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BUS. ADM.
ESTABLISHED 1S39
LIBRARY
FEB 2 3 1350
Tk e
an a.
Financial
Chronicle
Reg. U. S. Pat. Office
Volume
171
Number 4884
New
York, N. Y., Thursday, February 23, 1950
Price 30
Cents
Copy
a
EDITORIAL
How 'Good' Will 1950 Be?
As We See It
"Do-Nothingism''
vs.
By
By LUDWIG
Jefferson-Jackson
regale themselves at $100 per plate. If their
palates suffered somewhat from a
meagre fare
and,
of
how
course,
vacuous
are
one
of the
"good"
pass as policies or platforms
opposing party. It was all according to
naturally, and the diners v/cnt home or
back to their hotel suites
doubtless feeling
their
evening had been well spent. As to
great rank and file of the
an
aspect of the matter
less said the better.
But
and
that,
than
even
the
that
it
to
that
slightly modified -form
Fair
Deal.
of
the
New Deal
the
or
place ourselves in the
position of appearing to defend the
Republican
party as a whole or its lines of
strategy during
the past decade or two.
It, as our readers are
well aware,
has often seemed
to
us
to be
Continued
EXEMPT
FROM
FEDERAL
ALL
INCOME
PRESENT
this
40
page
for
not
are
that
to
unions to
I
On Whom Does the Incidence Fall?
Whenever
difficult
(1)
■■
The
World
ceiving
have
anxiety
in-
II
,■
,
a
sequel
to
promises
toN keepstate of continuous
as
generate concern as to
whether the course to be taken
in the
nation's economic
development will be toward
the new objective
of» economic expansion as
expressed
in the Presidential
Messages or toward welfare Social¬
ism.
(3) Many industries
are
probably
going to be conContinued on page 42
*An address
turers
by
BOSTON SECURITY
TRADERS'
Dinner of the Boston Securities
TAXES
Mr.
Shields
Association, New
appear
on
before the Sulphite
York City, Feb.
20, 1950.
PICTURES—Candid shots
Paper Manufac¬
law
tract.
,
to the fate of the world.
(2) In
the
pre-election
months
political considerations are likely to
Shields
a
for several
not-so-cold
War
everyone
Murray
one,
•,
an
of the
year
a
a
employers with
hand, there is much to sup¬
port the view that whether the level
of business is
"good" or not the
be
law
or labor union
pressure burdens the
additional expenditure for the benefit
employees, people talk of "social gains." The idea
implied is that such benefits confer on the
employees a
boon beyond the salaries or
wages
paid to them and that they are re¬
most
assume
other
reasons: i
Pyrrhic victories.
the
that the year 1950 will be
"good" in
the sense that underlying economic
conditions will be sound.
On the
will
/
a
or
which
grant
missed in
such
the
they would
absence of such
clause
in the con¬
It is assumed that the workers
a
are
getting something for pothing.
view is
entirely fallacious.
the employer takes into
ac¬
count in considering the
employment
This
What
of additional hands
or in
discharging
a
number of those
already in his
service, is always the value of the
services rendered or to be
rendered
them.
He asks himself: How
much does the
employment of the
by
man concerned
add to the
output? Is
it reasonable to
expect that the ex-
penditure caused
by his employment
will at least be
recovered by the sale
product produced
by his
at
the
Annual
Compensation
January 1, 1955-59
plus
(When,
1.05%-1.50%
accrued
as
Funds,
550 Branches
White,Weld&Co.
40 Wall
on
the
an-
page
across
A Mutual Fund
Canada
COMMON STOCK FUND
Chicago
Bonds
Monthly Commercial Letter
upon request
THE
UTILITIES FUND
INCOME
Exchange
Street, New York 5
Municipal
inc.
BOND FUND
Boston
additional
If
Winter
PREFERRED STOCK FUND
interest
and, if issued)
Members New York Stock
Mises
Traders Association at the
Copley-Plaza Hotel in Boston,
pages 25, 26, 27 and 28.
i
Franklin Custodian
I3/4% Bonds
Due
von
Stale and
Washington
Prices to yield
the
employment?
STATE OF
War Veterans'
Ludwig
of
Continued
taken
em¬
Notes great psychological dangers in all
pen¬
plans in obscuring fundamental economic needs, as
for increased
capital investment; and thus restricting
fairly close
mean
prepared
pension movement,
sion
emphasized, however,
does
current
tary unit.
1949.
of
divided,
on
income
and
whole will be
a
observers
people—well, that is
about which
possibly the
We shall not
that
that
either has
but '"scare" words and
as
analysis of the
gains,"
rises, hits the wage-earner, and furthers
unemployment. States such plans for security are selfdefeating if causing long-term deterioration of the mone¬
and
expenses
It should be
the
nothing to offer
phrases, or else only some
In over-all
inent economist maintains incidence of all "social
similar to wage
if the last half turns out to be less
year
it
reason
of
first, production
does seem
appropriate at this time tc
give some quiet thought to this idea so
ardently
again expounded that the Democratic
party and
only the Democratic party has any
really con¬
structive plans,
programs or policies, and that
the Republican
party has of late decades been
repeatedly and emphatically rejected for the
chief
Economists;
In almost all of the
year-end forecasts it appears to
be taken for granted that the
year 1950 will be a "good"
those
strange things which
plan,
curtailment
on
MISES
Author "Human Action," Etc.
taxes,
modification of labor laws, and
abrogation of present
monetary and fiscal policies.
figure, their
—
depends
von
Professor of Economics, New York
University;
Leader of the so-called Austrian School of
grasp;
but
morale must have been given
a lift
upon hearing (but not for the first time)
how constructive their
party's plans and programs
are
New York
states
despite inevitable un¬
certainties, stage is slowly being set for period of major
expansion, because of (1) improved psychological posi¬
tion; (2) population rise; (3) technological
progress;
and (4) trend from radicalism. Asserts
an era of un¬
precedented industrial expansion is within our
Day dinner has
history. This time something more
5,300 champions of the poor gathered to
at that
of the Manhattan Co.,
Prominent bank economist
passed into
than
Economic Aspects oi
The Pension Problem
SHIELDS*
Vice-President and Economist,
Bank
"Forward-Looking
Action''
Another
MURRAY
(BALANCED) FUND
Prospectus
FRANKLIN
64 Wall
on
THE NATIONAL CITY BANK
request
OF NEW YORK
OF COMMERCE
DISTRIBUTORS, Inc.
Street, New York
5
Bond
Dept. Teletype: NY
Bond
CANADIAN BANK
Head Office: Toronto
1-708
New York
Seattle
Department
THE CHASE
NATIONAL BANK
OF
THE
CITY
OF
NEW YORK
Agency: 20 Exchange PI,
Portland, Ore. San Francisco Los Angeles
CJToe
Bond Fund
OF
Canadian
Stocks and
Underwriters and
Distributors of Municipal
BOSTON
New England
CANADIAN
BONDS & STOCKS
Public Service Co.
An
and
interesting workout situation
bonds
Corporate Securities
Prospectus from authorised dealers
"VANCIS, SANDERS
Ill
&
CO.
OTIS & CO.
Devonshire Street
Established
Los
Angeles
New York
Cincinnati
ic«ig
Limb
Columbus
Co.
MEMBERS NEW YORK STOCK EXCH.
115
Toledo
&
ESTABLISHED 1891
CLEVELAND
Chicago
Goodbody
1899
(Incorporated)
BOSTON
New York
Booklet avai'able for
Institutions and Dealers
or
Buffalo
BROADWAY
NEW YORK
Dominion Securities
Grporatiqti
CHICAGO
Members New York Stock
Exchange
and
40
105 W. ADAMS ST.
IRAHAUPT&CO.
Exchange Place, New York 5, N. Y.
Teletype NY 1-702-3
other
111
WOrth 4-6000
WHitehaU 4-8161
Principal Exchanges
Broadway, N. Y. 6
Teletype NY 1-2708
Boston Telephone:
Enterprise 1820
22
COMMERCIAL
THE
(794)
2
The
IN
MARKETS
TRADING
Long Island Lighting, New Com.W. I.
in the investment
Long Island Lighting, 6% & 1% Pfd.
Nassau & Suffolk
for favoring
participate and give their reasons
Queens Borough G. & E. 6% Pfd.
dend
THOMAS H. JONES, Jr.
Lighting 1% Pfd.
T. H. Jones & Co.,
Cleveland, Ohio
New York Hanseatic
Established
graph
1920
BArclay 7-5660
of
tures
New York 5
Teletype NY 1-583
is
and
Telephone
American
120 Broadway,
present
at
mendation
Corporation
recom¬
3y8
convertible
1959,
the
Tele¬
deben¬
selling on
the New York
now
increases granted in
together with those
applied for but not yet granted,
total over $250,000,000.
Expansion and improvements of
some $4,500,000,000 since 1946 have
been financed in part by means
of convertible debentures and sale
change
tional
at
I
be¬
117.y4.
conversion
from
Rights & Scrip
Since 1917
sured
qualifi-
d
around
sive
frfe RONNELL & CO.
New
York Curb Exchange
BROADWAY, NEW YORK 5
120
Til.
imately
2-7815
REctor
reached
opportunity Thomas H. Jones, Jr.
for capital gain.
The bonds are selling at approx¬
York Stock Exchange
money
country's basic money rates.
On the
Common
Common
the
At
gest the purchase of an oil stock.
Most statisticians and investment
advisers
levels in years
Dow-Jones
At the
m
BANKERS BOND sa
1st
Life Bldg
KENTUCKY,
LOUISVILLE
2,
Bell Tele. LS 186
238-9
select
from
have
done
relative stability of rev¬
and
limited competition
rising market, I particularly sug¬
with
gest the purchase of Phillips Pe¬
surance
company
communi¬
and natural
we
operation since the end of
the
war,
and operating savings
should start to show up in the
into
near
future.
Some
(2)
phones have been installed, which
indicated for 1950-51.
is
increase of over 50%.
an
have
tended
to
recognize
that
earnings of utilities should be suf¬
ficient to uphold
the credit of op¬
companies
erating
attract
and
equity capital.
(4)
148 State St., Boston 9, Mass.
Teletype BS 259
f
In
Phillips Petroleum is one of the
a
generally
accepted rate of return of 6% on
vide
ownership of this stock,
investment for rate purposes, total
safe
present financial requirements in¬
troleum
cluding interest and the $9 divi¬
natural gas pro¬
important reason for the
an
to
assume
as
it is
Phillips Pe¬
that
play
an
important
part in supplying this new indus-
Brokers &
Call
Inc.
Assn.,
30 Pine St., N. Y. 5
WHitehall 3-9177
West Penn Power
believe, is that
Manufacturing Co.
is
It
growth and acquisition.
tural
unit
a
caters
industry
an
management
could
profit
which
be
! costs
were,
where
and
supplies
still are,
and
Pennsylvania Pr. & Lt. Com.
Philadelphia Transportation Co.
Issues
made
plants close to sources of raw material
Philadelphia Electric Common
Allan Wood Steel Com. & Pfd.
concluded
j' through establishing cotton textile
1
Harshaw Chemical
At an early
to all people.
its
date
in
than in the New
will
Put &
Dealers
company
more
dous reserves of
relation to
Members
good
Phillips Petroleum
company's tremen¬
Filer, Schmidt & Co.
selec¬
has demonstrated
management through more
than one generation. It has prog¬
ressed over the years through na¬
The
optimism inasmuch as
industry is a rela¬
tively new medium in this coun¬
try for supplying the needs of the
people with a much cheaper fuel
for the purpose of cooking and
heating. Therefore, it is logical to
the
Request
One such stock, I
of West Point
with much
that
Calls
of
principal will remain intact over
a
period of years with an excel¬
lent chance of appreciation.
For this reason in particular,
one could safely view
feel
900.00
Aug. 14
Puts and
on
on
tion, to purchase industrial stocks
with a reasonable belief that the
of crude oil
gasoline amounting to
of
Booklet
with
possible,
I feel that
future
Allied Ch.& Dye 210
as-
any
careful
approximately 1,200,000,000 bar¬
rels, this company has one of the
largest natural gas reserves in the
United States (14.4 trillion cubic
the
be
urchased
liquidity, it is
A. Taggart
Charles
complete and low cost pro¬
ducers in the oil industry.
Aside
the natural gas
(3) The regulatory commissions
call for de¬
-
most
ft.).
11,000,000 new tele¬
-
com¬
stocks
cannot
p
225.00
26 250.00
20 275.00
18 450.C0
24 475.00
Yngs. Sh. &Tb. 76% Mar. 18 $137.50
Amer. T. & T. .149% Aug. 28 275.00
Patk & Tilford 42% May 27 275.00
Tex.Pac.Ld.T% 56
May 20 375.00
Atch. T. & S. F.105% May 27 500.00
the
in
While
mon
buying securities in a
of
(1) A great deal of new and im¬
proved equipment has been put
Actually
profit through expanding sales
Telephone WOrth 4-5000
course
industry
225.00
26
SPECIAL PUTS OFFERED
those which
safety in purchasing sound secur¬
ities
than
following the easier
the
pany
Y.
earn¬
ings for the
from its huge reserves
scriptive analysis
Schenley Ind... 32% May
Yngs. Sh. &Tb. 79% Apr.
South. Railway 33% Aug.
Atch. T. & S. F. 105
Apr.
pre¬
to
mine
20 125.00
28 17 >.00
21 212.50
13 225.00
8% 2/21/51
St. Paul
no con¬
occult, I
fer
result
in lower
.
Because
pro¬
exceptional opportunity for
N.
*
Magnavox
21
May
Pepsi Cola Co 12
Aug.
Ra«!io Corp.
.
14% Aug.
Richfield Oil.. 39% May
Schenlev Ind.. 33
May
fidence in the
prices, which
troleum.
THIS is whose stock affords
a new product com¬
:
would
and
gasoline
think the
basic qualities of American Tele¬
phone and Telegraph Co. are far
stronger than they were a few
Investment
:
Id
oil
ball.
I have
essential
the
structure;
which
cation.
A Growth
7-0425
crude
years ago.
V.
"
"
Tel. CA.
%
I
I
Elec. Bd. & Sh.
Best" is
not an easy subject since there
are
many
I could write about
without
consulting
the
crystal
in
1 $100.00
16% July 27 112.50
19% Apr. 17 112.50
Socony Vacuum
past.
vides;
GREER HYDRAULICS
or
re-
&
Like
Security I
well
from other methods of
W rite
the
to
SPECIAL CALLS OFFERED
Philadelphia, Pa.
Inc.,
Co.,
"The
in
enues;
an
b y
Taggart
A.
Charles
general. Inasmuch as in times of
declining prices there is a greater
nancial
bonds
DIgby 4-2727
UnitedLt.&Ry. 43%June
Fundamentally, the strength of
stock is based on a sound fi¬
savings
Exports—Imports—Futures
one
President,
in¬
ductions
Paul S. Ames
service
J
as
substantial
■
Liquid
(PLUS TAX)
probability of
the
s.
due
averages.
—
purchase of Phillips Pe¬
CHARLES A. TAGGART
individuals
present price—just under
level.
buy
u.
held
vestments
6%
is very attractive, and is higher
than the yield on many other high
grade public utility stocks.
The
$9 dividend has been paid without
interruption since 1922, and in our
opinion will be maintained at this
Floor, Kentucky Home
Long Distance
are
Refined
—
the
curities which
in relation to the
sugar
Raw
might see a lower
of the stock in
the immediate future, but bought
with the idea of an investment in
a company whose future prospects
are extremely bright, I feel that a
stockholder will be well rewarded.
sale of oil se¬
$150 per share—the return of
Incorporated
are
advising
i
4
level in the price
it would
present time,
regard to its potentialities and
in consideration to the fact that
it is now at one of the lowest
Preferred
5%
In the
rather out of place to sug¬
in
Kentucky Stone Co.
this company will be in a
position to satisfy the demands
made- upon
it and its earnings
likewise should benefit materially.
troleum,
seem
STREET
WALL
NEW YORK 5, N. Y.
years,
New York City
r
both
underpriced
is
levels
to
years.
appreciation side of the
convertible
99
With the ever increasing
consumption
of this new
and
cheaper
fuel
over
the coming
try.
Investment Adviser
ledger I believe that A. T. & T.
common into which the bonds are
American Turf Association
'
in recent
branch offices
LAMBORN & CO., Inc.
PAUL S. AMES
10
points above their
rate basis and that, I be¬
lieve, is the extent of the down¬
side risk, assuming that no fun¬
damental
change occurs in this
American Air Filter Co.
prospects of selling at
pricescomparable
position
with excellent
Members
New
I consider
sound 6% investment
level,
$10
a
with good
defen¬
sound
the
the stock
of
cations
Mobile, Ala.
Los Angeles, Calif.
merman,
high
Birmingham, Ala.
Direct wires to our
(guaranteed by
York Central)—Hazel Zim¬
Albany
&
With the $9 dividend as¬
and
earnings
probably
years.
discov-
o m
e r e
sel-
and
after
d
NY 1-1557
New Orleans, La. -
City.
Weiss, Bache & Co., N. Y.
Exchange
New York 4, N. Y.
HAnover 2-0700
Aircraft Company Stocks—George
de¬
of
Stock
York
New
25 Broad St.,
reached in each of the last seven
sought
most
the
below
Members
phia, Pa.
price of the
prices
security offers
two
of
the
Steiner,Rouse&Co.
Philadel¬
Inc.,
Co.,
&
Taggart
New
factor in keeping the
stock
.
Manufacturing Co.—
Charles A. Taggart, Charles A.
has undoubtedly been a
bentures
Bought—Sold—Quoted
Co., Cleve¬
Point
West
Boston
lieve that this
Specialists in
Louisiana Securities
■»
and
T. H. Jones &
land, Ohio, y.'
stock and that re¬
common
sulting
'
1959—Thomas H. Jones,
tures of
The addi¬
employees.
City.
Telephone
Jr.,
year,
to
York
Tele¬
graph 3%% Convertible Deben¬
Rate
the last
of stock
Ex¬
Stock
only 4.6% of estimated
are
New
American
investment.
(5)
security
favorite
My
Phillips Petroleum—Paul S. Ames,
particular security.
a
Alabama &
Selections
Their
a
and
Participants
Foruin
different group of experts
and advisory field from all sections of the country
which, each week,
Week's
This
Security I Like Best
A continuous forum in
Thursday, February 23, 1950
CHRONICLE
FINANCIAL
&
labor
lower
England States.
•
Henry B. Warner &. Co., Inc.
Members
123
National
Phila. Telephone
PEnnypacker 5-2857
New York
Continued
on page
Securities Dealers
Assn.
South Broad St.,
Phila. 9, Pa.
Bell System Teletype
PH 771
City Tel.: BOwling Green
9-4818
40
'iiimiimmiiifimmiiiimiiiiMiiim
Specialists In
Trading Markets
FOREIGN
American Furniture Co.
VIRGINIA—WEST VIRGINIA
Bassett Furniture Ind.
NORTH and SOUTH
Dan River Mills
CAROLINA
Externals— Internals
—★—
MUNICIPAL BONDS
★
Scott, Horner &
Mason, Inc.
SECURITIES
—
—
zippin & company
208 South La
Salle St., Chicago 4
Tele. RAndolph 6-4696
Tel. CG 451
Since 1932
Lynchburg, Va.
Tele. LY 83
LD 33
illlllllllllllllllllllllllllllllllllllllllllllt
Specialists in
Over-the-Counter
Stix & Co,
Quotation Services
for 37 Years
INVESTMENT
509
•F. W.-
SECURITIES
Olive
street
St.LouisI.Mo,
National Quotation Bureau
Incorporated
CRAIGIE&CO.
RICHMOND.
VIRGINIA
Bell System Teletype:
members
*
RH 83 & 84
Telephone 3-9137
Established
midwest
stock
46 Front Street
1913
New
exchange
CHICAGO
SAN
York4,N.Y.
FRAN CISCO
Volume 171
Number 4884
THE
COMMERCIAL'
&
FINANCIAL
CHRONICLE
(795)
INDEX
Oil
Articles and News
Economic Aspects of the Pension
Problem
—Ludwig
Mises
von
Oil Industry in
Be?—Murray Shields
Unique in
or
Selling
price structure will ensue
backing-up of foreign oil into American markets on
top
of normally
growing domestic; production. Concludes stockmarketwise leading
companies are relatively
Securities
—Philip J. Jacoby
4
of
6
____.
and
(Concluding Instal-
Suggestions
s
status.
Benefit
Not Use
16
Diplomacy?—H. Murray-Jacoby
16
____
17
:r,
Financial and Economic
Aspects of Social Security
—Emerson P. Schmidt..
4
2
_i___
NAM and Commerce and
Industry Association Register Oppo¬
sition to Frear Bill
The Welfare
State
"In
Court"
tig, F. R. Coudert, Jr.
and Adolph
The Worse, the Better
Reason
Business
and
Finance
(Participants:
old
the
itself.
the
been
En-
in
Turn
(More statements by
leading executives
pects in 1950)
of
the
Year
''
■■•
M
■
See
It
Insurance
?
v;.''
the
*.
/
'V4
.
Investment Field
15
i-
Dealer-Broker Investment
Recommendations-
Einzig—"British Concern Over German
and
v
8
From Washington Ahead of
the News—Carlisle
Bargeron
44
A
shift
Our Reporter
on
is
49
1
*
!!:See article
on
page
COMMERCIAL
Reg.
U.
S.
Patent
Park
Reentered
Publishers
Place, New York 8, N. Y.
REctor
2-9570
to
52
WILLIAM D. RIGGS, Business
Manager
Every Thursday (general news and ad¬
vertising issue) and every Monday (com¬
plete statistical issue
market quotation
—
Offices:
3,
111.
135
ary
25,
York,
8,
London,
E.
C.,
Eng-
bank
South
(Telephone:
La
clearings,
Salle
State
the
logically
of
various
impossible,
never
current
ground
over7
to
the
systems
voluntary
been conspic¬
The major oil
industry has been
off
balance
by William
Company
as
B.
be
felt
for
We
by
St.,
0613);
of
Other
and
$38.00
per
of
processes
pro-
has
per
the Eastern Coast and the
price
distillate dropped about 26%.
The retail price for
gasoline has
made
in
and
been, in general, well maintained
but
in
price
recent
have
wars
several
months
Record
—
Monthly,
advertisements must
New
York
funds.
brief review of
a
the Cement
-
broken
out
Earned
in
major
consuming areas.
heavy consumptive season for
gasoline ends in early autumn.
Since
that
time, inventories of
1948
$9.50
•disregarding
and accelerated
gasoline have been mounting each
now
to
stand
at the
spring.
of
This
well
augur
until
grow
condition
for, the
Investment Securities
10 Post Office
Tel.
not
Square, Biston 9, Mass.
HUbbard 2-1990
maintenance
prices in months to
and, since gasoline has al¬
been the "money" product
ways
in the
industry,
any reduction in
will be foreshadowed by
drop in the price of crude.
its price
•
depreciation of $1.74
gasoline
come
a
to Class A,
arrears
LERNER & CO.
early
does
Selling about
$5.22*
The
week and
Industry.
gasoline
If the
foregoing condition
structive
of
the
attitude
toward
matter
is,
a
complete record of
ing consult
our
"Securities
were
purely the product of domestic
factors, a somewhat more con¬
dustry might be taken.
For
potential corporate financ¬
the
Registration"
in
section.
in¬
The
fact
however,
that
considerations
involving national
international policy have in¬
truded and give every indication
o£ continuing in force.
The in¬
and
creased
and manifold
throughout the world
of
it
as
a
uses
for
oil
and the lack
national resource,
par¬
uing
drain
).
upon
the
Continued
on
REACHES READERS
reach the whole
Western
page
23
to influence
want
you
To
community,
more
more
financial
advertisers
financial
advertising
in The New York Times
than in
any
and Industrial
PREFERRED STOCKS
other newspaper in the world
...
because The Times is read in
And air
states.
*
Times
Spencer Trask & Co.
Members
(Foreign postage extra.)
Note—On account of the
fluctuations in
the rate of
exchange, remittances for for¬
eign subscriptions and
be
CALIFORNIA
of
in
year.
New
York
Stock
Exchange
25 Broad Street, New York
HAnover
4
Members
-
Chicago
-
New
50 Congress
2-4300
York
Glens Falls
Curb
on
cation in
cities
delivery
sale the
more
2-8200
1-5
Schenectady
-
48
The
day of publi¬
than
130
key
throughout the U.S.
Stye Keto fjtrrk SitneA
"All the News
That's Fit
-
puts
Exchange
Street, Boston 8
Hubbard
Teletype—NY
Albany
'<
CLASS B (common) STOCK
ticularly in Europe, have served
to make
oil
strategically one of
markets
the most
of
Publications
Quotation
-
on
High Grade Public Utility
S.
year.
$25.00 per year.
•
year
During 1949, the price of
heavy fuel oil dropped about 40%
interested in offerings of
are
•
ANALYSIS OF
11,000 communities in all the
year;
Canada,
Countries, $42.00
Bank
AN
interested
Control
legal
Subscription Rates
Subscriptions in United
States, U.
Possessions, Territories and Members
Pan-American Union, $35.00 per
Dominion
Teletype-BS 128
rapid
another
Dana
second-class matter Febru¬
at the post office at New
under
the
Act
of
March
Y.,
1923
STREET, BOSTON 18
thrown
by the
place
1950
1942,
N.
30 FEDERAL
certain
Department, have become increas¬
maintaining ingly concerned with the contin¬
and
income.
duction
Smith.
1879.
Other
Thursday, February 23, 1950
Other
&
9576
WILLIAM DANA SEIBERT,
President
records, corporation news,
state and city news, etc.).
Gardens,
c/o Edwards
Copyright
Office
HERBERT D. SEIBERT, Editor &
Publisher
Chicago
Drapers'
Connolly & Co.
INCORPORATED
HUbbard 2-3790
and
CHRONICLE
WILLIAM B. DANA
COMPANY,
25
1
for
maintaining orderly
important commodities.
conserving oil reserves but
During the most recent quarter
naturally the independent
producers have always been more century, the War and Navy De¬
interested in getting their oil out partments, as well as the State
of
land
FINANCIAL
led
and in
12.
Published Twice Weekly
The
Walter J.
importa¬
discoveries
quite
„
j
its
markets.
of
in
42
4
of
problems
uously successful.
companies have been
5
L
You
demoralization
recurring
proration has
2
Says)
of
over-supply with conse7
practically
Security I Like Best
ahead
years
by state authority. Because
re7
strictions upon the
output of small
marginal
producers
have
been
46
The State of Trade and
Industry.
Washington and
several
prorating production, some en¬
tirely voluntary and some imposed
23
(Walter Whyte
of potential fu¬
The use of petrol¬
has broadened and
for
N
Railroad Securities
Tomorrow's Markets
prospect.)
the industry has been able to
production
21
Registration
demand
continue
development
•
The
in
and
acute
The
18
Public Utility Securities
new
two.
or
by the
and
shortage.
quent
Governments
Bought—Sold—Quoted
high¬
est figures on
record.
There is
long ago to the development of
every prospect that this total will
long-range programs of explora¬
in
5
Prospective Security Offerings..
Common Stock
to
fields
increasing
reduced
will not
markets
requirements .but,
from time to
time, the opening up
of flush new fields
has resulted
51
Securities Salesman's Corner.
world
consumptive
20
•1
of
,
important
The
f
de¬
a
keep
.
Report
Securities Now in
to be
seem
14
News About Banks and Bankers
Reporter's
in
accentuated
process,
16
Our
and
that of any other
commodity. The
steady rise in oil consumption led
way,
_
NSTA Notes
Observations—A. Wilfred May___i___;
supply
development
by
the
major oil companies, as well as to
greater activity on the part of in¬
dependent wild-catters.
In
this
9
__________
cutbacks
new
Natural Gas
relationship throughout the
in
tion
Jap Competition" 21
Indications of Business
Activity
Mutual Funds
altered
eum
products
increased over the past half cen¬
tury at a rate probably eclipsing
16
■'; 1
for
PRENTICE
CORP.
RIVERSIDE CENERT CO.
an
over-supply
10
,
•
REED
by
early
oil products.
in
paradox that the oil in¬
dustry has almost always lived in
a
condition of potential current
10
J
that
pated growth in the use of heat¬
ing oil. The full impact of this
ture
.
at
Now Available—
shifts
33
j
y
well
per
Even
additional
upon
devaluation of the pound
sterling
further and ifrore extensive
Cover
Canadian Securities
Coming Events in
products
and
and
Stocks
i
WHitehall 4-6551
of natural gas into
the Middle West and Eastern
mar¬
kets to the detriment of antici¬
world.
V
Business Man's Bookshelf
STREET, NEW YORK
degree, is
production, particularly in the introduction
It
'
and
WALL
further
is
'
Sears
brought
31
(Editorial)
'
Bank
oil
of
D.
Europe have placed demands
about
Regular Features
As We
consumption
tions,
Thomas
mand
-
Pension Fund Rise Not
Likely to Upset Investment
Markets,
Says Bankers Trust Co
■
simply
oil
business pros¬
on
nine
presence
more
Middle East and in
Venezuela, has
been even larger and has
18
20
the
is
ly the recent terrific expansion in
A. Berle, Jr.)_
After
it's
the
office
Telephone:
brought into production. This fact
than any other has made it
possible for the price of crude oil
to remain at a
high level in the
industry exceeding any pre¬
viously experienced. Concurrent¬
Lawrence Fer-
(Boxed)
Speaks
city
dogs all
m'ofe
United
even
allowables
25%.
compensate
con¬
sumption
Our
date, surpluses were
beginning to
he apparent. Since then there
have
industry
"larged
99
um¬
pro¬
duction
about
the
and
flooded with obsoletes!
Approxi¬
mately a year ago, the Railroad
^Commission in Texas reduced
the
as
considerable
current
situation.
a
the
12
into
of
part
cats
industry and
(that, to
"sharply rising
Security I Like Best
the
frequently been forced
position of • holding an
brella over the entire
States and the
19
successful, particularly
state of Texas, but Texas
has
and
almost
some
our
raining
vulnerable.
more
,
._
Things to Come—Roger W. Babson
The
posi¬
forces,
as
Fiscal
.___
Why
in
of recent
12
Sound
rates
been
has
some
oil
Policy—Charles E. Wilson
a
origin,
Without
RAIN!
In
time!
in the early
from
This
basic:
10 *■
J
Frear Bill and Small
Business—John Dutton___
No
WE CAN MAKE IT
unattractive, with
high dividend
been the prod¬
uct of several
9
.
+.
of
transition
transition
;
,
Taxes and Take-Home
Pay—Harley L. Lutz
High National Income
deteriorating
fully in- (the
8
—Elisha M. Friedman.
faces
on
ternational
ment)—Howard F. Vultee____
and
pressure
tion of dominance and
control by
American capital into a
6
Investment Values
Treasury Tax Proposal's—Analysis
States
industry is
stages of
Irredeemable Currency
—Walter E. Spahr
petroleum industry
their current
The oil
A.—Philip Cortney
Anti-Trust Suits
profit outlook.
