8

o1

share

to

new

machinery and working

9th

Street,

dial

Offering—Ex¬

Office—208 Arch SI

Lake

Superior District Power Co.

due

J.

retire

struction.

Edwards,
certain

Office—212

East

Palestine Economic

Feb.

15 filed

/.,

$50,000 of first mortgage

1961-1971.

"

Price—At

100%.

a

Oklahoma City,- Okla.
capital stock and for con¬

Broadway, Cushing, Okla.-

Corp., New York

200,000 shares of common stock (par $25).
share, Underwriter—None. Proceeds—

per

For further

development of Israel industry.

Pan

American

Milling Co.,

Las Vegas, Nev.

to
,

pire March

Underwriters—Robert W. Baird & Co.,
Inc., Milwaukee,

Wis.

Proceeds—For

new

/

construction.

in

Mexico and for

•

Pennsylvania

(3/5)

mortgage bonds series D, due
March 1,, 1981. Underwriters^To be
determined through
competitive bidding. Probable bidders:
Co.

Halsey, Stuart &
Inc.; Otis & Co.; Robert W. Baird & Co., Inc. Pro--

ceeds—For expansion program.
company

III,

up to

Bids—To be received by
in Room 2154. 20 No. Wacker Drive, Chicago 6,
11:30

a.m.

(CST)

on

March 5.

Power Co.

(3/20)

Feb. 16 filed

to public,

40,000 shares of preferred stock (par $100)
Underwriter—To be determined by competi¬

tive bidding.
and

Lake Superior District Power Co.
Feb. 5 filed $2,000,000 first

general corporate purposes.

on

basis; lights to be mailed Feb. 24, to ex¬
12.
Price—To be supplied by amendment.

Price—At

par ($1 per share).
Underwriter—None. Proceeds—To
purchase machinery and equipment, to construct a mill

(2/24)

one-for-five

Un¬

Inc.,

Price—$28

cap-

Feb. 5 filed 41,845 shares of common stock
(par $20)
be offered to common stockholders of
record Feb. 16

Lincoln,

Co., Cushing, Okla.

bonds

Proceeds—To

Products, Inc., Riverside, Conn.
(letter of notification) 100,000 shares of common
(par $1). Price—$2.50 per share. Underwriter—
Proceeds—For

North

(letter of notification)
6%

derwriter—R.

Office—

Salsa

ital.

Office—227

selling stockholder.

serial

Feb. 14

None.

to

7

Jan.

Pa.

Price—At

working capital.
Walnut Street, Philadelphia
7, Pa.

stock

shares

Oil Co., Bakersfield, Calif.
(letter of notification) 1,000 shares of capital
stock (par $1). Price—500 shares at $3.50 each and 500
at $4 each. Underwriter—E. F. Hutton &
Co., Los An¬
geles, Calif, as to 500 shares. Proceeds—To A. W. Scott,

Bonds

increase

unsubscribed

Norris

Feb.

Preferred

Co

Proceeds—To

basis:

Nebraska.

Bonds

& Co.,

first to stockholders of record about

l-for-2

a

Jan. 24 filed 200,000 shares of common stock.

record Feb. 24 at rate of
223/1000ths of a share for each
share held; right to
expire on March 31. Unsubscribed
shares to be offered

pected to be mailed

Kurz

Co., Kingsburg, Calif.

publicly.

on

publicly offered. Price—$25 per share to stockholders,
and $26.50 to public. Underwriter—Ellis, Holyoke & Co.,
Lincoln, Neb. Proceeds—For working capital and to
produce anti-hog cholera serum and other pharmaceu¬

•

offered, first to

Underwriter —None.

Power

12

be
Bonds

a

1000

5,000

Kittanning Telephone Co., Kittanning, Pa.
(3/1)
15 (letter of
notification) 6,021 shares of capital
to

Feb.

September 11, 1951
Alabama

None.

(letter of notification) 5,000 shares of
capital
(par $1). Price—$4.25 per share.
Underwriter—
Fewel & Co., Los
Angeles, Calif. Proceeds—To John H.
Dinkins, the selling stockholder.
Address—P. O. Box
277, Kingsburg, Calif.

$25)

stock to be offered

-Common

5, 1951

July 17, 1951
Mississippi Power Co
:

$2,425,000 of 27/s%
preferred stock
Expected late in February.

Laboratories, Lincoln, Neb.
(letter of notification) 11,055 shares of capital

31

Pact Gas

stock

(oar

Jan.

Georgia Power Co

•

shares of capital
stock (par $1). Price—At
market (about $4.25
per share).
Underwriter—Fewel & Co., Los
Angeles, Calif. Proceeds
—To Fewel & Co., the
selling stockholder. Address—
P. O. Box 277,
Kingsburg, Calif.
t

Co

June

cumu¬

Oil Co.

notification)

(EST)—

retire

Norden
Bonds

a.m.

Proceeds—To

England.

Common

Co

Power

only).

of New

Public Service Co. of Oklahoma-—

■•"'•"•'X V'-

par

Underwriter—None.
Proceeds—For
Offering has been deferred.
24

Co., 11:30

one

bonds and the remainder to retire 4V2%

~

•

Kingsburg Cotton

ferred

Common

April 24, 1951

Kingfisher Water Co., Kingfisher, Okla.
Dec. 27 (letter of
.notification) 250 shares of 5%

Jan.

Bonds

April 9, 1951

Kimberly Corp., Culver City, Calif.
Jan. 29 (letter of
notification) 34,500 shares of common
stock (par $1).
Price—$2.87% per share. UnderwriterMorgan & Co., Los Angeles, Calif. Proceeds—To three

lative preferred stock.

Edison

at rate of

Hampshire share for each 12 New England common
held.
Underwriter—To be determined by com¬
petition biddnig.
Probable bidders:
The First Boston
Corp.; Kidder, Peabody & Co. and White, Weld & Co.
(jointly); Harriman Ripley & Co., Inc. (latter for pre¬

April 3, 1951

Potomac

supplied by amendment.
Underwriter—
Blyth & Co., Inc., New York. Proceeds—For
expansion
program.

Co

Co.——

/

(no par).

be

selling stockholders.

Edison

(parent.)

New

shares

April 2, 1951

(3/7)

stock

common

land Gas & Electric Association

——..Common

March 29, 1951
American Gas & Electric Co

V

Kimberly-Clark Corp., Neenah, Wis.

Feb.

Hampshire Electric Co.
15,000 shares of $4.50 cumulative preferred
stock (par $100) and 140,000 shares of common stock
(no par). Of the latter, 130,100 shares are to be offered
for subscription by common stockholders of New Eng¬
Jan. 25 filed

March 27, 1951

1; unsubscribed shares

construction.

new

New

Common

March 21, 1951

Power

value plus 8%. Underwriter and In¬
Manager—Russell, Berg & Co., Boston. Pro¬

ceeds—For investment.

March 20, 1951

Consumers

Statement-withdrawn Feb. 9.-

Boston, Inc.f Boston, Mass.
20,000 shares of capital stock (par $1)

filed

vestment

Common

lEquip. Trust Ctfs.
Paciffe Gas & Electric Co._———1'
Common

Mills, Inc

15

heaters.

Fund of

Price—At net aset

Illinois Central RR

—

Proceeds—To

install

Business-—Manufacturers of gas and electric

Mutual

Feb.

—Common

March 19, 1951

to

Proceeds—For

•

__—

River Brand Rice

a

water and space

Pfd. & Common

March 14, 1951
Laboratories

Pennsylvania Power Co

Co., Los Angeles, Calif.

machinery and equipment
proposed new plant to be located east of the Rocky

Mountains.

Bac.hrnann Uxbridge Worsted Corp.—

share for each five shares

March

in

—Preferred

Laboratories, Inc.—

Cutter

(par $5),

stockholders

common

writer—Lester &

retire bank loans and

March 13, 1951

common

employees.
Price—$15 per share for
common.
Underwriters—The First Trust Co. of
Lincoln,
Neb., and Cruttenden & Co., Chicago, 111., and associates.

stock

(EST)—-Common

a.m.

March 12, 1951

Co., Inc.

common

Mission Appliance Corp., Hawthorne, Calif.
;
July 24 filed 50,000 shares of 6% cumulative convertible
preferred stock. Price—At par ($20 per share.) Under¬

Pipe Line Corp.---Preferred
11

(2/27)

16

at $7 per share)./, Underwriter—George B. Wallace &
Co., New York.
Proceeds—To further develop com¬
pany's properties and for general working capital.
r

Debentures

March 8, 1951
Electric & Power Co.„

Virginia

Aircraft Corp., Windsor
Locks, Conn.
(letter of notification) 20,000 shares of class A
non-voting common stock (no par). Price—$6 per share.
Underwriter—None. Proceeds—For working capital to
develop and manufacture rotary wing aircraft. Office—

•

Gas

.Mexican Gulf Sulphur Co.

(letter of notification) 42,800 shares of common
stock (par $10 cents).
Price—At the market (estimated

——-Common

7

filed

•

Feb.

6, 1951

____

West Penn Electric Co.

common

Kaman

Feb.

Common
Common

March 7, 1951

Transcontinental

holder.

•

—Bonds

Co.

Washington, D. C.

organizational expenses and working
capital. Office—Wolfe and Jackson Sts., Fredericksburg,
Va.
V 1

Telephone Corp..Preferred
Kimberly-Clark Corp.
..^.Common

Todd, Chairman of the Board, who is the selling stock¬

5

•

*

Proceeds —For

Commonwealth

(par $1).
Price—At market price on New York
Exchange (approximately $7.12% per share). Un¬
derwriter—None, but brokerage accounts are maintained
at Hallgarten &
Co., New York; R. V. Nuttall & Co.;
McKelvy & Co. and Hemphill, Noyes, Graham, Parsons
& Co., all of
Pittsburgh, Pa.
Proceeds—To Kirk W

to

——Common

Co

March

American

Co., Jeanette, Pa.
(letter of notification) 10,000 shares of

offered

•

Products

Metal

Underwriter—James T. DeWitt & Co.,

Curb

Jan.

•

March 5, 1951
Superior District Power Co.

Glass

Bradley Field, Windsor Locks, Conn.
Kansas-Nebraska Natural Gas

Maynard & Co., New York. Proceeds—To selling

stockholder.

1, 1951

Rotary Electric Steel Co

stock

Feb.

4,800 shares of common

(par $100). Price—At market. Underwriter—Still-

Common

Rhinelander Paper

Proceeds—To selling stockholders.
12

RR.

(letter of notification)

Common

(no par).

Feb.

Equip. Trust Ctfs.

11:30 a.m. (CST)
Prospect Exploration, Ltd

Water

Jeanette

12

Mfg. Co., Inc. (3/1)
Feb. 12 (letter of notification) 25,000 shares of class A
voting common stock (par $1). Price—$5 per share.

Lake

Price—At market (estimated at $22 per
share. Underwriter—Blyth &
Co., Inc., New York, who
has agreed to purchase said shares for resale to
public.
•

Central

Maine

stock

Kittanning Telephone Co.—
Mfg. Co., Inc.—
Ventures, Inc.—

(steel) for resale. Office—Care of
320 Broadway, New York, N. Y.

Supply Co.
(letter of notification) 4,545 shares of

7

stock

to

Metal Products

chase of merchandise

Metrick,

share

per

Underwriter—Tellier

public.

Television

Office—Room

Steel Corp.
(letter of notification) 15,000 shares of common
Price—At par ($10 per share).
Underwriter—

corporate

to

man,

Chicago & North Western Ry.
noon
(CST)

Israel

&

•

February 28, 1951

series U and $1,200 per unit for series E. Underwriter—
None. Proceeds—For investment.

Proceeds—For

cents

stockholders;
& Co., New
Proceeds—To drill wells and develop leases.

York.

Debentures

Feb.

Inc., Oakland, Calif.
5,700 units, single payment plan, series U,
and 7,750 units, accumulative
plan, series E, 10-year
participating agreements.
Price —$1,000 per unit for

Efrein

Price—25

7.

cents

30

Common

Standard-Thomson Corp.

16 filed

None.

19

March

Mexican Gulf Sulphur Co

Insurance Securities

stock.

.

Corp., Conrad, Mont.
(letter of notification) 1,200,000 shares of com¬

stock (par H), to be offered initially to stockholders
of record Jan. 19 on a one-fpr-two basis; rights to expire

Bonds

March

Calif.

San Diego,

Oil

mon

Bonds

February 27, 1951

Underwriter

Proceeds—For working capital.
362, Russ Building, San Francisco, Calif.

Jan. 2

Jan.

Corp.

___________

(EST)

a.m.

-*

Price—At

Lexa

.-Preference

Consolidated Edison Co. of New York, Inc.
11

—

-Preferred

Steamship Corp

(EST)

a.m.

Francisco,

—None.

Feb.

Second

11:30

(letter of notification) 200,000 shares of capital
stock, to be sold to C. Marshall Wood pursuant to an

•

..Common

Steel

common

Price—$1.75 per share. Underwriter—
For
working capital.
Office — 660

(par $1).
Proceeds

Tennessee

Jan. 30

agreement.

Langley Corp., San Diego, Calif.
(letter of notification) 160,000 shares of

stock
None.

Standard

Insurance Co., Philadelphia
notification) 64,000 shares of capital
Price—$4.50 per share. Underwriter—

coverage.

•

Armco

stock (par $5).
Jenks, Kirkland & Co., Philadelphia, Pa. Proceeds—To
increase capital and surplus in order to offer additional

liability

ceeds—For expansion program.

..Common

Premier

cap¬

.

Feb.

record

Feb. 28, 1951. Price—At par

share). Underwriter—None, but unsubscribed

per

Aluminium, Ltd.