3
—
United Nations Experts
Propose Nationally Planned Economies
Subsidized by U. S.
Contentions of Advocates
maintains
from
Transition—Thomas D. Sears
Nothing Exotic
* AND
COMPANY
Cover
Mr.
Sears
LiCHTfnsifin
"
Cover
__
How "Good" Will 1950
Industry in Transition
By THOMAS D. SEARS
Investment Counsel, Santa
Barbara, Calif.
Page
3
Worcester
to
Print"
*
4
Nothing Exotic
In
Unique
Selling Securities
the ultimate
funds, or the profits that he
may realize, by virtue of his in¬
vestments.
'
American Direct Mail Company
Jacoby, asserting first job of security salesman is to
Mr.
fellow
The
in
Vice-President and Sales Manager,
of
terms
children
of
was
stresses importance of proper
along with emotional appeal. Holds suc¬
cessful salesman, regardless of personality, must have thor¬
ough knowledge of product or service and must create
confidence and respect.
Lists as three major problems: (1)
locating prospects; (2) getting in touch with people who wield
influence over individuals; and (3) create proper relationship
like
to
and
travel.
I can, to
as
and
There
going to direct my talk, so
far
so
selling, in general,
see it, as it may
I
as
pertain to your own type of selling.
However, in
And
that
connec¬
tion, I should
with
start
a
an
That's
story.
It may call for a
of application
little different type
principles but, in general,
in the sale of securities you have
of these
what it is that the
recognize
to
and
he
up to the
want, in securities, as a
basis for selling.
We try to analyze our particu¬
lar market, regardless of what it
may be selling, whether it is a
product or a service.
In the sale
of securities, you probably will
encounter
three types of indi¬
bartender and
viduals—there will be the fellow
"If you'll
give1 me • a
drink,
I'll
who is looking for a quick
the
orthodox
way
to start a
talk,
anyhow.
It's about this
fellow
into
came
bar,
goes
who
a
says,
Philip J. Jacoby
show
you
the
most wonderful act you ever saw
life."
in your
i
said, "Go away.
out drinks to everybody
in and has a bright
If I gave
who
.>
bartender
The
comes
idea, I'd go broke."
But a man standing at the bar
said, "Go ahead, give
him a drink.
talking about."
So the bartender poured out a
drink and with that the fellow
Let's see what he's
put his hand into his pocket
out
took
small
piano,
little
a
a
and
very
And out of the other
one.
people
conservative, who is interested
substantially in safety, and will,
for that, take a small return on
course,
Really,
couldn't have heard it played
ter.
you
bet¬
his audience spell¬
.He had
When he finished everyone ap¬
plauded the mouse.
He bowed
again, and the bartender says,
"Say, this is wonderful. This is
I'll give you $5,000
just terrific.
piano."
for that mouse and
"Oh, that's
nothing.
Let me have another
drink and I'll really show you
something."
So
the
bartender
poured out another drink without
fellow
The
hesitation.
a
little
on
the
said,
This time he takes out
and puts it down
The canary bowed,
canary
bar.
the
mouse started playing some beau¬
tiful aria, and the bird sings to
the accompaniment.
turned
to
the
mouse,
and
encounter.
people, to
you
of these
a
job,
for
fore,
security
a
all, I wouldn't part with it.
Sec¬
ondly, I couldn't sell it to you
because I have to be honest.
canary
a
can't sing.
That
The mouse is
ventriloquist."
So I have to be
perfectly honest
with you,
to begin with.
I don't
think there is any real distinction,
there is nothing
that this prospect
calls
This
for
factors in
wants and, nat¬
I
exotic or unique
suspension
bridges
or
rubber
boots, or anything that you can
conceive of, hold equal effect in
the case of selling securities. - •
•Stenographic report of lecture by Mr.
Jacoby, 19th in a series on Investment
Salesmanship sponsored by Investment
Association of New York, New York City,
Feb.
9,
1950.
be,
a
Now, it seems almost axiomatic
that if you can
sume
to
show profit, that
in turn—the pros¬
in turn be able to as¬
may
what that profit may
him.
every¬
and they run the entire
spectrum
of individual
charac¬
teristics, with extreme individual
to
financial world
I have
factual
to
be
who
seen
successful salesmen,
perfectly honest
are
little
a
But
your
prospect is sluggish, and he won't
take that step. You as a salesman
his
taking that step.
Since you al¬
ways want to keep control of a
sales situation, you will lead him
certainly cannot depend
upon
there.
with
happy-go-lucky,
telling type
successful
There
less
are
and
less
apparent.
But there
ceed
seen
with
who do
are some
tactics.
these
dignified,
reserved
I
tally
suc¬
and
have
what
so,
in
it
is
common,
if
which creates confidence
would
be
the
understanding
of
the proposition which you are of¬
men.
And
one
respect. Of course, you can
where a prerequisite of that
see
individ¬
uals, who make successful sales¬
have
all
common among
salesmen.
I found that re¬
gardless of what may be their
physical
appearance,
whatever
may
be the type of impression
that they create, it is fundamen-.
those
of
the
of all,
Second
story¬
I will
of approach.
ideas
thing which is
that he is in the descendency.
say
in
reflect upon
in securities
may
general, and in investments in
particular. That, I know, is some¬
back-
a
whatever
to
preconceived
about
careless
changes,
in
you,
I have seen suc¬
salesmen
slapping,
mean
often
very
with
that that would
indispensable. In that connec¬
tion, I,would also say that you
can
not acquire that knowledge
and relax, and that you would be
obliged constantly to be alerted
thing,
accepts, because they represent an
ambition or a goal.
may
I would assume
be
not only
selling securities but selling
fering,
that they
anything?
what
'
but this would go some¬
beyond
that.
Confidence
and respect are
Now, certainly, they have in com¬
mon
effectiveness, an ability to
something that
Continued
on
are
page
24
FREEDOM
that
or
Only when all Currency is
Redeemable in Cold Coin
Demand
the
average
in
on
can
re¬
the fellow who wants
YOU
You have Freedom
FREEDOM FROM
ROBBERY by
a
Government turned
Is he For
predatory, slyly taking your earnings and savings
Regardless of that, a
factual
presentation
would
be
compelling.
In the one in¬
stance, of course, you would try
to show a basis for anticipating a
quick return on the investment,
factually, and in the second case,
very
show, histori¬
of manage¬
ment, the history of interest pay¬
would
you
cally, the
try
to
soundness
bility of the
considerations
upon
the sta¬
Tell your
tinue
to
long
as
as our
Government prints "Promises
your
road for all free Americans.
munism
never
Standard
Socialism and Com¬
survive when measured by the
which
translate these facts that you
have
in
which
have
an
emotional appeal, you
have
substantially fulfilled that
obligation which I have repre¬
sented as an appeal to a want,
or a desire on the part of a pros¬
presented
gives freedom
Gold
of choice to the
the
be the controlling rea¬
to
POLITICAL POWER which corrupts
FROM
the electorate and from a Government
have said "We
well
and
elect and
are
which might
going to print and print
elect."
may
to
mean is that
doesn't mean any¬
It is always what you can
buy.
What I
I
George T. Kearns, Treasurer
The Gold Standard
I
League
One Lloyd Avenue
I
Latrobe, Pennsylvania
I
•
I
wish to join
The Gold Standard League
support Gold
Redeemable Money at the
I
I
I
and
fixed
legal rate of $35.00
1
I wish to be
SUPPORTER
Money is the Currency of Socialism
STANDARD
I
SUSTAINING
I
REGULAR
I
NATIONAL
ONE
LLOYD
AVENUE,
PENNSYLVANIA
($35)
SUPPORTER
SUPPORTER
;
($100-$500).
($10)....
My support for one year is enclosed.
I
I
I
□
I
I
□
I
□
I
B
8
I
I
HEADQUARTERS
LATROBE,
Check
One
a:
I
Fiat
per ounce.
I
I
individuals
offer
whifch
son
FREEDOM
you
securities
Mr.
I
.7/,, COIJ) STANDARD EE AG E
will find that it
emotional appeals which
Very often
I
I
I
terms
pect.
voices heard.
WE CAN AND MUST GET SOUND MONEY NOW
the end of the
essential.
can
and others must know.
neighbors the dangers of printing
thing of value.
FREEDOM FROM FEAR OF SOCIALISM,
Sound Money
Against the Gold Standard?
Support the Gold Standard League. Get
the Farts. Join with others and make
pay" without responsibility for payment in any¬
individual.
presentations, I think,
However, what I
strongly recommend, what I
strongly urge, would be that we
do not lose sight of the emotional
appeal of your securities. If you
get RESULTS!
press money.
DEFICIT SPENDING which will con¬
company.
Factual
are
is
FROM
FREEDOM
or
Tell him you
by monetary inflation.
to think in terms of his heirs and
successors.
can
Tel! your Congressman you want
indi¬
facts,
gardless of whether he is the fel¬
low who wants to make a rapid
dollar,
Gold Redeemable Money
on
selling securities,
interested
is
Rests
of
presentation:
assume
vidual
combination
a
First of all, in
in
selling securities. The general
rules of selling that pertain
to
successful salesmen
seen
com¬
sell, from technical considerations.
a
cessful
man
someone
"What type of a sales¬
successful salesman?",
and that is something that prac¬
tically escapes definition. I have
is
how they dress.
pect
the salesman
say,
man
translate that into terms which he
the
part, you
often
a
salesman,
would be to determine what it is
reflect
"Well, first of
as
successful
common
understanding, or a, thor¬
ough knowledge of their proposi¬
tion, or their product. They un¬
derstand the fundamentals. They
have a firm grasp of what it is
that they are attempting to sell.
Now, I assume that most of the
men who are present here have a
good, sound knowledge of what
it is that they are attempting to
strong case for
very
to
I see it, there¬
as
may
The fellow said,
may
presentation will, alone, not do
the complete job.
You have to
varying de¬
Find Out What Your
which
that."
it
Whatever
So far
mo¬
myself
plete
differences.
person
Prospect Wants
Well, by now, they were all
aghast. The bartender said, "Let
me
have this, and I'll give you
whole bar.
You can have
everything I own, but I must have
he may get
salesmen have in
into
Now, speaking in terms of per¬
concerned,
few
a
I have found that these
Personality and Salesmanship
will
for
direct
conservative investment.
other
my
the basis of what
immediately.
their prime interest will be
either
in quick appreciation or
and
ing.
on
gree,
ments
was
obligation
the cost of meeting that
guess,
really enthrall¬
The effect
acquire addi¬
tional property, additional equip¬
ment, or a business, in which case
he is thinking of hoping to defray
can
actually,
that
But in each one
I
average
urally, to appeal to those wants,
bound.
presented,
be
may
he
very
that
would
formula, and in some way
may be helpful.
First of all,
that
yourself.
sonality.
of
a
I
area
the
is
The first
sat down
Chopin
concerto.
terms of ambition on his
have made
na¬
advantage
profit
the
that
you
large
a
appreciation.
that
piano,
stool,
that
offer
translating
by
thought
ments
have, in
,.of indi¬
viduals who want both safety and
of
Now,
between,
First Job:
the
take
to
the personality
individual, his aims and
objectives, all of which is open
to you if you conscientiously ad¬
dress yourself to this prospect as
an
individual.
Having done so,
be
somebody
be
may
I
the
of
Now, what is it that they do
have?
his investment.
arranged the
and played a
to
ap¬
preciation. You will find, at the
other extreme, a man who is ultra-
pocket he drew a little mouse.
The
mouse
stood up, bowed,
went
buck,
wants rapid
who
fellow
the
would
sell.
that this is predicated on
say
understanding of
leisure
conservative
a
there
whereby
ciples that prevail, and in selling
securities, actually, it would be
different than selling any con¬
product.
that
That, also, would
wants
who
no
sumer
in
I
foundation which represents an
a
is
certain general prin¬
are
he
terms of
be
may
think
na¬
ture.
self-satisfied.
I'm
It
something of
Warns against becoming smug and
customers.
That
college.
conservative
more
a
ture.
your
fund
would fit in with the fellow who
deter¬
factual presentation
with
want to think
to send his
may
a
through
mine what his prospect wants,
far
objective may be for
the
>
JACOBY*
ThursdayFebruary 23, 1950
CHRONICLE
ing what the customer wants, in
terms of his securities, but what
oz
By PHILIP J.
FINANCIAL
&
COMMERCIAL
THE
(796)
B
Name
(Please print)
I
PHILIP
LeBOUTILLIER
N.Y. STATE
B
CHAIRMAN
■
Street Address
money, per se,
thing.
do with
that money.
Therefore this, of course, would
be
predicated not only on know¬
NATIONAL CHAIRMAN
1
8
City and State
'L.—-
1
I
J
mm
Volume
171
Number 4884
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
(797)
Cinli.
Electric
Output
Observations...
Carloadings
Retail Trade
State of Trade
By A. WILFRED MAY
Index
Cincinnati
Business Failures
The Real Issue in the British Election
J
A
moderate decline again marked total industrial production
last week.
This was due in some measure to the continuation of
the soft coal strike which has now entered its seventh week. Out¬
-
put
Midst all the variegated
how
the week, but was counterbalanced
by
layoffs which attained a seasonal high point.
because of the
of
example, in the steel industry, continued high-level steelmaking belies the precarious situation the industry faces because
coal
Additional
blast
furnaces
banked and more are scheduled to go down
curtailment in ingot production
by March 1 is
coal supply improves
have
aged
producers
to
maintain
ingot operations in the face of the
To illustrate
ings, in the
below
the
further, the soft coal strike's effects
week ended Feb.
week
decrease of 43,683
previous, resulted from a further
that week in coal
It
11,
a
on
carload¬
reduction
did
A.
"As
in
shipments.
the
on
same
day found the union in civil and criminal
con¬
tempt of court for disregarding his back-to-work order issued a
Saturday. The union is required to answer the govern¬
earnestly
personalities
a!
candidates
"Blood
the
of
Island
our
hope
cocktail party and
and out-of-
a
town
guests
will
May
on
be
April.
Malcolm Irving With
Albert de Jong Co.
in
the
Labor
infinitely
possess
Albert de Jong & Co., 37 Wall
Street, New York City, dealers in
foreign securities, announce that
Malcolm D. W. Irving has become
associated with the firm's trading
Mr. Irving was for¬
department.
merly with Goodbody & Co.
greater
Joins A.
Dewey and Dulles.
While
to the wartime Prime Min¬
C.
Allyn Staff
(Special to The Financial Chronicle)
..
*
up
and
Sweat
and
KANSAS
Tears"
CITY, MO.
Allen
—
Logan has become associated with
A. C.
Allyn & Co., 1016 Baltimore
Avenue.
He
formerly
was
and
that what
Established
with
indeed
throughout the world. We
written here may be a help to
is
H. Hentz & Co.
right decision for the juture of their
may strengthen their confidence that we have a
glorious future and their resolve that we do not cast it away."
[Italics mine.]
in contrast
Members
New
And further down the line the Conservative
ment's charge in
writing by Friday and to appear in court next
Monday for a full hearing. John L. Lewis, head of the United
Mine Workers' Union, was not named in the
contempt citation.
Exchange
Curb
Exchange
Cotton
Exchange
York
Commodity
Chicago
Exchange,
Board
And
other
Inc.
of
New Orleans Cotton
Party has such
colorful personalities as M. P. David
Stock
York
New
seemingly-fatiguing Foreign Minister
Ernest Bevin is the "dashing Sir Gallahad" Anthony Eden with
his traditional record of fearless independence on the international
week ago
York
New
the
to
1856
a
country, and
scene.
Invita¬
during the
25.
mailed
Conservative
those who wish to make
And
Annual
Straus & Blosser.
Leader
throughout
its
members
tions
month of
Party, I feel that in so
doing, we are not only reviving the Tory democracy of Lord
Beaconsfield and after him of Lord Randolph Churchill, but are
giving expression to the spirit of liberalism with its sense of
progress, tolerance and humanity which has spread so widely
to the effect that President Truman
had drawn up a message
Keech
et
necessarily not
May
for
courage:
was
Congress seeking powers to seize the struck mines. Meanwhile,
Federal Judge Richmond B.
Keech on Monday of this week ex¬
tended, at the government attorney's request, until March 3 his
temporary no-strike order against John L. Lewis' striking soft
coal miners.
The original order was scheduled to
expire on
Tuesday of the current week.
Complying with a request of the Department of Justice, Judge
overwhelmingly greater strength
individual
inspira¬
tional effort, a passage like the following from
Mr. Churchill's foreword to a recent Conservative
Party manifesto
must have
exerted
a
popular appeal connoting strength and
Reports circulated in Washington
were
Wilfred
ister's
reported that miners present at meetings of union
locals in the soft coal fields stated
that they intend to remain on
strike until a contract is won.
to
dinner
glamor and other personal attractiveness than
7.1%
cars, or
the
Churchill
been
alarming supply outlook.
There will be
Versus Cake
The kindly, beneficent and honest Mr.
Attlee presents a good analogy to the 1948
Truman; but there
is no doubt that Mr.
this week.' Severe
indicated unless the
quickly. Some curtailments in open-hearth
and,, bessemer converter operations have been effected, but hope
that the coal strike will
begin to break up this week has encour¬
Claus-Security*'
party.
strike, "Steel," national metalworking magazine, de¬
its current issue.
"Santa
this framework the present British re¬
sults will have proved
particularly significant
For
in
the
hold
and
electorate—following the poli¬
In
latest back-to-work order and present indications that the strike
would continue, poses a serious threat to the nation's health and
economic well-being.
-
of the
is
to the
Personality
The lack of compliance on the part of the soft coal miners to
L. Lewis' United Mine Workers Union
President, to his
John
clares
Britain's
on
tician's technique which has grown from "Let
!em have bread" to "They must have cake."
rise in agricultural
a
strong
appeal
asps
will
Party
Outing at the
Kenwood Country Club on May 26.
basically significant issue
—long-term and worldwide—which this week s polling will decide.
The $64 question facing the Democracies at
mid-century is just
week in 1949.
in
discussion being foisted
Spring
34 V2 million voters, there is
actually one
also noticeably below the high level for the comparable
Industrial employment showed a mild upward trend
was
CINCINNATI, OHIO.—The Mu¬
nicipal Bond Dealers Group of
=
Auto Production
Industry
vL
6
Men's
Commodity Price Index
Food Price
and
Municipal
Spring Party
Steel Production
The
5
Trade
Exchange
Exchanges
Harold Stassen, the two of them discovering much common agree¬
iji.
$
•
the association stated.
660,195 sets
same
the
as
monthly
last
month,
about
the.
for the fourth quarter of 1949, the
average
association noted.
It
One-third of the total United States exports in the period of
,
the first three postwar years
were
ernment, the Department
Commerce
of
financed
by the Federal Gov¬
declared.
Of
a
total
of
$51,500,000,000 in American goods and services furnished foreign
countries from 1946 to
1948, inclusive, government cash or credit
provided $15,400,000,000.
Foreign nations were able to pay for $33,400,000,000,
imports from their own resourcee,
65%
by selling goods and services to the United
States, the
department noted.
Payment was accomplished by the use of
newly-mined gold or gold and dollar balances for the remainder.
remarks:
"If
Such facts
this be
in history,
crisis,
by
that 14% of the
as
expenditures,
all
the worker-voter yawningly
means
have about reached the
let's
have
more
of
as
would be
in
whether the
personality of
over
the mines.
nace
late
make the evils of nationalization
Continued,
and
if coal is
steel
not
on
trade.
its
much
as
page
situation
is
critical
coal
own
stocks;
They
(3)
OUR
They
from
production
from
industrial
industries.
which
use
since the steel strike.
as
In
Users of
Most of
who
some
cases
assure
these inventories
themselves of
two months at
least
one
steel
company
enough steel lined
up
into
for its
A
recent
front
war.
new
—A
Ex¬
Govern-'
—
head
textbook
of
of
one
INVEST¬
the im¬
to
answer
that
con¬
investor and
spec¬
questions
every
seeing
a
record demand for
new
homes—why this demand should continue,
professional
evaluating
His real buying power has increased
we are
Investograph Weekly Investment Letter discusses this
of
exists.
It
ihe
dynamically
explains
powerful
why prosperity
foundation
may
which
last longer than
sta¬
now
fore
For
a
copy
of this letter and
(new readers only)
send $1.00
a
six
a
set
real service to the investment
COMMERCIAL
&
"It
outstanding
FINANCIAL
a
^
.
contribution."—BANK¬
glorious book."—J. K.
highly lauded
selling book of its type
most
lished.
LASSER.
and
best
ever
pub¬
Price $3.50
to
MAIL
The
Please send
Dept. CF-1, Rochester 4, N. Y.
THIS
COUPON
Intelligent Investor,
me
J I enclose check
S of returning for
"The
for
full
TODAY
Intelligent
$3.50,
refund
INVEST—INVESTOGRAPH!
!
Investor."
S
with
within
privilege J
5
«
days.
,
i
Name
J
{
»
!
Address
»
J F'tv
1
—-
N. Y. 7
150 B'way,
•
YOU
.
CHRON¬
MAG.
is
The
,
BEFORE
au¬
.
world."—
ICLE.
"An
J
Another auto maker has
needs into June. Other manu-
READING!
uniquely qualified
clearly and honestly
a
most
weeks' trial subscription
INVESTOGRAPHS
April.
of
forth
«
Gibbs Street,
of
hereto¬
undisclosed.
FASCINATING
r~
31
method
securities,
CRAMMED INTO 288 PAGES OF
ERS
people think and why the right stocks should still be cheap.
It has booked such orders with at
41
Stock
S.
Adviser
—An expert's
I
page
Y.
U.
SUCCESSFUL
most
thor
tistics,
are
on
Investment
portant
subject in detail and gives proof, through comprehensive
an
Continued
—
Expert—Lecturer in Finance
ment
economic changes which have taken
present rates of production.
own
Nl.
Partner
"Conclusions
companies which had been piddling in conversion are
now going into it on a
larger scale. One car producer is buying
50,000 tons of semi-finished steel per month for conversion pur¬
"The Iron Age" reveals.
Statistician
as
which the average man has benefited
to
Auto
poses,
recognized authority in this ex¬
acting field gives you the benefit
of 35 years of active
participation
LONGER
great
the result of
as
automobiles and
heavy plate and structural steel are in better shape.
report their inventories will carry them for from
to
extent
the result of the
place
them
three weeks
LAST
use
Their efforts to
now.
MAY
enormously. This is why
critically
operating supply
of steel and rebuild their inventories are
adding strong pressure
to demand for steel items which were
already in short supply,
this trade authority points out.
low
hess.
A
ulator today.
going to be felt immediately by some
sheets and strips, and some of those
bars, haven't had a chance to build up their inventories
Those which
BOOM
Few realize ihe
power
curtailments; and (4) lack of strategic parts from suppliers
have been forced to shut down or curtail
their production.
Cuts in steel output are
University
Graduate School of Busi-
account.
THAN MOST PEOPLE THINK
for
of
Newman
-
Columbia
MENT FUNDS IN AMERICA!
are
loss
own
author—Present
steel consuming
industries, too,
being pinched from four directions:
(!) Interruption of vital steel shipments, as steel
suppliers are
forced to curtail output for lack of
coal; (2) exhaustion of their
the magazine adds.
36
Graham
Pres.
for
Corp, Associate in Finance
their
the
include curtailment of blast fur¬
157c.
as
(Harper & Bros., 1049)
advice
act
or
by
Benjamin Graham
finan¬
cial
—
Plans
way
give
change
on
Practical
who
more
On the one hand, it is pointed out to the voter that free mono¬
cles, free-toupees, free scholarships, and the multiple helpings of
social security from a bankrupt State must in the
long run mean
Book of
Counsel
tho.se
a
important to the pub-er
than the size of his paycheck and his social
security.
Some of these plans
operations by
The
this week
Security!
MUST for
a
the
bottom of
already been laid.
will be announced
A
contrasted with 5% in
pubs give effect and meaning to the
the dangers of State deficit-spending; whether he
can
Your
The Intelligent Investor
2 million
The vote tabulation will show
Churchill
PITTSBURGH
pational product is going into "wel¬
Age," national metalworking weekly,
states in its "current
summary of the iron
for drastic cutbacks in
production have
it."
DETROIT
How To Insure
the United States;
unemployed but for the grace of
American charity, and the crucial sterling-balance
problem; all
tend to be regarded as merely "theoretical" and academic.
that there
Exchange Bldg.
GENEVA, SWITZERLAND
exchange difficulties, while basking in the sun at Worthing-byand—more significantly—in the glow of his highest pay
check for the least work
STEEL PRODUCTION AT LOWEST
LEVEL SINCE WEEK OF
NOVEMBER 28, 1949
The major steel producers
their coal piles, "The Iron
CHICAGO
the-Sea
can
of
including $26,100,000,000 de¬
rived
issues available to them that has
popular appeal so difficult for even these personalities.
his daily newspaper's account of his country's dollar-
Reading
Cotton
NEW YORK 4, N. Y.
is the objectivity of the
dialectics
or
N. Y.
Facts
vs.
made their
fare"
■
a counterpart of our
September.
Campaign Difficulties—"Gland"
$
January television set output exceeded all months of 1949
except November, the Radio Manufacturers Association
reported.
Members of this association produced
335,588 receivers last month.
Average weekly television production in January was 15%
above the figure for
December,
Radio production totaled
ment in London last
Eccles,
CFC
.Zone
State
J
«
■'.mmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmm*.
6
(798)
COMMERCIAL
THE
ticularly
United Nations Experts Propose
&
FINANCIAL
CHRONICLE
international economic
on
relations.
We
Thursday, February 23, 1950
regret
to
have
to
that
say
Contentions of Advocates
the report does not meet the test
Nationally Planned Economies
Subsidized by U. S. A,
of
The
Relations
fices
aimed at U.
are
that other countries
so
can
S., requiring
Maintains
ing
to make sacri¬
us
which
they felt emotionally impelled to
ployment published by the United
Nations overstresses full employ¬
call full employment.
Now, gov¬
ernment can, I believe, secure and
assume
full
employment under
nomic
ress
stability
of
detri¬
the
to
certain
eco¬
position
prog¬
and
high¬
woman
standards of
er
conditions.
earner
tell
to
entrepreneur
—
what
—
what
in
The
and
-As-
hours he shall work
and
sociatiqn
o
he
produce
how
consume,
a
wage-
or
shall
he
living.
remuneration
is
every /man
National
f
it
If
shall
Manufac¬
he
agrees
the
on
save
cast
can
those
who
do
not
importance of
a high level of
product ive
employm e n t,
out its instructions into
but
must
but
of
sist
that
in¬
the
maintain¬
ing
Philip Cortney
employ-
lives of
should
jnent
the camp
sacrifice human
liberties.
This question of em¬
ployment is, therefore, a question
immediately affecting the daily
used
means
for
side
not
undermine
us
all."
do
we
What
or
destroy the individual competitive
system, and should not make im¬
society?
possible the restoration of
individual
a
well-
By
not
mean
by
free
a
society we
in which the
rights and
free
a
one
the
enjoys
kind
spending
it
nomic
into
:
a
Ut
of
is
which
we
fa¬
are
best
job he possibly can, the
right of the consumer to use the
port. (Mr. Truman does not agree
in purchas¬
ing whatever he wants.
More¬
over, in a free society the indi¬
either
vidual
full employment given by the re¬
with
the
definition
of full
employment proposed by the
perts,
with
the
according to
Arthur
15.
published
York
Times"
Truman
states
"New
Mr.
ex¬
interview
an
Krock
of
"A
from three to five millions, is
supportable. It is a good thing that
say
job-seeking should go on at all
times; this is healthy for the eco¬
nomic body.") It ought to be obvi¬
ous,
however, that employment
an
aim in itself, or we
would consider that
an
army camp
prison is the most desirable
prototype of society.
or
a
Dr. Alexander Loveday, former
Director of the Economic Intelli¬
gence
Department of the League
pf Nations, has expressed himself
employment in
ton
free society
a
follows:
as
"In
a
free
rub.
Many
since
the
the
governments
formally
have
assumed
responsibility for securing and
♦Statement
behalf
of
made
the
Manufacturers
Social
the
society: there is the
war
Council,
United
by
Mr.
National
G.
N.
Nations,
on
Cortney
on
Association
the
before
Economic
leave
to
try provisionally
a
coun¬
permanently,
or
he wishes.
as
by
the
The
disrupt
words
U.
"costs
known
that
not
destroy
human
vidual
human
liberties
enjoys
We hold that
rights
which
do
we
and
indi¬
the
society.
civil and politi¬
in
free
a
our
cal
rights are dependent on the
preservation of an individualistic
costs becomes
when
that
overriding ob¬
jective is that national policies for
full
employment should be de¬
vised
so
ments of
suit
the
require¬
well-knit world
a
to
the
policies
of other
effects
sion
and
debt
n
think
the
be
costs of
ing
volume
production
of
factors
of
goods
the
with
production
profit at pre¬
Economic depres¬
usually characterized by
a
prices.
are
fall
a
produced at prevail¬
cannot be sold at
vailing
what
of
A depression
in
/.' The
are
not. concerned with
They even argue that we
attempt in our economic
policy the impossible task of sta¬
bilizing prices, about which
ommenaton
we
shall
words
say
a
rec-
its
Continued
par¬
of
pension of redeemability
ratios
ages)
lew
ranging (as
from 8.1 to
range
non
I per
be
These data
Share
this issue,
who
how
could
gress
£
■R &
New
CO.
York 4,N.Y.
with
be
not
so
the
at war."
World
from
I
than
one-third
high
as
not
half
re¬
deficit financing by the
Government, delay in in¬
stituting redeemability invites a
situation in which redeemability
without devaluation may become
impossible.
Should that occur, it
regarded
ratio
been
13
in
to
the
range,
inadequate
the
Now that
months
recent
the
' worthy
as
in
15%,
has
roughly,
argument
is
of
of¬
gold supply
the face of the
our
in
to
should be expected that thereafter
the
approach of the day of reck¬
oning will be hastened.
,/.*)
Opponents
range
of
of
ratios for
redeemability,
confronted
evidence
better
a
debts
that
Federal
should
non-gold
money
claims
our
on
for themselves
case
contending
state
conclusive
adequacy of the
sometimes attempt to
ratio,
build
with
the
on
be
and
page
to
deposits
as
The of¬
fice of The Gold Standard League
(1 Lloyd Ave., Latrobe, Pa.) pub¬
in The Washington Bui-
lished
letin of the League,
the
following
that
data
Sept. 3, 1949,
in respect to
contention:
Ratio of Gold
Reserve
Their
and
to
Dollars
Equivalents
iBillions of Dollars)
Ratio of Gold
Total Deposits,
to Dollars
Currency, Net
Federal &
Gold
State Debt
Year
Research
a
id Their
Equivalents
1916
29.6
2.4
8.0% :
1917
40.1
3.2
7.9%
1918
57.3
3.2
5.6% "
1919
66.4
3.1
4.6%
1920
69.4
2.9
4.2%
1921
67.3
3.3
4.9%
1922
69.4
3.8
5.5%
1923
72.7
4.0
5.5%
The fact that the ratio has fallen
from 24.6 in 1941 to 13 in
October,
74.5
4.5
6.0%
1925
78.6
4.4
5.6%
1926
80.4
4.4
81.9
4.6
5.6%
1928
8.6%.
1924
1927
when
re¬
deemability was maintained, was
from 6.7 to 10.9, the average being
1915-1932,
84.4
4.1
4.8%
1929
84.8
4.3
5.1%
1930
84.9
4.5
5.3%
This is under
37
ISSUE
500,000 Shares
Moller-Dee Textile
Corporation
go
Capital Stock
much high.er?"
($5 Par Value)
Price $5 per
Share
MAY BE AMAZED
Copies of the Prospectus
may
be obtained from the undersigned
significant timing
*
r
as
send
$1
to
Dept. C-2.
986, G. P. O.
Coffin, Betz
ACTION
New York 1, New York
&
Co.
Member New York Stock Exchange and
New inquirers only.
Incorporated
Box
5.5%
circumstances to he construed as an offer of these securities
solicitation of an offer to buy any of such securities. The
offer is made only by means of the Prospectus.
no
or as a
(A DELAWARE CORPORATION)
rally
and
added
gold stock.
are
1941
With the
Federal
than
that of
as
re¬
that
re¬
fought
ranging
less
to
of serious consideration.
the
"we
point
a
would make the institution of
we
ratios
on
to
"because,"
was,
The fact that
War
less
was
reply
common
to
graphically portrayed;
MARKET
P. O.
ratio
a
persuaded
institute redeemability
clues are hidden, in such vital
volume, most active stocks, odd lot trading, profes¬
sional trading, issues traded, advances, declines, new
highs, etc;
For samples of our unique IVL4RKET X-RAY GRAPHS and latest
many
bulletin
u.
are
YOU
at
statistics
Tare
That
always posing questions. To help you
with the answers we
publish factual trading data
and interpretive analyses not obtainable elsewhere.
obtaine0dtherr°brokheer
fr$L?n
aver¬
The market is
CLUB
gold
on
yearly
by most Averages, recently
highs since 1946.
"THE QUESTION—Will the
Stock
sus¬
of 13% as of October, 1949.
When
the ratio was at its peak of 24.6
in 1941 and at 23.2 in 1942, Con¬
The market, as measured
|G
do¬
10.9%.
compares
for sale
on
MARKET X-RAY GRAPH
[NESS
I
governments
ratio
deemability unsafe.
by
War
mestic
NEW
new
the
later.
(2) The report starts from the
assumption that government can
and
made
banks and
duce
few
O. Committee, of
Feb. 15, 1950."
ICIVI^
a
eign
gold
without
years
should
and
World
Walter E. Spahr
ex¬
an
in money and
deposits
withdrawal of gold by for¬
when
United
and before
so
pansion
States
fought
through
the
economists who have written the
data
should
tention.
that
higher
-are
dispose of that
frequent con¬
fact
a
The
which
activity to
or
and
factual
is
sion
1 d
pertinent
tion and thereby permit economic
its pre-depreslevel.
But the
our
g o
-
following
ten advanced that
resume
of
n
deposits.
prices, which is neces¬
sary to reestablish the balance be¬
tween production and consump¬
a
o
money
of life
with
expan¬
in recent
years
even
or
re-
out¬
are
currency.
1949, indicates the importance of
instituting redeemability while it
turn
accept
way
of
Maintains
or
pay
of
the well-be¬
on
countries,
a
econ¬
should
country
regard
national
ing
to
Each
omy.
due
second
as
who
ineffective
or
is safe to do
great
note, by
It is well
particularly signifi¬
we
that
can
costs.
The
a
our
arguments
resumption
the
the
once
of
non-gold
deemability is that our gold stock
is
inadequate
considering
the
way
selves by our bootstraps. The lack
of
concern
with
the
matter
of
report
competitive system.
(2)
against
current
us
the
costs
of
their experiments.
Obviously the authors of the re¬
port believe that we can lift our¬
sions
process
as
national
of
objectives:
the
in
those
spending
available
in
the
of
ratio
our
the
not concerned either with the
are
analyzing the
and the
proposals to remedy unemploy¬
ment, we must give paramount
consideration to
two
overriding
employment
That
the
either false
and deposits
money
One
to
may
of production"
except
Professor J. M. Clarke.
means
We submit that in
(1)
not
depression really is.
Overriding Objectives
problem of
of
for return to gold standard.
are
the
of
stock
of life, because
our social eco¬
that
N.
mentioned
cant
.
,
/
Feb.
that:
free
in
certain amount of unemployment,
^cannot be
product of his work
is
way
symptomatic
volume
We
question
gold
thinking of the economists who
the
activities.
The
totalitarian form of society.
icy to which governments should
their
we
system and would lead
deficit
all
as a
would
"over-all objective" of public pol¬
relate
thinking
result
a
the process we would destroy
miliar, but also the right to work
or
not to work, the right to get
leave undisputed the definition of
As
causes.
of
disorders
II
weighed by benefits of gold redeemable
individualistic free enterprise sys¬
tem.
We
cannot 'accept
deficit
freedoms
with
these contentions
chronic monetary inflation, but in
knit world economy.
This report
speaks of full employment as the
the
never
this
economic
on
contrasted with gold; and (6) condi¬
paper currency
not favorable
are
have written the report published
mean
only
managing
tions
of
of
Committee
as
get full employment by means of
can,
I believe,
employment—in¬
or outside.
But if
full
chain
symptoms
it
camp,
guarantee
the
reasoning with "ef¬
fective demand" is attacking only
carry
that is done, you
tration
in
the fol¬
are
preservation of the individu¬
its
concen¬
a
prevailed
society by using the notion of
"effective demand," which is the
economist's idiom.of the popular
remark: "to buy you need money."
Economic thinking which
starts
spend, and if it
or
has
National
chief contentions of advocates of our irredeemable currency: (1) insufficiency of gold stock for con¬
vertibility; (2) current scarcity of gold; (3) danger of
stampede for gold; (4) danger of gold hoarding; (5) ease of
Spahr lists
our
what portion of his remuneration
turers fully
shall
PART
Dr.
alistic competitive system. It deals
with the economic problems of
many
day, what
receive,
a
Economists'
Monetary Policy; Professor of Economics, New York University
the problem
ternational Measures for Full Em¬
and
By WALTER E. SPAIIR
Vice-President,
Executive
(1) The intellectual approach to
is incompatible with
isolate themselves in socialism.
the
.
is imbued with in¬
making of the report
lowing:
rec¬
maintaining what at San Francisco
ment
jj.
Keynesian Influence
report
Our main objections to the think¬
The Report on National and In¬
ment
Of Irredeemable Currency
over¬
stemming from what is known as
"Keynesian" or "New" economics.
Committee
road to ruin for free competitive system.
ommendations
fundamental
tellectual prepossessions and ideas
Prominent industrialist terms plan drafted by five economists
under UN's aegis, over-ambitious, unrealistic, fantastic, and
sure
two
The
By PHILIP CORTNEY*
Member, NAM's International
these
riding objectives.
Philadelphia-Baltimore Stock Exchange
123
South
Broad Street
February 20, 1950.
Philadelphia 9, Pa.
,
Volume
171
Number 4884
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
r*""-
(799)
(Billions of Dollars)
Total
Deposits,
Currency, Net
Federal &
Tear
Ratio of Gold
to
Equivalents
1931
86.8
5.0
1932
83.3
3.9
promptly advanced by opponents and deposit liabilities. This is the
redeemability that our gold common ratio of the asset cur¬
stock is inadequate.
rency, which can be paid out, held
Another
by the
Federal
Reserve
banks
commentary
on
our
lack of
their
Federal
Reserve
understanding of, and on against
of
5.4%
5.7%
1933
82.6
4.3
5.2%
1934
92.2
7.9
Silver and
8.6%
In
asset
practice
is
currency
currency
all
ratios
circulating
our
convertible
into
the
1935
100.3
9.1
9.1%
1936
108.9
Treasury's stock of silver. On Oct.
10.6
9.7%
1937
112.5
31,
12.3
10.9%
1938
113.0
13.0
1939
119.6
128.2
20.0
146.7
1942
199.4
1943
279.4
stock, held as reserve
chiefly against silver certificates,
was
$2,301,000,000. The ratio of
11.5%
16.1
1940
1941
that
-
13.4%
22.6'
that
15.6%
and
15.4%
22.7
has
11.4%
stock
to
deposits
been
smallness
of
22.4
8.0%
the
1944
people
362.1
21.2
5.6%
the
silver
429.2 '
20.2
1946
414.5
4.7%
20.3
1947
403.1
21.3
1948
400.9
23.5
1949
398.6
-
24.5
But,
5.3%
that
the
over
ratio.
believe
Because
they
demand,
upon
money
No one
can
there
get
is
unusual demand for it.
no
4.9%
1.2%.
concerned
1945
1
non-silver
was
when
it
is
recommended
that provision
be made for rerjoer^nhiiitv in gold having a ratio
of 13%,
the contention is often
5.8%
6.1%
gold
our
7.0%
1934 is
to
4.6%
/
1949 is
Average ratio from 1916
and Their
Research
State Debt
Average ratio from 1916
to Dollars
Gold
■
against their Federal Reserve note
and deposit
liabilities, they could
have paid out
$23,231,916,000 (ig¬
noring penalties for going below
reactions to, the
is the fact that
ratios
reserve
people are not
disturbed in the least by the
very
small
percentage
of
asset
cash
which the
usually
Federal Reserve
have
banks
pay out against
their liabilities in the form of Fed¬
Reserve
For
example,
their
notes
liabilities
and
in
were,
this
little
This
amounted
V2 of 1% of their
over
ratio
;•
.
•;
..
3 A
is
to
noteworthy
the fact that the
Federal
out
Reserve
note
only
banks
domestically
Reserve
of
aspect
and
.
can
The
reserve
be
pay
a
out
domestically—merely
foreign central banks and
the
form of gold.
note
';.rv
require the Federal Reserve banks
to meet their liabilities in terms
to
of
a
which
reserve
governments in
•
is
Continued
;
nearly
on
page
$375,000,000
Commonwealth of
1
la
Vz%Series M, Serial Bonds
1950
Due March I, 1952-65, incl.
Principal and semi-annual interest (September 1 and March
1) payable in Philadelphia at The Philadelphia National Bank
or, at. the option of the
New York City at The National
holder, in
City Bank of New York, or in Pittsburgh, at the Mellon National Bank
and Trust Company.
Coupon bonds in,denomination of
$1,000, registerable
as to
principal only.
.
Interest Exempt jrom present Federal Income Taxes
v
•
Exempt jrom taxation in Pennsylvania (except succession
or
inheritance taxes)
Legal Investment for Savings Banks and Trust Funds in New
York, Pennsylvania and certain other States and
u
■
for Savings Banks in Connecticut and Massachusetts
These Bonds
are a
part of a total of $500,000,000 of bonds authorized
by an amendment to the Constitution of the Commonwealth of
Pennsylvania, approved by
people, to provide funds for the payment of
compensation to certain Veterans of World War II. In the
opinion of counsel, these Bonds are direct and
general obligations of the Commonwealth of
Pennsylvania, secured by its full faith and credit.
vote of the
,
AMOUNTS, MATURITIES AND YIELDS OR PRICE
$27,000,000
1952
•85%
27,000,000
1953
.95
27,000,000
1954
1.05
27,000,000
1955
1.10
!
27,000,000
1956
$27,000,000
1957
1.20%
27,000,000
1958
1.25
27,000,000
1959
1.30
27,000,000
1963
27,000,000
1960
1.35
27,000,000
1964
24,000,000
i
1965
$27,000,000
1961
1.40%
27,000,000
1962
1.45
*
@ 100 (Price)
*
1.55
1.15
(Accrued interest
be
to
1.55
added)
The above Bonds
are offered
when, as and if issued and received by us, and subject to
prior sale and approval of legality by Hon. T. McKeen
Attorney General of the Commonwealth of Pennsylvania,
Chidsey,
by Messrs. Townsend, Elliott d; Munson,
Attorneys, Philadelphia, Pa.,
and by Messrs. Reed, Smith, Shaw &
McClay, Attorneys, Pittsburgh, Pa.
^ 1
•
■
-
The Chase National Bank
Halsey, Stuart & Co. Inc.
*
The National
Smith, Barney & Co.
City Bank of New York
'•*,
Bankers Trust
Chemical Bank & Trust Company
Company
Drexel & Co.
Harriman Ripley & Co.
Incorporated
The Northern Trust
Company
Harris Trust & Savings Bank
Continental Illinois National Bank.
and Trust
Glore, Forgan & Co.
The First National Bank of
Company of Chicago
Union Securities
Equitable Securities Corporation
Ingen & Co. Inc.
Ladenburg, Thalmann & Co.
Corporation
.
.
Lazard Freres & Co.
White, Weld & Co.
Company
A. C.
Stroud &
Alex. Brown & Sons
.
Lee
I
Merrill
Lynch, Pierce, Fenner & Beane
Eastman, Dillon & Co.
Allyn and Company
R. W.
*
Barr Brothers & Co.
'
Yarnall & Co.
,
v',
1
'
Company
' .i.
-
Reynolds & Co.
Braun, Bosworth & Co.
Peoples First National Bank
Incorporated
Bacon, Stevenson & Co.
Moncure Biddle & Co.
A. G. Becker & Co.
First of
E. W. Clark & Co.
Incorporated
Company
Incorporated
The Illinois
New York,
Company
February 17, 1950.
v
Fidelity Union Trust Company
Newark
The Marine Trust
Company of Buffalo
The First National Bank
of
Corporation
First National Bank
Francisco
Dick & Merle-Smith
PittiburpK
Company
Incorporated
R. H. Moulton &
San
Pressprich & Co.'
Stone & Webster Securities
Company
•>.
Phelps, Fenn & Co.
Blair, Rollins & Co.
American Trust
Higginson Corporation
'
R. S. Dickson &
C. J. Devine & Co.
of
Estabrook & Co.
(Incorporated)
Moseley & Co.
The Philadelphia National Bank
Hemphill, Noyes, Graham, Parsons & Co.
Mercantile-Commerce Bank & Trust
Company
Harris, Hall & Company
F. S.
Lehman Brothers
Incorporated
Shields &
.
Incorporated
Bear, Stearns & Co.
Chicago
Corporation
Kidder, Peabody & Co.
.
Goldman, Sachs & Co.
Salomon Bros. & Hutzler
B. J. Van
The First Boston
Blyth & Co., Inc.
Portland, Ore.
& Trust
Company
Michigan Corporation
Coffin & Burr
Incorporated
Hallgarten & Co.
Boston
W. H. Newbold's Son & Co.
Hayden, Stone & Co.
L. F. Rothschild & Co.
are
plain to the interested public, it is
unwise to pass a law which would
not
purposes—gold certificates—can¬
paid
people of this country
told by leading Federal Reserve
officials that, despite this situation
which they do not describe nor ex¬
lawful money for
purposes of reserve, and
that the only
money
that is lawful for
not
of
tically.
Federal
deposit liabilities is
ratio
This gold certificate re¬
amounted to 56.4% of their
note and deposit liabilities. It
was
serve
almost 100 times larger in amount
the
only asset cash held
which they could
pay out domes¬
picture
their
required
date
than
cash which
asset
hold
against
and
this
minimum
that
on
25%).
of
Federal
this combined liability of
$41,166,360,000, the only cash the Federal
Reserve banks held as an asset
which they
could pay out was
434 ooo.
low
deposits
banks, doubt¬
;
notes, $23,373,496,000, and
deposits, $17,792,864,000. Against
*997
extraordinarily
asset cash to the notes and
of Federal Reserve
Reserve
in
the
Had the Federal Reserve banks
been authorized to
pay out gold or
deposits.
30, 1949,
Nov.
on
deposits.3
The people are not disturbed
by
less because they are not aware of
it.
to
eral
notes and
our
certificates
New Issue
Dated March I,
7
Hornblower & Weeks
Schmidt, Poole & Co.
W. E. Hutton & Co.
Wood, Struthers & Co.
100
34
8
and
linoleum
not
are
Dealer-Broker Investment
neces¬
Recommendations and Literature
scrutiny as a
part of the Government's drive
against "bigness." Some compa¬
VULTEE
Midland Trust Co. of New
the tin can
with 55.2%
with 57.9%. While
assets,
sarily monopolistic because of the
concentration of assets, they may
become
York
nies
PART IV
in
subject
these
For
future pattern
of portion of
company, rather than for its complete break-up.
Concludes
although anti-trust impact on stock market prices in recent
to
industries
are
It is understood that the
to
now
firms mentioned will he pleased
the following literature:
send interested parties
t
'
_
in suits.
involved
Citing current legislation, Mr. Vultee states early
in anti-trust activities is driving for separation
Thursday, February 23, 1950
CHRONICLE
group
industries
these
Investment Values
By HOWARD F.
tinware
and
Anti-Tiust Suits and
Vice-President, The Marine
the
of
55.0%
FINANCIAL
&
COMMERCIAL
THE
(800)
immediate
the
future,
20
quality stocks selling at least
5% above 1946 highs compared
Union
Brooklyn
Movements—
Contrast in Price
the
pattern in anti-trust activities ap¬
Gas
Co.—An-
anlysis—Vilas & Hickey, 49 Wall
Street, New York 5, N. Y.
to drive for the sepa¬
with
20
equally
good
calibre
portion or a division
Colgate-Palmolive-Peet—Study
now
available
at dis¬
of a company, rather than to work equities
Ralph E. Samuel & Co.,
115
counts of more than
15% from
for the complete break-up of a
Broadway, New York 6, N. Y.
suits has not been severe, any intemperate drive could seriously
their
postwar peaks—Francis I.
company into a number of indi¬
du
Pont
& Co.,
affect market confidence and values.
1 Wall Street,
vidual
General
Public Utilities—An¬
companies.
Divisions of
New York 5, N. Y.
many
companies dominate
the
alysis—H. Hentz & Co., 60 Beaver
tively few cases in which the De¬
Future Anti-Trust Suits
particular field that they are in,
Five Outstanding Buys—Report Street, New York 4, N. Y.
partment of Justice had sought
Further suits against individual
even
though the company itself on five
them. Most of the suits have been
old-established, long-time
Greer Hydraulics — Descriptive
companies or groups of companies civil actions.
may
not dominate its industry. dividend
payers averaging
9.7%
analysis — Raymond & Co., 148
in key industries appear in pros¬
What course actions at some time
While patent protection is es¬
return—George J. Martin Co., 79 State
Street, Boston 9, Mass.
in the more distant future might
pect. In fact, revivals of past suits sential to
the
preservation of
Wall Street, New York 5, N. Y.
on
a
slightly
take is conjectural. Court deci¬
property rights, the practice of
Hytron Radio and Electronics—
different basis
sions and legislative enactments
Income from Tax Exempt vs.
cross-licensing
or
pooling
of
Study—Clayton Securities Corp.,
might also oc¬
will be among the major deter¬ Taxable
Bonds
Tabulation —
82 Devonshire
patents to form monopolies and
Street, Boston 9,
cur. In the apminants.
Hannaford
&
Talbot, 519 Cali¬ Mass.
fix prices is not inviolate. In this
*
*
*
proximate
fornia
Street, San Francisco 4,
study I have not included the
half
century
Calif.
Koehring Company — Analysis
effect on investment value of this
General Conclusions
peals to be
ration of a
—
of anti
-
trust
suit, although in some
Individual Lists for Individual
(1) It seems reasonable to ex¬
questions are a fun¬
Needs—Six
selected portfolios—
great many
damental part of the monopoly pect more of our leading corpora¬
of
our
lead¬
tions to be sued under the anti¬ Bache & Co., 36 Wall Street, New
proceeding. Likewise
suits in¬
ing companies
trust laws over the next several York 5, N. Y.
volving the question of price fix¬
have at some
ing
and trade agreements are years and that some of these suits
time or other
Intelligent Investor—A book of
will be successful and will result
generally outside the scope of
been prose¬
practical
counsel by Benjamin
in break-ups.
this study. It is in this type of
cuted.
Some
Graham—$3.50—Dept. CFC, "The
(2) Obviously, some hardships
suit, however, where many of
have been in¬
intelligent Investor," 150 Broad¬
the criminal actions are instituted to individual companies could re¬
volved in two
way, New York 7, N. Y.
and where imprisonment is sought sult, managerial efforts could b6
Howard F. Vultee
or three sepa¬ in some instances.
diluted
by the court tests, and
Market X-Ray Graph—An in¬
rate
proceed¬
and
new
product de¬
The Federal Trade Commission scientific
vestment advisory service special¬
ings at various times over the has
prepared a study of the con¬ velopment could be handicapped
izing in internal market analysis;
past several decades. Others like centration of
capital assets of all if the attacks are intemperate. On
graphs are designed to improve
General
Electric
and
Westingmanufacturing corporations. Their the other hand, if these suits and
forecasting, determine supply and
house Electric, have been defend¬
report covers 113 of our largest any subsequent separations are
demand, reveal hidden strength
ants in several suits at the same
manufacturers
in
26
industry part of the future, then it is im¬
or weakness—Send $1
for infor¬
time.
All of this points to the
portant that they should be ac¬
groups. They classified the indus¬
mation and latest bulletin or $5.00
fact that some of our major cor¬
tries into four separate
groups, complished in an orderly and ju¬
for trial
subscription including
porations have been under more which
they labeled as extreme, dicial manner over a period of
explanatory manual, 1949 weekly
or
less
continual
study by the
high, moderate and low as to con¬ years, and not be the result of and daily graphs, traders' stock
Department of Justice.
centration of control. In the "ex¬ precipitous action.
guide
rating
several
hundred
Study of the need for tighter treme
group"
where 'three cor
(3) I am satisfied that anti¬ stocks, supervised stock list with
anti-trust
laws
was
begun
re¬
fewer
companies accounted for trust actions do not necessarily de¬
specific recommendations, and
cently by a Congressional Com¬
60% or more of the industry they stroy
investment
values.
The next four weekly bulletins and
mittee. At an early hearing the
listed: aluminum with 100%, tin filing of an anti-trust suit and an
current graphs—Dept. C-2, Market
Attorney General called for the cans and other tinware 95.3%,
adverse
decision,
both
interim Action, Inc., P. O. Box 986, G.P.O.,
repeal of so-called loop-hole leg¬ linoleum
92.1%, copper smelting and final, has had temporary de¬ New York
1, N. Y.
islation and for an increase in
and
refining
88.5%,
cigarettes pressing effects on the market
penalties, rather than
for any
77.6%,
distilled liquors
72.4%, prices of the stocks, but the fun¬
Municipal Bond Trends—16th
major overhauling of the -laws.
plumbing equipment and supplies damentally sound companies and annual comparison of prices and
He
emphasized,
however,
that
71.3%, rubber tires
and tubes their parts continued to prosper yields of
state
and
municipal
monopoly "is to be found in those
70.3%, office and store machines whether divided by the courts or bonds from December, 1933 to
industries
controlled
by a few
69.5%, motor vehicles 68.7%, bis¬ allowed to continue as a whole. December, 1949—Chemical Bank
large companies—the Big Threes
cuits, crackers and pretzels 67.7%, It might be argued that the en¬ & Trust Co., 165 Broadway, New
or the Big Fours."
agricultural machinery 66.6% and terprise might have prospered York 15, N. Y.
Present legislation provides for meat
products 64.0%. Only
in more if not divided, but the fact
actions,
maximum
fine
of
ment,
Fines
judges
order
penalties
$5,000,
or
have
on
a
imprison¬
each count.
levied,
been
but
industries
three
a
been
did
they
report
single company as representing
more
than
half
the
reluctant to
jail sentences in the rela¬
have
of
in current issue
suits patent
year
a
both
either
of
type
a
These were in
dustry
where
of
the
industry.
the aluminum in¬
one
company
remains
greatly
that
increased
Oil
the
after
Tobacco
Trust
Continued
old
the
and
Trust
Standard
American
had
values
investment
on
were
page
30
2, Wis.
available
Also
Oil
Lee
Pacific
Missouri
New
To be
$164,000 annually from March 15, 1951 to
guaranteed unconditionally as to payment of principal and dividends
Western Maryland Railway Company
Nash Kelvinator
to
yield 1.30% to 2.43%, according to maturity
Boom
The
insti¬
Broadway, New York 6,
Ill
Co.,
N. Y.
Manufacturing Co.
Orangeburg
Wall
—Analysis—Cohu & Co., 1
Street, New York 5, N. Y.
Cement
Riverside
Co.—New
analysis—Lerner & Co., 10 Post
Office Square, Boston 9, Mass.
Also available is a brief review
of the Cement Industry.
With A. G. Edwards
to The Financial
(Special
Chronicle)
LOUIS,
ST.
Sons, 409 Eighth Street, mem¬
of the New York and Mid¬
&
bers
Stock Exchanges.
Longer
Think"—In-
With Otis &Co.
(Special to The Financial
is
Field
R.
subscription
trial
(new
showing
Jones
readers
now
affiliated
with
Terminal Tower.
COMMON STOCK
WARRANTS
N. Y.
an
up-to-date
com¬
Averages and the thirtyover-the-counter
industrial
Quo¬
both as
stocks used in the National
Bureau
Averages,
yield and market performance
an eleven-year period—Na¬
tional Quotation Bureau, Inc., 46
over
Front
Chronicle)
CLEVELAND, OHIO —Andrew
Otis & Co.,
last longer than most people
and why the right stocks
should still be cheap—for a copy
of this letter and a six weeks'
to
authorization by the Interstate Commerce Commission.
Offering ( ircular 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.
of these Certificates are subject to
for
available
tutions and dealers—Ira Haupt &
Last
May
People
Most
tation
Issuance and sale
Service
Public
England
New
Co.—Booklet
west
five
Priced
Corp.—Special
Davis & Co., 10
Salle Street, Chicago 3,
La
South
parison between the thirty listed
industrial stocks used in the Dow,
—
Broadway,
York 5, N. Y.
let
„
Analysis
111.
Over-the-Counter Index—Book¬
by endorsement by
&
MO. —William B.
Gerstund is with A. G. Edwards
Rochester 4,
March 15, 1965, inclusive
Co.—
report—Paul H.
are
To mature
—
&
Co.. 50
York 4, N. Y.
only) send $1.00 to Dept. CF-1,
Investographs, 31 Gibbs Street,
(Philadelphia Plan)
Gas
Hoffman
Dreyfus
may
Equipment Trust Certificates, Series N
on
Electric
Co., Mercantile Trust Bldg., Bal¬
timore 2, Md.
think
2lA%
&
Natural
&
Circular—Mitchell,
vestograph
Weekly
Investment
letter explaining why prosperity
Maryland Railway Company
circular
a
Co.
bond
government
"Our
Western
is
Indiana Gas
Southern
portfolios
and sources of gross income of
19 New York banks—Laird, Bissell & Meeds, 120 Broadway, New
of
Than
$2,460,000
Digest"—Loewi & Co.,
Mason Street, Milwaukee
225 East
Banks—Breakdown
York
New
of "Business and
Financial
Street, New York 4, N. Y.
m
the
volatile components
market. Thus $1,000
of the most
one
securities
investments in each of
&
Atlas
Scott,
Corp.
Merritt-Chapman.
and Tri-Conti-
in
1942 were
worth
and $170,000
respectively just four years later. Con¬
versely, a $50,000 investment in Colo¬
rado Fuel warrants in 1948 was worth
about $1,000 just two years later.
Corp.
warrants
$48,000,
$50,000
nental
potentialities in warrants,
and declining markets,
investor.
SPECULATIVE
MERITS
OP
The inherent
both
rising
in
make them of interest to every
THE
STOCK
COMMON
WARRANTS,
by
Sidney Pried, just published, is one of
the most comprehensive studies to date
of this type of security.
covered: common stock
(defined — how they come to
1— when attractive for pur¬
short-selling warrants with
expiration dates — investment trust
warrants.
Contains G full page charts
Some
topics
warrants
Puts and Calls—Booklet—Filer,
Schmidt
HALSEY, STUART &. CO. INC.
&
New York
Co.,
30
Pine
Street,
5, N. Y.
be issued
chase
—
giving
more
R. W. PRESSPRICH
& CO.
A. G. BECKER &, CO.
INCORPORATED
OTIS & CO.
(INCORPORATED)
Speculative Merits of Common
Stock
Warrants—Comprehensive
Fried of this
type of security—$2.00—R. H. M.
Associates,
220
Fifth
Avenue,
Dept. C, New York 1, N. Y. (or
send for free descriptive folder).
.study
FREEMAN & COMPANY
February 21,1950
McMASTER HUTCHINSON &. CO.
by
Sidney
3 year weekly
active warrants
interesting
(if
other
A
logical,
makes
this
high and low of
and description
warrants.
mathematical
study
approach
absorbing
as
well as
profitable reading. For your copy send
$2 in check or money order to
the
""Wishers,
R. H. M.
Associates,
220
Fifth Avenue,
Dept. C, New York 1,
N. Y., or send for f ree descriptive folder.
Volume
171
Number 4884
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
*
(801)
steeply
Treasury Tax ProposalsAnalysis and Suggestions
From
Washington
Ahead of the News
he
cover
inescapably
was
the feeling that
gang of parasites
up
one of a
living off the fat of the land.
The attitude of
the fellow
thusly charged up was: "So what if
am a parasite, I'm doing all right, ain't I."
There will be little or no reference by the
I
>
Leftist columnists and commentators to Cadil¬
lacs
mink
and
coats
there
as
about
was
the
Republicans' box chicken get-together several
days before. But there were Cadillacs and there
It
their
of
world.
not
to
them
that
in
mines their subjects have had little
for
than
more
Treasury
tax
taxes
freight.
on
in
loss
the
To make
it
revenue,
leaders—this
Mr. Truman could
is
sitting
to
having worked
out
formula
a
to
to
destroy
atomic and
hydrogen bombs
same time.
look at that roll call. Were the
Republicans un¬
duly worried in 1936? The only things Roosevelt had done
up to
that time were to establish
a
farm policy which called for the
destruction of crops, an NRA
by which a government agency told
every business in the country what it could sell and under
what
conditions it could
sell; billions had been spent to organize the
of them, under the guise of
giving them relief; the country had been taken off the
gold stand¬
ard
and
put on a managed currency; Federal
bureaucracy was
moving into every nook and
cranny of the land. Nothing to get
excited
luxuries
what, in the
of
Heaven, could they—the Republi¬
cans—have been excited about in the
campaign of 1940.
simply violating all
was
traditions by
our
running for
he had further showed his
unambitiousness by trying
Suprerhe Court and trying to purge Senators who
Roosevelt
third term,
a
to pack the
disagreed with
Some of the millions who had continued
to be unemployed
despite the spending of billions were going to work as he
prepared
to lead us into war.