Fire

(letter

stockholders of

to
on

Common

—Common

February 26, 1951

new

Address—P. O.

first

offered

Feb. 9

share for each 15 shares
held; un¬
subscribed shares to be offered to
public. Price—$30 per
share. Underwriter—None. Proceeds—For
one

be

shares will be offered at private sale to public through
the Salisbury Bank & Trust Co., as agents, at par. Pro¬

Common

Lake

Insurance

to

2, 1951; rights-to expire
($25

(J. C.) Corp

Water Co., Lakeville, Conn.
(letter of notification) 1,200 shares of common

25

stock

February 23, 1951

writer—Glore, Forgan

For

Thursday, February 22, 1951

...

Lakeville
Jan.

Glenmore

Chronicle

Probable bidders: Kidder, Peabody & Co.

White, Weld & Co.

and W.

C. Langley

(jointly); Glore, Forgan & Co.
& Co. (jointly); First Boston Corp.;

and Blyth & Co., Inc.

(jointly); Lehman Brothers; Smith,
Barney .Co.; .Harriman Ripley & Co., Inc.;. Merrill
Lynch, Pierce, Fenner & Beane. Proceeds—From sale
of preferred stock, together with proceeds from sale to
Ohio

Edison

shares

(par

Co.,

$30)

parent, of 40,000 additional common
for $1,200,000 cash, will be used to

finance in part the

company's construction program for

Volume 173

Number 4988... The

Commercial and Financial
<

..(851)

.

43

.

t

^

1951W Rids—To bcv opened around March 2(k~ Additional

Financing—It

is

estimated

additional

an

$7,000,000

financing will be required before the end of 1952,

•

,<

of

•

Proceeds—For

Piasecki

Helicopter Corp., Morton, Pa.
(letter of notification) not to exceed 5,000 shares
of capital stock. Price—At market
(approximately $35
per share). Underwriter—None. To be offered through
regular brokers acting as agent for the seller. Proceeds—
A.

Felix

•

Natural

South

Feb.

Gas

Co.,

Inc.,

rants

100,000 shares of

common

Spartanburg,
stock

one

share

construct

and

•

Pikes

Proceeds — To
six lateral pipe lines. Expected

operate

second week in

or

Peak

writer—None.

March.

-

Mine

Development Association
Jan. 20 (letter of notification) 30,000 shares of capital
stock (no par). Price—$1
per share. Underwriter—None.
Proceeds—To buy machinery required to mill and
centrate

Address—P.

ore.

O.

Box

con¬

William

stockholder.

Feb*

15

of

notification)

share)T"Underwriter—None.

To be loaned to Premier Peet

of

Prospect Exploration, Ltd.
Feb.

9

filed

and

for

expansion

170,000 shares of

N. Y.
•

Proceeds—

common

York, N. Y.

program.

(EST)

a.m.

Zachry &

Bids—To

Statement effective Feb. 16.

Thatcher

be

received

Proceeds—To purchase additional
equity securities
of its
subsidiaries—Monongahela Power Co. and

of two

The Potomac
at

11

a.m.

.:/-7

^

Glass

Manufacturing Co., Inc.
(letter of notification) 3,000 shares of common
(par $5), to be offered to employees.
Price—At

stock
cost

(3/5*4.0JU
stock (par $1),

at market, whichever

or

$13-per .share.

is lower.

Underwriter—None.

;

imburse treasury for cost of shares.
Central

com¬

Cost

price

Proceeds—To

was
re¬

Office—1901 Grand

Ave., Elmira, N. Y.

pany and

95,000 shares for selling stockholders. Price
ThiokoJCorp., Trenton, N. J.
$11 per share. Underwriter
White, Weld & Co.,v
|Jew; ;, peb 6 (lette^ of ;aaptification) 10,833 shares of capital
York.
Proceeds-To company for working capital and
stock" (par4tJ Price-At market
(about $7.75 per share).
general working purposes.
Underwriter
None, but Smith, Barney & Co., New
•
Reis (Robert) & Co.
York, will handle, sales. Proceeds—To Dow Chemical
.

19

(letter

of notification)
4,100 shares of $1.25
prior preference stock (par $10) and 20,500
shares of common stock (par $1).
Price—At market
(common about $2.50 each and preferred about $11.87Vv

Co., the selling stockholder.

dividend

act
•

•

share).
Underwriter—None.
Proceeds—To establish a
plant for manufacture, sale and distribution of pharma¬
ceutical products; to purchase
machinery and raw ma¬
terials.

broker.

as.

Proceeds—To

selling stockholder.

14

(letter of notification)

4,000

shares of

common

Price—At market (about $20 per share).
Underwriter—None, i Proceeds—To American Research
&

Rhineiander Paper Co. (3/5-10)
Feb 15 filed 150,000 shares of common stock
(par $5).
P^ice—To be supplied by amendment. Underwriter—

Prospective Offerings
Feb.

6, it

and

•

A. G. Becker & Co., Inc. Proceeds—To reduce

—To

March 5.

Weld & Co. and Stone & Webster Securities
Corp., New
York. Proceeds—To redeem $26,500,000

■

-

Co., Inc., Jenkintown, Pa.;%^:>^

-

Feb.

long-term
by $2,150,000; for additions and improvements to
property and for working capital. Expected week of

interim

•

Feb.

Proceeds—For

working capital—
Office—741-A Yorkway Place, Jenkin¬

to make loans.

&

Inc.; Morgan Stanley
Co.; Blyth & Co., Inc.; Harriman Ripley & Co., Inc.;

Shields & Co. and Salomon Bros. & Hutzler
(jointly);
Drexel & Co.; Union Securities Corp. and
Equitable Se¬
curities Corp. (jointly); Kidder, Peabody & Co.; The
First Boston Corp.; Lehman Brothers.

pansion
opened
•

Rotary

Electric

for

Steel

Co.

(3/6)

Aluminium, Ltd.

Feb.

15

mon

stock

Feb.

26.

on

about March 6 at rate of

or

program

and

Shropshire
N.

Feb.

Y.

(2/26-3/3)

For

working

Syndicate,

Ltd.,

Office

—

stock.

will

be

Underwriter

Levittown,"

American Gas &

Boston

com¬

Corp., New
—

Price—At

the

1,000 shares of
market.

Electric Co.

(3/29)
26 company announced that an offering of
about,
340,000 additional shares of common stock will be made-

Jan.

one

share

on

for

or

each

about March 30, 1951 on the basis15 shares held, together with an

oversubscription

privilege; rights to expire April 17.
by amendment. Underwriters—To be
determined by competitive bidding.
Probable bidders:
The First Boston Corp.'; Union Securities Corp.;
Dillon,
Price—To be filed

Read & Co.

Inc., who will name compensation. Proceeds
in equity securities of the
operating
subsidiaries as part of the plan for financing the Amer¬
ican Gas & Electric System's large construction
program.

—To

be

invested

Registration—Expected

Service, Inc., N. Y.

to

be received

on

about

March

9

Home

Fire

Insurance

Underwriter—

19

for

subscription

Co.

on

or

working

Salt Lake

capital.
Office—47
City 1, Utah.

West

before

Feb.

28,

South

Temple,

Stone & Webster Securities

March.

Bids—Expected

Appalachian Electric Power Co.
stated the company plans to issue and sell

was

of

first

bonds

in May or
by competitive
Halsey, Stuart & Co. Inc.;

mortgage

be

determined

bidding. Probable bidders:
Kuhn, Loeb & Co. and Unicn Securities Corp. (jointly);
First Boston Corp.; Harriman Ripley &
Co., Inc.
Proceeds—For property
expansion and improvements,

on

which company may expend up to $90,000,000
during

the next three years.
Arkansas
Feb.

Corp., New York. Proceeds—
expenditures.
Offering—Expected in;

Preferred stockholders will vote March 2

on

ap-

16

(letter of notification) 9,000 shares of common' »■> proving issuance of the new securities.
<
stock
(par $1)., Price—$5 per share.
•
Underwriter-*-*
Warre»r- (l;(Cii VvCorp. ■ (2/23)
"';None, but will be offered "as a speculation"
Feb. 15 (letter.of notification) $56,000 of 5-year 4%
through
the Syndicate's officers.Proceeds—To Herbert
Mar¬
convertible notes due Feb. 15, 1956.
Price—At 100%
shall Taylor (President), who is the
selling stockholder;" in multiples of $70. Underwriter—Talmage & Co., New
Office—2 Quiet Lane,
Levittown, N. Y.
York.
Proceeds—To repay bank and other debt, for;
South American Gold & Platinum Co.
I /-n^tieasehold improvements, machinery and equipment and
Feb. 19 (letter of notification)
18,500 shares of common
working capital.
Office—901 Merrick Road, Bellmore,
stock (par $1).
L. L, N. Y.
Price—At market on New York Stock
;
Exchange (approximately $5.37y2 per share).
•
Under¬
Welex Jet Services, Inc.
writer—None, but G. H. Walker & Co., New York, will
Feb. 9 (letter of notification) 2,000 shares of common
act as brokers.
Proceeds—To General
stock (no par). Price—$20.50 per share. UnderwritersDevelopment Co.,
New York, the selling stockholder.
Offering—To begin
Laird & Co., Wilmington, Del.; and Barron McCulloch
on
Feb. 28, 1951, and to continue
up to and including
and Wm. N. Edwards & Co., both of Ft.
Worth, Texas.
Feb. 19, 1952.
Proceeds—To Robert H. McLemore, Vice-President, the
South State Uranium Mines Ltd.
selling stockholder. Address—P. O. Box 11307, Ft. Worth,
(Canada)
Nov. 30 filed 560.000 shares of
Texas.
/ '■/
capital stock. Price—At
:\V:
\par (SI per share). Underwriter-Optionee—Robert
•
Irwin
West Jersey Title & Guaranty Co.
Martin of Toronto. Proceeds—For
commissions, explora¬
Febwl6»(letter- of1 notification) 4,818 shares of preferred
tion and development
expenses, and working capital.
capital stock (par $50). Price—Estimated at from $53 to
7 Southern Union Gas Co.
$55 per share.
Underwriter—Camden Trust Co., Cam¬

it

1

Louisiana

Gas

announced

was

Co.

plans issuance and
mortgage 3% bonds, the pro¬
bank loans ($20,125,000 at
Nov. 30, 1949), to retire $3,500,000 funded debt incurred
company

sale of $27,500,000 new first
ceeds

Virginia Electric & Tower Co. (3/8)
Feb. 1 filed 100,000 shares of preferred stock (par
$100).
Price—To be supplied by amendment.
UnderwriterFoxv«$©itstruction

28.

The

(letter of notification) 10,000 shares of capital
(par $10), to be first offered to stockholders of
Jan.

Feb.

29.

common

1951, on basis of one share for each six shares held.
Price—$20 per share. Underwriter—None. Proceeds—

-

First

Proceeds—To selling stockholders.

Underwriters—To

For

/

(2/24)

The

—

June.

record

/:/^

shares of

publicly offered during the week of

$18,000,000

Utah

East

about 300,000

announced

was

about

stock

Cincinnati, O. Proceeds—
working capital.

capital.
Prairie Ronde Street, Dowagiac" Mich.
•

at

Meyer Nurenberger, President, will supervise and
personally solicit subscriptions.
Proceeds—To be

Jan.

purchase 10,000 shares
(par $1), exercisable only in its en¬
tirety at any time prior to Sept. 30, 1955. Price—$3 per
—

1951,

(letter of notification)

commonLstock

Proceeds

1,
,

one

Rudy Mfg. Co., Dowagiac, Mich.

share.

May

outstanding 6%
106% and accrued

develop a news service and to develop
weekly newspaper or newsletter.
Office, 261 Broad¬
way, New York 7, N. Y.

Feb. 8 (letter of notification)
options to be issued to Wil¬
liam A. Collins, Vice-President to
of

due

'

Underwriter—White,

a

four shares held; rights to
expire about
Price—To be supplied by amendment. Under¬
writer—W. E. Hutton & Co.,

•

it

Feb. 5 it

each

expansion

notes

amendment.

used to set up and

March 20.

For

12

capital

additional shares of common stock
offered for subscription by common

share

be

will

Feb.-15 filed 48,419

(par $10), to be
stockholders of record

ex¬

expected to
Registration—About Aug. 10.

Sept. 11.

on

Proceeds—For

Bids—Tentatively

program.

None.

town, Pa.
•

supplied by

Universal News

.

Underwriter—None.

be

interest.

:

(9/11)

stated that company contemplates issuance
$10,000,000 first mortgage bonds. Under¬

was
sale of

writers—To be determined by competitive
bidding. Prob¬
able bidders: Halsey, Stuart & Co.

of

debt

Ritter Finance

.

Mass." Office—130 High h to stockholders

Development Corp., Boston,

f: St., Boston, Mass/
Transcontinental Gas Pipe Line Corp. (3/7)
v
15 filed 550,000 shares of $2,55 cumulative
pre¬
ferred stock (no par—stated value $50 per
share). Price

Feb. 20 (letter of notificatin) 4.948 shares of
5Vz% cumu¬
lative preferred stock
Price—At par ($50 per share).

(

Alabama Power Co.

York.

stock (par $1).

Underwriter—None, but Lehman Brothers will

:

International, Inc., Great Neck, L. I., N. Y.
(letter of notification) 4,700 shares of class A
stock
(non-voting).
Price—At par ($50 per

14

common

Tracerlab, Inc., Boston, Mass.

Feb.
"

each).

Bids—Expected to be opened

March 7.

on

YWY

Feb.

—

Feb.

Edison Co.

(EST)

Yampa Valley Coal Co., Denver, Colo.
(letter of notification) 30,000 shares of 7% cumu¬
lative participating preferred stock
(par $5) and 30,000
shares of common stock (no
par).
Price—$5 per share.
Underwriter—None. Proceeds—To engage in
strip min¬
ing operations for coal, and for equipment and working
capital.
Office—506 Cooper Bldg., Denver, Co.

up

Feb. 26 at the office of Cahill,
Reindel, 63 Wall St., New York 5,
on

Feb. 20
an •

(Canada)

of which 75,000 will be sold for the account of the

11:30

Gordon,

6^%

Ltd.,
affiliate:' Office—535 Fifth Avenue, New York City;

Inc.