(Don't you say that, dbn't you
say FDR led
us into war!)
Yet his claim to immortality rests on his
him.
having had
"foresight" to realize
ity to
maneuver
had again to
we
But the Republicans
nothing has happened.
were
went
still
Only that
and untold billions in that
we
save
reluctant nation into
a
in, except that
and end up worse
war
reason
we
aren't
off than before
have attained the "global
we
Yet
lose thousands of young men
realize
or
leadership."
doesn't
want
to,
completely socialized today is that the
affairs.
and also
on
his
opposition, reinforced, has
That
predecessor.
finish
us
aren't
we
If he
completely
could
served
as
a
restraint on.
Fisher
and
Income
by
lower
costs.
his
book
Taxation"
Professor
T.
"Constructive
and
was
urged
Adams
S.
when
II
Corporation Income Tax
industries
fall
with
Secretary
and
20%
coats
bracelets.
to
10%
undue
and
$20,000
Since
ers
small stockhold¬
on
stockholders
of
However, in large corpo¬
American Telephone,
rations like
the
U.
S.
Steel, General Motors and
theory of
"ability to pay," who can pay bet¬ Pennsylvania
Railroad, between
tax
income
on
than
the
on
ex¬
taxes
on
neces¬
sities and recommends
graduating
excise taxes on luxuries.
No at¬
tempt is made to estimate the in¬
in
crease
the
receipts from such
graduated taxes
Instead of raising the
corporate
rate, it would seem more
tax
equitable
small
give
relief
to
the
by the British
of refunding to him the
collected
above
the
dends.
to
to
stockholder
tax
at
due
the
source
his
on
divi¬
It would also be desirable
treat
preferred dividends, like
interest, as a deduction from tax¬
able income.
To mitigate double
the law. could exempt
part of the dividend from normal
taxation,
tax,
tax
as
on
offset
an
capital gains
lyzed
to
corporation
again
tax should
in
the
experience
rates and
existing
of
the
appropriately
income
80%
these findings.
such
House
by Mr. Friedman before
Ways and Means Committee,
1950.
The
British
and 85%
less
own
the
most
introduced
war
under
government
and
a
Conservative
retained
them
under the Labor government.
-
To
eliminate
essential
transportation
should
the excise
services
of the stockholders
than
not
ticularly
tax
of
shipments
seems
production,
necessities.
required
are
we
We
par¬
Freight
even
the lowest income groups.
for
Again,
should
tax
on
freight
sound.
stockholders, really partners, who
despite a relatively high income,
will
thus pay a lower rate than
the small stockholder that owns a
few shares in a large
company.
The tax
i
tax
like
on
a
on
corporate income is
regressive tax
individual in¬
on
A tax of
comes.
42%
on the earn¬
corporation is virtually a
100% tax upon the smallest stock¬
ings of
a
holder
on
the first 42% of a poten¬
Would any govern¬
tial dividend.
ment dare to propose such a
plan
of taxation on the smallest share¬
holder openly and directly?
Is it
abolish completely the
telegraph and long-distance
less unjust and intolerable for the
telephone,
which
the
Treasury
merely to cut from 25%
a business
charge
ultimately is paid by the
proposes
to
15%.
poorest
This is
consumer.
to
the
tax
The
on
new
revised
out
graduated excise taxes dur¬
ing the
plies
Receipts could
♦Statement
the
Feb. 17,
expensive
carry
which rates produce
prove
transportation,
when
business purposes.
on
on
To
to be graduated so as to exempt actually, although nominally the
low-priced furs bought by the low Treasury is taxing the large cor¬
income groups and so that very porations.
On
the
other hand,
expensive items might bear high small companies making less than
and rising rates. Experiments will $25,000 may have
two or three
ana¬
six
of
tax
and
be
light
under
The
holding period and
new
thereupon
the
income.
buyer
items?
revenue.
luxuries.
on
the
luxury
production
same
ap¬
passenger
it
is
for
The excise tax
should
nated but the excise tax
ful consumption, as on
be
on
elimi¬
waste¬
furs, jew¬
government to do
by indirection?
large company
so
The
covertly and
income
belongs
to
thousands of small people.
because
they
like
farmers
shall
their
England,
notice
them the
and
not
trade
stockholders
the
amount
because he can't do this
into the richer
out
to the
$100-Mplate
No, there
will
was
show—some
on
company
$20,000
a
on
pickings, the practitioners
Superior District Power Company
he has got to get
year;
of which gave tone
First,Mortgage Bonds, Series C, 2%%
spree.
little enthusiasm at that dinner
forced handclapping
at
the
as
the television
outset,
Dated
January 1, 1950
4
"
Due January 1, 1980
occasional
spurts thereafter.
-It is rather
that
one runs
heartening that there
into
ton these days.
more
There
comes a
shame.
was
and more of this
And, it is
a
Price 100.75% and accrued interest
fact
feeling around Washing¬
time in the lives of most
men
when
they begin to wonder what
they have done to justify their exist¬
ence.
Considerable satisfaction is to be
had, of course, by the man
who has reared and
provided for a large
family and from the
he
cherishes
accomplishments.
the
But
second
the
begins to worry and fret.
and
Copies of the Prospectus
hope
that
generation
fellow
who
will
go
has just
on
been
The Washington
gang is
see
some
of them
.
be obtained from the undersigned.
barnacle
I wouldn't
looking around for charities
donate to, in order to feel
better in their old
age.
money with which to do it.
a
may
greater
getting older
corpulent and I think I detect signs of
mellowness.
be surprised to
to
HALSEY, STUART & CO. Inc.
to
They've got the
February 20, 1950.
unions,
In
a
telling
of the tax paid
Continued
$2,000,000
Lake
Merely
receive
an
offer to sell or a solicitation of an offer to buy these securities.
\The offering is made only by the Prospectus,
-
a
organized,
This announcement is not
.
of
many
rights be ignored?
from
elry and toilet articles, should be
are
vanced when
him
exempt
small com4
American people have ad¬
only the extremely high income man can build
up
security for his dependents? Why, one of his ablest aides has
left
raise
on
of large companies and
panies.
diamond
graduate
we
the tax
crease
large
$10,000
on
would
large corpora¬
tions to 42% and keep the 23%
rate on corporations
making less
than $25,000. Thus he would
in-?
consumption." Yet, he
reducing the excise
from
mink
Snyder
the rate of taxes
af¬
gone is no fault of his or of
Truman think that the
This
developed by Irving
was
in
get his spending program, 4t w,Quld
up.
Does Mr.
proposal
$2,500 in market
theory of "ability to value. It is these little people who
pay," the luxury excise tax ought will have their taxes increased
elimi¬
consumption of
foreign
That
stream
ter
cise
time came when Roosevelt ceased to
have his way, and Truman
doesn't have his. In 1938 a
strong opposition developed to Roose¬
velt and checked him. It
caused him to divert his talents to
Truman.
on
prod uction
years'
crying wolf in '44 and *48.
we
Apparently, Mr. Truman doesn't
that the
the world and his abil¬
following him.
o
ex¬
and
nating all
Elisha M. Friedman
excess
name
business
mends
method
about.
Now
t
«
the
enter
instead recom¬
a
unemployed, make political slaves
un¬
taxes
Thus
enlarge plants and to improve
processes
low income groups and
impose barriers to invest¬
which
ment
the
to
which
tax
desirable
all at the
us
Let's take
to
recommends
cise
on Republican alarms sounded over
the past 17 years and ridiculed
them with the inescapable fact that
aren't
completely ruined yet. As a matter of fact, we have
progressed to the amazing point of where we can have free medi¬
relatively free housing and
will at¬
reduce the
spending.
reinvested would
taxed, because such savings
would
on
why it is
we
care,
capital
tempt to show
keep millions in misery
not be
Secretary recommends re¬
excise taxes which "are
ducing
fected,
weight
paper
Instead he called the roll
cal
rate
loopholes
the
individual
Excise Taxes
The
-
gains tax. This
the top of the
on
n
burdensome
in
a
to
i
tax
lux¬
on
Treasury advisor.
the
coal
but
money saved or
holding period further.
and to close
have uttered
and make them like it.
the Fifth Avenue shops.
bill to tax not individual incomes
increased further by reducing
cor¬
poration
six
crowd
the
come
be
the
cheap
or
member of the House introduced
the
up
proposes
raise
something worth remem¬
bering had he said candidly that he and his gang owed their suc¬
cess
eliminate the
work
or no
to reduce
proposes
and to
months, or that thousands
Chrysler employes are idle because of the
of
whim
mattered
$10,000,
consumption seems unwise. In
fact, the late Ogden Mills while a
on
galore because, of course, this
dough.
crowd is in the
Carlisle Bargeron
The
excise
to
sense
fur coats
on
ury
busi¬
on
expenses
mink coats
were
tax rate
same
toilet articles purchased in the 5c
10c store and expensive
per¬
(freight rates, telegraph, etc.), but imposing
non-essentials. Asserts Treasury's proposals
would greatly increase burden on small stockholders of
large
companies. States that corporate income tax is a disguised
sales tax even on necessities. Holds that
capital gains tax
proposals are inadequate. Proves that shortening holding
period would increase receipts further. Urges publication of
Treasury data for revising capital gains taxation.
ness
graduated tax
drinks to make
enough
on
no
and
Mr. Friedman recommends eliminating all excise taxes
except among some of the younger element, of
course, but among the oldsters there was the
defiant, to
proportion
luxury
and
makes
Abolishing excise taxes
armory for the
dinner that there was a lot of shame
among them. There was rela¬
tively little of the gayety one might expect of such gatherings,
feel
in
price
for $100 and for
fumes in
people who gathered in the
$100-a-plate Jefferson-Jackson Day
one
levy the
It
Consulting Economist
Be it said for the more than
5,000
tendency to take
rising
character.
By ELISIIA M. FRIEDMAN*
By CARLISLE BARGERON
Washington
graduated
their
to
9
page
39
10
COMMERCIAL
THE
(802)
By DR. HARLEY L. LUTZ *
ed
various
to
taxes
and
assessments
department
Pollock
E.
Pine
sales
the
to
Wm.
attention
Bank and Insurance Stocks
&
Co.,
By H. E. JOHNSON
of
Inc.,
20
This Week—Insurance Stocks
Street, New York City.
deducted from
payrolls which reduce take-home pay of work¬
Says if these deductions go too far a great many people
going to say /'game is not worth candle," and "quit
ers.
are
The reports of fire
best way,
to
taxes
perhaps, to talk
who are
women,
of households and also
public affairs,
managers
interested in many
would
be
to
unions.
tion
Government
dollars
by
a
From an overall point of view, the most marked improvement
during the year occurred in underwriting operations. The loss
ratio improved significantly as losses declined even though there
was
and
Cost
Security,
The
T.
Washington
stitution,
6,
C.—
D.
Y.—paper—$2.
;
places. There is
Book
many
made. In
were
tries
indus¬
the
em¬
this.
flation
of
1920's the German
the
house frau carried her
was obliged to check-off; her purse and took along a bas¬
the union dues so that union man- ' ket to carry home the groceries—
the
inflation was on she
agers would not have so
much1
trouble collecting from the mem¬ carried her money in the basket
and the groceries in her purse.
bers, and what was left was the;
United
The
worker's take-home pay.
is
States
planning
In due course the government to throw away Our potato surplus.
picked up this idea.
The first Fifty million bushels costing $80
government check-off was The million may be left to rot. That's
Old Age and Survivors tax in the the present story on the potato
middle 30's.
In the middle 40's support program.
An article in
withholding of income tax began. today's "Herald Tribune" says that
This
is
withheld
weekly, ;bi- it cost us $250 million last year
weekly or monthly from the {lay to buy up and throw away pota¬
Some
of
Blue
have
us
Cross and
Savings Bonds as vol¬
untary deductions.
Now let us ignore union dues,
Blue Cross, and all the others and
consider only the taxes, because
they are by far the most import¬
ant check-off that whittles
take-home pay.
Obviously
who works and
son
and
a per¬
income
earns
that income divided be¬
sees
himself
tween
down
and
the
toes
found
for
school
could
use
no
industrial
lunches,
or
be
purposes*
anything else
Beveridge Philosophy
Do
a, book which outlined
schemes for greater security?, In
this book
that
statement
a
made
was
vide
time for the government and the
rest of the
time for
himself
and
his family.
This is an elementary
fact, but it is important to realize
that you, or your husband, as the
Worker, have a chance to spend
only a part of the income earned
and
cisions
how
to
as
to
nues
further
taxes
is
check-off
great
jsay
and
burdensome.
are
the
game
candle.
reven-
can
go
that
say
If the tax
pushed too far, a
people are going to
many
Some
isn't
of
pro¬
scheme then, but now we are pay¬
ing farmers to grow potatoes and
we then throw them away.
This
the
same
Sir William
as
worth
old
us
expense.
Bev-
age
we
pay
to
keep
of soil fertility.
The other way to increase take-
the
work¬
Thus
the soil in good condition, and we
also pay for the unnecessary wast¬
home income
is to reduce taxes.
horses get into a work trance, but
even old workhorses can get tired
Of
and quit pulling on the collar. •
There are two ways of dealing
work border and
with this dilemma.
tem to
that
makes
The incentive
people; Work
is
either
cut
quit
tion is
come
to
or
too
slack off.
When
far,
they
One solu¬
increase dollars
of in¬
for everybody so we would
still have
fore
even
lution
down
the
is
amount of take-home pay.
this
is
as much money as
after taxes. Another
to
reduce
be¬
so¬
course, a few of us might be
foolish enough to say "I'll just
know
know
There
are
Won't
the
have to
certain
groups
that
able to get pay increases
(big
are
his income
at
decisions
by Dr. Lutz before the
Department of the New
ViHk State Federation of Women's Clubs,
*Ati
address
Home
New York City,
Feb. 1, 1950.
You
more
—
and let
about
him
how
Recent
as
-
.
were
1948
1949
Net
premiums written
Net premiums earned-——--
$24,886,000 $22,112,000
21,400,000
22,029,000
Losses incurred to premiums earned-53.8%
46.8%
Expenses incurred to premiums written
41.9
46.5
invest¬
should
stocks
still be
weeks'
six
trial
cheap, and
Total ratios
,
readers
$37,760,000 $39,654,000
30,038,000
32,467,000
$48.16
$51.95
—
Total investments
share
——
-
Liquidating value
Per
share—
per
operating earnings
on
a
consolidated
CONSOLIDATED
NET
OPERATING
Job Modifications Under Collec¬
Bargaining
—
A
Survey
of
Year
1949—
Case Studies-^Industrial Relations
underwriting
Section, Department of Economics
From
equity
in
premium
Social Institutions, Princeton
University, Princeton, N. J.—pa¬
and
Federal
Income Taxes
$0.26
$2.11
3.-37
investments
From
and
After
for Federal
Income Taxes
$2.37
/
From
Experience
EARNINGS
Provision
Federal
1.43
2.24
Income
/
Four
Company
basis were
also compared for the two years.
Rofore
tive
93.3%
95.7%
Total assets
subscription
only); send $1 to
Dept.
CF-1,
Investographs,
31
Gibbs Street, Rochester 4, N. Y.
(new
raxes
unearned
reserve
change
Totals
Market X-Ray
Graph—Graphic
portrayal of factual trading data
and
interpretive analyses.
For
samples arid
$1
latest
bulletin send
is
0.07
0.07
$6.11
$1.69
$4.42
money
to reduce
ih
your
own
pocket
public spending.
must
no
have
question but that
Wise
Money
'
The
Intelligent
Everyday Fi¬
nance—Mary Berkeley Finke and
Helen Knox—G. P. Putnam's Sons,
2 West 45th
Street, New York,
N. Y.—cloth—$3.50.
government.
Continued
on
How
page
43
From
—
Guide
National
ures
to
& International Meas¬
for Full Employment—United
Nations
(UN 1949 II A3)—Colum¬
bia University Press, 2960 Broad¬
way,
New
York
27,
N.
Y.
paper—750.
•
Relative
Imports
Prices
of
Countries
Exports and
of
Under
-
Developed
United Nations
(1949
II
B3) — Columbia
University
Press, 2960 Broadway, New York
2?, N. Y.«—paper—$3.75.
—
in
$2.35
—
$2.35
-1,52
-1.52
3.49
3.49
$4.32
equity
premium
$4.32
unearned
reserve
change
Great American Insurance Co., another of the fire insurance
companies which has issued its annual report, showed favorable *
results for the year.
Net premiums written on a consolidated basis showed a
over
gain *
of $3,301,851, reaching a record total ex¬
same general factors effected losses and ;
mentioned above. Of particular importance
the preceding year
ceeding $81,500,000.
The
loss expenses as were
was
►
the adjustments of costs and accident frequency in the auto¬
This helped considerably in the results of the indem-
mobile field.
Underwriting
nity company.
expenses,
cussion
over
WGN
and
the
Mu¬
tual
Broadcasting
System
by
Dewey Anderson, Harold Isaacs,
Speculative Merits of Common
Stock
R.
H.
Warrants—Sidney Fried—
M. Associates, 220 Fifth
Avenue, Dept.
N. Y.—$2.
C,
New
York
1,
Statistical
increased moderately with the higher volume.
As the increase in
premium writings was less than in the year
additions to unearned premium reserves were
smaller.
The increase for the year was $5,996,274 as compared
with $8,936,924 in 1948.
These factors resulted in a substantial
increase in the statutory underwriting gain. For 1949 it amounted
to $5,010,838 as against $1,010,316 a year earlier.
Nations
Book
—
United
Columbia
University Press, 29.60 Broadway,
(UN XVII.I)
New York 27,
—
*N. Y.—cloth—$6.
,
before, however,
,
Concerning investments,, consolidated earnings were reported
$4,357,406 for the year compared with $3,968,019 iri 1948. The
gain for the year was thus, $389,387.
i
at
America have released
Co. and Insurance Company of North
preliminary reports of their operations for
the year just ended indicating that they, too, enjoyed a very prof¬
itable period.
Their annual reports as well as others in the
industry should be available
soon.
NATIONAL BANK
19 NEW YORK BANKS
oi INDIA, LIMITED
Bankers
to
the
Government
Govt. Bond Portfolios
Office:
Head
Branches
Breakdown of:
in
Kenya Colony and Uganda
26, Bishopsgate,
London, E. C.
in
India,
Ceylon, Kenya
Colony, Kericho. Kenya, and Aden
Paid-up
The Bank
Capital
Capital--
£2,000,000
£2,500,000
conducts
every
description oi
banking sind exchange business
and
Circular A vailable
£4,000,000
Fund
Trusteeships
Sources of Gross Income
Burma,
and Zanzibar
Subscribed
Reserve
Year
v
although well controlled,
The Home Insurance
Should
America
Develop the
World's Resources?—A radio dis¬
I
we
underwriting
Totals
Cut Federal Spending
There's
investments
From
Office, New York 1, N. Y.
Woman's
1948-
From
Dept. C-2, Market Action,
Inc., P. O. Box 986, General Post
to
The first line of attack
Year
to
make
it
this question of how to have
more
unions, for example) to offset both
American
—
securities
stock holdings con¬
letter "Our Boom
May Last
Longer than Most People Think,"
explaining why prosperity may
last
longer and why the right
a
income
on common
Counsel—Ben¬
Work 'and A. Wilfred
May with James
the less you
take home
H. McBurney as Moderator—The
out of the extra, money earned. If
Northwestern University Review¬
we want
tq <sp,e jricome. and pro¬
ing Stanct, Evanston, 111.—Paper—
duction increase—and that is the
single copies 10c (16 weeks' sub¬
ultimate goal of a free society—let
scription to "Reviewing Stand"
the individual have ihe-first crack
$1).
on
Help
more."
that it is very cun¬
ningly devised
the
taxes.
earn
enough about the tax sys¬
be spent.
Inflation
Investographs
ment
soil conservation program at more
necessary.
step
ope
must have
support' its
are
to
We
the
spend
Taxes Are Necessary
Taxes
worth while
operations.
to
rest.
Government
was
eridge's philosophy—dig holes and
fill 'em up again.
In fact, our
way is the more wasteful.
The
hole-digging would not deplete
the productive quality of the soil,
but continuous cropping uses up
the fertility of the soil, and this
makes it necessary to operate a
else makes the de¬
someone
it
employment even if
you
merely hired men to go out and
dig holes and then fill them in
again. We laughed at Beverddge's
is
A
New York 7, N. Y.—$3.50.
way,
The larger vol¬
primary reason,
you
written
that, in effect,
what he is doing is working part-
—
per—$2.
remember a few years
ago when Sir William Beveridge
was
over
here and he had just
govern¬
ment should realize
.
Which
for
of Practical
The
in
money
ployer
while
Investor,
Intelligent
interesting figures
fixed
on
the
was
shown by the Providence Wash¬
ington Insurance Co. in its 151st annual statement recently dis¬
tributed to stockholders. The figures summarize the operations of
the Providence Washington Group for the past two years.
jamin Graham—Dept. CFC, The
Intelligent Investors, 150 Broad¬
many
check.
Some
,
t h e'
great many
also at record levels.
was
available for investment
of funds
well
'1949
It has been tried in
ratio, however, was lower than in recent years
sharp improvement in the statutory underwriting
a
although higher yields available
as larger dividend payments
tributed to the improvement.
Latin
11.51)—Columbia University Press,
2960
Broadway, New York 27,
N.
was a
Investment income
ume
Economic
Survey
of
America—UnUited Nations
Un¬
increased for practically all companies and,
modest gain in the expense ratio.
expenses
resulting in
profit.
paper.
ons
a story from Ger¬
which goes something like
Before the big German in¬
moderate increase in the volume of business handled.
result, there
a
The combined
Schlotterbeck, and Mil¬
dred Maroney—The Brookings In¬
Karl
from
Dr. Harley L. Lutz
as
Meriam,
Lewis
—
Social
of
Financing
deducti
pay
a
derwriting
and
general give-away pro¬
put it in terms grams. Back in the 30's there was
of take- home, a misguided individual who said
income.
This the way to correct depression was
term, take- for the government to print a lot
home income, of greenbacks and send up a flock
of airplanes to sow them around.
o r i g i n a ted
down at the Well, inflation is not a solution,
the
wage
worker whether
money
is passed
level because around by airplane or in some
it was there, other way. You all know that in¬
historically, flation isn't the way to correct this
that the first: difficulty about take-home pay.
week's
In
published in the press so that a good idea of the operations
during the past year is now available.
general infla¬
a
weeks.
been
give us
can
of the major companies have not as yet re¬
reports, they should be available within the
a number of cases preliminary results have
many
their annual
next few
taxes and prices. A lot of us can't
do that.
We don't all belong to
more
in the history of the fire insurance industry.
Although
leased
of income taxes.
The
insurance companies now being issued are
was indeed the most profit¬
favorable and indicate that 1949
very
able yeat
pulling on the collar." Notes incentives to make people work
are being taken away and, as remedy, urges reduced Federal
spending and taxes. Favors consumption levies and reduction
about
Thursday, February .23, 1950
Martin C. Harris has been add¬
Consultant, National Association of Manufacturers
Finance, Princeton University
calls
CHRONICLE
Adds Harris to Staff
>
Emeritus Professor of Public
Dr. iutz
FINANCIAL
Wm. E. Pollock Co,
Taxes and Take-Home Income
Tax
&
Executorships
also undertaken
laird, Bissell & Meeds
Members
New
York
Stock Exchange
120 BROADWAY, NEW YORK 5,
Telephone:
Bell
BArclay
Teletype—NY
(L. A. Gibbs,
N. Y.
7-3500
1-1248-49
Manager Trading Dept.)
.
Volume
171
Number 4884
-
COMMERCIAL' &
THE
FINANCIAL
CHRONICLE : t
'
.
/
•
.
Balance Sheet
December 31,1949
ADMITTED
ASSETS
'DECEMBER 31,
1949
Cash in Office, Banks and Trust
United States Government Bonds
Other Bonds and Stocks
Investment in The Home
Companies
$ 35,561,204.01
.
110,418,558.10
143,358,542.85
7,690,736.20
3,017.83
4,477,325.36
.
First
Mortgage Loans
Real
Estate
.
.
,
...
Agents' Balances, Less Than
90
Reinsurance Recoverable
Other Admitted Assets
Paid Losses
on
Days Due
....
Total
A company
a
is
than
more
building
or a
a name,
.
Indemnity Company
.
14,370,413.65
.
.
.
.
374,237.35
1,891,094.14
.
;
.
.
.
.
-
.
Admitted Assets
y
1
LIABILITIES
legal entity. ..it is people
Reserve for Unearned Premiums
Reserve for Losses
.
.
$146,128,831.00
.
30,890,845.00
13,900,000.00
Reserve for Taxes
.
Liabilities Under Contracts with War
Shipping
Administration
Reinsurance Reserves
„
Other
Behind The Home's financial condition stand
by
many
people. It
.
.
Liabilities
.
.
Total Liabilities
important human assets—the people who own
this Company, the
people who work with us and
the people who are served
by the Company.
The Home is owned
.
Capital
Surplus
.
Except Capital
1,608,917.08
1,191,579.00
3,057,570.33
.
.
$196,777,742.41
••••••«»..»...
•
•••••«•«••...
Surplus
as
Regards Policyholders
Total
serves
people—in all walks of life, in all parts of
the country, in
many other parts of the world.
You or your neighbor, whether a
many
NOTES: Bonds carried at
$5,376,605.79 Amortized Value and Cash
$80,000.00 in
the above balance sheet are
deposited as required by law. All securities have been
valued in accordance with the
requirements of the National Association of
Insur¬
ance
Commissioners. Assets and Liabilities in
Canada have been
adjusted to the
basis of the free rate of
exchange. Based on December 31, 1949 market
quota¬
tions for all bonds and stocks
owned, the Total Admitted Assets would be
increased
to
$319,766,705.54 and the policyholders'
surplus to $122,988,963.13.
policyholder
or
a
stockholder,
or
a
prospective
portant to The Home Insurance
Through its
sentatives,
more
The
Its
Insurance
and
smallest
;
strength
well
as
For almost
a
as
the
im¬
repre¬
Company is
protector of Ameri¬
homes and the homes of American
size
are
Company.'
than forty thousand
Home
today the leading insurance
can
one,
enable
it
to
Directors
serve
which
the
Charles G. Meyer
The Cord
largest insurance need.
estimate.
Home
more
Since
the
been
restored
are
a
billion and
a
is
to
Henry C. Brunik
General Counsel
President,
Empire Trust
Ivan Escorr
Vice President
Company
C. Stevenson Newhall
Harbin K. Park
Chairman of Board,
Pennsylvania Co.
President &
of Philadelphia
First National Bank
Title Guarantee &
Company
-
Lawyer
protect
Harold V. Smith
Percy C.
Madeira, Jr.
President,
President
Harvey D. Gibson
affect
the economy of the
country, this
of The Home's financial condition
may
be of interest to the public.
Trust
Director,
of Columbus, Ga.
Boykin
Land Title Bank
President,
Manufacturers
Leroy A. Lincoln
Earl G. Harrison
Company
C.,Wricht
Lawyer
& Trust Co.
Frederick B. Adams
Lawyer
President,
Metropolitan Life
Chairman of
Executive Committee,
statement
Vice President &
'
Chairman,
Committee,
property values in which so many people are
concerned, and because the loss of such values
would
Meyer
Company
Wills & Trust
half dollars in finan¬
business
The Cord
Charles A. Loughin
Guy Cary
Home's
Robert B. Meyer
Trust Co.
Ceorce McAneny
Trust
The
-
Chemical Bank &
Lawyer
cial losses.
Because
Roger W. Barson
Chairman of Board,
Babson's Reports, Inc.
President,
Union Dime
Vice
'
of
Wilmington, N. C.
President,
Savings Bank
Edwin A. Bayles
founding of the Company,
President,
Peoples Savings
Bank & Trust Co.
Harold H. Helm
Chairman,
beyond
;
Warren S. Johnson
Cleveland Trust Co.
William L. DeBost
policyholders have been reimbursed for
than
George Gund
Meyer
Company
hundred years, The Home has
have
President,
City Investing Co.
Banker
stood between property owners and the risk of
sudden financial loss. The homes and business
futures
Robert W. Dowlinc
Lewis L. Clarke
industry.
Champion McDowell Davis
Insurance Company
President,
Thomas J. Ross
Atlantic Coast Line
Atlantic Coast Line
Railroad Co.
Senior Partner,
Railroad Co.
Ivy Lee and T. J. Ross
Sincerely,
PRESIDENT
Home Office: 59 Maiden
FIRE
The Home
•
AUTOMOBILE
Indemnity Company,
an
•
Lane, New York 8, N. Y.
MARINE
•
PROPERTY
INSURANCE
affiliate, writes Casualty Insurance, Fidelity and
Surety Bonds
'
'
(803)
li
12
COMMERCIAL
THE
(804)
to
investors
smaller business
Two
associations of
prominent
submitted to
of the Senate
have
businessmen
Subcommittee
the
concerns.
fluctuating
widely,
reports would unduly upset
the companies' stockholders and,
in fact, mislead them as to actual
conditions
these
Text of NAM's Protest
Association
National
The
Manufacturers,
in
of
statement
a
submitted under date of Feb. 14 to
Subcommittee
the
of
the
Senate
Banking and Currency Committee,
expressed unqualified opposition
to
the
Frear Bill.
The
consideration
must
be
Committee
conditions.
open protests against the. Frear
Bill, a measure under consideraBanking and Currency
statement
given to the normal growth of
companies under our free enter¬
prise system. For example, a com¬
pany now having 300 stockholders
and only $2J/2
million of assets
would find itself subject to the
bill
when
its
assets
proposed
reached the $3 million mark. The
prospect of being subject to the
onerous
and costly provisions of
an
act such as proposed in the
Frear bill cannot be considered
very
a
effective incentive or reward
effort and ingenuity of
the
for
management and security holders
to
provide
a
volume
greater
oi
goods and increased employment.
has
As
been
publicly
stated
by
officials of our government,
smaller companies must be given
assistance in every possible re¬
on
maqy .smaller business enter¬
spect in order that they may grow,
prises and asserted that "no con¬
clusive evidence has been brought expand and make their import
tant contribution to the further
to light that the public interest
will be served" by the passage of development of our economy. The
imposition
of
handicaps
upon
the bill.
these smaller businesses incorpo¬
Full text of the NAM state¬
C, A, Putnam
Thomas J. Miley
rated in the proposed bill does
ment, which was accompanied by not live up to the spirit of these
tion to extend the jurisdiction of a letter
of transmittal from its
public statements.
the Securities and Exchange Com¬
President, Claude A. Putnam, is
mission over all business corpora¬ as
More Facts Needed
follows:
tions having assets of $3 million
The
National
Association of
In the opinion of the NAM the
or more and the number of whose
Manufacturers has carefully re¬
public and the Congress is en¬
shareholders exceeds 300.
viewed the provisions of S. 2408
titled to much more detailed in¬
Such extension of the powers of
[Frear Bill] and the case which formation regarding the number,
the Securities and Exchange Com¬
the Securities and Exchange Com¬
kind and size of companies which
declared that the proposed legisla¬
tion would inflict severe hardship
many
•
mission
over
American
business
is
Frear Bill and Small Business
By JOHN BUTTON
addition
In
best interest of
industry and will hamper and heavily burden
extend SEC powers is contrary to
and
Thursday, February 23, 1950
Small Companies Real Losers
Association of N. Y, hold
NAM and Commerce and Industry
CHRONICLE
FINANCIAL
panies which would be affected
are relatively small in size.