Probable bidders: Halsey, Stuart
Inc.; Stone & Webster Securities Corp. and White,
Weld & Co. (jointly)./1 roceeds—To
repay bank loans

Price—At

Moss Producers,

System. Underwriters—To be de¬
c/ompetitive bidding.
Probable bidders:

by

competitive bidding.

(2/26)

stock.

to

be

used

to

repay

in 1950 and for construction program.

The sale of these

bonds is contingent upon approval by SEC of Arkansas
Natural Gas Corp.'s plan to split itself into two new

companies.

Probable bidders: Halsey, Stuart & Co. Inc.;
Corp. and Lazard Freres & Co. (jointly);

First Boston

Union Securities

Corp.; Smith, Barney & Co.; Equitable

Securities Corp.

Feb

/

Natural

Arkansas

Gas Corp.

announced
unexchanged new 3%% preferred
(issuable in exchange for 6% preferred stock on
basis of $10.60 of new preferred for each old share,
under proposal to split company into two units) may
be sold publicly.
1

stock

.

Jan. 8 filed 150,799 shares of

common

ing offered for subscription by
record

Jan.

shares

held,

25

on

with

to expire Feb. 26.

None.

basis

of

one

stock

common
new

(par $1) be¬

stockholders of

share

for

each

oversubscription privilege; rights
Price—$16 per share.
Underwriter—

Proceeds—For construction.

Jan. 30.




Statement

effective

Power & Light Co.
reported that the company will sell $8,000,000 additional first mortgage bonds, probably in late
summer or early fall. Underwriters—To be determined
Arkansas

Feb. 6 it

Atlantic

City Electric Co.
*
!
stated tentative plans call for the raising
about $2,250,000 through an offer of additional com¬

Jan. 15

holder.

of

Proceeds—To latter, who is the selling stock¬
Office—300 Market St, Camden 1, N. J.

West Penn Electric Co.
Jan.

31

mon

(3/7)

filed

320,000 additional shares of common
stock (no par) to be offered to its stockholders for sub¬
scription on the basis of one additional share for each

ten shares held about March 9, with an

oversubscription

was

by competitive bidding. Probable bidders: Halsey, Stuart
& Co.
Inc.; Lehman Brothers and Stone & Webster
Securities Corp. (jointly); Equitable Securities Corp. and
Central Republic Co. (jointly); Union Securities Corp.;
The First Boston Corp.; White, Weld & Co. Proceeds—
For construction program, estimated to cost about $20,000,000 in 1951.
;
\
;
•

den, N. J.

10

an

;

Electric

Goldman, Sachs & Co. (jointly);
Morgan Stanley & Co.; W. C. Langley & Co. and The
First Boston Corp*
(jointly); Harriman Ripley & Co.,

& Co.

the selling

shares

2,000

non-convertible preferred

per

Office—55 West 42nd Street, New

-

Distributors, Inc., N. Y.

'(letter

($100

par

Piper, President,

Business—Investment.

Tennessee Gas Transmission Co. (2/26) '
Jan. 26 filed $35,000,000 of first mortgage
pipeline bonds
due Feb. 1, 1971.
Underwriters—To be determined by

to

Premier

cumulative

T.

r

termined

Unsubscribed

companies in the

Penn

Feb. 6

Ulm, Minn.

1

penses.

Piper Aircraft Corp., Lock Haven, Conn.
5 (letter of notification) 25,000 shares of common
stock (par $1). Price—At market on New York Curb Ex¬
change (about $3.50 per share). Underwriter—None, but
sale will be made through Josephthal &
Co., New York,
Proceeds—To

be

Ventures, Inc., New York (3/1)
(letter of notification) 49,000 shares of common
stock.
Price—$1 per share. Underwriter—None. Pro¬
ceeds—For organizational and
general operating ex¬

1178, Billings, Mont.

rights to expire March 26.
shares to be offered to
employees of

Television

Feb.

Feb.

•

Price—To

savings certifi¬
cates, series 1207-A at $95.76 per $100 principal amount
and $15,000,000 of accumulative
savings certificates, se¬
ries 1217-A at $85.68 per
$100 principal amount. Under¬

writer—White, Weld & Co., New York.
around first

attached.

Feb.

Price—$4.50 per share. Under¬

privilege;
West

Lehman Brothers and

State Bond & Mortgage Co., New
5 filed $1,500,000 of accumulative

(par $1)

stockholders at rate of

common

for each 2V2 shares held.

mining

supplied by amendment.
Underwriters—Lee Higginson Corp. and P. W. Brooks
& Co., Inc., New York. Proceeds—To
pay off RFC note,
to repay bank loans and for working
capital.

Carolina

20 filed

to be offered to

developing

Standard-Thomson Corp. (2/27)
2 filed $1,500,000 of 5%
sinking fund debentures,
series B, due Sept. 1, 1967, with common stock
war¬

Pont, Jr., the selling stockholder. Not
Registration subsequently withdrawn.

Piedmont

and

Feb.

du

consummated.

prospecting

claims..

Feb. 2

To

i|iWw Uramum Mining Co., Inc., Pocatello, Ida.

Feb; 13./letter of notification)
2,500,000 shares of capital
stock.
Price—10 cents per share.
Underwriter—None.

it

was

stock

Probable

will be

on

a

l-for-10 basis held around May or June.

underwriter: Union

used

to

pay,

Securities

Corp.

Proceeds

in part, construction expenditures,

which, it is estimated, will total about $5,400,000 in 1951.
Continued

on

vaae

44

44

Continued

from

stockholders will on

Worsted Corp. (3/19)
Feb. 13 it was announced that between 200,000 and 300,000 shares of common stock will soon be registered with
the SEC. Price—To be supplied by amendment. Under¬
writers
Kidder, Peabody & Co. and Bear, Stearns &
Uxbridge

—

Proceeds—To selling

stockholders.

Co.

Edison

Boston

that com¬
pany plans to issue $32,000,000 of securities to aid in
financing its construction program, which, it estimated,
will cost $65,300,000 through 1954.
He added that no
common stock financing is planned until 1955.

Jan.

30,

•

Jan.

V.

J.

President, announced

Toner,

Bridgeport Gas Light Co.
19 it was reported company plans

natural

at,

gas

Bridgeport Hydraulic Co.
Feb. 17 it was reported company plans to issue and sell
an
additional 44,000 shares of common stock, first to
stockholders.-Underwriter — Smith, Ramsey & Co., Inc.,

Proceeds—For new construction.

Bridgeport, Conn.

(A. M.)

Byers
25

Co.

revealed that the com¬

Rains, President,

F.

L.

is considering a plan to refinance its 7% cumula¬
preferred stock (par $100), about
50.000 shares outstanding. These shares are redeemable
at 110 and accrued dividends. Holders may be offered in
exchange a new convertible preferred stock, plus com¬
mon stock.
Company being advised by Blyth & Co., Inc.,
pany

tive

participating

and Fahnestock & Co.

informed the SEC that it intends to issue
approximately $20,000,000 of securities in addi¬

the $15,000,000 first mortgage

tion to

Jan.

sell

bonds now being

proposal to issue and

a

Offering—Tenta¬
tively expected about the middle of March.
construction

Proceeds—For

•

program.

Chicago & North Western Ry. (2/28)
(CST) on Feb. 28 at the

Bids will be received up to noon

West Madison St.,
Chicago 6, 111., for the purchase of $6,555,000 equipment

office of the company, Room 1400, 400

certificates

trust

in

mature

to

March

dated

be

instalments' of

annual

15

March 15 from 1952 to 1966, inclusive.

1951

15,

$437,000

and
each

to
on

Probable bidders:

Halsey, Stuart & Co. Inc.; Harriman Ripley & Co., Inc.
and Lehman

Brothers, (jointly); Salomon Bros. & Hutz-

ler; Harris, Hall & Co. (Inc.). No bid will be accepted
for less than 99% of the principal amount plus accrued
dividends from March 15, 1951 to

certificates.

■

Columbia
Dec.

it

7

Gas

date of delivery of said

:v/ ^

System, Inc.

reported that corporation may issue and
new securities in the Spring or early /

was

summer..

Probable bidders for debentures: Halsey, Stuart

& Co. Inc.; Morgan,

Stanley & Co.; Kuhn, Loeb & Co.;
Salomon Bros. & Hutzler; Lehman Brothers; Merrill
Lynch, Pierce, Fenner & Beane and White, Weld & Co.
(jointly). Probable bidders for common stock, in event
of competitive bidding: Morgan Stanley & Co.; Goldman,
Sachs & Co. and Union Securities Corp. (jointly); Mer¬
rill Lynch, Pierce, Fenner & Beane; Lehman Brothers;
Shields & Co. and R. W. Pressprich & Co. (jointly).
Proceeds will be used for expansion program.

»)

•

Columbus

Southern

&

Ohio

Electric

.Feb. 19, J. B. Poston, Chairman and President, announced

contemplates

issuance and sale of additional
during the first half of 1951. If compet¬
itive, probable bidders may include Dillon, Read & Co.,
Inc.; Lehman Brothers and Kidder, Peabody & Co.
(jointly); The First Boston Corp. Proceeds—For expan¬
company
common

stock

sion program.

Commonwealth
Jan.

10

it

was

$181,000,000
securities.

Edison

additional

Co.
the

announced

Neither the nature

financing has

been

company

financing

through

the time of

nor

determined.

contemplates
the sale of

Probable

the

bidders

new

Price—At

($20

par

offer about

Detroit

disclosed that it had approved
1,290,annually and to increase its finishing capacity
from the present 180,000 tons to more than 1,000,000
tons at the company's Portsmouth, Ohio, works.
The
expansion program is estimated to cost about $50,000,000. The method of financing is being determined.
In
January of 1950, $15,000,000 of bonds were placed pri¬
vately.
•

.

Duke

Feb.

16

sell

Power Co.

it

that

company

care

plans to issue and
its construction

of part of

Underwriters—To be determined by competi¬

program.

tive

stated

was

bonds to take

some

Probable

bidding.

bidders:

Halsey,

Inc.; Morgan Stanley & Co.;

Stone &
Corp.; The First Boston Corp.

Stuart

&

Co.

Webster Securi¬

Englander,

Feb. 19,

it

Inc.

reported to be contemplating new financ¬

was

ing. Underwriter—Glore,-Forgan & Co., Chicago, 111.
Power

was

March 29

on

stock

mon

Corp.

Jan.
cf

9

it

was

between

-debentures.

reported

$50,000,000

Co.

company

contemplates issuance

and

$60,000,000 of convertible
Underwriters—To be determined through

competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; White, Weld & Co. and Paine, Webber, Jack¬
son Curtis (jointly); Dillon, Read & Co. Inc.: The First
Boston Corp.; Blyth & Co., Inc.; Morgan Stanley & Co.
Proceeds—To

finance construction

Expected late in April.
Consumers
Jan/ 26

v

Power Co.

company

sought

program.

Offering-

proposal to increase the authorized

com¬

(par $7.50) from 1,600,000 to 2,500,000 shares

and the authorized

preferred stock (par $100) from 120,000 to 250,000 shares.
Underwriters for preferred stock
by competitive bidding. Probable bid¬
include Kidder, Peabody & Co. and Merrill
Lynch, Pierce, Fenner & Beane (jointly); Salomon Bro§.
& Hutzler; Harriman Ripley & Co., Inc.; Equitable Secur¬
ities Corp.; Union
Securities Corp.
Probable under¬
writers for common stock. Kidder, Peabody & Co. and
Merrill Lynch, Pierce, Fenner & Beane.
ders

may

Food

Machinery & Chemical Corp.
President, announced an expansion
program which will involve well in excess of $25,000,000,

Jan. 29, P. L. Davies,
to be

financed, in part, by the issuance of $25,000,000 of
debentures. Later it is probable rights may be given to
stockholders to purchase additional common stock, pos¬
sibly by the end of 1952 or early 1953. Traditional under¬
•

Kidder, Peabody & Co.; Mitchum, Tully & Co.

Foote

Feb.

Mineral

Co.

15 stockholders approved
stock from

common

an

increase in authorized

100,000 to 300,000 shares to provide

for the payment of a

200% stock dividend

on

the 57,995

outstanding shares, par $2.50. G. H. Chambers, VicePresident, stated that the company is committed to a
policy of expansion. "This," he said, "will require more
money, and the directors later this year may seek some
form

of

brook

capital."

new

&

Co., New York.

Traditional underwriter—EstaExpected this Spring.

Georgia Power Co. (6/5)
< 8
it was reported company may issue and sell
$20,000,000 of new first mortgage bonds. Underwriters—
To be determined by competitive bidding. Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.;
Drexel

&

Brothers; Harriman Ripley &
Co. Inc.; Shields & Co. and Salomon Bros. & Hutzler
(jointly); Blyth & Co., Inc. and Kidder, Peabody & Co.
(jointly); The First Boston Corp.; Kuhn, Loeb & Co.;
Union Securities Corp. and Equitable Securities Corp.
(jointly). Proceeds—For construction program. Bids—■
Tentatively expected to be opened on June 5. Regis¬
tration—Scheduled for April 4.
Co.;

Lehman

Steel

Gibraltar
29

it

Corp., Trenton, Mich.
company is being formed

announced

was

P.

S.

Commission

a $100,000,000 fully-integrated steel plant with
capacity of 700,000 tons of ingots annually, to be built
at Trenton, Mich. C. S. Eaton, of Otis & Co., who will be

Chairman of the

Board, stated that

no

public offering oi

securities would be involved.
Granite City Steel Co.
Jan. 26 it was announced that

additional

ing

common

proposed

change in

par

be voted upon

stock to

company

common

plans to offer

stockholders follow¬

split-up of 497,201
value from no par to $12.50
2-for-l

shares and
share to

per

March 12. It is planned to raise $6,000,000.

Greenwich

(Merrill.Lynch, Pierce, Fenner

Proceeds will be used for expansion.

Gas

earlier than 1981.
competitive

basis and to issue and sell 8,000 additional shares of pre¬

•..with

issue

interest

not

$40,000,000

exceeding

of

first

2%%

mortgage bonds
and maturing not

Underwriters—To be determined by
bidding. Probable bidders: Halsey, Stuart

&

Co., Inc.; Kuhn, Loeb & Co. and Union Securities
Corp. (jointly); Harriman Ripley & Co., Inc. and The




the executive committee

plan for the refunding of Illinois Central RR. and
Chicago, St. Louis & New Orleans RR. joint $18,812,000
of first refunding mortgage bonds due 1963 (including
$14,611,000 of 41/2% series "C" and $4,201,000 of 4% series
"D" bonds). It is reported that $20,000,000 of new con¬

bonds will be issued. Probable under¬
& Co., New York. No immediate
financing expected.

solidated mortgage

writer—Kuhn,

Loeb

Illinois Central

RR.

(3/19)

13, it was reported company expected" to raise $6,800,000 through the sale of equipment trust certificates,
Bids—Tentatively scheduled to be received on March 19,
Probable bidders: Halsey, Stuart & Co. Inc.; Harriman
Ripley & Co., Inc. and Lehman Brothers (jointly); Har¬
ris, Hall & Co. (Inc.); Salomon Bros. & Hutzler; The
First Boston Corp.
,

Jersey Central Power & Light Co.
asked SEC permission to issue and sell
40,000 shares of cumulative preferred stock (par $100).
Underwriters—To be determined by competitive bidding,
Probable bidders include Glore, Forgan & Co.; Kidder,

Feb. 7 stockholders

ferred stock.
Mass.

& Beane

White, Weld & Co. (jointly); The First Boston Corp.;
Union Securities Corp. and Salomon Bros. & Hutzler
and

Early regis¬
Bids—Tentatively scheduled for mid-

Proceeds—For new construction.

(jointly).
tration

expected.

March.

Jersey Central Power & Light Co.
13 company requested SEC authorization to issue
sell./$1,500,000 first mortgage bonds due in 1981,
Underwriters—To be determined by competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; White,
Weld & Co. and Shields & Co. (jointly); Equitable Se¬

Feb.
and

curities

The First Boston Corp.; Otis & Co.;
Hutzler; Harriman Ripley & Co., Inc.;

Corp.;

Salomon Bros. &

Kidder, Peabody & Co.; Glore, Forgan & Co.
—For expansion program.
Bids—Tentatively
to be received in mid-March.

Proceeds
scheduled*

City Power & Light Co.

Kansas

announced company
of new money through the
sale of new securities, including from $5,000,000 to $8,000,000 preferred stock, and the remainder common

Feb. 7, Harry

B. Munsell, President,

expects to raise $15,000,000

stock

bonds.

and

Probable bidders for preferred stock:

Langley & Co. (jointly);
Corp.; White,
Republic Co.
(jointly); Harriman Ripley & Co., Inc.; Salomon Bros. &

Glore, Forgan & Co. and W. C.

Barney & Co.; The First Boston
Co., Shields & Co. and Central

Smith,
Weld

&

Hutzler

Merrill

and

Lynch,

Pierce,

Fenner

were

Underwriter—F. L. Putnam &

& Beane

(jointly); Union Securities Corp. and Stern Bros. & Co,
(jointly). Probable bidders for common stock: Lehman
Brothers; Glore, Forgan & Co.; Harriman Ripley & Co.,
Inc.
•

Kansas-Nebraska

Feb.

15,

it

was

Natural Gas Co.,

Inc.

announced that company plans to raise

$4,200,000 through the sale of debentures or first mort¬
gage bonds in the spring of 1951 (this is in addition to
current sale of 10,950 shares of $5 cumulative preferred

dividends
(par $5) at $15 per
share (the latter to common stockholders).
The bond
financing early last year was placed privately through
Central Republic Co. (Inc.), Chicago, 111.
The proceeds
(no par) at $105 per share plus accrued

stock

133,812 shares of common stock

and

to

are

be used for

Laclede

Gas

the company's expansion program.
Co.

30, R. W. Otto, President, stated it appears

that

the

some

Co., Boston,

likely

will sell additional mortgage bonds
time this year to finance its 1951 construction re¬
company

During the current fiscal year, he said,
$10,000,000 may be spent for new construction, of
which more than $4,000,000 had been spent up to Dec.
quirements.
about

31, 1950. It was also stated that the company
serious consideration to early refinancing of

Co., Greenwich, Conn.
to vote on approving issuance
and sale of 60,000 additional shares of common stock at
$5 per share to common stockholders on a 2.045-for-l

authority to

RR.

Jan.

to

operate

& Beane, New York.

(3/27)

Michigan

Illinois Central

to be determined

Traditional underwriter:

t

of mortgage

preferred stock. Bond financing may be pri¬
vate, while preferred stock may be underwritten by
Wegener & Daly Corp., Boise, Idaho. Proceeds would go
toward expansion program, which, it is estimated, will
cost nearly $23,000,000 for 1951.

Peabody & Co.; Merrill Lynch, Pierce, Fenner

announced common stockholders will vote

a

a

Gas

will raise $18,It is believed

Feb. 13 company

•

Proceeds

Natural

reported that this company

was

Feb.

>

..

it

to

Steel Corp.

000 tons

Jan.

Consolidated

Idaho Power Co.

Jan. 22 the directors authorized

plans to double the company's ingot capacity to

for

to be used for construction program.

invited for purchase of 5,000

are

Feb. 6,

Underwriter—

share).

per

construction program.

Proceeds—For

None.

& Co.

;

announced company plans to

was

850,000 shares of additional common stock to its stock¬
holders on the basis of one share for each ten shares

Halsey, Stuart & Co. Inc.; The
First Boston Corp.; Glore, Forgan & Co.; Morgan Stanley

-

(4/2)

Detroit Edison Co.

Jan. 29 it

or

are

Y.
shares of class A
preferred stock (no par value) of the above company
from Commodore Hotel, Inc., 42nd St. and Lexington
Ave., New York 17, N. Y.
Harrison-Rye Realty Corp., N.

•

Bids

bonds and

1, 1993.

bonds

debentures:

that this company may sell se¬
In event of preferred
probable bidders may be Kidder, Peabody &
Co. and White, Weld & Co. (jointly); Equitable Securi¬
ties Corp.; Union Securities Corp. and Salomon Bros. &
Hutzler
(jointly); Harriman Ripley & Co., Inc. But
definite plans have not as yet been formulated.
6, it was reported

stock issue,

Jan.

Jan.

Co.

Gulf Power Co.
Feb.

curities "for new money" this year.

500,000 through sale of securities this year.
that this financing will be through sale

writers:

sell $35,000,000 of

..Thursday, February 22, 1951

funds, to redeem $35,000,000 of 3%-4% first mortgage
bonds, series A, due Jan. 1, 1993, and $8,666,900 of Den¬
ver
& Salt Lake income mortgage 3%-4%
bonds, due

Florida

publicly 25,000 shares of preferred stock (par $100).

.

RR.

by competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Morgan Stanley & Co.; Kuhn, Loeb & Co.
Proceeds—From sale of new bonds, together with other

Feb. 13 it

Illinois Electric & Gas Co.

stockholders approved

25

Grande Western

Rio

reported to be considering is¬
suance and sale, probably in May, of about $40,000,000
first mortgage bonds.
Underwriter—To be determined

publicly offered.
Central

&

Feb. 20 the company was

Light Co.

Jan. 4 company
and sell

27.

Denver

ties

Power &

Carolina

•

of

program.

Jan. 30 the management

•

Jan.

bank loans and for 1951 con¬
Bids—Expected to be opened on
Registration—Scheduled for Feb 23.

$8,000,000

repay

Marcn

Corp.

Co.

struction

held.

to convert to
cost of about $800,000.
Smith, Ramsey & Co., Inc.,

Bridgeport, Conn.

'

to

&

estimated

an

underwriters:

Probable

Boston

Shields

April 10 vote on a proposal to increase the authorized
cumulative preferred stock from
100,000 to 150,000
shares. Previous preferred stock financing was handled
by private placement through Union Securities Corp.
and Smith, Barney & Co.
Bachmann

(jointly); White, Weld & Co. and
(jointly); Morgan Stanley & Co.; W. C.
Langley & Co. and Glore, Forgan & Co. (jointly).
Proceeds—To redeem $5,300,000 of first mortgage bonds,
First

43

page

Atlantic City Electric Co.
Jan. 29, it was announced that the

Co.

Financial Chronicle

The Commercial and

(852)

is giving
its

out¬

bonds due Feb. 1, 1965, and
$6,500,000 3V2% bonds due Dec. 1, 1965, through the is¬
suance
of possibly $28,000,000 of new bonds. Probable
bidders: Halsey, Stuart & Co. Inc.; Goldman, Sachs &
standing $19,000,000 3V2%

Co.; White, Weld & Co.; Lehman Brothers and Merrill
^Lync^ Pierce, Fenner & Beane (jointly). \
•
Lake Shore Pipe Line Co., Cleveland, Ohio

acquire, con¬
facilities / which will - carry
natural gas into ^northeastern Ohio foff the.'firfit time.
Financing
plan ''(includes the issuan^e/it and $sale -/of
Feb.

struct

15

FPC

and

authorized this company to

operate pipeline

$1,075,000 in bonds to Stranahan, Harris;
iCo... Inc.,
Toledo, O., $225,000 in preferred stodr'apkL$150,000 in
common

stock.

Volume

173

Number 4983...The

Commercial

and

Financial

Chronicle

(853)
Lone

Star Steel Co.

issue additional

•

Long Island Lighting Co.
31, Edward F. Barrett, President, said

in

financing

common

These

increase
assist
be first

shares

will

has not yet been determined. Probable bidders may in¬
W. C. Langley & Co.; Kidder, Peabody & Co.;

1

it

announced

was

on

15.

Monongahela Power Co.
Dec.

program.

July 17.

Jan.

Bids—
Regis¬

event

+

March 23.

Montana-Dakota

on

Montana

April 24, with SEC

Co.

and

England Power Co.

may be initially offered.
Ripley & Co. Inc.; Lehman
Brothers; Kidder, Peabody & Co.; First Boston Corp.;
Merrill Lynch, Pierce, Fenner & Beane; W. C.
Langley
& Co. Proceeds to be used to repay bank loans and for

was

Co. and

<& Hutzler.

For

1951

Northern

Feb.

15

it

,

Ry.

Halsey, Stuart & Co. Inc.; Lee Higginson Corp.;
Ripley & Co., Inc. and Lehman Brothers

Dec. 20 D. S.

Kennedy, President, said company is con¬
sidering refunding outstanding $6,500,000 5*4% cumu¬
lative preferred stock (par $100) with an
equal amount
preferred stock with a lower dividend rate and may




in length.

lateral

Carolina.

It

is

now

lines, aggregating about

Estimated total capital cost is ap¬

Co.

bonds and junior securities.

of Oklahoma

9

Feb. 6 it

'

Co.

(4/3)

reported that the company plans to issue
1,000,000 shares of common stock (par

was

additional

an

$5). Underwriters—To be determined
by competitive
bidding. Probable bidders: Morgan Stanley &
Co., Kid¬
der, Peabody & Co. and Merrill Lynch,
Pierce, Fenner
& Beane

(jointly); Union Securities Corp. and Equitable
Corp. (jointly); Blyth & Co., Inc.; Lehman

Securities

Brothers; Harrimon Ripley & Co., Inc. Proceeds—For
construction program.
11:30 a.m. (EST) on

Bids—Expected to be opened at
April 3 at company's office, 20 Pine
Street, New York, N. Y. Registration Statement—Sched¬
uled to be filed with SEC

Southern
*

Jan.
sell

18

it

Union

was

March 2.

on

Gas

March 21.

Salem
Jan.

Gas

Light Co.

26 company applied to SEC

and sell to common stockholders

for authority to issue

30,236 additional shares

■

,

Co.

announced

plans to issue and,
of preferred stock (par
$4,000,000 of first mortgage
company

approximately1 27,000 shares

$100)

and

bonds

approximately

(in addition to

columns).
•

the

150,799 additional

stock filed with SEC

common

; v-Y.

Standard

Fruit &

on

shares of
Jan. 8.—see preceding

i/// 7v-v

,>'-y■'

Steamship Corp.

(2/26)

Bids will be received up to noon on Feb. 26 for
the pur¬
chase from Hibernia Bank & Trust
Co., in liquidation,
405 Baronne
Building, New

Orleans, La., of 8,025 shares
participating preference stock.

of Standard Fruit $3
•

Stearns

Jan.

31

Manufacturing Co., Inc.

"

Federal

Judge F. A. Picard, at Detroit, Mich.,
Manufacturing Co. to sell its 87,000 shares
of Stearns common stock
(198,763 shares outstanding).
directed Besser

Texas Gas Transmission
Corp.
Jan. 3 company asked FPC
permission for approval of a
$42,300,000 construction program, which will include the

building of 580 miles of pipe line to supply natural gas
own mid-Western service area
and in Appalachian
The program would increase the
capacity of
the Texas-to-Ohio pipe line
system to over 900,000,000

in its

markets.

cubic feet per day.
around

Tentative plans include the sale of
(which «may be placed pri¬
insurance firms) and about $10,000,000 of

$30,000,000 bonds

vately with
preferred stock

(depending

upon

market

conditions).

The balance of the funds needed will be
obtained from

treasury

cash

temporary bank loans.
Traditional
underwriter is Dillon, Read & Co.
Inc., New York.
or

Trion, Inc.
stock

common

(par $2) to 2,000,000 shares, in

a

step

preliminary to the sale of additional stock. Previous
financing handled by Graham & Co., Pittsburgh, Pa.
would

be

used

to

handle

expanded

defense
'';

United Artists Corp.