Register Opposition to Frear Bill
measure
&
mission has made in behalf of this
would be affected by
the proposed
contrary to the best interests of proposed legislation. Three facts
legislation as well as to estimates
and
industry
alike, stand out clearly—
of the cost to these companies of
Jefferson Miley, Execu¬
(1) The powers of the Securities complying with its requirements.
tive Vice-President of the Com¬
and Exchange
Commission The NAM has found no evidence
merce and Industry Association of
would be greatly expanded. of
any strong public desire on the
New York, Inc., declared On Feb.
(2) A large number of smaller part of individual stockholders or
16 in announcing the Association's
companies would be affect¬ groups of individual stockholders
opposition to the measure.
ed
adversely
by
this to have the powers of the SEC
In a letter to Senator J. Allen
expanded as proposed by S. 2408.
proposed legislation^
Frear, Jr., of Delaware, the spon¬
The NAM, of course, does not con¬
sor of the measure,
(3) No apparent need for this
transmitting
done any practice detrimental to
a
statement for inclusion in the '■■■(,
legislation has been demon¬
the public interest.
It believes
record of the hearings on the bill,
strated.
that stockholders are entitled to
Louis K. Comstock, Chairman of
Particularly in view of the fact
adequate information but it does
the Association's
Asserting Frear Bill will eventually force more and more securi¬
ties of small companies that are now traded over-the-counter
into the listed market, writer contrasts this with lack of growth
in securities industry and efforts, even applauded by former
SEC Chairman, to increase selling ability and attract able men
to
participate in greater distribution of stocks among public.
Warns measure, by destroying over-the-counter dealers, will
hamper small business.
It is
lot of theory about the
sell securities, but such talk
wake up some day and don;t
sell. There are all sorts of
people who have been telling the Securities Dealers in
this country how to go out and sell.
Clinics have been
held in various cities and so-called experts have told
you how to do it.
Recently an acknowledged expert in
the field of intangibles held a series of lectures about it
in New York.
Your various associations are obtaining
information from top salesmen in other lines as far re¬
moved from security salesmanship as the oil industry
and transportation, and passing it on to you.
Most of this
material has been published in the "Chronicle.5'
In addi¬
tion, the ever-present masters of the art of security sales¬
manship in the Investment Trust field are also filling your
mail bag with ideas and suggestions.
one
thing to
pass on a
best
ways to go out and
doesn't go very far if you
have any merchandise to
Everybody wants to tell
the Security Dealer,
you,
how to do it!
Even a past Chairman of the Securities and
change Commission once had the temerity to tell
investors
how to sell—Mr. Hanrahan (I think
Thomas
He said, "Sit down with your
•
<
,
Committee
Security
Regulation,
on
suggested
that "before considering
the powers of the SEC
enlarging
over pri¬
enterprise in this country, it
would
be
well
to
investigate
thoroughly the manner in which
vate
the Commission has administered
the laws under which it operates
and whether it has really proven
to be
a
protection to investors and
in the public interest."
Reiterating its stand when
posals similar to
in the Frear Bill
those
and
Industry
also
proposals
Association
apparent that
these
to
impose
a
heavy
burden of regulation and govern¬
mental
ment
control
upon
vast seg¬
a
of
American
industry
are
designed
primarily
to
the
special
interests of
serve
small
groups
(stock exchanges and their mem¬
bers) who may indirectly benefit."
Other
objections
to
cited by the Association
The
publication
the
bill
are:
Federal Government.
The
National
Association
of
of
communities
and
members
salaries,
to
Increasingly
rights of States and localities
are
being absorbed and usurped
by a central government. The de¬
cerns
from
every
State in the velopment of a great bureaucracy
Union ranging in size from very
imposing a constantly growing tax
small locally-owned concerns em¬
burden on the people without pro¬
ploying fewer than 50 people to
portionate benefits to them must
the
large companies employing be resisted. Experience indicates
thousands of people whose secur¬
that bureaus or agencies once es¬
ities are widely held by stockhold¬
tablished constantly endeavor to
ers
throughout the nation. The extend their
power and control.
Association is especially interested
The
Securities
and
Exchange
in the operations of the smaller
Commission is no exception to this
companies because 83% of its rule.
have less than
500
The
original intent of the Se¬
consideration,
curities Act of 1933 was: "To pro¬
vide full and fair disclosure of
2408, is another sponsored by
the character of securities sold in
The
S.
the
em¬
ployees.
and particularly
those of sales
representatives and other person¬
nel, would be most damaging in
smaller
proposed
being con¬ Manufacturers
represents approx¬
1942, the Com¬
imately 15,000 manufacturing con¬
stated:
"It is
the
legislation not believe that isolated instances
of the lack of information should
ies, the NAM believes that the Se¬ be used as a basis for unneces¬
curities and Exchange Commission
sarily burdening many smaller
must justify beyond a reasonable
companies.
doubt its request for additional
power. In the opinion of the NAM
More Control Dangerous
no such justification has been es¬
The proposal to expand govern¬
tablished and in the absence of
ment controls over new segments
such proof the NAM must register
of industry must be reviewed in
its opposition to S. 2408.
the light of continued centraliza¬
tion of power in the hands of the
NAM Members
contained
were
sidered in 1941 and
merce
pro¬
that
would affect the smaller compan¬
bill
under
the Securities and Exchange Com¬
mission for the purpose of extend¬
the
ing to investors in certain unregis¬
smaller companies
tered securities the alleged basic
Many companies of this char¬ protection now afforded by the
acter have for years given their Securities Acts, as amended, to
stockholders detailed reports. The investors in securities now regis¬
SEC picks on isolated examples tered with the Commission.
interstate
and
foreign commerce
through the mails, and to
prevent frauds in the sale thereof,
and for other purposes."
In other
words the purpose of the act was
to assure that the potential in¬
vestor had full and adequate in¬
and
formation regarding a new
of
The
improper or inaccurate ac¬
Securities and Exchange
counting practices as though these Commission in its report "A Pro¬
in
order
that
he
might
issue
exercise
posal to Safeguard Investors in prudent judgment before making
his investments.
The Securities
might be severely Unregistered Securities" contends
handicapped by being required to that "approximately 1,100 com¬ Act of 1934 was designed: "To
give a breakdown of its inven¬ panies not now required to file provide for the regulation of se¬
tory. If customers knew a com¬ any reports with the Commission curities
exchanges and of overand about 650 additional compan¬
pany was long on merchandise it
ies which file some but not all of the-counter markets operating in
might be more difficult" to deal
the reports required by Sections interstate and
■\vith these customers.
foreign commerce
12, 13, 14 and 16 of the Securities and
through the mails, to prevent
Quarterly reports in such indus¬
Exchange Act would be affected
tries as textiles mi^ht be far too
by the proposed amendment."
In inequitable and unfair practices
frequent and some sort of sliding the
body of this report mention is on such exchanges and markets,
scale for reporting might be more
made of a few large companies and for other purposes."
It also
desirable.
were
A
the general^procedure.
company
,
which would be brought under the
If
some
companies had to give
quarterly reports during 1949 with
supervision of the SEC. However,
it is obvious that most of the com¬
had the effect of
broadening
Continued
on
some
page
43
pectus to him.5'
but
none
They all
can
of them db it, nor do
a
was
his name).
prospect and read the pros¬
Some of the ideas, however, are
to make
that
Ex¬
you
tell you how to do it—
they pay your overhead.
good. But we are trying
point, and here it is:
The
securities
business
is
behind other
The listed busi¬
ness being done
today is behind the volume of the
twenties—despite our great increase in wealth and
population. New issues of equity securities are almost
non-existent.
Small business is so hard up for funds
that the politicians are now trying to get up a new
method of syphoning off some more of your tax
money and setting up another government agency to
loan, or invest money, in small business. These things
way
industries in this country in growth.
have been said
The facts
So
will
now
are
and
over
over
there for all to
another wrinkle
eventually force
whose securities
again, and they
comes
more
are
true.
see.
and
along. This Frear bill
small companies,
more
traded over-the-counter, on to
they will have less marketability
than they enjoy today, and more and more local security
dealers will eventually give up their business and do
something else.
Or they will go to work as salesmen
for some stock exchange firm, or as a last resort, go out
are
now
the listed markets. There
and sell Investment Trusts.
There is little
men
to
enough incentive for skilled and able
stay in the securities business today in most small
towns and local communities.
But this bill will fix it for
No longer will it pay any local dealer to follow
local situations, give clients service, and make markets,
in good times and bad, for the securities of small com¬
panies having 300 security holders (not shareholders, mind
you—there's a difference). Who wants to work for a small
stock exchange commission when it entails all the time
and effort that is put into following these small situations
that is now being done by local security dealers all over
the nation?
Does Washington think they can go on in¬
definitely placing impediments before the smaller security
dealers of this country without completely destroying
them—or do they want to destroy them, so small busi¬
nesses can't raise capital through the sale of securities?
Is it a part of socialism, and the planning of the present
good.
Administration to
eventually kill what is left of the securi¬
business, which traditionally has financed small busi¬
ness, so that the government planners can put over their
idea of gradually absorbing all business in this country?
ties
You
study all the salesmanship you can find from
history onward, but it won't help you one
bit if you wake up some morning and find out you haven't
got anything more to sell that you can make a profit out of
except some trust shares, and a few bank and insurance
can
the dawn of
stocks.
You had better
~
get busy
on
this one!
Volume 171
Number 4884
THE
A
COMMERCIAL
&
FINANCIAL
CHRONICLE
(805)
Report of Progress
ASSOCIATES INVESTMENT COMPANY is primarily
engaged in automobile financing.
Operations are conducted in 108 branch offices located in key towns and cities east of the
Rocky
Mountains. At these points, motor lien retail installment notes are
purchased on a discount basis
ASSOCIATES
from automobile dealers. In
conjunction with this business dealer wholesale and other loans are
made. Insurance for these
transactions, in the form of comprehensive fire, theft and collision
coverage on motor
vehicles, is provided by
In the Commercial Loan
panies, the majority of which
our
Division, rediscount advances
are
assignments of
other
accounts
are
made
to
smaller finance
engaged in purchasing automobile installment
short and medium term credit is also extended
:> a n v
subsidiary Emmco Insurance Company.
to
industrial and
receivable and inventories and
notes.
com¬
Cemmcrcnil
Secured
trading enterprises against
d>h/
Installment
t~1I
pledges of machinery, equipment and
eligible collateral.
ASSOCIATES INVESTMENT COMPANY, South Bend, Indiana
-
E. M. MORRIS, Chairman of the Board
CONSOLIDATED
BALANCE
H'V
<
•••..
lit;
SHEETS
ASSETS
December 31,
\
<
Cash
|
Other bonds
$ 31,443,434
$
cost or
$
less:
U. S. Government bonds
4,862,850
31,239
31,479
2,050,000
notes
Stocks (market value
$5,125,464)
1,850,000
4,546,086
$132,580,803
34,793,800
4,241,597
11,792,394
3,771,091
4,200,943
11,014,142
7,857,664
3,386,822
Receivables:
3,684,953
$ 10,429,282
19,395,175
•
$ 12,940,124
$172,767,389
Total marketable securities
3,058,485
i
Motor lien retail installment
notes
wholesale, short-term loans
Modernization loans
Chattel lien and conditional sales installment
Direct or personal installment loans
Accounts receivable assigned
Advances to other finance
companies
Commercial loans
on
on
notes
(other than
motor
6,277,057
.J
Land, Buildings
and
Prepaid Interest,
in
2,757,766
$205,968,000
518,949
I
Total receivables and
repossessions, less
lower of
1,008,665
i
,...
Less—Reserve for losses
at
Equipment,
reserve
(3,572,116)
$222,179,241
depreciation
reserves
$202,872,101
$
at cost less
$
of $1,212,303
587,200
417,618
1,079,782
of
Affiliated Finance
Company,
at cost
(50% owned)
1,063,214
668,875
etc
Stock
476,217
(4,274,821) '
market
cost or
3,482,021
$225,935,113
J.
Repossessions
5,444,124
4,073,175
collateral
Total receivables
Inventories,
lien)
collateral
Miscellaneous
Investment
6,312,799
"
.
Short-term commercial
.
1948
$ 35,694,023
Marketable Securities, at
Motor lien
December 31,
1949
514,410
50,000
50,000
$273,199,247
$246,790,059
$150,948,200
$144,475,300
2,199,639
2,067,431
LIABILITIES
Notes Payable, short-term
Accounts Payable
Reserves
Reserve
for
for
and
r
Accruals
Unpaid Insurance Losses
State
and
and
Loss Adjustment Expense
1,786,869
Reserves Withheld-Dealers
and
Others
3,379,760
2,247,446
10,822,355
10,801,939
Unearned Insurance Premiums
Minority Interest in insurance subsidiaries
8,843,768
13,000
to
$ 20,000,000
Capital Stock
and
$ 20,000,000
$ 22,500,000
1957.
Subordinated Lonc-Term Notes due in
1959, subject to annual sinking fund
requirements of $1,800,000 beginning in 1953
$176,416,502
$ 15,000,000
$ 10,418,240
Long-Term Notes due in equal annual installments 1955
13,000
$188,289,914
Total
(MILLIONS)
6,039,890
12,633,868
Unearned Finance Discounts
Growth in Net Worth
1,907,312
6,526,639
Federal Taxes
$
Surplus:
Common stock, authorized 1,500,000 shares of $10
par value each;
outstanding 1,041,824 shares
Paid-in surplus
r
Earned surplus
3,600,000
(under provisions of the long-term
available for cash dividends
on, or
notes
payable, $24,374,339 is
10,418,240
3,600,000
not
reacquisition of, capital stock)
Note: Guarantees
for them
to
surplus applicable
to 1,041,824 shares
28,391,093
outstanding
21,355,317
$ 42,409,333
$ 35,373,557
$273,199,247
Total capital stock and
$246,790,059
up to an amount of $824,000 have been made to certain banks
honor manufacturers'1 drafts covering shipments of automobiles.
STATEMENTS
OF
CONSOLIDATED
INCOME
Total Assets
War Ended
(HUNDREDS OF MILLIONS)
Year Ended
December 31,
1949
1948
December 31,
1949
Discounts, interest, premiums and other
Operating
income.
.
$ 44,442,285
expenses
29,625,219
Net income before income
taxes
Provision for Federal income
26,086,886
$ 14,817,066
$ 11,408,961
taxes
Net income for the year
Consolidated Net Earnings
1948
$ 37,495,847
5,760,000
$
per
share
South Bend, Indiana, February 17,1950.
9,057,066
$8.69
4.632,700
$
6,776,261
$6.50
13
14
(806)
Jas.
COMMERCIAL
THE
CHRONICLE
Kennedy, Jr., in N. Y.
James
C.
Kennedy, Jr.,
in
gaging
New York
is
Mutual Funds
Cooper Square,
deal
of
prospectus
RESEARCH
but
strong
covering
-
trade
will
stock
CORPORATION
offering
$100.
at
BROADWAY. NEW YORK 5, N. Y.
of
1,000
perhaps
a
relatively
short-lived stimulus from the pay¬
ment of $2.8 billion in National
shares
"A
possible
adverse
influence
which cannot be disregarded in an
The
describes
company
vestment policy
its
impartial
in¬
scanning of the retail
the continuing decline
"in horizon is
in agricultural income.
Farmers
at prices lower than their true in¬ as a group have had several years
vestment values, and to maintain of considerable prosperity, and it
a balanced
portfolio of diversified is perhaps premature to shed any
investing
as
securities that appear to be selling
investments
different
among
crocodile tears in view of this
in¬
dustries and companies."
cent
Liquidating
Unusual
to
is
the
"company
the
extent of
also invest,
50%
in securities of
however,
fallen
up
investment
or
_
dealer)
(
(PHILADELPHIA 2,
PA\
1
that
The fact remains
farm income has
today
for the latest
and other
prospectus
descriptive material about
Fundamental
J
A
r
liquidating
provides
value."
for. the
The
charter
unlimited
rowing of money by the company
for any of its purposes.
As of Jan. 31, the total assets
of the company were
$.136,026,
net assets were $112,424.
the
total—obviously
and
The Fund, at 76 Beaver Street,
New York City, was
organized as
a
closed-end investment trust in
June,
from
1949.
amended to
or
added
■
48
f
and
at
about
trasted
from
Company
annual
provide that the
as
los angeles
&
New
in
Co.
Phoenix, Ariz.
Also
1
Sims &
associated
with
IF. England
Marache
is Charles N. Bishop.
Co.
Fund
i
£7/e
\fyearyje
i*
PUTNAM
Incorporated
Founded 1898
BOSTON
Ujodton
NEW
HARTFORD
PORTLAND
Putnam Fund Distributors, Inc.
Street, Boston
CHICAGO
YORK
BANGOR
Members—Boston Stock Exchange
*
New York Curb Exchange (Associate)
American Business
too
auspiciously
sales
are
I
has started off "none
year
as
far
the study
reports
of
24
pared with January, 1949.
of
this
j
load"
will
was
that
COMPANIES
is
due
to
Loud, Abbett & Co
New York
Chicago
—
Atlanta
—
—-
Los Angeles
country."'
sales
420%
those
of
in
A
Diversified Investment Company
Jan¬
be
con¬
Jan.
Halsey, Stuart Offers
31,
under¬
no
1949.
uary,
directors
West. Md.
Halsey,
Corporation are:
Joseph C. Galdi, President, Treas¬
associates
urer
INVESTMENT
A part
Securities, Inc., reports
in
January, 1950,
its
of
Mutual
upon request
LOBD-ABBETT
valued
17,
on
and
THE
Group Securities Reports
Group
V-
officers
Prospectus
asset
$112.25
There
of the
totaled
net
Feb.
on
volume
prices, a part to the work
stoppages, and a part to unseason¬
ably warm weather in some sec¬
i
"sales
or
share, which
$117
lower
lower
in¬
vi
no
Shares, Inc.
retail
as
concerned,"
Shares
of
Stuart
$2,460,000
Eqp. 2i/is
&
Co.
Inc.
the award
won
Western
and
Feb.
20
Maryland
and
Director; Max L. Heine, Ry. Co. 214% equipment trust
Vice-President and Director; Ber¬ certificates,
series
N,
maturing
nard S. Kantqn,
Secretary and Di¬ annually March 1, 1951 to 1965,
rector; Roderick W. Cash, Direc¬
tor; r Vincent Ingersoll, Director;
t
Jessie K.
Byerly, Director.
inclusive.
The certificates, issued
Philadelphia Plan, were
reoffered Feb. 21, subject to In¬
terstate., Commerce., Commission
under the
/
Keystone Revamps Booklets
K.
Keystone Company has
ed the
:ystone
format
and
authorization,
from
revamp¬
to
contents of its
10 individual Fund
booklets.
The
text
removed.
The
layout is
tificates
for
essential
what
do if it isn't
can
remains
INVESTMENT FUNDS
'
IN
■
BONDS
(Series B1-B2-B3-B4)
(Series K1-K2)
^
:
■
■
?
COMMON STOCKS
(Series S1-S2-S3-S4)
?
Broad
suing
Street
relationship
Prospectus
may
ol Boston
50
Congress Street
Boston 9, Massachusetts
and real income for mutual funds
York
loco¬
Natural Resources Fund, Inc.
the
"Perspective"
retail
current
that
the
for
the
trade
foreseeable future depends
a
great
Co.,
Price
$4
a
share
209 South La
and
Midwest
Mr.
Stock
O'Keeffe
has
Ex¬
re¬
as
Manager of their Chicago
Waddell & Reed Add
(Special to The Financial Chronicle)
incomes," the firm of Cal¬
in
&
A
V
Prospectus
•
may.
be obtained from authorized
investment dealers
or
from
,
office.,
Pointing out that "retail pros¬
perity is dependent above all on
an
uninterrupted flow of con¬
states
CAPITAL STOCK
cently been with William R. Staats
...
.
Co.
for
eight
Street, members of the New
investment, high grade bonds and changes.
outlook
,
sue
ILL. —Robert
E.
purchasing O'Keeffe has rejoined the staff of
between
Cruttenden
of
and
switching
New 1:
CHICAGO,
Salle
issue
$8,road
1
ing,
Bullock
than
electric
locomotives
and the rising cost of liv¬
the contrasts between dollar
vin
less
Diesel
electric
power
sumer
cer¬
(Special to The Financial Chronicle)
simple-minded, the
be obtained from
Keystone Company
of
CORPORATION
ST., BOSTON 16, MASS.
provide
Rejoins CruHenden
Bullock Looks at Retail Trade
The
PARKER
Corporation is is¬
booklet, with excellent
entitled
the
"Story
of
Income." The graphs chart clearly,
graphs,
the
to
Robert E. 0'Keeffe
a
even
sale
"Story of
preferred stocks.
•
not
cost
12
Diesel
Income" and Smaller Dollar
THE
or
new standard
equipment esti¬
motives.
Broad Street Tells
for
PREFERRED STOCKS
to
freight
squashed by tra¬
the
used
be obtained from
following
railroad
086,000:
•
..vj.
the
be
mated
—
imagination
dition.
Cert iflcates of Participation in
investing tlieir capital
information
demonstrating
from
will
may
200 BERKELEY
gauge
ex¬
cellent, and the miracle is that the
Funds
to
maturity.Proceeds
booklets are briefer, with the
stupefying. detail and solid set
new
Custodian
1.30%
prices to yield
2.45%, according
at
Prospectus
f your local investment dealer,
«
CHICAGO; : ILL.—Marvyn
B.
Stolley is now with Waddell &
Reed, Inc., 332 South Miehigan
Avenue.
Frank L. Valenta & Co., Inc.
ONE WALL STREET
*
NEW YORK 5
I
j
Coffin & Burr
FUND
50 State
,
General Distributor
Year Starts Badly
The
■
*
QRGANIZED 1931
com¬
open-end
an
the. price
with
The
Street, New York 5
chicago
first
writer.
incorporated
Wall
the
will. be
to
1950.
Hugh W. Long
At
operate
pany
There
authorized
any
formerly
Ellis
A.
tant segment of consumers."
meeting, held in December, 1949,
the certificate, of
incorporation was tions
Registered
investment dealer
Kenneth
Exchange,
was
impor¬
an
He
with
Co.
year.
."The
Holdings continues.
in 17 companies in the
process of chains for the month of January
liquidation, at market value, were showed a drop in. dollar volume of
$44,235.50 on Jan. 31.
slightly more than 5% as com¬
value per
Available
Cruisse
bor¬
:
No "Sales Load" Added
/]
Loewi &
many years
At the present time our farm
population accounts for about 18%
of liquidation, which can
purchased at less than their
■
Investment Company
I
formerly for
is expected to show a
decline' in
the "current
of
companies in the
vestment trust.
Investors, Inc.
associated
Sims & Co., 458
Spring Street, members of
Ver
with
was
re¬
.
send
Mr.
become
Marache
considering
be
your
with
■
and
further'
of its assets
and
process
prospectus from
Ver Cruisse has become associated
population
has
powerful advocates in legis¬
,
has
with the Lee Higginson Corp.
Chronicle)
farm
lative councils.
stipulation that
may
our
many
Companies
the
prosperity
that
To Invest in
Financial
the Los Angeles Stock
receive;
2,000 shares of capital stock to be
offered to the public.
The ex¬ Service Life Insurance dividends
pected
offering
date, is
about to 15 million veterans in the first
March 1.
At the present time, the half of this
year," the firm says.
company has 25 shareholders who
purchased
the
initial
common Farm Income Is Adverse Influence
&
SECURITIES
"Retail
with the Securities and
Commission
labor difficulties.
To Receive Short Stimulus
of
registration
a
early end to prevailing
an
South
Corporation
filed
Exchange
request
upon
NATIONAL
York
statement
and
program
Shares
Mutual
New
on
The
LOS ANGELES, CAL.—J. Peter
and threatened
Shares to Public
to
..,:
MILWAUKEE, WIS.—Elroy W.
Buchholz
(Special
Mutual Shares to Offer 2,000
Details
Willi Marache Sims
By ROBERT R. RICH
investment program
An Open
Inve^merOcpunt
With Lee Higginson
(Special to The Financial Chronicle)
City.
[National
Thursday, February 23, 1950
J. P. Ver Gruisse Is
en¬
securities* business
a
from offices at 30
120
FINANCIAL
&
•
Volume
171
Number 4884
THE
COMMERCIAL
!
Smith, Polian Add
COMING
OMAHA,
EVENTS
In
Investment
With
(Special to The Financial Chronicle)
NEB.
—
Charles
L.
26-27, 1950
CHRONICLE
Prescott, Wright Co.*
KANSAS
(807)
George K. Baum Adds
(Special
CITY,
The
to
Financial
(Special to The Financial Chronicle)
M. Crowe is now
cott, Wright, Snider Co., 916 Bal¬
Baum & Co., 1016 Baltimore Ave¬
with
timore Avenue.
nue.
Chaoman
has joined
the
staff
of
Smith, Polian & Co., Omaha Na¬
KANSAS
CITY,
MO.—Joseph
with George K.
PORTLAND,
J.
Callnan
has
MAINE—Thomas
become
King
Merritt
Bldg.
&
(Washington,
D. C.)
National Association of Securi¬
ties Dealers, Inc. annual
meeting
at the Shoreham Hotel.
1
•
Security
Group of
Bankers
'
,
March 8, 1950
(Philadelphia, Pa.)
Eastern Pennsylvania
Investment
''
'
is
something
Association
more
Forum at Hotel Warwick.
April 21,
1950
Security
New
(New York
Traders
York
annual
than
City)
Association
dinner
at
of
Waldorf-Astoria.
#
Do you want to see
security in the making?
April 28-30
(Greensboro, N. C.)
Southeastern Group of the In¬
vestment
Bankers
Stand in
And
factory and watch the fashioning of wood and
of leather, of steel and of
plastics. Or stop at the roadside
where a
harvesting machine is pacing its amazingly intelli¬
Association
Spring Meeting at the Sedgefield
Inn.
a
broad
gent way across
May 4-5, 1950 (San Antonio, Tex.)
Texas Group Investment Bank¬
ers
provision for old age
the
of wheat.
acres
places you see security in the making. For security
is not
just something we find in a rocking chair when we
grow old.
the Plaza Hotel.
May 26, 1950 (Cincinnati, Ohio)
•
Municipal Bond Dealers Group
of Cincinnati Annual
Spring Party
and Outing at the Kenwood
Coun¬
Security is abundance, and comfortable living, and enough
leisure for sunshine and
play.
try
Club
(to be preceded by a
cocktail party and dinner
May 25
for out-of-town
for all
5-8,
1950
by
together with
guests).
June
to
(Canada)
Help and protection in
Better
It
with varied talents and skills working
common purpose: more and better
things
men
a
enjoy.
annuities
us
we
buy
emergency.
living from day to day.
provides both.
provides help and protection through its
guarantee to
individuals.
as
It
provides better living from day to day through its invest¬
in
industry, in public utilities, in states and munici¬
palities, in the development of homes and farms.
ments
These
It is created
we
buy life insurance and
security.
For life insurance
In these
Association annual
meeting at
when
so
kinds of
two
are
of the
some
reasons
why the John Hancock and
companies continue to grow and why
gratifying to all of those who work in
other life insurance
this
growth is
so
the life insurance business.
Investment Dealers Association
;
of Canada 34th Annual
the
Seigniory
Meeting at
Montebello*
Club,
Quebec.
June 14,1950
Twin
Bond
the
at
Club
White
annual
Bear
ASSETS
Yacht
Club.
*
■
Bonds and
tional
$2,032,410,279.15
divisions.......
Public utilities
.*...
94,937,213.33
Stocks..
j
!
......
161,535,838.16
issue
an
Common
of
share
Coffin,
phia.
Proceeds
Corp.
at
&
Co.
20
by
will
of
be
Real
by
Oct.
21,
1949,
to
construct
and
estate
.
......
A
on
real
properties)
on
estate
309,275,752.64
.....
to
own
business
other
as
a
foreign
to
Israel,
Israel
tion
corporation.
carry
as
an
unless
It
quire
plant
land
the
proposes
to
construction
miles
are valued in
conformity with the laws of the several States, and
prescribed by the National Association of Insurance Commissioners
Securities carried
at
$493,032.00 in the above
for purposes
statement
are
of
4,496,000.00
........
reserve
for fluctuation
security values.
21,340,000.00
192,214,917.53
$2,696,506,366.08
Total
deposited
surplus
to
Policyholders including special
surplus funds.
..
$218,050,917.53
DIRECTORS
its
Elwyn G. Preston
of
Frank G. Allen
Charles L.
waterfront
north
Sidney W. Winslow, Jr.
Haifa
Ayling
Albert M.
Guy W. Cox
Carl P. Dennett
James V. Toner
Joseph E. O'Connell
Paul F. Clark
the company on a lease for 49
right to
renewal
•
ac¬
Charles F. Adams
a
for Group
Total
as
11
to
a
reserve
Unassigned funds (surplus)
required by law
which the government has offered
years with
9,549,000.00
All securities
approximately 125
unimproved
20
payable in 1950
operate
tract of
of
acres
15,461,954.39
.
in¬
on its business in
American corpora¬
company
for
a
in
$2,696,506,366.08
in Israel.
The
Contingency
45,712,727.08
through a
wholly owned subsidiary incorpo¬
rated
Contingency
49,280,637.31
-
Total ..........;
the
a
advisable. to
taxes
45,000,000.00
sundry items
Special surplus funds:
and
change in interna¬
conditions
makes
it
tional
74,418,964.59
21,545,009.55
.
assets
company intends to register there
tends
•
and
property
in
36,010,557.69
valuation standards
Accrued
Cash in banks and offices.
order
21,057,249.13
........
changes in policy
Accrued expenses and
Company's
due and accrued
paid in advance
Reserve for ultimate
55,688,983.76
.....
.
rents
of payment
process
Insurance
fabrics.
transact
Policy benefits in
29,704,350.00
.
40,408,419.00
,
Premiums due and deferred and
yet engaged in business,
but plans to concentrate
its pro¬
duction on
cotton
yarns
172,054,761.34
108,174,012.00
..
78,469,662.00
(home office, housing
Interest and
not
In
.
preferred
policies
operate a modern textile plant in
the State of Israel.
The company
is
.