Fe|. 8, Paul V. McNutt, Chairman,

announced

that

a

refinancing of the corporation has been arranged.
Virginia Electric & Power Co.
Feb.

I it

was

issue dnd sale

$100)
1951

announced that
of

filed with

(in addition to proposed
100,000 shares of preferred stock (par

SEC

is anticipated in

on

an

Feb.

1)

further financing in

amount which may aggregate

$25,000,000. The proceeds will go toward company's

con¬

struction program.

River Brand Rice Mills,

Inc. (3/21)
19, it was reported registration of 250,000 shares
is expected about Feb. 28. Underwriter—Lee Higginson
Corp., New York. Offering—Tentatively scheduled for
<

issue of

new

"

Southern

(4/9)

Feb.

Electric Co.

of

& Co. Inc.

Proceeds

•

(jointly); Salomon Bros. & Hutzler; Harris, Hall & Co.
(Inc.); Kidder, Peabody & Co.
&

seven

in North

it was stated that company
plans issuance and
$10,000,000 of first mortgage bonds. Underwriters
—To be determined by competitive
bidding. Probable
bidders: Halsey, Stuart & Co.
Inc.; Glore, Forgan & Co.;
White, Weld & Co. and Shields & Co. (jointly); The First
Boston Corp.; Kuhn, Loeb & Co. and Union Securities
Corp. (jointly); Salomon Bros. & Hutzler; Harriman
Ripley & Co., Inc.
Proceeds—For new construction.
Registration—Expected about March 5f
Bids—Tenta¬
tively expected to be received up to April 9.

announced company plans to issue and
of equipment trust certificates. Probable

Gas

communities

sale of

Harriman

Oklahoma

34

a

business.

Feb.

was

sell $6,900,000
bidders:

Pacific

Inc.

bank loans with

Underwriters—To be determined by
competitive
bidding. Probable bidders may include
Halsey, Stuart

from 150,000 shares

serve

Public Service

construction program.

Expected late Summer and early Fall.
•

reported that this company is
planning to
outstanding $4,000,000 of 41/8% bonds and

bonds.

issuance of first mortgage

Corp. (jointly); Kidder, Peabody
White, Weld & Co. (jointly); Salomon Bros.
—

its

proximately $4,500,000, which would be financed by the

be

Securities
Proceeds

was

Feb. 8 stockholders increased authorized

168 miles

by competitive bidding. Probable bidders:
Drexel & Co., Kuhn, Loeb & Co., and Lehman Brothers
(jointly); W. C. Langley & Co.; Smith, Barney & Co.
&

to raise additional funds for construction
in the second quarter of 1951. The amount

proposed to build

determined

Union

Feb. 7 it
refinance

to

reported that company tentatively plans
to issue and sell $2,500,000 of preferred stock to
public
and $1,500,000 of common stock to General Public Util¬

and

(4/3)

the next five years.

over

Jersey Gas Co.

Feb. 9 company filed with FPC a second amended
appli¬
cation in connection with a proposed natural
gas system

Jersey Power & Light Co.

Underwriters—For preferred to

South

Co.

Public Service Co. of North Carolina,

■construction program.

to be completed

are

financing.
privately

Halsey, Stuart & Co. Inc.; Blyth & Co., Inc. and Smith,
Barney & Co. (jointly); The First Boston Corp.; Lehman
Brothers; Kidder, Peabody & Co.; Harris, Hall & Co.
(Inc.); Glore, Forgan & Co. and W. C. Langley & Co.
(jointly).

80,000 shares of preferred stock

Corp., parent.

Electric

new

placed

annual

of

925,863 shares outstanding.
plan, recently announced, will
sharply increase ingot capacity, pig iron and coke
output
and finishing facilities. The
additions and improvements

the

needed is estimated at about $7,000,000." Probable bid¬
ders for a reported issue of $15,000,000 new bonds are:

Probable bidders: Harriman

ities

General

was

in

necessary

purposes

was estimated that
$32,000,000 of new financing
required prior to Dec. 31, 1952 (including the
$12,000,000 of bonds filed with SEC). Between 70,000 to

19 it

require

available

Public Service Co. of Colorado
Nov. 1, J. E. Loiseau, President, announced that "it will

be

Feb.

shares

that company plans to issue
$10,000,000 of first mortgage bonds. Underwriters—To
be determined by competitive
bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; W. C. Langley & Co. and The
First Boston Corp.
(jointly); Kidder, Peabody & Co. and
Alex Brown & Sons
(jointly); Glore, Forgan & Co.;
Salomon Bros. & Hutzler; Harriman
Ripley & Co., Inc.,
and Union Securities
Corp. (jointly); Lehman Brothers;
Equitable Securities Corp.; Drexel & Co. Proceeds—For
expansion program. Offering—Expected on April 3 with
SEC registration tentatively scheduled for March 2.

Jan. 24 it

New

such

Potomac Edison Co.
Dec. 1 it was announced

be

••

have

conditions

the

was

some

$3,338,000 of short-term

Halsey, Stuart & Co. Inc.;
Shields & Co. (jointly);
Corp.; Harriman Ripley Co., Inc.

First Boston

Ladenburg;

At present, the
company has
The company's expansion

,

able bidders for bonds
may be
Salomon Bros. & Hutzler and

facilities,
therewith, and the proposed funding of $5,800,000 shortterm bank loans, it is planed to issue and sell common
■stock, preferred stock and mortgage bonds for a total
of $11,500,000. Traditional underwriters are Blyth & Co.,
Inc. and Merrill Lynch, Pierce, Fenner & Beane. Financ¬
ing expected before April 1, 1951.

will

to

future

and

meeting March 22 to increase the debt
the company to
$30,000,000 and to increase
authorized capital stock to 2,500,000 from
1,000,000 shares.

an
offering of 40,000
expected to be announced'

27, Thomas Delzell, Chairman, said that the $20,000,000 Deschutes River project, temporarily being fi¬
nanced by short-term
borrowings and bank ldans, may
be refinanced some time
prior to May 1, 1952, by the
sale of long-term bonds and common
stock. The latest
stock financing was handled
by Blyth & Co., Inc. Prob¬

Wyoming and to construct additional
estimated to cost $5,864,094. In connection

New

order

Portland

/Feb. 16 company applied to the FPC for authority to ac¬
quire natural gas facilities of three companies operating
an

at

ilmit

Jan.

and

7

Utilities

in

that

Corp.

announced that as a
preliminary to fi¬
phases of the corporation's $49,000,000
expansion program, stockholders will be asked to vote

that

is

preferred stock financing
through The First Boston Corp.

(4/24)
plans issuance

stock

Latest

Pierce, Fenner & Beane; Glore, Forgan & Co.; Harriman
Ripley & Co., Inc. Proceeds—For expansion program.
on

announced

it

nancing

on April
plan to increase authorized preferred stock by 60,000

a

Securities

Sharon Steel Corp.

&

shares

Union

(jointly); Merrill Lynch, Pierce, Fenner
Beane; Kidder, Peabody & Co.; F. Eberstadt &
Co.;

Jan. 29

Pitney-Bowes, Inc.
4

(Inc.),

Co.; F. S. Moseley & Co.; Riter & Co.

Feb. 5 directors voted to submit to stockholders

Corp.; W. C. Langley & Co. and The First Boston Corp.
<jointly); Union Securities Corp.-and Salomon Bros. &
Hutzler (jointly); Lehman Brothers; Kidder, Peabody &
Co. and White, Weld & Co.
(jointly); Merrill Lynch,

registration

was

to the highest bidder
by the
Property. Probable bidders: A. G. Becker

& Co.; new
company to be formed by United
States & International Securities
Corp.; Dillon, Read &

Co., Inc.; White,
Co.; Harriman Ripley & Co., Inc. Proceeds—
To finance, in part, the
company's expansion program.
Weld

sale of $10,000,000 of first mortgage bonds. Underwriters
—To be determined by competitive bidding. Probable
bidders: Halsey, Stuart & Co. Inc.; Equitable Securities

Offering—Tentatively expected

it

26

Co.

probably in March

Allen

shortly.
Underwriters—To be determined by competi¬
tive bidding.
Probable bidders: The First Boston Corp.
and Drexel & Co.
(jointly); Blyth &

-

company

new

Pennsylvania Electric Co.

shares of preferred

construction
June

of

Pennsylvania Power & Light Co.

<par $100). Underwriters—To be determined by competi¬
bidding. Probable bidders: W. C. Langley & Co.,
Glore, Forgan & Co. and Sterne, Agee & Leach (jointly);
Blyth & Co., Inc.; The First Boston Corp.; Kidder, Peafoody & Co. and White, Weld & Co. (jointly); Lehman
Brothers; Union Securities Corp. and Equitable Securi¬
ties Corp. (jointly); Merrill Lynch, Pierce, Fenner &

for

cost

(jointly); Harriman
Ripley & Co., Inc. Probable bidders for preferred stock:
W. C. Langley & Co. and Glore,
Forgan & Co. (jointly);
Kuhn, Loeb & Co.; Smith, Barney & Co.; Kidder, Pea¬
body & Co.; Harriman, Ripley & Co., Inc. Proceeds—
For 1951 construction program.
Expected late Summer
or early Fall.
\
777/

(7/17)

Tentatively expected to be received

&

&

Lehman Brothers and Drexel & Co.

tive

tration—Scheduled

Thalmann & Co.

Proceeds—To be applied
construction, estimated to cost

16 it was reported company plans to issue and sell
$3,000,000 of first mortgage bonds, $2,500,000 of preferred
stock and $2,500,000 of common stock (latter to General
Public Utilities Corp., parent). Underwriter—To be de¬
termined by competitive bidding. Probable bidders for
bonds: Halsey, Stuart & Co. Inc.;
Kidder, Peabody & Co.;
Merrill Lynch, Pierce, Fenner &
Beane; Union Securities
Corp. and White, Weld & Co. (jointly); Equitable Secur¬
ities Corp.; The First Boston Corp.;
Kuhn, Loeb & Co.,

Feb. 6, it was reported that this company contemplates
issuance and sale of $4,000,000 of preferred stock

Proceeds—For

was

reported that the company's entire com¬
issue (440,000
shares) was expected to be
registered with the SEC in the near future and offered

Feb.

the

Beane.

it

for sale

the

on

stock

Office of Alien

•

_

Mississippi Power Co.

Feb. 2
mon

$130,000,000 in 1951.

>

.

stockholders

each three shares held.

program.

toward

Utilities, Inc.
Feb. 16, it was announced company plans issuance and
sale of 450,000 additional shares of common stock (no
par). Underwriters — To be determined by competitive
bidding. Probable bidders—Union Securities Corp. and
Equitable Securities Corp. (jointly); Blyth & Co. Inc.;
Lehman Brothers; Kidder, Peabody & Co. and Merrill
Lynch, Pierce, Fenner & Beane (jointly); The First Bos¬
ton Corp.
Proceeds—To finance part of 1951 construc¬
tion program. Bids—Expected to be received some time

common

Schering Corp.

(3/19)

—Blyth & Co., Inc., New York.

South

to

(92.9%) of
subscribe for 28,092shares, plus any not subscribed for
by the minority stockholders.
Price—$15 per share.
Proceeds—To repay bank loans
and
advances from
parent, and the remainder for expansion

share for each seven shares
held; rights to expire
April 14, 1951. The subscription period is expected to
open March 19. Price—To be supplied later. Underwriter

ing program provides for the elimination of these bank
loans prior to their maturity, July 1, 1951, and such pro¬
gram will include the issuance and sale of $12,000,000
additional bonds and $3,000,000 of additional common
stock (latter to American Natural Gas Co., the parent).
Previous debt financing was placed privately. If com¬
petitive probable bidders may include The ^irst Boston
Corp.; Harriman Ripley & Co., Inc.; Glore, Forgan & Co.

late in March.

shares

Co.

one

Michigan-Wisconsin Pipe Line Co.
July 25 company received SEC authority to borrow not
more than $20,000,000 from banks.
A permanent financ¬

(par $10)

System (parent), owner of 42,138
the 45,353 outstanding
shares, will

on

Smith, Barney & Co.

Middle

Electric

Feb. 8 directors authorized issuance and sale of
1,419,562
additional shares of common stock (par $25) to common
stockholders of record on March 13, 1951 on the basis of

clude

•

&

Pacific Gas & Electric Co.

much stock will be issued

How

Gas

Feb. 7 it was announced that
company plans some new
financing in connection with proposal to build an $8,750,000 power plant near Sulphur, Okla.

shares is in prospect to

construction.

offered to stockholders.

an

Oklahoma

capital stock

the basis of two new shares
for
New England Electric

tion program.

For expansion program.

in the number of

of

ket conditions warrant such

President, announced that com¬
pany will raise $5,000,000 through a common stock offer¬
ing within the next 120 days to be first made to common
stockholders. Underwriters—Probably Straus & Blosser;
Estabrook & Co., and Dallas Rupe & Son.
Proceeds—

Jan.

stock

common

(par $10) provided mar¬
action, to finance construc¬
Probable underwriters: Lehman Brothers;
Smith, Barney & Co.; Harriman Ripley & Co. Inc.

Jan. 16, E. B. Germany,

45

Worcester County Electric Co.
Jan.

22 it was stated early registration is
expected of
$12,000,000 first mortgage bonds. Underwriters—May be
determined by competitive bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; Lehman Brothers; Merrill
Lynch, Pierce, Fenner & Beane; Kidder, Peabody & Co.;

The First Boston Corp.; Harriman
Ripley
Proceeds—To retire bank loans.

&

Co.

Inc.

46

The Commercial and Financial Chronicle

(854)

Thursday, February 22, 1951

...

Proceeds

Continued

The

from

2

page

demption

and

CHARLES A. TAGGART

to

Inc., Philadelphia, Pa.