Loans and liens
the
company, which was incorporated
under
Delaware
State
laws
on
>
.
or
.,......
and other
Philadel¬
used
.
Mortgage loans
$5
Feb.
made
was
Betz
on
Dividends payable to
Policyholders in
Premiums
500,000 shares of capital stock of
per
323,930.227.85
''
$2,138,913,507.00
1950
...
Guaranteed
Moller-Dee Slock;
Textile
premiums
to mature all
Policy proceeds and dividends left
deposit
819,244,978.77
.....
Railroads.....
Coffin, Betz Offers
offering of
by law
policy benefits!
,
Cavalier Hotel.
Moller-Dee
is established
30,828,911.04
■
Industrials;..........
-
Reserve which with future
$601,933,110.00 f"
Dominion of Canada .V
States and other civil
' !
Security Traders Associa¬
Public
LIABILITIES
notes
U. S. Government.....
Sept. 26-30, 1950 (Virginia Beach.
Va.)
Annual Convention of the Na¬
tion at the
December 31, 1949
(Minneapolis, Minn.)
City
picnic
Financial Condition
for
further period of 49 years.A
Creighton
John M. Hancock
Thomas D. Cabot
William M. Rand
Charles
Merrill Griswold
J. Diman
Edward Dane
Ralph Lowell
Samuel Pinanski
Daniel L. Marsh
Charles E.
Philip H. Theopold
Byron K. Elliott
Karl T.
Spencer, Jr.
Compton
Twin City Bonri Club
T» H«M Annul Picnic
MUTUAL/LIFE
MINNEAPOLIS,
Board
of
MINN. — The
Governors of the Twin
City Bond Club has decided
June
14,
for
•held,
as
Club
Picnic.
It
is
the
to
be
usual, at the White Bear
Yacht Club.
COMPANY
MASSACHUSETTS
upon
^Wednesday,
Annual
INSURANCE
BOSTON.
A
COPY
OF
THE
COMPLETE
ANNUAL
REPORT
WILL
BE
15
With King Merritt & Co.
Chronicle)
MO.—Ivan J.
Donaldson, Jr., is now with Pres¬
tional Bank Bldg.
Feb.
FINANCIAL
(Special to The Financial Chronicle)
Adams
Field
&
SENT
ON
REQUEST
connected
Co.,
Inc.,
16
COMMERCIAL
THE
(808)
01 No Benefit Without
Sound Fiscal Policy
nomic
slowly to
at
electrical
the
In
time.
with
been
In
for
us
long
a
quate", and every year for as long
I can remember, we have been
and
researcn
i
as
fine engineer¬
ing
trying
accomplished
great
truth.
of
frigerators
else
to
and
that
continue
<:
:
to
defy us.
One of these has long been known
have
To
the
trical
future
better
that
house
a
has
role
that
concealed
tice
for
fellow
many
demonstration
in
fiscal
com¬
own
then
you
course we
is
been
sions
affairs.
I
somehow
feeling that people have
standing up
this,
on
such
occa¬
to
decry govern¬
extravagance and deficit
as
right size of wire, because if he
doesn't, you are never going to
mental
be able to
lot of
the convenient and glamorous de¬
It has been
vices
special
use
that
would
think, ! long
this
at
venture
described
it
least
before
have
a
1
a
little
of
this,
named
out
of
or
"streamlined
what
long,
a
written
time.
long
about
in
our
and magazines and in
pamphlets. It has been
sternly and repetitiously pointed
on
the
to
be
political
kicked
advertising
of both
the floors
Congress.
ceased
channel of electron emission" and
put
for
newspapers
You
"super-wiring",
as
planning,
a
manufacture;
we
would
we
efficiently
back
has
just a
It
long since
football of
gridiron,
and
houses
forth
to
be
at
the
11
*
*An address
by Mr. Wilson
on
ing
the
William
Penn
Award
Annual Dinner of the Philadelphia
ber
of
Feb. 14,
Commerce,
»
♦
«
receiv¬
at
the
Cham¬
Philadelphia,
miracle.
all
are
you
for
mixture of wish¬
and the expectation
As Dr. Ralph Bunche
Pennsylvania speech,
living on borrowed
put it in his
we
latter
margin
a
on a
thinking
a
time.
proper
season
of the
year.
More
and more people, of all political
faiths, of all occupations and call-
Pa.,
Continued
1950.
on
page
45
No doubt, you are familiar with
"The Sor¬
cerer's Apprentice" so ably dram¬
atized in
Disney's "Fantasia." You
the apprentice in
to
convert
of his master is able
into
broom
a
brings
The Security Traders Association
of New York will hold its
mile
on
been
Nevertheless,
slave
a
buckets
countless
of
Laurentian
the
merely
so
scratched.
Charleen, the daughter of Charlie Ebner,
he
find
cannot
he
and
market
the
for¬
and
his
house
are
It is
plies
this
vide also
paper
and
abounds
area
pro¬
unrivalled wealth of
an
of
acter
sup¬
The fast running rivers
which
nature
the
are
unlimited
lumber,
of
plastics.
in
almost
of
In
the spectacular char¬
power reserves.
this
has
geological
been
of
freak
dramatized
by
into
the
limelight
scientific
result
a
Great
Bear Lake
deposits
which are
principal
of
sources
the world's
of
one
of
prominent
A
progress.
pitch-blends
now
as
uranium.
Another
atom
hydrogen bomb which we even more recent noteworthy dis¬
have smartly conjured up, but if covery is the vast ilmenite field
we can stop this weird
new serv¬ located at Allard Lake, Quebec.
ant
of
destruction is quite an¬
Ilmenite is the source of the
other story.
We
and
wonder
new
made
highly meritorious
a
unselfish attempt in promul¬
gating the Baruch Plan of trying
has been appearing on KFI television.
Char¬
being
is
equally
a
quadruple-threat
expert
on
the
performer,
outlaw
lateral
the
bomb
basis;
that regard
but
like
piano,
pipe
which
experts, is
destined
to
replace
aluminum and magnesium, both
on
a
the Glidden Company
reason
undertaken
new
a
has
expansion pro¬
spearheading: of the recognition gram which incorporates the con¬
a
$2% million ti¬
Franco Spain is*just another struction of
example that we are completely tanium-oxide plant located at St.
Montana.
Other paint
oblivious to the feelings of people Helena,
with whom, unfortunately, we are companies in this country are ex¬
of
obliged to deal if
what
to avoid
we are
McMahon
Senator
calls the
incineration of fifty million Amer¬
was
stationed in
Abys¬
negotiate with
semi-
some
barbaric chieftains in the interior
of
pected
thus
his
vast
to
but
embarrassment
he nevertheless
man¬
and
ne¬
There
is
no
increase
enor»-
future.
near
time
one
below 10%
Alberta
total
in
were
discount.
demand
Stocks ral¬
lied strongly under the leadership
of
oils
Western
ahead
which
following
the
surged
announce¬
ment of the results of the Alberta
oil
lease
cific
auctions.
Royalite, Pa¬
Anglo-Canadian,
Petroleum,
Federated Petroleum and Calgary
and Edmonton
were
movement.
this
gains
and
prominent in
industrial
The
registered
also
group
the
golds
Red Lake and
in
active
randa
Quemont
and
in
the
Among
No-
Sullivan,
East
featured
wise
firm
Campbell
McLeod Cockshutt
demand.
base-metals,
notable
were
with Madsen Red Lake,
like¬
were
the
general ad¬
vance.
With Merrill Lynch
(Special to The Pinanciai. Chronicle)
OMAHA,
Kuethe
office
is
of
Fenner
NEB.
now
there
mineral
will
be
the
Omaha
Lynch,
Pierce,
Beane, Patterson Bldg.
Johnston in Ft. Wayne
(Special to The Financial Chronicle)
FT.
WAYNE,
Johnston
curities
1041
is
engaging
business
in
from
the
offices
East Wayne Street.
CANADIAN BONDS
Government
Provincial
i
Municipal
treasure
Corporation
other
many
ests
As is
now
industrial inter¬
in this country and elsewhere
quite
apparent,
becoming increasingly aware
are
of the
situation.
to
expect from
a
group of
possibilities inherent in this
Consequently, in the
an
' Emily
Post
insistence that
in
meet
Stalin
CANADIAN STOCKS
period
be
instead of a
belongs
in
the
Washington
place
category of thinking as did
fiasco
at
*An
address
Paris
where
on
page
by
Mr.
50
-
A. E. Ames & Co.
incorporated
any
•
Boynton
.•
,
'
•
Two
I-'/',
T
Wall Street
touched.
New York 5, N. Y.
In
the
meantime,
promising
Alberta
the highly
oil boom,
WORTH 4-2400
NY
1-1045
had
which
Murray-Jacoby
before
the
Woman's
Club,
Beach, Fla., Feb. 17, 1950.
fringe of which has only just been
recently lost some of
its impetus, has taken on a fresh
lease
of
life.
Canadian
and
American oil companies have just
paid
new
Crown
record
reserve
high prices for
oil
leases
in
the
Fifty Congress Street
Boston 9, Mass.
i
W.
IND.—Ira
spectacular discoveries, perhaps of
yet unknown.
S.
Fred
—
with
Merrill
&
in this
doubt that
Canadian
diplomacy do not mix.
our
the
cost
now
Canada's
on
this metal of the future.
metals
With
interest
Eventually, the aircraft manufac¬
turing industry will also be an
important factor in the market for
vast
Continued
Jr.
dull
were
and
lead
this
likely to
in
the
are
mously
house
endless
follow
demands
the
Empire who, sure
enough, broke treaties and caused
our
Charles L. Ebner,
ex¬
newly discovered ilmenite depos¬
its
neutral
organ,
the
bonds, payable in U. S.
These
bonds
are
to replace at a lower
intended
titanium,
according to metallurgical
we
public relations
reverse
gear.
Our
in
counselor
same
marimba and vibraharp.
that
foreign trade
metal,
a
multi¬ as an alloy and in the pure form,
could not as the most efficient lightweight
possibly
have
succeeded
in it metal which has also the virtue
extraordinarily high
tensile
considering that we did not at of
It is also in strong de¬
first produce a climate in which strength.
mand by manufacturers of paint
such negotiations could
possibly
have been .successful.
We have in which field it is superior to
For this
acted for a number of years in lead at cheaper cost.
to
Alberta
at
covering this region
and the
him
leen
com¬
clouds
currency.
ests
example is the
tive's
Bateman, Eichler & Co., Los Angeles,
the
the
on
During the week both
...
trader for
despite
outstanding
in this
The corporate-arbitrage
Dominion in the forefront of the country.
rate
was
unchanged,
but free
world's precious and
base-metal
producers.
In addition, the for¬ funds continued to appreciate and
immediately ahead it can
confidently predicted that a
do we seem to know too much steady supply of U. S. and other
about the problem of face saving, investment funds will play a vital
at least as far as the other side role in the early exploitation of
is concerned.
Our Chief Execu¬ Canada's vast mineral empire, the
VERY PROUD PAPA
pros¬
horizon.
debt
even
created,
internationalized behaviorism. Nor
EBNER IS
con¬
are
opportune
discoveries of
rarer
metals which have come suddenly
revolutionaries
CHARLIE
economic
pardonable
evident
this relatively
minor exploitation has placed the
hundred and seventy-five years of
April 21.
with
placency
are
been
is concerned its surface
has
far
of
area
Shield
absurd
at the Waldorf Astoria Hotel
Dominion's
pects
by
historic democratic training, it is
annual dinner
the
bond
stituted
aged to get along as he fully un¬
derstood
that perfectionism and
YORK
it has
as
house, thus reliev¬
ing him of his burdensome chore;
but when he wants to stop the
weird creature which his magic
with whom
NEW
a
was empty wastelands.
wonder, therefore, that the
Canadian authorities are viewing
ago
ternal and internal sections of the
him
OF
a
of
remarkable
recent years
able to
ASSOCIATION
with
least
at
the absence
sinia, I marvelled at the skill with
which Emperor Haile Selassie was
SECURITY TRADERS
induced
prospect of
faced, if not with
degree
hydro-electric
While I
Notes
be
will recall how
icans.
NSTA
have
now any
confidence.
development is by no
source
Goethe's famous poem
pursuing in the management
our
the
needs
our
appalled at the
have the
put
of
strength,
and
must be
of
it
to
must
other natiops of the
modern world, both through ac¬
tive
assistance
and
through
a
so
by the Jus¬
Department, All
some
of
as
overwhelmed by the deluge.
thus with thq, miracle of the
or monopo¬
up
ful
90%
mula
of
great discoveries, or
be broken
country
our
political and social salvations
are
lies to
based
one
as
and
wait
expire,
briefly
a
greatest economic assets
as
ernments and economic structures
petence
any
even
and in sustaining the gov¬
peace,
enough current to do all the jobs
that people want done. It is a
simple little thing. It does not
on
consider
play today in maintaining world
elec¬
within its walls electric wiring of
sufficient capacity to let through
for patents to
make
would
can
a
means
for
which only a few
acres
long foreseen that the Dominion's
water into the
the
living probably nothing is
important than
to
make
more
sure
of
it,
about
Such
fields, for
Government
million
$9
Small
reasonable
maintaining trie
The
10%.
as
construe
who
When you
science balked
of
this scale. We talk
on
read
just now,
war,
economic system.
outstanding example
by semantics.
an
eventual
administrative betrayal of a great
in the industry by the unexciting
title of "adequate wiring."
There
you
color—or
and get it all
farm programs
and hydrogen bombs and social
security and the Marshall Plan.
It just goes rolling along, to my
mind an example of shameful de¬
reliction to duty and of immoral
mixed
homely
problems
that kind
about it,
up
with
jokes
is
little unheroic
Charles E. Wilson
it,
is
lacks
debt
It
to ask me,
were
and the chances of
error,
colorblind to red ink
are
we
about
acceler¬
It
problem.
when used
electron
ators.
national
The
years
complacency,
de¬
over
1,920
mere
Alberta
The new Quebec 5-year
the enormous latent glected.
and forestry
who has lived with the problem mineral
wealth of 2V8S were also inactive at lOOVsof war and
peace
for over 40 the Fabulous Laurentian Shield, 100%, but it is expected that
and the tremendous oil potential greater
interest will be shown
years, where
we are heading, I
in
the
would have to tell you reluctantly of the Canadian prairies.
proposed
issue
of
pos¬
that I assess the probability of an
$60
million
Province
of
As far as the 2,000,000-square sibly
you
may
Problem of National Debt
things,
rang¬
ing from re¬
radar
If
peace
many
amazing
the
to
course,
the years
over
a
committee meetings and
lick the problem. Of
we are on the side of the
holding
have
we
re¬
mere
a
Stettler
and
the
received
threat of serious
products
conciliation.
attempts at
into it, but
we haven't. We go
on using that
colorless and dreary word "ade¬
scientific
of
terms
must
we
Whereas
which
markets for farm
this kind
tough" attitude
Russia. Urges constant
toward
"whammy"
call
Holds
commencing
Redwater
any
ago
major crisis,
diplomacy
" get
cries
dollar.
men
we
of problems that
number
a
have
industry
and
is
wane.
of
eco¬
overseas
loss of
out
design Baruch Plan, and
people will find themselves dealing in "cigar coupons"
of dollars.
Says it is government's task alone to
insure value of
points
scheme
decade
maintaining
slight,
are
do not mix.
and moral dishonesty characterizes Federal fiscal policy.
Warns if unbalanced budget continues and national debt in¬
instead
for
present
perfectionism
standards, if waste, extrava¬
gance
have
diplo¬
staff, asserting chances
peace
creases,
Ambassador-at-Large
importance
paramount
matic
holding five-year goal of $300 bil¬
attainable, contends, however, it will
raise living
By WILLIAM J. McKAY
The
Former member of U. S.
Prominent industrial leader,
or
Canadian Securities
agriculture in the Canadian
WILSON*
lion national income is
benefit nation
Thursday, February 23, 1950
By H. MURRAY-JACOBY*
Former U.S.
President, General Electric Company
not
CHRONICLE
Why Not Use
Diplomacy?
High National Income
By CHARLES E.
FINANCIAL
&
,
se¬
at
Volume
171
Number 4884
THE
COMMERCIAL
&
FINANCIAL
lina.
Things to Come
By
ROGER W. BABSON
Mr. Babson, basing his
;
tions
predic¬
suggestions of leading
on
scientists
and
things to
come:
inventors, lists as
(1) human be-
ings flying like birds; (2) partly
overcoming gravity; (3) betterr
and cheaper
foods; (4) more
power of mind over matter; (5)
large scale expansion of the
plastic industry and (6) a uni¬
.
versal
Once
each
religion.
I like to write
year
about things to come as I see them.
These suggestions are not
original
with me, however. They are based
should
His experiments definitely
that the mind acting upon a
plant or planted seeds can have a
direct effect in hastening or re¬
tarding growth. The Fonda Horse,
miles south of Richmond,
Virginia, is worthy of study.
stand
Such plastic shoes
longer, be more
beautiful, requiring only 10 work¬
ers
instead
up
of
sell for half
100,
and
will
Watch
The
use
the
of
Plastic
plastics
Industry—
has,
as
yet,
a
great
movement
Church
consolidations.
readers
may
hardly been scratched. Women
are
movement
carrying
are
some
plastic
bags
and
wearing
plastic
raincoats;
but
other plastic materials, including
rugs
and
dress
goods, are about
ready for the market. The purpose
Religion—I visual¬
not
class
toward
Many
such
"miraculous"
as
a
tions,
or
new
the world
to
live
a
products will make
better
unless
place in which
accompanied by
Stock
number of years.
M. Rosenthal will
a
Edward
tire from
partnership
will be admitted to
New
York
Exchange
re¬
I
i
IIP'!
n
these
is
Like
It
—
believed
is
in
soon
start
uals
gulls and
rier
An
Because
...
as
car-
The Columbia Gas
System in 1949..
pigeons,
alloy
of
r..„.
magnesium
and
should
in1950
individ-
flying
do
Roger W. Babson
NATURAL GAS
connection
with
t
More Homes* Can Be Served With
that
experiments
wdl
enable
titanium
individual
an
to
light engine and
Furthermore, new power-,
ful gases being developed would
enable a very small light turbine
engine to lift and propel an indi¬
carry
a
very
wings.
vidual. This person may be obliged
to wear a special suit
containing a
Reached the primary
objectives of a
$ 168,000,000 expansion program—an ade¬
light
quate gas
It is true that nothing
gas.
of the kind has
oped,
but
boards.
is
it
yet been devel¬
as
age
the
drawing
speeds for
on
Far
greater
planes are definitely
assured.
Within five years I ex¬
pect to fly from New York to Los
Angeles in two hours.
commercial
supply, adequate underground stor¬
capacity and facilities adequate to supply
people with more natural gas. >/'■'
more
V.j.■
•
■'
■.
sales, in the volume of
gas
in
a
gas
single day; in Southwest
in total
reserves
,'A. ,j
•
In 1949 the System established
*
new
highs in
it could deliver
gas contracts
and
for the future.
Partly
Overcoming
Gravity—
Considering the millions of pos¬
sible
alloys
been
which
will
someone
alloy which
yet
stumble
such
on
to
partial
By the use
serves as a
insulator for
of
not
gravity tested, it is possible
that
an
have
In
for
addition
being
to
such
trouble, it will be welcomed
go up even a few
steps, to
a mez¬
zanine floor.
Better
and
Chemists
Cheaper
food
are
direct
from
sunshine.
to
*And the System contracted with other
lic utilities
600,000
grasses, water,,
These experiments
"by-pass" the
steer, both of which
to
pub¬
supply the gas required for their
customers.
As demand continues
cow
and the
are now very
inefficient manufacturers
of milk
to
pansion is inevitable, for,
increase, further
as a
ex¬
public utility,
Columbia Gas System has the
responsibility
and the legal duty to provide the service the
public's needs require.
*
Foods—
making headway in
preparing
sugar,
proteins and
yeasts from small trees, and other
are
through the West Virginia
discovery
a
by all merchants who have great
difficulty in getting customers to
and
transmission line
mountains.
great boon to those with
a
heart
Columbia opened new gas frontiers, drill¬
ing the first producing well in Maryland. It
built the "Toughest
Inch," a 26-inch
gravity.
stair-treads, it would,
require no more effort to walk
upstairs than to walk on the level.
sale
Utilities serving 23 cities
sought whole¬
deliveries from Columbia.
Applica¬
tions to service Baltimore,
Md., Poughkeepsie, Newburgh, Beacon, Kingston,
N. Y.; Charlottesville,
Va., and Hagers-
town, Md., have been approved.
awaited FPC approval as of Feh.
Others
10, 1950.
Full details
are
in the Annual
Report of
System, Inc., 120 East
and beef!
The Columbia Gas
is in
41st Street, New York 17, N. Y.—available
will
a
The whole study of diet
most elementary stage. We:
have
much
use
of
more
food
nourishing
direct
tasty
and
from
minerals, sunshine,
on
request.
the
water
and air, at much lower prices. We
will buy peaches ground
up, skin,
flesh and
seed; meats and fish
ground
up,
bones, body and skin;
claws„
while lobsters will be sold
meat and tamale all ground into a
delicious paste suitable for lobster
bisque
or
thermidor.
These prep¬
arations will be more tasty ancl
nourishing and sell for less money
because
of
the reduced labor
in¬
volved.
Unlimited Power of the Mind—
The
ter
tain
power
has
of the mind
been
religious
cer¬
organizations;
only recently has such
tested in laboratories.
power
I
cially interested
in
Professor
Rhine
J.
mat¬
over
emphasized by
B.
the
am
but
been
espe¬
work
of
of
Duke
University, Durham, North Caro-
on
and
Midwest
March 1.
Both
Stock
were
a
to
have
Flying
partnership in
E. J. Shean & Co.
entirely eliminate spiritual awakening. All these can
Bendix Luitweiler Partner
weaving by rolling out the goods be used either to construct or to
E.
J.
Shean
&
Co. has been
from a liquid the same as
paper destroy according to the peoples'
Bendix, Luitweiler & Co., 52 formed with offices at 14 Wall
is now made. Leather
shoes, which religious faith. The first step to Wall
Street, New York City, mem¬ Street, New York City, to
now
engage
require about one hundred such a spiritual awakening will be bers
of the New York Stock Ex¬ in the
securities business. Partners
separate operations, will someday Church consolidations and a uni¬
change, will admit Herman Hagen are Edward J.
Shean, Robert P.
largely be discarded for quickly versal religion.
to partnership on March 2.
MacCulock, and Edward T. Shean.
of
and inventors.
Birds
H. New¬
Walthouse
formerly partners in Faroll & Co.
scientists
g
F.
Feb. 28.
on
had with lead■
William
David A. Noyes &
Co., 208 South
Salle Street," members of
the
March 2. He has been with the
on
firm for
and
La
Exchanges,
as
the above developments,
but it will be. No wealth, inven¬
man
&
Midwest
Noyes Partners
CHICAGO, ILL.—John
Co., 208 South La Salle
Street, members of the New York
and
of
To Be
CHICAGO, ILL. — Walter A.
Mooney will become a partner in
Faroll
17
Newman, Walthouse
Admit Walter Mooney
present prices.
A Universal
ize
Faroll & Go. to
sell
three
(809)
talks
on
which
hhhmbmhhh
moulded shoes.
prove
CHRONICLE
The Columbia Gas
System
18
(810)
COMMERCIAL
THE
Welfare State uIn Court"
&
FINANCIAL
CHRONICLE
Thursday, February 23, 1950
Meai Heads Hd.
Our
Reporter
Governments
on
Concert Fend Drive
By JOHN T. CHIPPENDALE, JR.
W.
•
Carroll
Mead,
The
market
government
is
the
under
influence
financing with its attendant adjustments.
in
cross-currents
many
the
situation
of
the
investors
&
i
able
for the
This has resulted
securities.
new
been
mediums for
outright
some
these operations.
in consider¬
bonds
have
savings
banks
letting
felt
also
out
the
of
pressure
of
some
these
for
Where
it
"Welfare
contended
is
Adolph A. Berle, Jr.
State"
is
c
with
Previously
Cancer
a
n
Society
fund-
raising
Insists it
"big
becomes
captive of the
has favored.
very
unsettled
side,
means
sidelines
until
there
money
2V4S
drive.
Mead
„
■
.
7, 1950.
„
Fertig, what does the term
"Welfare
State"
as
it tonight mean to
Answer
sir,
the
by
using
are
you?
Well,
taken a
has
out
of
the
dic¬
tionary—welfare, meaning wellbeing—and has appropriated it for
themselves.
They have combined
it with the word state and
implied
by the words "Welfare State" that
the state
itself creates
the
maxi¬
well-being for its citizens.
Justice Douglas of the Supreme
mum
Court said that it Was the greatest
of the twentieth cen¬
invention
tury.
But, of course, it is only
people
themselves
who
create
their
own
well-being through in¬
creased
production.
does not
create
The
a
The
state
well-being.
"Welfare
State"
is
simply
method of taking people's money
and giving it back to them
away
in the form of services which
they
would
normally buy for them¬
selves. The "Welfare State" prom¬
ises more and more services and
Now
the
.
State"
is
bodied
scheme
dred
ism.
have only
we
beginnings of the "Wel¬
State," we cannot balance our
budget. Yet these gentlemen here
mere
fare
This
than $13
plan for
of
expenditure.
Now, how
going to pay for it?
In
only one way. We dilute the cur¬
rency.
We inflate and take away
are
we
through inflation a great part of
your bank balance; of the buying
billion
It would
trols
ment
that
forced
ready
State"
is
Q.
Wheir
you
called
"Welfare State"
state
as
the
you
mean
term
such
a
would exist if the present
Presidential
trols.
should
of
I
the law?
must
should
make
have
you
said
correction.
the
I
so-called
lead
to
leads
Q. There
to be
benefits
some
that-
seems
abroad
all
A.
has
Mr.
Coudert,
arrived
maturity
knows that
free in this world.
A.
The
people
will
and
woman.
paying for' this pro-y
by direct payroll taxes be¬
such taxes would break the
of
production.
cause
back
Therefore,
will
part of
try to
it
get
the
country.
It will ruin
us
through
inflation, and then they will im¬
pose
which
the
socialistic
they have
measures
already
spon¬
greater
inflation
will
be
and
the
once
again.
will
cause
1956
issues
eligible
you
notice,
he
far, quite
so
so-called
payroll
Yes, I noticed that.
very
clever
fact,
there
all
comes
distinction.
is
out
no
of
a
deduc¬
was a
But,
Mr.
years
by
had
Heksch
manager
as
'
in
-
/
....
;.
■
.
:
..
;/■■
,
of
town
wide
in
eligibles will be augmented
takers
open
not inclined
are
to
at
go
from
more
prevailing
for the
the
market
shorter
scale
a
member :i
Exchange
September, 1944, while still in
the armed forces and
the
deposit banks continue to be buyers of the
issue, but much
10
for
served
of the Deutsch
Bank in Heidelberg.
this has
They have been, however, doing quite a/bit of
the earlier eligible taps into the victory, bonds.
eligible
as
the
2%s
longer
have
market
SUPPLY
member of ',
a
Curb
York
New
Exchange
1947.
YFormation
was
of
the
new
-
previously ! reported
firm,
in
the,
"Chronicle" of Feb. 9.
With Colvin, Mendenhall
(Special
SAN
to
The
CALIF.—5
FRANCISCO,
Stuart D.
Wattles is
with Colvin, '
ery
Street.
.
*
.
quotations.
maturities,
being switched
are
partially
exempts
not
many
been
into
continue
of these
the
to
be
lHs
but
1955,
of
well
u. s.
bought.
bonds appearing
in the
TREASURY
despite price shading.
OF
NEW
out
of
the
1%S MAY BE INCREASED
intermediate terms into
Pension funds
of the market
ineligibles.
as
The
seem
the
to have taken
★
the demand
★
BILLS
CERTIFICATES
NOTES
five-year obligation.
over
BONDS
side
they continue to be the main buyers of the
longest
issues
are
getting practically all of
their attention.
Fire
and
casualty companies have ; been
sellers of not too sizable amounts of the
2%s and the 2%s of
1956/59, with indications these funds have been
going into
the equity market.
Eleemosynary institutions have
pushed
out
quite
a
few
of
the
Joins
2*4s of 1959/62 in the past week.
Cantor, Fitzgerald
H. M.
(Special to The Financial Chronicle)
in
It
BEVERLY
HILLS, CAL.—Noel
McVickar, Jr., and Carl F. Rogers
have joined the staff of Cantor,
Fitzgerald & Co., Inc., 21L South
Beverly Drive.
Mr.
McVickar
and
page
33
previously with Leo Schoenwas with King
brun; Mr. Rogers
Merritt & Co.
~
Byllesby Adds
Aubrey G. Lansyon
(Special to The Financial Chronicle)
CHICAGO, ILL.—Edgar A. Ormand has
joined the staff of H. M.
8c
Co.
/
INCORPORATED
Byllesby and Co., Inc., 135 South
La
Salle
Street, members of the
IS Broad
St., New York 5, N. Y.
.
Midwest
Ormond
Stock
was
Exchange.
formerly
Mid-City National Bank.
with
•
Financial Chronicle)
MendenhalL& Co., 220 Montgom¬
angle
Although the new IV2S enjoy a good demand, some observers
believe the supply of this issue will be added to because^ certain
holders of the maturing 2s will probably not take the new issue.
They point out that this may mean the llis will not be fully
digested for a time, which could result in more swops being made
was
production,
on
of
obligations.
normal
distinction.
Continued,
European papers.
He served for
financial editor and
later assistant managing editor of
the New York "Staats Zeitung."
\
many years as
the
make
It
most
few of the
a
and
Con¬
tions?
A.
from
They
sav¬
on
was
While
eligibles
fi¬
was a
American
in
the other hand, the uncertainties of the new monetary
pol¬
icy has brought about cautious buying from these institutions.
inflation
when
outstanding
business in Europe.
previously
writer
nancial
While
Oppen-'
Mr.
on
budget that the taxpayer pays and
these
large.
Out
maladjustments
and much hardship.
Q. Did
the
line with this thinking that, the
longest
many
This
Mr. Deuble
in the recent
as
time,
active in the banking
was
and brokerage
LIQUIDATION UNDERWAY
shifting
average
his
of
to
sellers of the restricted issues, although so far the volume has not
lay the basis for
robbed
likely
are
to "this
heimer
during the year, has come liquidation of the 1952 eligibles, top is¬
sues, especially the 214s of 1959/62." Quite a few holders do not
believe these bonds as attractive as they might
be, if the Treasury
is to offer longer-term issues that can be bought
by commercial
banks. Savings banks have, come into the market at intervals as
by' borrowing—that is,
I.O.U.'s.
Thus, the
the
the
In
printing
government will
between
ruin
SOME
There
Theyy
avoid
gram
by
man
distinction
will
of
_
of
pay,
Prior
circles
government
Treasuries
of these securities.
owners
need
the
no other
way to
It is paid for out
production and the sweat
in
needed issues
up
selling
some
Heksch have been associated
Mr. Kristeller became
not
of
get the money.
and
with Hirsch & Co. for many years.
of the New York Stock
There is
course.
Street, New York City, and will
a
general American and
foreign brokerage business. •
/ Messrs. v Oppenheimer,
Deuble
conduct
September
While
will
The program these
opinion
the
the: longest
of
j
Oppenheimer, Albert H.!
Deuble,
Hugo
H.
Heksch and;
Ralph Adrian Kristeller announce!
the formation of Oppenheimer &
Co., members of the New York
Stock Exchange and New York*
Curb Exchange. The new firm will'
maintain 5 offices
at
25
Broad
Max E.
2M>s have also appeared for sale from those institutions that do
Q. Well, who is going to pay?
proposed
propose
about
been in the
laws
age
,
continued sales of the higher income issues.
non-bank
nothing; is
to
opposite.
brought
anyone
the
at
attempted
the
though
as
prices
Exchange.
.
The opinion that bank obligations with higher coupons
than
Well,-
who
was
"
likely to be available in the not too distant future has
are
free.
are
Bimiller
gentlemen
that
V'
aggressive in picking
as
these:
the proposed
under
im¬
it
as
for investment are ample, buyers are becoming
cautious about the probable trend of quotations and are
past.
been
gressman
Quite
lower
a
stand,
the people's welfare.
to
con¬
socialism,
to
State," because what is
prove
not
so-
leads
"Welfare
definitely not im¬
the
see,
State"
ings
this
horrible
living' and the loss of
So where is the welfare
pression
new
Yes, Mr. Coudert, but first
seems
mean
more
be
of the people?
man
| A.
the
solid
as
funds available
govern¬
Inflation leads to
socialism
be
come
So,
Controls
and
adopted by; the Congress and be¬
program
more
is
will
con¬
would
lower, be¬
move
offering of the l^s,' and it would not take
uncertainty to bring quite a few of these bonds
of action is al¬
in
"Welfare
inflation.
they
use
many
we
of
work somewhat lower, although no sharp declines are looked
for.
It is believed Federal will keep the pressure on and this
more
Federal
socialist
a
Spence Bill.
will
the inflation state.
so
course
outlined
of
re¬
much
f
o
Oppenheimer & Co.
Opens in New York
being
these
are
holders
recent
.
your
And,
the
It
of the govern¬
soon
That
get in
people of their savings.
member, the "Welfare
to
part
into
ment.
nature
the
lead
the
on
1956/58
to expect, and this is to be brought about principally
and/or increased offerings of the larger coupon issues, the
Holders do not want to see
now
It is the
more"
due
many
are
into the market for sale.
nobody can estimate the
huge amount it will cost.
the
robs
too
gram and
every
That is the
■x
money
for education;: it^- is, in
short, the perfect giveaway pro¬
of
pensions.
cost
today.
groups,,
of
inflation—it
every¬
housing for middle-
more
income
of your government bonds;
of what you have saved in
your
life insurance; of what you will
power
would
2V2S
because
eye,
of the fear that the, supply of higher coupon bank eligibles
Because of this question of future supply the
before
as
a
pension, which Mr.
Tobin, the President's Secretary
of-Labor, suggestedf in a recent
speech.
the
and
eagle
technical position of the 1956 maturities is not
-
Ex-
Baltimore
the
OFFING?
1956/59
an
an
President
! "
maturities could be vulnerable.
body
asking for at least $10 billion
are
more
medicine;
to
in
W. Carroll Mead
Stock
THE
is
and
to
developments
of
Baltimore
of
will be increased.
Plan; it's the
month
a
clarification
move
to
of
the Bond Club
uncertain
seem
new
cause
It's
socialized
inclined
are
prices of the outstanding 214s and 2y2S gradually
em¬
Farm
for
liberty.
the
by
"Welfare
program
measures.
specific
dollars
scale
ultimately to Social¬
today, when
in¬
it's the proposition to pay a hun¬
flation
Even
so-called
specific
a
in
inevitably becomes
the
"give¬
away" state.
It leads to both in¬
and
the
control
the
on
a taking down of premium, this is not the
important point of concern insofar as the 2J/4S and 2V2S are concerned.
If somewhat higher yields are to be'! forthcoming, as
1956
the Brannan
Fertig:
opposition
good word
very
we
Mr;
order to
flation.
Coudert
Mr.
in
is
the IV2S of 1955, with
many
sored
list
is
President
prices
beginning to question their attractiveness at cur¬
rent
levels in light
of possible changes in monetary
policy.
Although there has been switching out of these securities into
rence Fertig, Economist
and Columnist, under questioning
\of "counsel" Frederic R. Coudert, Jr., .and "cross-examina¬
tion" by A. A. Berle, Jr., on "The Court
of Current Issues"
program produced by Irwin Sulds and broadcast over Du-
TV network Feb.
of
with
securities
mone¬
upon
markets.
LOWER PRICES IN
The
operators
is
effect
an
The short-term market is
of the
end
that
the
Following is the testimony of "expert witness" Law¬
mont WABD
obligations.
longer
the
it
groups
the
and
which
watched
Questions by Congressman
financing but also the belief that
new
and yields of Treasury
balloon"
technique for taking people's money away and giving it back
to them in services they would otherwise
buy for themselves.
Mr. Fertig charges it is "the perfect giveaway program" with
cost to the people incalculable, and leading unavoidably to
socialism.
the
tary policy is to be changed, is having
the
Ameri-
Mr.
Not only
Hon. F.R.Coudert, Jr.
Fertig
Chair¬
1 9 5 0
these instiutions had been mainly on the buying side.
Lawrence
Cam¬
paign
man
liquidation,
securities.
Maryland
State
in¬
The
the
ointment
p p
as
Nonetheless, there has
selling of the longest bank issues.
eligible
has
accepted
switching, and the intermediate term eligibles have been the
principal
tment
n v e s
a
make way
of
Baltimore
brokers,
are
traders
and
partner
Co.,
new
Accordingly, there
as
Mead,
Miller
Mr.
the
Telephone WHitehall 3-1200
Teletype N. Y. 1-3690
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/>
Volume
171
Number 4884
THE
COMMERCIAL
but
Aspects of Social Security
of Commerce of
U.
conclusion
First,
security
no
S. A.
to
of
Viewing Security
Whole
as a
be obtained at
may
a
security
surance).
modest price.
The more security demanded, the
higher the outlay. Total security
in
an
tain
historic
The
Research,
for
of
larger
for
se~
curity. Financ¬
ing social se¬
sense)
is
Dr. E.
P.
but
the burden
our
upon
more
than ever, we are confronted with
hard choices as to priorities.- In
the
past
sider
have
we
tended to
con¬
each
program separate and
However painful it will be,
apart.
from
now
forced
on
to
we
give
sideration to
whole.
are
going to be
much
more
con¬
these programs
as
a
We will be forced to view
aggregate costs of financing. If we
are going to be
statesmanlike, we
will
view
not
these
aggregate
only in terms
burden
year's
costs
of the current
the economy, and next
on
budget,
but
also
of the next decade and
in
terms
subsequent
decades.
The current
and
a
with
concern
more
security is not so much
on individual hu¬
more
commentary
man
nature as.it is
on
the limita¬
tions and
*
frailty of economic and
political institutions.
Forty years ago Samuel Gomopposed workmen's
pers
sation.
F.
A.
Not
of
until
L.
favor
compensation.
of
couple
a
shifted
from
reliance
did
the
unemployment
In
the
short
decades
of
compen¬
1933
have
we
virtually
span
The Social Security Act of 1935,
the NRA, the AAA, and a host
of other laws and programs were
bring security; The Wagner Act
to
was
create
worker
Although it is still
is
as
the
most
of
1930!s, the
pears
to feel
on
our
past;
continuation
The
the
ployment."
spending
greater degree of
a
time
any
This raises the
ques¬
mote.
security programs.
low-income housing act of
extend
is
the
the
the
act
to
be
middle-
of
1950.
added
to
HR 6000 would greatly
coverage
upward
crease
added
housing
the AAA.
of
benefit
Federal
OASI, revise
formula, in¬
Treasury
re¬
sponsibility for the indigent, and
add
"total
and
permanent"
dis¬
ability to the hazards to be
cov¬
ered. The states
non¬
are
occupational health
coverage
i
*
at "full em-i
to
higher
If the
have
we
short
fallen
of
our
sub¬
prewar
investors and business
able
be
to
prewar momentum in
mant
regain
it
be
can
combined
with venture capital which is the
dynamic and vitalizing factor of a
Colin Clark
claims,
upon
clear
indication
collections
national
that
equal
'income,
The
dilution of the money
the
indisposition
citizen
to
buy
of
the
hold
and
govern¬
ment
bonds, with their steadily
declining purchasing power. This
reaction
of
of
will in turn increase the
dollar
by forcing, deficit
through
the
banks.
financing
Thereby
spread
insecurity
is
augmented,
leading
possibly to "forced saving" and
other
compensatory reactions of a
malfunctioning
Labor
and
that
fostered,
underwritten
is
now
more
more
plight
of
Kingdom
economy
and
p.
et
All would admit that
be
"insurance
poor."
Can
any
adopting
and, accident
(temporary disability in-
Address
by Dr. Schmidt, at Cornell
University, Ithaca, N. Y., Feb. 11, 1950.
a
poor"
national
a
man
can
"land
or
be
omist is any
an
judge, the
answer
is
unqualified "yes."
"Veterans' Benefits
The
hazards
of
the
piecemeal
in
appraising or build¬
security programs can
perhaps most clearly by
ing social
be
seen
examination of benefits for
an
our
veterans
of past wars.
Veterans
have never been reluctant to ask
for special treatment.
have about
19
million vet¬
They constitute about 40%
standing defense establishment
1.5
million
and
men
draft' there will
be
crement of about
The
its
United
in¬
400,000 veterans.
has
can
many
has
ex¬
al,
The
Benefits
vet¬
to
War I—have grown stead¬
ily for decades after the
each
war
war.
For
they tend to reach their
*■?
of
that
war.
Experience also in¬
Restoration
dicates that veterans' benefits tend
is. greatly
think it is1
to
Blackiston
Co.,1
197.
provided
These benefits
already
for
exceed
the
costs
reach
in
of
the
under
$4
the
existing law
$5 billion per
future (not in¬
to
near
cluding
hospital and
construction costs).
In
addition
there
prospect
of
a
veterans
of
World
domiciliary
is
also
Federal
the
bonus
War
II.
to
The
Congress has always shown
a
ready responsiveness to veterans'
demands. With the great increase
of veterans among the
constituents
proposals
any
sions,
inclusion
for
of
the
care
relatives
vivors, and for
most
enlarged
medical
more
pen¬
and
and
the
sur¬
a
bonus, are al¬
certain to pass if
they' reach
floor
of
the
Senate
House.
aiid
-
the
:
Already our social security and
veterans' programs are so vast and
complicated that many veterans
will be eligible for duplicate ben¬
efits covering the same hazard.5
passing
judgment
on
these developments and the
pros¬
pects, it must be clear to every¬
one that the
for the general popula¬
must be judged in the
light
programs
of every war—1812, Mexi¬
War, Civil War, Spanish War,
World
this!
costs.
care
will
financing of security
treated
.
countries.
un¬
But pensions and
compensation
disabilities
will
grow
and
grow. The same is true of medical
Without
annual
an
pay,
guaranties.
for
the
States
veterans
of
continue
loan
figures.
"social
security poor" or unduly "secu¬
rity-minded"? If the liberal Econ¬
tion
of
current
and
probable
outlays under veterans'
The
that
future
programs.
involved
sums
are
so " great
responsible. student
every
must
pause and contemplate the
Should we fail to avert
third world war, the pressures
for benefits could
outcome.
a
be
probably not
by a free society,
free society emerge from
absorbed
should
such
a
a
war.
>
wars
The Hidden Payroll
3"Socialism in America,"
Commerce of U. S. A.,
1950, 75
Chamber
see
Washington, D. C.,
pages,
50c.
an
analysis of Europe's plight
particularly
"Compulsory
Medical
Care and
Since
of
4 For
the
Welfare State"
by Melchior
Palyi,. National Institute of Professional
Services, Inc., Chicago, 1950.
1939,
hourly
average
earnings have increased by 123%',
5 The
curity,
Cost and
Lewis
Institution,
Financing of Social Se
et
al. Brooking!
1950,
Chapte
Meriam,
Washington,
Continued
on
page
38
by gov-;
powerful
Its
for
less
iN
Kansas
work
CITY/?
sketchy background of the
pressures
other
and
These will taper
off, and perhaps
terminate or shrink to nominal
year
insatiable.
appears
in
of the adult males in the
country.
If
we
continue
to
maintain
a
tax!
origin of Clark's ideas see "A
of Contemporary Economics" by
Ellis,
democracies
lands.4
money and more
wage-supplements
This
1948,
no
: evidence
that
democracies
learn anything from the
folly and
years
readjustment
pro-:
itself.
government
demand for
S.
is
recent
the
economy.
unionism
ernment
than
2 For
H.
But there
us.
eran^
Proceedings of 17th Annual National;
Meeting Controllers Institute of America,
New York, 1948.
Survey
warning to
This should
economy
1
further
and
time lag of
a
two decades.3
other
depreciation of the value
the
moted
hindered,
and
peak only 50 years after the close
United
viable
British
the
of
hs intolerable
We''have reached
ceeded this tax level.
a
a
allowances
as
yet,
parallel
American
of
of
employment benefits, educational
British
the
when
regard
The
of
be
or
We
is al
peril point.2
average
the
been
variety—mustering-out
face
means
benefits
have
unmistakable
developments, with
erans.
responses of the public to what
thdy
burdens.
no
generously,
more
generously by a wide margin than
25%
the
of
an
between
indue-}
investigation, that there
tax
the .plight
one
the
All this despite
by
we
there is
approach
unless
disappeared from
billions of aid to the British.
,
our
The
five
but
While
productivity
gains.'
ment
our
permitted to fulfill theif
will
erans'
all
British economy.
the
productivity.1
Only if
inventors, • designers,
engif
the
supply, accompanying deficit
spending, will in time increase
upon
our
resources
gouthern
be the starting
point for
discussion of the financial and
economic aspects of
security. "So¬
cial
security" in the
is but
our
a
narrow
sense
part of the demands upon
OPERATING RESULTS FOR THE YEAR ENDING
DECEMBER 31, 1949
economy.
No
Security Without Adequate
Production
.
It has often been
not
be said too
curity rests
on
Kansas City
said, but
Southern
can¬
often, that all
se¬
strong, dynamic
productive economy. The produc¬
ing elements of our economy must
a
Railway. Operating Revenues
is
no
save
way by which a nation,
for its old age.
Social
is
building
primarily
up
a
device
can
se¬
for
legal claims in behalf
Is production
against producers.
keeping
pace
growth of demands upon the
economy?
What is happening to
per manhour?
Slichter
in
a
recent
analysis
of
Old-
"Can the country afford an ade¬
quate scheme of security for old
age?" Assuming that old age se¬
curity will cost 8% of payroll, he
that
7,202,663.31
24,703,423.00
2,846,018.10
8,995,018.10
4,356,645.21
15,713,404.90
2,366,151.11
717,844.76
3,083,995.87
9,963.81
191,370.19
201,334.00
8,980,644.77
3,447,430.26
12,428,075.03
Railway Tax Accruals
Railway Operating Income
Debit.
Joint Facility Rents—Net Debit
Net
Railway Operating Income
Other Income
722,782.57
Miscellaneous
Total
Fixed
Net
Deductions
Available
for
Fixed
from
Charges..\
...
343,433.12
3,614,747.47
12,771,508.15
33,786.04
Income
167,317.21
9,703,427.34
Total Income...A
9,129.82
42,915.86
9,669,641.30
3,605,617.65
12,728,592.29
Charges
Income
764,549.10
...$ 7,228,967.91
2,658,555.83
$ 2,841,068.55
$10,070,036.46
to the optimistic conclusion
if
we
increase
about
17,505,759.69
Sumner H.
"The Pressing Problem of
Age Security," (New York Times,
Oct. 16, 1949) raises this
question:
comes
33,794,325.85
...
with
the
output
11,554,346.59
6,149,000.00
Railway Operations..;;..
Rents—Net
$58,503,248.85
$18,757,009.90
22,240,479.26
11,356,759.69
Net
Equipment
*
^Combined
...$39,746,238.95
Expenses
Revenue from
Louisiana
& Arkansas
...
Railway Operating
support the non-producers. There
of beneficiaries
of
."Brannanism"
productivity,
breaks down, or goes into an
in-';
probability
of
balancing
the
flationary spiral, depending
budget in the years ahead is re¬
upon}
the
all
be
perhaps
agers are
a
Tne
continue,
pressures
curity
to
at
the increase.
on
State legislatures and the Con¬
gress are being urged to revise
and amend,
extend and expand
income
stands
Resistance
taxation is
legislation of
citizen ap¬
t
.1949 is
debt
trillion dollars.
a
budget is unbalanced
average
anything short of the
"total state" can satisfy, the pres¬
sures for security.
To the
and since V-J Day
of
very
Federal
quarter of
security.'
tion whether,
manner
is
of
expenditures
upon,
arma-f growing economy.
outlays under innumer-j
The double taxation of
corpo¬
foreign aid programs, with
rate income and the
steady de¬
the hope that, come the next
war, mand for
higher taxes do not bode:
we might have a few
dependable well for the outlook
of venture!
allies.
capital.
'
'•
'
the books
insecurity today than at
in
Co},
in
roles
Controls continue, la¬ to which
they relate. World War
restless, economic growth is II cost us about $400
billion!
thwarted and the Economist (Lon¬
Many of the World War II vet¬
don) states that personal saving
should
social security.
I;
to
foreign policy both
war
a
complete
responsi¬
bility to preponderent reliance on
our
means
individual
on
of
during the
rate
Current and Prospective Programs
Trust
who
that
neers
their
and
programs
Cleveland
producf
able
economy.
Today
veterans'
in
ments and
part
imposed
Schmidt
in¬
large
of
a
health
stoutly promoted. Expenditures
come
curity (in the
narrow
The
promoting
compulsory
rise
scarcity of venture capital
dependents will be substantial— has been
greatly and properly
permanent pension,
compensation, emphasized.
Regardless of the
medical carc and
possibly bonus abundance of loan capital, this
programs.
The catastrophic out¬ cannot create much new
invests
sense, is but a
much
laws.
are
Federal aid to education
surance.
is
a
bureaus
universal
curity" in the
drive
compensation
Federal
se¬
state unemploy¬
on
by
student
stantially
trend
ment
is
part
series of pro¬
a
the
accepted
small
of
posals to impose cost-raising Fed¬
unobtainable.
"Social
Department
finds
eral standards
uncer¬
world
The
are
19
bor is
burdens
new
in a recent
study concluded that
the increase has been
only 8% for
the decade. Soloman Fabricant of
the National Bureau of Economic
.
Labor has issued
seen
age
to the current maintenance
as
our
closest
of
only
old
our
tivity.
healthy, dynamic, effectively-functioning economic society.
amount
have
we
the
of
(811)
impossible.
has
burdens
bear.
tion
production for
to
mounting hidden payroll costs
in business and their
inflationary effect, and concludes, despite
its importance, expanded social
security will impede goal of
modest
some
.
economy is being asked
Second, all studies of
productivity raise serious ques¬
Schmidt analyzes current and
prospective programs of
social security and points out these
programs will be imprac¬
ticable and ineffective unless there is adequate
A
as
requires
,
new
means
which
Dr.
a
in 30 yeairs
payroll cost would be
tenth of this increase. But
one
qualification.
By EMERSON P. SCHMIDT*
Calls attention
CHRONICLE
and the 8%
this
their support.
FINANCIAL
amount to about 80%
Financial and Economic
Director, Economic Research, Chamber
&
in
2%
maintain
manhour
per
year
our
normal
output of
this would
Intercompany interest eliminated
J
20
THE
(812)
Thursday, February 23, 1950
FINANCIAL CHRONICLE
&
COMMERCIAL
*
of the Office of the
23rd Bulletin
Comptroller of the Currency.
The
Woise, the Better Reason
"It must be obvious that the
istration
wants
President
does
and
can
Earl
conference to put across any
policy.
"The State Department has se¬
cret
meetings in Washington to
brief, as the term is, all the busi¬
ness,
labor and women's groups
who have headquarters here. The
York,
dent,
gandist in the Administration. There are hundreds
publicity agents scattered through the Depart¬
ment of Agriculture, to say nothing of its production
and marketing administration bureaus throughout
a
Secretary Johnson boasted that he had cut the num¬
was
ber of press
Fund's
agents in the military establishment in
Washington and environs from 493 to 233. Just
think, there are 'only' 233 press agents in and
around Washington now. If they were just propa¬
is
the
a
In his annual report
round-the-clock
maintain
so
With Davis, Skaggs Co.
(Special to The Financial Chronicle)
affiliated
has
Kennedy
with
Davis,
CHICAGO,
become Meyers, has
Skaggs
with
&
San
Stock
Francisco
ILL. —Robert
become
Coffin
South
Co., Ill Sutter Street, members of
the
Co.
&
Burr,
Salle
La
has
associated
Inc.,
Street.
231
Mr.
banking
that
of
house,
his annual visit
bank's correspondents in
departed
the
to
L.
of
of New York
head of the International
Division
Joins Coffin & Burr
(Special to The Financial Chronicle)
on
year,"
"This
Europe.
Arthur
announces
Kleeman, President of
S.
"Mr. Diez will also call
correspondents in the
will probably re¬
turn via the Pacific, stopping to
see those banks in Pakistan, India,
the bank,
our
upon
Middle East, and
Meyers was previously with C. J.
Ex¬
Devine & Co.
change.
Hong Kong, Japan and the
Iran,
Philippines."
s'si
President of
appointment
of
as
Assistant
Vice-President. Mr. Petersen, who
had
been
Secretary
Assistant
an
has been
associated with the company since
and Assistant Treasurer,
is
He
1946.
graduate
a
the
of
University
Graduate
School of Banking,
and was for¬
Rutgers
the
of
information
for
them
Report to the Investment
on
your
York
company.
opened
Branch
We have
a
for
alphabetically
States
by
most
list is revised daily
up-to-the-minute
Our charge for
dent
We
can
available.
Canada) is
an
Mr.
#
gummed roll
N.
Herbert d. Seibert & Co., Inc.
of "Security Dealers of
25 Park Place
State
on
Banking
Jan. 19
plans whereby the capital of the
Bank
Industrial
North America"
REctor 2-9570
New York 7
to
Y.,
of
Schenectady,
is increased from
President
is
sen
$225,000
of $10 each.
The
Bank
Union
of
creased its
*
*
Market
Watertown,
capital
as
$750,000
At their annual meeting
proved plans calling for a $50,000
stock
dividend,
increasing
the
capital from $750,000 to $800,000.
indicated by
was
Through
$800,000.
increased its
Chicago, 111.
in
Bank of
National Security
The
$800,000
by
capital
from
a
$700,000
to
stock
December
dividend
of
$100,000.
*
*
The
Na¬
Northwestern
Fourth
tional Bank of Minneapolis, Minn.
reports a capital of $150,000,
now
having been increased
as of Jan. 16 by a
dividend of $25,000, a re¬
$125,000
cent bulletin
Tex.
of the Office of the
*
*
National
The
Topeka,
of
Bank
capital
its
enlarged
has
Kansas,
$1,000,000 by a
dividend of $500,000.
The
$500,000 to
capital became effective De¬
new
13.
Jan.
election
Jan.
on
following officers: Fred¬
10 of the
erick P. Champ, Chairman
of the
G.
Hemingway,
President;
Harmon
B.
Barton,
First
Vice-President;
Rulon F.
Starley,
Vice-President;
Frank
Francis, Jr., Vice-President and
Cashier; Richard K. Hemingway,
Assistant Vice-President; H. W.
Robert
Board;
Trust Officer; Wm. A.
Assistant Cashier; J. Leo
Cooney,
Assistant
Cashier and
Hinley,
Budge,
Auditor.
*
*
tf
stock
A
dividend
$1,000,000
the
of
increasing
in
resulted
capital of the Idaho First National
Bank, of Boise, Idaho, from
$2,-
$3,000,000.
The new
capital became effective on Jan¬
uary 13.
to
000,000
s':
*
*
cember 28.
*
*
The
election
Following
!|!
today of
Fielding
Childress, President Columbia
T.
Terminals
Louis
Bank
has
W.
by
man
the
of
rectors
merce
Co., to the board of di¬
of
Mercantile-Com¬
and Trust
announced
of
St.
Feb.
10
Co.
on
Linn Hemingway, Chair¬
the Board.
Mr. Fielding
on
Francisco
M. Gian-
Feb. 14, President L.
nini
announced
that
the
favorably considered
had
board
a
pro¬
posal to change the par value of
the stock of the bank and to issue
to the shareholders
an
additional
share
new
share of stock for each
Childress, who recently
now
held.
Wade
son
completed 30 years' service
director
of the directors of Bank of Amer¬
of the late
Childress is the
board.
the regular meeting
ica N. T. & S. A. of San
Mr.
of
Childress
is
on
the
also
a
Mercantile-Commerce
National Bank, and other
organi¬
*
*
in
%
the
The
cut in the par
to
on
in the rate of the
the present
are
of
the
that
nounced
cash
National
ville, Tenn. to the First American
current
in¬
National Bank of Nashville, effec¬
able in two
tive Feb. 1, was
at
noted in the Jan.
the
a
stock.
dividend
The share¬
to act on the plans on
Mr.
March 21.
title
proposal calls for
value from $12.50
$6.25 of the shares and an in¬
crease
holders
zations.
change
a
clared
Mass.
is made by the
Commercial Security Bank of Og-
American National Bank of Nash¬
of Jan. 17 by
*
*
❖
Announcement
has
*
The
$3,500,000 to $4,000,000.
enlarged capital became effective
Comptroller of the Currency re¬
ports.
increased
been
has
Fort
at
Bank,
National
Worth,
den, Utah of the
s':
#
capital
Worth
from
dividend of
of the Fort
stock
a
the
$500,000
Wash¬
S. Oliver Goodman in the
come
was
*
sis
in Jan¬
the stockholders of the Se¬
curity
Savings
&
Commercial
Bank of Washington, D.
C., ap¬
uary
surplus, it
The bank
said.
he
profits,
s,t
The
taken from
undivided
was
bank's surplus and
founded in 1919.
*
*
*
A
*
added
the
Franklin
the
of
National.
The stock is in shares
$275,000.
is
First National and Lewis G. Han¬
L.
*
*
York
New
$1,000,000, an announcement by
W. Neal Greer, President, stated.
The item further reports that the
the
of
capitalization from $250,000 to
its
of the
consoli¬
Board
the
of
and
Graham
Kelley
plan.
Chairman
branches
under the
T.
Department approved
small additional charge.
field,
said.
Carlin
completed within 24 hours.
Publishers
has many years of
Banking and
experience in the banking
also supply the list on
a
Vice-Presi¬
announcement by Walter
Jeffreys
Carlin,
President. Mr.
McCrodden who recently joined
the
staff of the
Lafayette, at¬
tended the American Institute of
The
labels at
dation
National
Brooklyn, N. Y., accord¬
of
ing to
$5.00 per thousand.
All addressing
become
Lafayette
the
of
Bank
addressing envelopes for the
complete list (United States or
banks
Franklin
the
of
branch
main
the
both
*
*
*
advices from Houston,
Tex., Jan. 28 to the Dallas "Times
Herald" stated that the Citizens
State Bank of Houston has.raised
Special
which
advices
the
that
added
stock
Assistant
appointed
and offers you the
service
*
William L. McCrodden has been
and
said
1,
containing
each
Committee.
become effective
March 28, would
July
four
into
divided
are
two or
three banks, and each group elects
a
representative to serve on the
if approved at a
stockholders' meeting of Franklin
from
si■■
❖
investment
country,
every
Cities, and within the Cities by firm names.
This
The branch was
Street.
72nd
and
banking and brokerage firm in the
arranged
and
for¬
Avenue
merly located at Madison Avenue
metal stencil in our Addresso-
Department
graph
Madison Avenue
Madison
at
76th Street.
Addressoyrttph Service
Feb. 14 the new
on
its
of
location
banks
groups,
of
banks.
both
of
of New York.
Bank
Reserve
merger,
stock
The National City Bank of New
Investors look to
Country.
officials
the
The
both
Bank,
City, has been announced
Jersey
from
jjt
Houses
National
Franklin
by
a
the amount
merly with Bankers Trust Co.
Mail your Annual
eral
The other eleven Federal Reserve
proposed merger of
the First National Bank and the
respondent,
elected by
banks is
Reserve
the board of directors of the Fed¬
"Evening
Newark
News", of Feb. 15, by a staff cor¬
the
Petersen
W.
ad¬
City
Jersey
to
the
to
of New York,
Trust Co.
announces
Louis
eral
According
vices
representatives of the Fed¬
of the
*
*
One
of the Federal Reserve banks.
dividend of $125,000.
*
representatives
five
and
System
stock
a
of
Board
the
of
Governors of the Federal Reserve
ington "Post" was likewise to be¬
#
Arthur S. Kleeman,
Colonial
through
$875,000,
the
members
seven
capital is now $1,000,000, having
enlarged effective Jan. 16,
from
member of the Com¬
year ending Feb.
as a
for
28, 1950. The Federal Open Mar¬
ket
Committee
consists of
the
J.,
N.
been
First National
Vice-President
serving
mittee
Brunswick,
New
at
would
*
*
Trust
and the
Reginald
for
Diez,
Colonial
CALIF.—
health
often made to appear
Mario
FRANCISCO,
help
3,000,000 New Yorkers.
some
the better reason!
SAN
as
services
welfare
social
and
*
is
Brunie,
Mr.
directors,
organized business to
from
good."—Senator Robert A. Taft.
worse
the
Council.
Mr.
former Vice-President
retiring Chairman, announced that
in 1949 the Fund raised $5,186,179
thing the establishment does under the Truman Ad¬
No wonder the
Co.,
of
Chairman
Larin, Jr., President of the Fed¬
Reserve Bank of Atlanta, is
The National Bank of New Jer¬
sey,
serve
eral
#
*
*
Members
of the Fund.
to
&
Altman
B.
elected
Burke
gandizing the military establishment it mightn't be
so bad. But one of their real jobs is to make every¬
ministration look
of
All
Bank
alternate member
on the Committee in the
of Mr. Davis. W. S. Mc-
absence
retaries and Assistant Treasurers.
Fund.
President
to
previously been Assistant Sec¬
had
director of the United
John S. Burke,
York, is
Hospital
Gilbert, Presi¬
have elected R. R.
Knip-
Morlock.
shild and Albert F.
Hospital Council of Greater New
Why,
Department.
Feb. 11,
Jesse G.
Karosen,
President of the
Mr. Goetz,
tion.