Plymouth Cordage Co.
A

do not hesitate,
stock of Ply¬

I

in

inclusion

for

Cordage

equity portion of any invest¬
portfolio.

Detroit Edison

selected
record.

turned
well

i

t

out

New

1

a

1

why

The

Taggart

the

of

bonds at

Monday

on

on

the

sale

Another

long-term record is Ply¬
and I select its

deemed,

company's products in varying
from
degrees and it has kept pace with
its

of

sources

materials

raw

New

years

has no long-term
preferred stock,. Sole

nor

sale

other

of

don

Direct

purposes.

the

and

225 East Mason

industries

Dividends

paid

were

in all but three

stock

on

,

years,

the

metal

be¬

and

and

metal

1900,

and

Without

shares.

addi¬

connected with lines of other

tional investment, he would today
have
400
shares worth $20,400.
There

was

a

panies at bordering state lines.

4-for-l split in 1945.

meantime, 1938 through
1950, the investor would have
received $10,750 in cash dividends,
making the total gain $20,550.
The $10,750 in cash dividends,
when divided by
the '13 years
(1938 through 1950), equals $827
a
year or an average yearly in¬
of

7.80%

the

on

The

(Special to The Financial Chronicle)

PORTLAND, Oreg.—George R.
Johnson

has

been

added

the

to

staff of William J.

Collins & Co.,
U. S. National Bank Building. He
was
cox

investor's

formerly with Sloan & Wil¬
and

Hughes, Humphrey & Co.

its

ended

fiscal

Sept.

year

Joins Foster & Marshall

30,

(Special to The Financial Chronicle)

1950, with:
Assets

Total
Cash

of

of

$19,314,000
5,010,000
11,902,000

—

Working Capital of__
Book

Value

Share

per

Net Current Assets

I

$56.50

Share

per

$43.00

depreciated

value

of

only

With Donald C. Sloan

$4v-

.(Special to The Financial Chronicle)

079,000.
The

fiscal

which

year

Sept. 30, 1950, was
itable

highly prof¬

for Plymouth Cordage.

one

Earnings

a

ended

were

equal

to

$8.18

PORTLAND, Oreg.—John Fer¬
guson

Co., Cascade Building.

and

The atmosphere in
circles

buyers of

tive.
to

was

therefore

tion, handled

on

was

due

inventory posi¬
a

"last

in, first

out" basis.

Plymouth Cordage, so well es¬
<
production of
rope and twine, should experience

tablished .in. the
considerable

demand

for

imported, but

ropes




LYNCHBURG, Va.

of nylon

—

John W.

Inc.,

Krise Building.

With Kirchofer & Arnold
(Special to The Financial Chronicle)

California

to

slow,

with

come

State

Boston office to

larger

at r- 75
Noble

quarters

Arthur

Street.

D.

;

^

*

down

took

Co.'s

Edison

say

least,

the

Institutional
or

hands"

banker

one

buyers

less

have

"sitting

since

it,

puts

since

of

bid of 100.848 was

and

cent under the top.

of

as

in the situation.

the

issues

the

New Rail Issue in

Another

find¬

turn

of

brought

the

agement, The—Lectures by Stuart

Sight

Chase, Stanley H. Ruttenberg, Ed¬

large piece of railroad

financing moved into sight

win G. Nourse,

as re¬

plans of Denver &
Rio Grande Western for refunding
ports told of

Jr.

two

of

deals

closed

same

upon

School

William B. Given,

of

Commerce,

Finance,

and

New

Washington

University,

Ac¬

York

Square,

this undertaking New York 3, N. Y.—cloth—$2.00.
may run to $40,000,000 of new first
Dow Theory, The—Robert Rhea
mortgage bonds.
The road has outstanding $35,- —Rhea, Greiner & Co., 301 East
000.000 of 4% bonds, callable at Pikes
Peak
Avenue,
Colorado
104V2
while its Denver & Salt
Springs, Colo.—$3.50.
Lake Division has $8,700,000
of
time

out

this

week, via the competitive bidding

buyer-resistance

—

counts,

certain outstanding obligations.

have

year

Institutions, Princeton

up

Expected to reach market some
debt

Social

University, Princeton, N.J.—paper.

Our Changing Economy and the
total had been
Securities Markets—Franc M. Ricto offering, time.
ciardi and Philipp H. Lohman—
New England Power
The
Dealers'
Digest Publishing
Co.'s $12,000,000 of first mortgage,
Inc.,
150
Broadway,
New
30-year bonds, priced at 102.129 Co.,
York 7, N. Y.—paper—$1.00. - ;
to yield 2.77%, also were reported
lagging.
Social
Responsibility of Man¬

had hard-sledding and the experi¬
ence

yield

Foreign Investment—Sir Arthur
Other bids Salter—International Finance Sec¬
low of 100.1499.
tion,
Department of
Economics

maturity.

spoken for
Meanwhile,

their

are

utility

Reports indicated only a small

Things might be considerably
different, it is argued, but for the
fact that these investors

a

the

indicated

an

runner-up

portion

resistance reveals little to indicate

early change

to

barely

been

and

a

for

The

their

on

mid-December,

paid

2%% coupon rate
reoffering price of
a

ranged down to a

is

and gone.

more

fixed

2.80%

potential

securities, that

new

i

101.34

brand

in

4s which

May,

are

callable at 102.

The Pulp,

Paper and Board In¬

public
dustry—Vol. IX of an Engineering

offerings.

Davis and Charles M. Bradley are
with Scott, Horner & Mason,

Pipe Line Stock

Interpretation of The Economic
Transcontinental Gas Pipe Line and Financial
Aspects of Amer¬
in the business of marketing new Corp. has completed negotiations
ican
Industry—George S. Arm¬
securities
do
not
see
any
real with a banking group for the
break in the present situation as flotation of
an
issue of 550,000 strong & Co., Inc., 52 Wall Street,
likely to develop while the Treas- shares of new cumulative pre- New York 5, N. Y.—Paper.
ury
and
the
Federal
Reserve ferred stock, $50 par, with a $2.55
Speculative Merits of Common
Board remain at loggerheads over^<&yic}sp&rate^
,w
y
Bankers

who

have

spent years

v*. *

.

control of the money market

jggug already has gone into

Stock

■

-k \ S *

i"

JL

i1

-'. n *

1

"

» *

$

Warrants—Sidney

Fried—

F.

N. C. —Samuel
Blythe is with Kirchofer &
Arnold Associates, Inc., Johnston

Consequently, they are pulling registration and, accordingly, will Dept. C, R. H. M. Associates, 220
for an early move on the part of be
available for marketing in Fifth
Avenue, New York 1, N. Y.
Congress to straighten the matter a fortnight or so if conditions are
(or
send
for~^ descriptive
out. But then they realize that right. Offering price will be filed —$2

Building.

this

its

products in connection with plans
for defense.
Supplies of fiber
are

With Scott, Horner
(Special to The Financial Chronicle)

conserva¬

Some of the profit

the company's

underwriting
at the

none-too-rosy
what

moment

of

The total of $4.40 a share
of dividends paid in the calendar

1950

is

route, encountered the

a

share.

year

is with Donald C. Sloan &

.

which

group

winners

The

New

and equipment at a cost
$11,276,000 was carried at a

,>

100.859999 for

Plant
of

-

inquiry

ments.

Building.

and

new

25-year bonds found preliminary

PORTLAND, Oreg.—Herbert R. ing sizable outlets for the funds
Bachofner has joined the staff of through the medium of a rather
Foster & Marshall, U. S. National heavy volume of private place¬
Bank

of their

removal

following the opening of bids.

an

original investment of $10,600.
Plymouth
Cordage
Company

BOSTON, ! Mass. — Coburn f &
Middlebrook, Inc., announce -the

$35,000,000 of first and refunding

issues, still playing "hard-toget"
even
though
almost
two
months
of
the
new
year
have

William Collins Adds

Coburn & Middlebrook

Co.,

&

Congress will be wary of be¬

Southern

debt

the

come

com¬

Bros.

So. Calif. Edison Bonds

and

any

Boston Office of

330

.

ing snared.

products, cotton
including

have manufactured clothing, chemical
allied
products, paper and
been paid continuously since 1860, and
printing, food and kindred prod¬
or for 92 years through four wars
ucts, rubber products and shoe arid
and as many depressions.
Transmission lines
If an investor had purchased leather goods.
of the company span Massachu¬
Plymouth Cordage stock at the
average 1937 price of $106 a share, setts,
extend into Vermont and
he would have paid $10,600 for New
Hampshire, and are inter¬
1832

tween

Co.,

.

will be in charge.

textiles

woolen

Ross &

Co.—Special report—Hodg-

include

served

Noble to Manage New

;•

that

is, in general, thickly settled
highly industrialized. Princi¬

pal

consistently maintained.

New York City Man¬

was

for Otis & Co.

,>

Company—Report—Loewi & Co.,
Street, Milwaukee 2/Wis.
,,

cated

excellent financial position

An

Co. and

Company, 10 State Street, Boston 9, Mass.

are**lo-

company

Co., 14 Wall Street, New
City. Mr. Sarles was former¬
ly with Shelby Cullom Davis &

Wisconsin Power & Light

electricity

of

sumers

stock.

&

>

Company—Card memorandum—Lerner

Southwestern States Telephone

re¬

power,

temporary

a

*

ager

Corp.—Memorandum—Sutro

Oil'

Sinclair

on

a

Witter &

York Hanseatic Corp., 120 Broad¬

Broadway, New York 5, N. Y.

120

has been getting

company

York

Limited—Analysis—Dilner,
1, Ont., Canada.
*

Oils

Scurry

be of¬

June/

Dean Witter & Go.

Co.—Analysis—Ira Haupt & Co.,

Seneca Falls Machine Co.

on

of

Kenneth D. Sarles is with Dean

Bay Street, Toronto

to ultimate
consumers are made only to large
users.
Territory in which the con¬

capitalization consists of 2-69,839
outstanding $25 par shares and
6,300
of $2.50 paf employees'

In

Co. and

England Power Co. is en¬

and

sales

Cement

will

end

.

Co., 10 Post Office Square, Boston 9, Mass.
Also available is a memorandum on Gear Grinding Machine

from

range

tricity for light, heat,

The company

debt

100

&

may

the

'

123

New York 5, N. Y.

way,

construction

says

Kenneth Sarles With

Rhodesia Broken Hill Development Co., Ltd.—Report on

management over the 126 gaged in the generation, transmis¬
sion, purchase and sale of elec¬
it has been in existence.

good

is

to

Co.,

&

stock

common

"

Broadway, New York 6, N. Y.

zinc and lead producer—New

or

be re¬
way, at prices
100%.
Special

redemption
prices
102.09% to 100%.

as

conditions have changed.
It has demonstrated successively
world

;

ordinary

104.95%

-

Street, Philadelphia 9, Pa.

Riverside

bonds

new

Betz

Company—Analysis—Coffin,

Broad

Portland General Electric
Ill

■

The

There is always a

expenditures

future

for

pay

Work.

recommendation now.
demand for the

for

stock

to

Cordage,

mouth

construction

>

Corp., 40

mar¬

report

revolving credit
carrying an interest cost of 2x/2%,
plus a standby fee of V2 of 1%
on the unused portion of the loan.

Maguire & Co.,

Company, Inc.—Analysis—J. B.

Permutit
South

be used to reimburse the treasury
for

analysis of Verney Corp.

an

through

to the bond

annual

through

Inc., 31 Milk Street, Boston 9, Mass.

series D bonds will be used to pay

with an ex¬

company

basis

Corp.—Memorandum—Lee Higginson

raised

part of its funds

Street, New York 5, N. Y.

National

the

of

Kingsburg Cotton Oil Co.

'

Marathon

Point
Manu¬ borrowings under a bank letter
facturing Company capital stock, agreement, aggregating not more
$10,500,000 which will be
which subsequently paid a 100% than
evidenced
by
2*4%
notes
due
stock dividend and almost dou¬
May 31, 1951.
The balance will
bled in price.

cellent

available is

Also

the

funds

necessary

be

recourse

before

fered

Street, Boston 9, Mass.

com¬

its bid

101.66%.
from

tional

& Co., 39 South

Plate—Analysis—Raymond & Co.,

Nickel

vs.

on

the
will

but

funds

it is now contemplated that addi¬

Exploration Co.

&

Co., plans

new

stock.

common

of

The

memoranda

are

Maine Central
148 State

group

Wall

Proceeds

year

West

was

The

ket,

Street, Chicago 3, 111.

Labrador. Mining

the

<

further

Co.—Memorandum—Leason

Also available

102.129%

at

interest.

petitive sale
of

1981,

due

award

won

past

last

one

D,

accrued

and

because

its

record.

A.

series

Salle

of

part

doubtless

Associates,

Bakeries

Jessop Steel

and

again

one

Charles

underwriting group headed

raise

through

Corp.—Memorandum—H. M. Byllesby
& Co., Inc., 135 South La Salle Street, Chicago 3, 111.

terday (Feb. 21) publicly offered
$12,000,000 New England Power
Co. first mortgage 2%%
bonds,

commend

&

expansion since the end
the
Columbus
&

war,

Part

Price

Rowe

the next three

over

Southern Ohio Electric

Avenue,

Second

such
the

to

Co.—Memorandum—T.

Interstate

I

should

I

t

2000

Company,

Light Street, Baltimore 2, Md.

La

reason

no

of

10

by Halsey, Stuart & Co. Inc. yes¬

dividends),

r e

An

Edison

of

top of $52,780,500 spent

on

of

Broadway, New York 6, N. Y.

cash

erous

facilities

for

Company—Copies of annual report—Treas¬

Detroit

re¬

Columbus & So. Ohio Electric

years,

26, Mich.

Ilecht

Halsey, Stuart Group

while
paying
gen¬

no

Ill

2%% Bds. Offered by

price

see

England Pow. Go.

y

in

doubled

South La Salle Street, Chicago 4,

Flying Tiger Lines—Memorandum—Aetna Securities Corp.,

so

(it prac-

c

The

urer,

Detroit

I Like Best," I
one because of its past
Since
that
selection

Security

for

interest

Having budgeted $55,000,000 ior
new

dum—Illinois Company, 231
Illinois.

used

and

notes

Recommendations and Literature

ment

writing about

in

ago,

year

the

recent

more

the

recommend

mouth

"The

are

developments.

President, Charles A. Taggart
& Co.,

fiberglass

be

106

currently outstanding interim
bearing a 6% interest rate,
and for general purposes.

Dealer-Broker Investment

Security I Like Best

will

at

„

CHARLOTTE,

is

a

real

"hot

potato"

and

by amendment at that time.

folder).

j

Volume 173

Number 4988...

Financial Chronicle
The Commercial

and

(855)

An Old Wall Street Man

With Hooker &

T. M. Hess Joins

Passes at

Age 70

.The Wall Street friends and

(Special

tomers of Garl C. Shippee, senior
member of the New York Stock

Thomas M. Hess has become

Exchange firm of Shippee & Raw-

ciated

will

son,

regret

hear

to

of

SAN

Mr.

England

when

he

background

and

Mr.

Co.

left

and

in

1932.

Mr.

Shippee

members

F.

Hutton

&

Co.

MGM

PICTURES

THEATRES

MGM

-

quarterly dividend of 37J^c per
on the
outstanding Common
Stock of the Company, payable on

Cohn

March 31, 1951, to stockholders of record at the
close of business on March 16, 1951. Checks

of

70.

CHARLES C. M0SK0WITZ

financier,

he

Davis

the

at

age

will be mailed.

11

Vice Pres. & Treasurer

•

An

international

was

recently

Pyne,

Kendall

York

associated

Dividend No.

Hollister,

City.

DIVIDEND

February 20,

1951,
share

A

90

MIDDLE
/

(

the

Common

NO.

Stock

of

The

stock

transfer

J.

A.

of

business

Company will
J.

E.

not be closed.

REEVES, Treasurer

February 19, 1951..

)

'i.

books

will

not

SIMPSON,
15,

of

day declared
per

share

Directors

KOBERTSHAW- FULTON

this

CONTROLS COMPANY

the Common Stock,

on

holders of

be

has

dividend of 30^

a

payable April

2,

1951,

record

the

at

stock¬

to

close

Greensburg, Pa.

of

COMMON

STOCK

business March 9, 1951.

this dividend.

York," N. Y., February

close

DIVIDEND

A

Treasurer.

New

New

the

at

Inc.

The Board

this

closed for the payment of

record

of the

133

Company has been
declared payable at the Treasurer's Office, No.
165 Broadway, New York 6, N. Y. on
Monday,
March
19,
1951, to stockholders of record at
three o'clock P.
M.
on
Monday, February 26,
1951.

Isf

)%
/

QUARTERLY
DIVIDEND of
One
Dollar
Twenty-five Cents
($1.25)
per
share on

and

5?

per

March 2, 1951. The transfer
books

UTILITIES,

<0

PACIFIC COMPANY

DIVIDEND
A

SOUTH

o.

)

quarterly dividend of 30c

March 26, 1951, to stockholders
of

O.

/

f

SOUTHERN

/—

A

inc.

NOTICE

share has been
declared, payable

a

New York, N. Y., February 20, 1951.

with

&

FLEMING,
Secretary

Corporation

RECORDS

The Board of Directors has declared

Jefferson

T.

REEVES BROTHERS,

dividend of One
Dollar ($1.00) per
was declared on the
Capital Stock of Newmont Mining Corporation,
payable March 1'5, 1951 to stockholders of
record at the close of business March 1, 1951.

February 21, 1951

15,

Newmont Mining

On

•

March

at the close

February 27, 1951.
RICHARD

In

LOEW'S INCORPORATED

Jefferson Davis Cohn

away

pany's capital stock, payable
1951, to stockholders of record

DIVIDEND NOTICES

share

Capt.

dividend of 25 cents per share on the Com¬

Francisco

of business

a

7

San

GUS MRKVICKA, Treasurer

gen¬

profession.

passed

the

of

The Board of Directors has declared a divi¬
dend of $1.00 per share and an additional

Street,

Stock Exchange.

member of Gib¬

a

DIVIDEND NOTICE

TEXAS GULF SULPHUR COMPANY

&

482

DIVIDEND NOTICES

principles and ideals in their

chosen

E.

the past he was

tlemen and exemplars of the high¬
est

Co.,

is with Hooker

Montgomery

and

old school

were

&

bons & Hess.

Rawson.
The
partnership con¬
tinued until Mr. Rawson's retire¬
ment

Barth

315

Stock Exchanges.
Mr. Hess was
formerly with William R. Staats

Hornblower & Weeks in 1917 they
formed the'firm of Shippee
&

Mr. Rawson

J.

—

asso¬

Fay,

Tillier

New

and

Rawson

with

Calif.

liam J.

California Street, members of the
York
and
San
Francisco

S.hippee's passing at his home in
Fair Haven, N. J., last Friday. Mr.
Shippee was a Harvard man, of
New

FRANCISCO,

DIVIDEND NOTICES

Fay

The Financial Chronicle)

SAN FRANCISCO, Calif.—Wil¬

J. Barth & Co.

cus¬

to

47

H.

1951.

New York 6,

F.

N. Y.

regular

SANDERS,

quarterly

di¬

vidend of 37j4js)tper share

Treasurer

the

on

February 15, 1951

''

Common

has been

Stock

declared,

pay-

'

able

INTERNATIONAL

DIVIDEND NOTICES

the

at

O'okiep Copper Company

HARVESTER
J. I. Case

i

>»

Company,

Racine,
.A

Wis.,

February

dividend of $1.75

19,

per share

1951

the out¬
standing Preferred Stock of this Company has
been declared payable
April 1, 1951, and a divi¬
dend of
75c per share
upon
the outstanding
$25 par value Common Stock of this
Company
has
been
declared payable
April
1,
1951,
to
holders
of
record
at
the
close
of
business
March 12, 1951.

Kj,

V-

-

(20c)

on

the Com¬

Corpora¬

per

tion

was

Mar.

WM. B. PETERS, Secretary.

•

METER

1951

ter

ord at the close of business

stock¬

of record

Feb. 28,

GERARD J. EGER, Secretary

V

of

Fifty

share

per

at

March

the

15,

close of

1951,

to

business

stockholders

of

February 28,

S.

L,

BLUME,

KENNECOTT

TKEASUHEB

been

Capital

Philadelphia, Pa.

120

Secretary.

'

resident shareholders tax

COPPER

the rate of

at

will be deducted.

America's

New

H. E. DODGE, Secretary.
York, N. Y., February 15, 1951.

February 16, 1951

today been

'lllllllHlimiilHIlii!

March

30,

record

at

Copper

171

Directors

of

TOBACCO COMPANY LIMITED

Anaconda Copper Mining Com¬

NOTICE

has today declared a
dividend of Seventy-five Cents
($.75) per share on its capital
stock of the par value of $50
per share, payable
March 29,

OF

pany

1951, to stockholders of record
at

the

close

March

of

business

on

6, 1951.

C. EARLE MORAN

Broadway,

DIVIDENDS

ORDINARY

STOCK

TO

AND

WARRANTS TO

New York 4, N. Y.

A first

interim

Stock

for

dividend

the

on

the

September 1951 of

year

one

-

Holders

of

dividend

Bearer

Stock

to

obtain

must

days (excluding Saturday) be¬
fore payment is made.
The

usual

half-yearly dividend of
the 5% Preference Stock (less

on

Income

Tax)

for the

ending 30th
September next will also be payable on
the 31st

ary

20,

1951,

dividend

of

half cents

declared

a

Febru¬

on

quarterly

eighty-seven and

(8IV2O

outstanding

per

one-

share on the

of

shares

the

Com¬

made.

able

April

2,

1951,

to

the

ho'de

s

of such stock of record at the close
of business March 5,

COMMON

1951.

DIVIDEND

The Board of Directors of Ameri¬
can

Cyanamid Company on Febru¬

declared a quarterly
dividend of one dollar ($1.00) per
share
on
the outstanding shares
of the Common Stock of the Com¬
ary

20.

pany,

1951.

payable April 2,

holders

of

1951, to the
record at

such stock of

the close of business March 5, 1951.
R. S.

KYLE. Secretary




At

meeting

a

13,

ruary

cided

to

Interim

53H
PACIFIC

FINANCE CORPORATION

Secretary

DATED

14th

BY

A.
Rusham

D.

House,

Egham,

Treaty

the

States and the United

Kingdom, to

credit

131

under

Section

of the

United
a

tax

United

States Internal Revenue Code can by ap¬
plication to Guaranty Trust Company of
New York obtain certificates giving par¬
ticulars of rates
come

of United Kingdom

In¬
Tax appropriate to all the above

mentioned

dividends.

March
of

cents a

share

on

Preferred Stock, and 3334 cents a share
S1.35 Convertible Preferred Stock,

Series

B.

All

preferred dividends

held

Feb¬

clared

de¬

was

Coupon

No.

dividend

idend

the

the

on

2l/z%

f

\

of

must

be

same

be

Ordinary

in

used

Stock

used

London

to

1,

1951

of

6%

Southern

on

INTERSTATE

div¬

3%

in

(less

A

United

the

United

States

Kingdom,

Section

Internal

131

Revenue

of

to

,

all

the

mentioned

dividends.

BRITISH-AMERICAN
TOBACCO COMPANY, LIMITED
February

13,

1951

business

March

20,

1951.
be

not

closed.

Code

Income Tax appropriate

above

of

the close

at

The transfer books will

PREFERRED

;

*

A dividend of 15

on

share

the Com¬

Stock, payable March 20,

1951, to stockholders of record
at

9,

the close of business March

1951.

The Board

of Directors has

authorized the payment

of the
following quarterly dividends:
50 cents per share on
inal Preferred Stock;
27

cents

per

share

lative Preferred

-

cents per

has been declared
mon

SERIES

NO. 16

on

Orig¬

Cumu¬

Stock, 4.32%

Series.

COMMON DIVIDEND-,

#

United Kingdom

on

holders of record

a

Guaranty Trust
Company of New York obtain certifi¬
cates
giving particulars of rates of

the

4.70% Preferred
Stock ($50 Par Value), pay¬
able April 1, 1951, to stock¬

the

by application to

quarterly dividend of 58.75
per share has been de¬

clared

transferees.

to

DIVIDEND

cents

or

be entitled by
of the Double
between the United

under

DIVIDEND NO. 167

CUMULATIVE

PREFERRED DIVIDEND

All

on

dividends

PREFERRED STOCK

STOCK 4.32%

tax)

Stock.

London

Company

'

DwiBUQ-E, IOWA

XIII(1)

Treaty

and

credit

ORIGINAL

COMPANY

who may

Article

preferred

POWER

be¬

or

April 30, 1951

of

California

Edison

and

for

on

of dividends

Taxation

stock¬

Febru¬

B. C. REYNOLDS

transferees.

Preference

received

of

to

record

13, 1951.

for

to

pay

dividend

issued

per

Common

5% Preference Stock. All

of dividends

transfers

to

March

ary

before April 6, 1951 will be in time for

tax

this

holders

February 26th will be in time for

half-yearly

cents

Stock.

on

must

received

Also decided

on

the

Preference

5%
209

on

transfers

40

the

($10 par value) of
Corporation payable

day
(less

pay

dividend

Coupon No. 95

fore

of

on

Stock

Secretary

issued

on

Treasurer

de¬

regular quarterly

a

dividend
share

first

1951

One

Pound

half-yearly
tax)

are

stockholders

to

A. E. WEIDMAN

it

31,

"share

on

February 15. 1951

Board of Directors

year

Also decided to

can

between

London

regular

cents a

Preferred Stock,
$1.35 Convertible

of record March 22, 1951.

Tax.

come

States

Surrey.

in

on

Stockholders

Stockholders who may be entitled by
virtue of Article XIII(1) of the Double
Taxation

pay

One

virtue

McCORMICK, Secretary.

declared

DIVIDEND NOTICE

Shilling for
of
Ordinary Stock
ending September 30, 1951
on
the issued Ordinary Stock of the
Company, free of United Kingdom In¬
each

for the

February, 1951.

ORDER,

also

1951

DIVIDENDS

On February 1, 1951, the

of Directors

1951

Dividend

payment

Cumulative Preferred
Series A and Series B, pay¬

directors

payable April 10, 1951

payment

Coupon No. 95 must be deposited with
National Provincial Bank Limited,
Savoy Court, Strand, London, W. C. 2.,
for examination five clear business days
(excluding Saturday) before payment is

pany's 3V2 %

Stock.

March, 1951.

the

The Board of Directors of Ameri¬
Cyanamid Company

year

STOCK

$2.60 Convertible

on

of California

Ordi¬

ending 30th
shilling for each
£1 of Ordinary Stock, free of United
Kingdom Income Tax will be payable on
nary

VI2%

can

The

on

business

DIVIDEND

Quarterly Payment

quarterly dividends of 65

BRITISH-AMERICAN TOBACCO

business

DIVIDEND

of

ROBERT C. SULLIVAN,

BEARER.

don, E. C. 3., for examination five clear

PREFERRED

close

STOCK

Consecutive

The Board of Directors of Seaboard
Finance Co. declared a regular
quarterly
dividend of 45 cents a share on Common
Stock payable April 10, 1951 to stock¬

on

PREFERENCE

deposit Coupon No.
209 with the Guaranty Trust
Company
of New York, 32, Lombard Street, Lon¬

COMPANY'

payable

COMPANY, LIMITED

this

AMERICAN

by Kennecott

1951, to stockholders of
the

64th

PREFERRED

HOLDERS

31st March, 1951.

Secretary and Treasurer
25

OF

declared

Corporation,

COMMON

COMPANY

holders of record March 22,

share has

a

February 26, 1951.

BRITISH-AMERICAN

February 15, 1951

of

Twenty-five Cents ($1.25)

Miciqar

AnacondA
Board

5ERB0RRD
FINANCE

7%%

A cash distribution of One Dollar and

The

Secretary & Treasurer

By Order of the Board of Directors,

Broadway, New York 5, N. Y.

PHILLIES

■

DIVIDEND NO.

WALTER H. STEFFLER

the terms of the Deposit Agreement
dated June 24, 1946. The dividend will amount

CORPORATION

Feb. 16, 1951

pay¬

will

under

record

1951.

books

closed.

February 9, 1951.

$1.11 per share, subject, however, to any
change which may occur in the official rate of
exchange for South Africa funds prior to
"'March 2, 1951.'Union of South Africa non¬

i

Cents

has

the '

r on

Stock of the Company,
able

February 23,

to

dividend

($.50)

declared

record

The Directors authorized the distribution of
the said dividend on March 13, 1951 to the
holders of record at the close of business on
March 6, 1951 of American Shares issued

15, 1951.

New York, February 21, 1951,
A

record at the close of business
1951.

1951. Checks will be mailed.

60 EAST 42ND STREET

—

Shares of the Company payable March
2, 1951 to the holders of Ordinary Shares of

March

on

not be

nary

144 of

fifty cents (SOf)
per share on the common stock payable
April 16, 1951, to stockholders of rec¬

payable

to

Company have declared quarterly

dividend No.

COMPANY

Incorporated
;

declared

15,

holders

AMERICAN

share

Stock of this

mon

transfer

17

The Board of Directors today declared a divi¬
dend of eight shillings per share on the Ordi¬

The Directors of International Harves¬

upon

of

close of business

March 9, 1951.

The

Dividend No.

A dividend of twenty cents

20, 1951 to

Limited

COMPANY

(Incorporated)

.

March

stockholders

The

transfer

books

above «dividends

Oscar Solberg.

Treasurer

^re1*^

to

stockholders of record March
5, 1951. Checks will be mailed

from the Company's office in
Los Angeles, March 31, 1951.
p. c.

will not be closed.

February 16, 1951

The

payable March 31, 1951,

hale,

February 16, 1951

Treasurer

The Commercial and Financial Chronicle

4 48

Thursday, February 22, 1951

...

(85G)
Key to this gimmick

is that a
institutions of
higher learning are standing at the
pay window, ready for "research

BUSINESS BUZZ

couple

Washington...
A

Behind-the-Scene Interpretations
from the Nation's

y*

part of the 1949

Under another

act,

JL

jljL m i/fA/

Capital

dozen

contracts."

m/ gyw |

gJ

of

will

government

the

pay

of what a city
loses in clearing a slum area and
two-thirds

gratis

mA/

re-selling the land, and will lend
entire

the

Grants

cost.

"frozen" except where slum

D. C.

WASHINGTON,

—

Speed

production, or make a seri-

arms

effort to control inflation?

ous

This, according to well-placed
lnformants, is the question which
few

a

weeks

faced the most

ago

rested

important officials on whom

the power of decision.
.
The decision was for arms pro-

Therein, it is explained,

duetion.

what has
happened in this capital in the last
the

is

to much of

key

several weeks.
With

there

clamor for inflation

a

was

The

control.

living

of

cost

was

There was a de-

sharply.

rising

Congress,

of

return

the

mand that it be halted.

cost of living,

To halt the rising

however, meant using genuine re-

against the upward movewages, as well as against
price increases generated by rising
wages and other catises.
At the present time the Administration's key controllers are fornaer
businessmen.
They bloodied
gtraint

'

irient of

trying to
buck the impregnable line of organized labor backed by govern-

their

for

heads

years

line

t War n eras>

diture, just in case anybody
has any

(1) When

Controllers took
at

practical look

a

would genuinely like, if it could,

inflation. That is be-

the inflationary steam be-

greater cause

decided that there was no

hind rearmament will push the
whole cost of living up too fast
and jeopardize several things,
himself
make any
move
which Then, too, the spending force of
would diminish any percent of la- rearmament would guarantee that
bor's decisive bargaining power at certain
deflationary actions, if
this time of acute labor shortage,
taken, would not threaten to bring

certainty upon which they could
count, than the refusal of President Truman to back any move or

^

So

the
was

production of arms being
primary goal — the decision
to give in to labor.
—

"

This

not

does

Johnston

that

men

and

mean

E.

Eric
labor

Wilson

Charles

like

give

to

mean

everything it wants the first hour
it asks for it. Officials would like
the government as a

control"

act

to

executive in

ness

part of "wage
a good busicollective bar-

like
a

gaining negotiation. They would
like the government to stall along
as
long as possible. They would
prefer that the government give
less than labor asks for. These are
desirable

but

objectives,

may

difficult of achievement unGoldberg-like de-

prove

der such a Rube
vice

B°ar(h

Officials

tried

that

figured

hold

to

down

if

there

produc-

If this traveffective wage

tion-delaying strikes.
could

so with taxes as well as

produce

stabilization, it might be worth a

Administration does not see
bow ft can promote expansion of
the

production, civilian goods,
and industrial capacity to produce
arms

both—all

three

sion—under
total

cials

figured.

In

the

end

would get the White House

labor
bless-

ing, and win.
the

In

me

are

lAfirlincr

leading

taking

view

as

losophy

a

7

Eoosevelt

rnnlvnl

control

oIca

officials

also

"realistic" view. They
nonsense the phi¬
some
of ^the former

"economists"

that

in-

fdustry can absorb labor costs.
There

'duction.

Mvheel
and

again, the problem is proIf price control were to

around

argue

of

(2) Even though the subject of
"slum clearance"

ing

a

most every one in

None

and

whether

the

of

ar0und the White House,
win whisper

it lor

birdies
however,

this in your ear.

I

feel

I

can

"

(This column is intended to re¬
flect the "behind the scene" inter¬

cut

long-line rates, thereby mak¬

ing the earnings case of local tele¬




first

The
trolled

test

plan

phone companies that much better
apply for boosts in in¬ run—with various
up
statistical
trastate telephone rates.
- ting
Federation

the

Utilities

Railroad

of

Commissioners, the
of
the
state
rate

probable

military

civilian

steel,

being
agencies get¬

when they

So

con¬

a

for

and aluminum

copper,

and

on

runs

materials

estimates
and

is believed they

business.

regulatory
officials either locally elected, or
The FRUC consists of

in, if appointed, with local
political parties. Hence its influ¬
ence
in
Congress
is enormous,
even
though it is little heard

tied

national

in

about

The

news.

of the communications

Chairman

subcommittee

is

reported

to

be

wholly in favor of the FRUC pro¬

posal.

He

Chairman
is

the

6

Senator

when

is

also

these

influential.

schedule

A. M. I., Inc.

*

We Invite

*

Inquiries

government spending:

Notes

on

Last

July

28"

Truman
making
up to 40 years at 2%% to
provide housing for students and
faculty at colleges and univer¬
sities. This was passed as part of
the 1950 Housing Act, when the
Mr.

"froze" appropriations for

loans

combination

of

VA-financed
boom

was

GI

Blair F.

Claybaugh & Co.

Members

Philadelphia-Baltimore

Stock

N.

Y.

Exchange

Security Dealers Association

Tel.: HAnover 2-7864 Tele: NY 1-2177

52 Wall Street, New

York 5, N. Y.

caus¬

ing the colleges to burst with en¬
rollment.

Ernest McFarland,

Democratic

furious

this subcommit¬

views.)

will lose.

*

'

students and the

It happens that
tee

The

the "Chronicle's" own

necessary

for

requirements

primary metals.

coincide with

and may or m,ay not

of

of
July 1 as the day for beginning
regulatory agencies, has formally
CMP still holds, it Is reported.
petitioned FCC to establish a dif-:
ferent accounting base, allocating
Although the steel and auto in¬
dustries are fighting the applica¬
a greater share of telephone plant
investment to intrastate and local tion of CMP to civilian uses, it
association

pretation from the nation's Capital

are

leader.

He

out

this

Now

was

put

Coy

order, wrote a blistering letter to

a

off

new

of

draft and the

GI

educational

benefits, enrollment is
cline.

FCC.

with

leveling

on

Nevertheless, the

the de¬

For

Large Appreciation Potential
WE

President

SUGGEST

"

has "released"

$

Us

*

the

materials

for

Notes

on

front:

of

college housing, "strictly

fense," of

de¬

course.

a

Authority
clearer idea than ever"
Production

military

for

requirements

materials.

Defense

of

Congress in 1949 passed as part
the
Public
Housing Act
a

brand

new

set-up giving Housing
Agency power

and Home Finance
to "research"

Production

Authority,

housing all over the

remarkable "report,"
Richard U. Ratcliff, housing re¬
given
permission
to
question search
director, tells in the most
closely military requirements, on
resounding 5,000 words, how hous¬
the theory that "the military al¬
ing research has been mobilized
ways wants all it can get." It is
for defense, and yet this has been
"overlord" to NPA, now has been

said

that

In

a

Harrison

Wm.

Gen.

place.

"why"

is

on

accomplished

"without

RIVERSIDE CEMENT CO.
CLASS B

*

National

scarce

control

§40 million to pay

a

shift in direction."

major

A

leading

in

(common) STOCK
producer of

cement

fast-growing Southern

California.

Analysis of this Company and
a

review of the

try

Cement Indus¬

available on request.

Selling about

$12.25

LERNER & CO.
Investment

Securities

10 Post Office Square,

Boston 9, Mass.

Tel. HUbbard 2-1990

<?

a

telephone

'tr4gUd^e
proceeding

Teletype—NY 1-971

HAnover 2-0050

rates, in a

Firm Trading Markets

cthPvrrTn?

beginning April 1, 3S tfl.6 FCC 311
Chairman

Wayne

Coy

an-

nounced this proceeding without
&oinS
through the
customary
courtesy of notifying in advance
the appropriate legislative official;
in this case the chairman of the

State officials have bitterly re-

sented the disposition of FCC to

Allied Electric Products*
Baker

Raulang

Gisholt Machine Co.

nounced it would do.

the Senate Interstate Commerce
Committee.

some

re¬

without successful

say

contradiction

FOREIGN SECURITIES
"

^

v

t

All Issues

W. L. Maxson
*Prospectu$

oh

request

*

r.ARL MARKS & r.O- I"C.
FOREIGN SECURITIES

communications subcommittee of

they might be able to force

vested

become

soon

cur¬

worries,

and

news

pretty good bet that the
Federal Communications CommisIt's

around

earnings would make possible the
absorption of higher wage costs,

year's

cipients who don't forget about it.

asking
these requirements.

corporation

mess

once

disappears

Congress

the front pages in the

there

definitely

^

A

research

rent

"now has

g0," for the Congress will do well
if it enacts three-fourths of one

package.

by

college hous¬

or

housing

or

adopted

expan-

the know around here took

r

arrant

of

forms

tions to create credit
As t0 taxes

have been changed, or

or

circumstances arise.

new

scheme of any sort

imp0ses

^,Ahf ,Aea^ AAA0"

would be lost, and to no point.
With respect to price increases,
A
the

a

shut-down on
capacity 0f lending institu-

which

But it wouldn't for sure, offi-

try.

"credits

reported heretofore,

As

grar,ted that the decision to have
a
"two package" tax bill was a
they tacit step to abandon "pay as you

wages,

would be long, costly, and

ail

perhaps not Mr. Truman himself—
has come to recognize that inflation cannot be controlled,

Wage Stabilization

the

_as

about a general era of deflation,
However, as of this moment
most of the Administration — if

control."

have dis¬

for the program

called

"—And

however, the

They to control

situation.

political

the

political de¬

and on, even if

it goes on

appeared

the Truman Ad-

this military build-up
Administration

During

is au¬

a new program

all the conditions which allegedly

mjnistration made loud passes at

era,

this is.

show that:

thorized out of some

and

During the postwar era, howof what it
ever, the Administration was
strike. That will interrupt produc- little concerned with controlling
tion. The only way in which labor inflation, but was
instead concould be made to "sacrifice" for cerned with deflecting blame from
the sake of inflation, would be to jtself f°r the accompaniment of
pass legislation placing legal curbs inflation—-a higher cost of
upon labor's coercive
power, or This was the consequence of the
to
take action under the Taft- inflation it never seriously dared
Hartley Act, directed to the same control, for fear of bringing deend.
This judgment was under- flation and political defeat,
labor's howl on the 10%

war

These projects

bate,

ever

idea of a balanced budget

after whatever

get a good share
asks for, labor will

formula.

these

all

then

from

present

If
be

projects will be ready for expen¬

If labor doesn't

scored by

cities to

cannot

need

them,

for

found

*

the

"defense"

on

of projects.

hundreds

up

some

learned controlling inflation.

Pr°CeSS

belter

*

*

both

putting the steam

are

This does not suggest that the
"realistic view" will result in all
smooth sailing for producers. The
necessity for seeming to act like
price controllers will undoubtedly
result in a lot of bickering, uncertainty, inconsistent administrative orders, and some substantial
snafus. It is only the underlying
motivation which is clear,
During

is for "defense." But officials

ance

of this viewpoint down the throats
of business. In the process, however,
they wouldn't be doing
much about encouraging production.
So the residual function of the
so-called price and wage controls
has been to give the appearance
of control to quiet the political
clamor for "doing something"
which rose to a peak during the
first few weeks of this year. So
the biggest function of "price and
wage control" is to make a lot of
noises that sound like price and
wage control,

are

clear¬

SPECIALISTS

50 Broad Street

Hill, Thompson & Co., Inc.!
Trading

New York 4, N. Y.

Department

70 WALL STREET, N.
Tel.

WHitehall

4-4540

t

Y. 5