R.
Leo
times
the farm states.
Defense
is
succeeding Henry C. Brunie, three
President of the organiza¬
of
Presi¬
by
on
as a
of Dallas, as an
Association of Amer¬
ica, and a council member of the
American
Geographical Society.
Norman S. Goetz, of the legal firm
of Proskauer, Rose, Goetz & Men¬
delsohn, was elected Chairman of
the
Fund's
board
of directors*
"Secretary Brannan is the best personal propa¬
Marek
St.
member of the Federal
Open Market Committee for the
year beginning March 1, 1950 and
Louis,
News," which reports the new of¬
ficials as follows: Jesse L. Conger,
and Annuity
paying
the
of
dent of the Federal Reserve
a
of the Teachers Insurance
trustee
A. Taft
announced
were
Bank
Reserve
Federal
according to the Newark "Evening
the
and
Corp.
Association,
Plan
Regional
J.
N.
dent Stanley J.
the
Dallas, and St. Louis have elected
Franklin-
the
in
*
directors of
Chester C. Davis, President of
of four new
Washington Trust Co. of Newark,
Institu¬
the
of
Securities
tional
under this Administration.
the
i!i
of
boards
Federal Reserve Banks of Atlanta,
*
*
appointment
Vice-Presidents
a
director
a
*
The
Mr.
Fund director since
1943, succeeded Carl Whitmore,
who resigned Jan. 18, because of
ill health.
The new Fund Presi¬
Schwulst,
Robert
tige of State Department position
but drawing government salariessalaries paid by the taxpayers who are
there's
of
on
annual meeting of
the Fund's board of directors.
meetings throughout the country
and sends speakers with the pres¬
"Then
9.
The
$150,000, rais¬
stock dividend of
ing it from $600,000 to $750,000.
Bank of New
elected President
New York Fund
16 at the
Feb.
Department sponsors similar
nose
was
Greater
The
a
of
Schwulst, President
B.
the Bowery Savings
favorite theory or
through the
capital became effective Feb¬
ruary
*
press
State
new
CAPITALIZATIONS
o
his
use
$200,000 to $250,000 through the
sale of $50,000 of new stock.
The
Bankers
and
ETC.
REVISED
them, and no Republican can get
more
than one at a time. The
North
Winston-Salem,
of
Bank
Carolina, has been increased from
NEW BRANCHES
NEW OFFICERS,
*
:]!
capital of the City National
The
'
CONSOLIDATIONS
propaganda
The President com¬
country has ever seen.
mandeers all four networks whenever he
i
News About Banks
Democratic Admin¬
today is operating the biggest
mill the
|
*
Giannini also
an¬
board
had
de¬
dividend
for
the
the
semi-annual period, pay¬
quarterly instalments,
rate of $2.80 per
annual
Volume
171
share
the
on
Number 4884
THE
present number of
shares outstanding, an increase of
12% over the previous annual rate
at
$2.50
share.
per
terly
payment
share
will
to
be
Feb. 28.
of record
at
the
cents
record
of
as
annual
By OWEN
31
share if the shareholders approve
the
issuance
of
the
additional
shares.
The
pointed
a
consider
directors
special
the
had
ap¬
committee
question
of
to
issuing
shares
new
of
stock...
Forum, and presented a 28-page book of charts
supplement the annual report just released.
,R..v W.
»
Shannon
been
ap¬
pointed General Inspector at the
head,t)ffice of The Royal Bank of
Canada in Montreal, the bank an¬
nounced.
Mr.
Assistant
Manager of the bank's
main
Shannon
Toronto
branch
»S
.'i:
Promotions
in
has
been
since
1948.
the
Royal Trust
Co.
(head office Montreal) were
reported as follows in the Mon¬
treal
ert
of
"Gazette"
P.
the
Jellett
of
Feb.
becomes
15:
Rob¬
Chairman
Board; Ross Clarkson
suc¬
ceeds Mr. Jellett
as
President, and
Pembroke, C.B.E., is appointed
General Manager
following the
50th annual
meeting of the Royal
J.
Trust Co.
■r-
*
-f
The
directors of Westminster
Bank, Ltd., London announce that
the Hon. Rupert E. Beckett
will,
March
on
31,
retire
He
years.
will
remain
board.
by
He
for
was
of
the
long
a
time
partner in the Yorkshire bank¬
a
ing
house
of
Beckett
&
Co.
On
its absorption by the Westminster
Bank in 1921, two of the
partners
of the firm, the late Sir Gervase
Beckett,
Bart,
and
Rupert
E.
Beckett, joined the board of West¬
minster Bank. Mr. Beckett became
Deputy Chairman of the
a
in
1927,
He
and
man
of
Bankers
and
Chair¬
was
of London
the
Lord
elected
years
Alden¬
director
a
Westminster Bank
1931.
British
in
1947-8.
in
the
of the Committee
1933-4
in
Sons
of
1924, and
Deputy Chairman in 1933.
Chairman
bank
and
Association
Clearing
ham
Chairman
President
was
Bankers'
background,
fact
that
about
a
He
is
of
Antony
Gibbs
&
Ltd., London merchants and
bankers.
whether
to
Reinholdt & Gardner
To Admit Matthews
ST.
LOUIS,
MO.
will
Robert
—
be
H.
admitted
to
downs of other
Street,
bers
mem
of
the New York
and
Midwest
Stock
Ex¬
changes
on
March 1.
Mr.
Matthews
was
formerly
partner
G.
&
H.
a
in
Walker
Co.
with
with which he
had
H.
companies, based
been
as¬
Matthews
sociated
for
many years.
large proportion of residential and commercial business is
stabilizing factor.
as
tion
in April, will be
but
enues
last
the
year's
rather
dealt
notes.
Legislature did not enact this legislation.
While
decision against New England Telephone was
rate
disturbing, President Toner feels
fairly with
missioners
the
have had
that the Commission has
electric utilities, and several of the com¬
long experience with regulatory procedure.
Charles F.
Eaton
was
Administration has
are
Western
Germany
in
recently been issuing
propaganda for the development of hydro power in New
England
a
large scale, President Toner stated that there has been no
shortage and he was sure that capacity would continue
adequate regardless of any recurring drought conditions. As far
power
Boston Edison is concerned,
system
planning has kept new gen¬
erating capacity comfortably ahead of increasing power demands
because of
an
expansion program which began in 1937. The entire
U. S. electric industry was short of reserve
capacity in 1947. The
chart (presented in the statistical booklet
as Exhibit No.
cates
to
be
the
1)
that Boston
out of
fact
indi¬
Edison might have had
difficulty in supplying
other utilities in that year if its
largest unit had happened
power to
service
that
1947
during
peak
a
period.
Nevertheless, despite
of extremely low water for New
England hydro plants, Boston Edison was able to
help neighboring
systems and still maintain a comfortable reserve.
was
a
year
ton
5
shows
the
estimated
generating capacity and
requirements for the whole of New
England, excluding Maine and
lower Connecticut. (Maine is
excluded because it does not permit
the exportation of
hydro power generated within its borders, and
Connecticut south of New Britain is also
omitted because the
company serving this area has disconnected an
existing tie in
order
to
while
in
remain
1946
a
purely intra-state company.)
there
was
a
relatively
narrow
This shows that
margin
of
reserve
reserve has now been about
tripled (to around 22%)
will at least be maintained
during the years 1950-1954. Con¬
New England is
virtually a power pool, with
sidering the fact that
very
complete
appear
inter-connection, private
ample
presidents
despite
all
of
Federal
the
power
suggestions
electric
to
facilities
of
Dr.
Old
the
Company and the
Colony Insurance Company at
annual meeting and election
of officers held Feb.
15
in Boston.
All officers and directors were re¬
elected.
Ernest
Ahmberg
was
elected Assistant
Secretary of both
companies.
it
is
Paul
Einzig
the
Allies
that ex-enemy
countries
under
their
occupation
achieve economic
On the other
should
self-sufficiency.
hand, the increase ol
German and Japanese
competition
is viewed with
growing
concern
This
factor, more than any other
single factor, is held responsible
for
the
ers'
by
termination
market"
and
of
its
the
"sell¬
replacement
"buyers' market" in a num¬
ber of categories of
manufactures
a
And
the
low
prices
quoted in
German or Japa¬
lines by
nese
exporters
During
capacity and maintenance schedules.
Boston Edison plans
during 1950-1954 to spend $20 million on
generating capacity and $53 million on other
plants. Since only
about $5 million retirements are
estimated, gross plant will in¬
crease by some $68 million or
28%. Since no equity
financing is
planned, common stockholders should obtain some
benefit from
anticipated earnings on this
investment, less the interest charges
required to provide funds.
Moreover, substantial fuel economies
are being obtained
from the new
generating plants; the new No. 4
unit at Edgar Stations is
using less than three-quarters of a
pound
Boston Edison
change
is
around 46 to
currently selling
on
the Boston Stock
Ex¬
yield 6.1%.
(Special
to
'The
Financial
CLEVELAND,
Leland
staff
Union
bers
has
of
of
change.
been
Jaffe,
added
Siegler
Commerce
the
Chronicle)
to
&
Arcade,
Midwest
H.
Co.,
Stock
(Special
to
The
Financial
the
mem¬
Ex¬
industrial
production
low
a
ebb, the
other
leading industrial countries
took possession of the world mar¬
kets.
They adopted policies re
garding expansion of output and
wages levels that were based on
the absence of German
and Japa¬
nese
competition.
countries
are
Now
that both
gradually
reappear¬
ing in the world markets, Britain
and other industrial countries will
have
to
face
new
problems ol
considerable gravity.
While even
few
steel
months
ago
constituted
one
shortage
the
of
cipal "bottlenecks," fears
entertained
about
prin¬
are
the
ol
now
coming
overproduction in steel, due to the
increase of the German output
As
for
textiles, while until
shortage
of
labor
cently
re¬
was
Lancashire's main complaint, there
is now a growing fear of price-
cutting by Japanese exporters.
Germany
has
her
offering
Although
long
by
German
to
insist
German
thai
ham¬
is
of
foreign capital,
export firms are willing
12
or
even
18
months'
where their British
cash
on
advance
on
of
credits
complaining
reconstruction
lack
grant
credits
term
Western
is
once
policy
-
the
Government
industrial
pered
resumed
traditional
CHICAGO,
Folds is
Yantis
now
&
lower.
the
low
Incorporated,
South La Salle Street.
was
part
war
135
Mr. Folds
formerly with Shields & Co.
or
after
payment
part
might
force
full
In
prevailing conditions
employment
difficult,
reductions,
wages
it
however,
would
be
enforce
even to in¬
to
or
duce the workers to put in longer
hours or harder work without
any
increase
of
probable
that
So
it
British
pay.
the
seems
siderable
trade
sterling
As
a
postwar standard of liv¬
German workers, and
to the fact that German
the
has
been
Allies
replaced
equipment.
Fears
British
that
German
among
unions leaders
a
and
further
and
increase
Japanese
benefit
largely
dis¬
In quarters
ranging from rightwing Conservatives to Com¬
munists there is growing agitation
in favor of steps to prevent Ger¬
and
man
the
and
Japanese
competition,
is urged to
government
intervene
to
that
effect.
The
question whether it would be pre¬
ferable for the Allies to continue
indefinitely
subsidize
to
enemy countries
without answer.
practice it is
the
United
Western
it
will
the
ex-
usually
is
In
left
any
States
that
not
put
in
subsidizes
with
up
nitely.
It
assume
that
by
aid
comes
Marshall
indefi¬
it
to
reasonable
seems
American
to
case,
almost entirely
now
Germany and Japan, and
probable that Congress
seems
when
1952,
to
Government
end,
an
assistance
Germany and Japan will also
So
alternative
the
to
achieving self-sufficiency by that
time would be chaos.
Since
German
and
Japanese
competition is inevitable, the wise
course would be to regulate it so
to
as
reduce
to
harmful effect
its
minimum
a
British exports.
on
This could
only be done by agree¬
aiming at preventing cut¬
throat competition by means of
ment
quoting unnecessarily low prices
or
quoting
unreasonably
long
credits.
is
It
of
interest
the
to
Germany and Japan not to quote;
lower prices than is necessary to
enough
secure
to
their
cover
of
vention
manufactures
of
important
of
is
the
as
all
the
of
terms
alreadv strongly in favoif
material producing coun-r
are
raw
tries
The pre^f
heavy slump in the
a
more
trade
exchange
foreign
imports.
price
with
compared
ditions.
Both
and Janan
a^e
prewar
con¬
Germany
laree raw material
Western
and it is not to their
interest to increase the volume of
importers,
rranufacturrs +vat have to be
ported
order
in
materials.
raw
soect
their
ex¬
the
for
pay
fair
re-
largely
the other
of
there
for
scone
this
in
are
those
countries
industrial
a
Since
interests
with
identical
be
to
volume of imported food or
same
an
should
under¬
standing.
G. G. McDonald & Go.
Opening in Detroit
(Sprcial
to
price-
The
DETROIT
Donald
&
offices
Bldg.
to
McDonald,
Ward
has
Mc¬
formed
Penobscot
in the securities
Officers
are
President,
Richardson,
Treasurer.
G.
been
the
in
engage
business.
Chronicle)
Financial
MICH.—C.
Co.
with
associated
entertained
are
trades
Socialists
of
war
by the
The
thus
may
con¬
a
appear.
This is due in part to
dismantled
extent.
even
or
payment.
considerable extent by up-to-
a
date
associated with F. S.
Co.
of
lower and the quality better.
But
in many instances German prices
to
L.
markets.
result, the Germans often get the
orders even if British prices are
industrial equipment destroyed by
Allied air forces during the
<|hronicle)
ILL.—William
competition
rivals
the
F. S. Yantis & Co.
cutting
British industries to cut wages as
an
alternative to losing essential
cease.
four
or
ing of the
William L. Folds Joins
OHIO—Max
unions.
Japanese
in
Jaffe, Siegler Add
causing
the first three
and exports were at
more
contrary. The
in New England have
are
postwar years, when German and
would
the
companies
formed a
voluntary organization known as the Electric Co-ordi¬
nating Council, which meets several times a year to
plan new
director of the Bos¬
Insurance
real¬
tnat
to the interest
a
No.
Eaton, Jr., President
Inc., Boston,
a
also
and
T"
Japan.
is
and trades
on
as
to
gained through the devaluation of
in
anxiety both among industrialists
Federal
agreements
munism
the company's fuel, tax and construction costs
relatively among the highest in the country.
costs:
While the
of
balance will be affected to
many
& Howard,
elected
a
as
While Boston Edison's residential rates
may appear slightly on the
high side, they are not at all high when contrasted with aboveaverage
negotiation
safeguard
against Com¬
are
of
condi¬
tions and
a common stock
equity of 61%, one of the
of the large utilities, and comparing with 25-30%
for many companies which have been released from
holding com¬
pany systems.
The company, therefore, will probably not find it
bonds, probably
prog¬
towards
normal
any
to retire bank loans and unsecured
of
ized
necessary to do any equity financing in connection with its con¬
struction program over the next three or four
years. A proposed
issue of $18 million mortgage
indica¬
an
ress
Boston Edison has
highest for
On
-
hand,
one
it is welcomed
strong
a
of coal per kwh.
Chas. Eaton, Jr., Director
Britain.
the
prosperity and depression; the
on
capacity, this
Locust
in
utility, since it relies less on large industrial customers than most
big utilities. Thus Edison's sales do not have the ups and
and
&
400
many and
mixed
feelings
of the
Reinholdt
Gardner,
production in Ger¬
Japan is viewed with
The company's business is more stable than that of the
average
partnership in
Robert
this
increase
industrial
President Toner indicated that the
company might dip into surplus
if necessary in order to maintain the current dividend
rate.
Exhibit
Matthews
Edison
l1/? years' dividend
as
LONDON, ENG.—The
of
(American Telephone, with its Bos¬
nearly all its earnings)-and partly to the
has an ample earned surplus, equal to
requirements. There may be some ques¬
surplus can remain in the rate base.
pays out
Boston
and
avoid cut-throat
competition.
stock traditions
common
over
price cutting of textiles because of
This has resulted in growing agitation for
intervention
government
generosity is perhaps due in part,to New Eng¬
Regarding the regulatory picture in Massachusetts, this has
perhaps improved somewhat, from the standpoint of the utilities.
The Governor, about a year
ago, proposed a 3% tax on gross rev¬
succeeded
member
a
ton
This
move.
po¬
a
Lord
Aldenham,
at
present
a
Deputy Chairman.
Mr.
Beckett
will
land
last year's rate being
payers,
his
a
concern
net income.
used
for the past 20
be
such
of dividend
on
Boston Edison is
about 96% of earnings. In fact, President Toner has indi¬
desire to increase the rate to $3 when earnings justify
or
cated
only a negligible effect
two Connecticut utilities,
or
the
from
Chairmanship of the bank,
sition he has held
$2.80
tion
*
one
of the most generous
one
has
output and
Japanese imports.
due largely to reduced sales to other utility companies,
Except for
if.
Asserting there is growing concern in Britain over increase of
German and Japanese
competition, Dr. Einzig says there is
fear of overproduction of steel because
of enlarged German
and statistical data to
but loss of this business had
ff
By PAUL EINZIG
Company
The company's earnings of $2.91 for 1949 reflected a gain of 11
cents over the 1948 figure of $2.80 (after deducting a
nonrecurring
credit of 10 cents). There was a decrease of about $1.4 million in
to
21
German & lap Competition
President James V. Toner of Boston Edison Co. recently made
the New York Society of Security Analysts at
their Luncheon
(813)
British Concern Over
address before
an
revenues,
for
CHRONICLE
ELY
Boston Edison
preferential rights to shareholders
subscribe
FINANCIAL
of
as
May 31, 1950,
of $1.40 per
rate
&
Utility Securities
per
March
on
of
The second payment will
on June 30 to sharehold¬
be made
ers
70
made
shareholders
Public
The first quar¬
of
COMMERCIAL
Both
Claude
G.
and
R.
Secretary
were
-
formerly
in Higbie, McDonald
&
Co., of which Mr. McDonald was
President, and in the old firm of
P.
ft
McDonald
Rr
Co.
22
Continued jrom first page
period of many
years
really means is this:/As
long as our own party is in office,
Economic Aspects oi
The Pension Problem
question is in
the
not
a
the second
operate
the long run
loss basis, the man
in
can
a
on
will
concerned
spectre of unem¬
the
up
Gift
a
wage
a
entitled
earner
to
a
pension consists of his wages plus
the amount of the premium he
have
would
to
to
pay
insur¬
an
for the acquisition
ance
company
of
equivalent claim. Ultimately
an
granting of pensions amounts
the
to
restriction of the wage earn¬
a
freedom
er's
the cal¬
into
to
his
signs.
He is forced
cut
down
his current consumption in
order
to
his
for
provide
own
to
old
We
age.
neglect dealing
with the
question whether such a restric¬
toward
tend
rates
market
labor
free
a
height
a
worker's
individual
the
of
find
can
all the
II
Pensions
But
as
the
as
soon
laws
labor unions fix rates at
level,
fixed
be
tendency disappears.
are discharged and
this
will be
day can only
man
one
of
terms
value
the
Hence
is
in
of
claims
there
job-seekers who cannot
find employment. The reason is
that at the artificially raised wage
monetary unit, the dollar.
rates
for
the
is
schemes
Administration
present
only
becomes a perma¬
phenomenon when the gov¬
system and to increase the bene¬
fits under this system. It openly
While
the
of
of
a
hands
pays.
unhampered
an
labor
unemployment
transitory,
nent
employment
number
on
market
is
it
ernments
the
or
raising
unions
succeed
to
eager
old-age
supports the demands of the un¬
ions
Beveridge,
tribution
about
twenty
years
that the continu¬
admitted
ago,
of
ance
rates
wage
substantial
a
volume
unemployment
is
in
proof that the price
labor
as
is
wages
of
for
pensions
the part of the bene¬
on
ficiaries.
the
granted
without con¬
be
to
companies
the
by
at
But
the
the
committed
asked
for
bound
high
for
the
to
lower
to
purchasing
Lord
budgets
called
policy,"
"full
implicitly
employment
acknowledged
the correctness of this thesis. His
.
main
tion
for advocating infla¬
reason
as
a
to
means
unemployment
do away with
that
was
he
be¬
lieved that gradual and automatic
lowering of real wages as a result
of rising prices would not be so
strongly resisted by labor as any
attempt to lower money wage
rates.
What
prevents the government
raising wage
rates to a steeper height than they
actually do is their reluctance to
price out of the labor market too
great
the
of life. While
hypocritically pretending to fight
inflation, it has elevated bound¬
nance, as a new way
less credit expansion and
reck¬
lessly increasing the amount
of
money in
circulation to the
dignity of an essential postulate
of
popular government
number
a
workers
of
people. What
getting
are
in
the
and
eco¬
nomic democracy.
Let
lame
and the unions from
deficit spending as
principle.of public fi¬
and
first
the
more
of the dol¬
unbalanced
power
lar. It has proclaimed
Keynes, the inaugurator of
and
more
is
which
policy
a
the conditions of the market. And
so
time
same
Administration is firmly
same
itself
too
is
nobody
excuse
not
be
fooled
the
by
that what is intended
deficits,
permanent
but
only the substitution of balancing
the
budget
eral
period of
sev¬
of
unions
ask
can
reduces
that
wages
for
without
deficits
incurred
in¬
sidered
cision of the party
Administration
any
contribution
the
beneficiaries
choice.
to
It
the
of
made
has
part
a
preferred pensions
increase
an
wages.
has
on
without
pay
in
take-home
Economically it
does
not
make any difference whether the
workers
contribute
do
or
do
not
as
that
spite of
its end,
it
fiscal
the
did
year
considerable
the
how
member
for its financial
or
by
the
take-home
wages
obligation to provide
For the worker, on
for pensions.
was,
deficit.
Democrats
1932 electoral campaign
cized
in
of prosperity; it pro
for the employer whether the cost
of employing workers is raised by
in
1949
The
declared
of prosperity. But
accumulate a surplus
the
increase
of
methods
"anti-fascist"
procedures,
of
overthrow
an
unlikely to
occur
almost
an
doctrine is
long as the
accepted
as
living generation of professors
politicians has not passed
and
the
Hoover
He-
in
criti¬
Administration
shortcomings. But
they came into office,
they inaugurated their notorious
schemes of pump-priming, deficit
as
soon
as
spending and
so
on.
of
The present writer, having
more
than forty years un¬
but
stacle
to
one
backward
Lord
evils
caused
return
monetary affairs
rather thin.
are
A realistic evaluation of the state
of
opinion,
public
doctrines
the
all
enterprise to
<
will
tendencies
simple
too
Inevitable
infla¬
policies is a drop in the
monetary unit's purchasing pow¬
er.
Compare the dollar of 1950
Valley
of
tionary
with
the
dollar
the
of
money
American
nal
Compare
European
or
country with its nomi¬
equivalent
dozen
1940!
of
any
dozen
a
two
or
ago! As an inflation¬
years
con¬
plan
all
The
state
projects which
the
government of
The
States.
There
are
Tennessee
America
in
action.
val¬
many
left
then
And
still
for
there
few
a
days
McMahon outlined
Senator
ago
pro¬
ject that dwarfs
the
Marshall
plan. Why not? If it is unneces¬
increased more and more, the
prices and wages and the
penditure to the means available,
there is no limit to the spending
of the great god State.
the
aire
rise in
corresponding drop in purchasing
will
power
erated
go
on
The
French franc
the
pace.
at an accel¬
experience/of
give
may
us
a
rough image of the dollar thirty
forty years from today.
or
"
is such periods of
it
Now
twenty, thirty or forty years. To¬
day
pension
a
dollars
in
mean
1980
or
rather
a
will
What
1990?
Today,
Commissioner of
Welfare
the
as
hundred
one
means
allowance.
substantial
it
of
month
a
has shown,
all the food
the City of New York
52
cents
buy
can
person
needs to meet the
daily caloric and protein require¬
a
much
How
ments.
will
52
Insufficiency
:
cents
is
Such
issue.
the
after social
What
the
aiming at in striving
security and pensions
security. But their
gain" withers away with
the drop in the dollar's purchas¬
of
is,
course,
"social
enthusiastically
supporting the Fair Deal's fiscal
ing
In
power.
policy,
the
union
members are
themselves frustrating
all their
social
security
and
pension
schemes.
The
pensions they will
be entitled one day to claim will
be
a
No
this
mere
falls
solution
the
illu¬
vision
of
tirely
neglects
main problem
recognize
to
the
of American busi¬
viz., the insufficiency of the
accumulation of new capital. He
ness,
while
abundance
of
dreams
a
shortage is threatening. He mis¬
interprets the high profits which
the
companies report. He does not
considerable part
of
these profits
are
illusory, a
mere arithmetical consequence of
perceive that
the
that
fact
a
the
depreciation
as
laid
sums
quotas
aside
are
in¬
These illusory profits,
phony result of the drop in the
purchasing power, will
dollar's
be
absorbed
costs
by' the already risen
replacing the factories'
of
worn
out
equipment.
Their
ploughing back is not additional
investment, it is merely capital
maintenance.
available
There
for
a
is
can
be
In
an
found
substantial
'ex¬
pansion of investment and for
the improvement of technological
methods
than
the
misinformed
as
current
saved
which
in¬
and
capital.
new
Feeling of Security
that
the
is
quota; of
higher.
kinds
be
give
is
fact
the
point.
this
the
workers
ail
of
security.
our
think,
need
pension
in
feeling
No
head
per
of
seen
to
unfounded
safe.
other
.
invested
obscure
Now, they
in
the
the
in
psychological dan¬
to
they
They
that
all
of
that
than
capital
The
plans is
why
reason
higher
are
States
countries
ger
only
rates
future is
to
worry
any
longer. The unions will win for
us
and
more
An
of
age
worried
social
more
gains.
in
sight.
plenty
the
Yet,
is
should
workers
about
the
be
the
of
state
supply of capital.
They should be
preservation
the further improvement of
worried
and
the
because
what is called "the American way
of life" and
of
ard
American
"an
living"
maintenance
of
crease
American
depends
and
the
stand¬
the
on
in¬
further
the
capital
invested
in
business.
Pension
fifty
Schemes Breed
Complacency
1
A
old
who
man
vide
his
of
must
age
income
is
save
take
or
a
to
out
his
of his
part
a
pro¬
for
insurance
an
policy. This leads him to examine
financial
the
ings bank
pany
status
the
or
he
try than
Such
scheme
a
his
of
whom
man
a
read
the
financial
interested
in
coun¬
pension
incentive
of his
page
will
and
newspaper
the
is
relieves of all
seemingly
worries. He will get the
to
man
idea of the
an
problems
a
sav¬
com¬
of
soundness
buys.
likely to get
economic
the
of
the insurance
or
become
which
articles
thoughtless people skip. If he is
keen enough, he will discover the
flaw in the teachings of the "new
economics."
the
But
man
who
confides in the pension stipulated
believes that all such issues are
"mere
him.
theory"
He
does
not affect
and
do
not
bother
about
those
things on which his wellbeing depends because he ignores
this dependence. As citizens such
liability. A nation
if its members are
fully aware of the fact that
people
are
a
cannot prosper
not
what
alone
conditions
their
improve
can
is
more
better
and
production. And this can only be
brought about by increased sav¬
ing and capital accumulation.
|T he
CHRONICLE
comments
the
on
pressed by Dr.
von
invites
views
ex¬
Mises in the
foregoing article or on any re¬
phases of the subject un¬
lated
Letters
discussion.
addressed
Editor,
to
and
CHRONICLE,
or
forced
account
own
MERCIAL
and Consume
backward
for
funds
been
Unfounded
be
Looking
those
have
vested
der
public thinks.
for
industrial
would
much- less
Progressive Ability to Produce
sham.
dilemma.
com¬
the
to
prey
dim
which
dignified statesmen and learned
professors. Like the expert ad¬
visers of the President, he en¬
a
workers are
that the
wonder
no
man
sufficient.
buy in 1980?
.
It is
•
mon
are
that
fact
system which taxes
expenditure
bonds
Capital
of New
the
dissipates
and
more
sions
time
that count for pension plans.
The
present
workers
of
the
United
States Steel Corporation
will
receive
their
pensions in
t
to adjust the amount of ex¬
sary
the
members
of
taxation
a
away
many
gigantic
a
with
farther
are
policy works only as long as
yearly
increments
in the
amount of money in circulation
ary
of
rivers in other parts of the globe.
Only
earner.
their
fate» is tied up with the
flowering of their employers' en¬
terprises. As voters they approve
unlimited
project and the Marshall
were
just
modest
begin¬
nings.
leys
has
con¬
pensions,
union
assume
big for private capital.
is
simply
nothing
that
surpass
the
financial
United
result
inevitable
is
economy.
disposal.
of the
power
The
its
undertake
can
would
.
with the
state
at
means
are
Drop in Purchasing: Power
•
unsatisfactory
They blithely
the
There
|
see
they recommend is
indeed. The state should
that
many years.
men
remedy
mentality of politicians and pres¬
sure
groups must show
us that
inflationist
capital
and
"mature"
not
wage
and
The
United
in
also
these
cope
ditions of the
The
As
i
is
that
fill the gap.
prevail for
but
saving
accumula¬
do
preoccupied
rates
wage
the
by the inability of private
taught at the universities and the
the
in
many
accumulation.
it,
prospects for a speedy
to sound management of
of
for* the1
conscious
is
economic
enthusiastically
by
capital
What the workers must learn
American
authors, advanced his doctrine of
supported
of
the
to¬
face
merely "management." They
not
shortage of capital,
the
Keynes,
problem
to
became
only
not
countries
England,
that
the
is,
new
tories.
jobs and
standard
farther
any
betterment
be
unions boast of their Pyrrhic vic¬
get
it
cannot
problems
vital
wage
rates for
in ;which
of
or
real
has
and
obvious that the most serious ob¬
the
the
labor
Exclusively
living,
instant
a
accu¬
down
there
capital
of
are
wage
to
eager
is
thereby to improve the
inflation, is forced sadly to admit
of
year
a
not
a
power.
that there
increase
to
all -those
passionately advocated by
pseudo-economists. It is
universally
con¬
moderate recession near
a
in this year
duced
in
itself
realize
means
of
Such
bad business is left to the de¬
to the fund out of which the pen¬
sions will be paid. It is immaterial
an
it is very
governments.
slowed
maintenance
cern
economics." This allegedly
philosophy ignores the role
capital accumulation. It does
not
is
The
day.
pur¬
"new
t i g e of sound
today decried
"orthodox" and "reactionary."
as
good business and what
as
the
has to
years
depression. But what is to be
creasing unemployment. The un¬
ions in asking pensions for which
company
in
the
cross
hew
of
by
capital
accumulation
is
ceases,
American
the
of prosperity budgetary
surpluses are to be accumulated
the
corporation
that
fiscal
years
employing
the
see
to restore the p r e s
for balancing it every
According to this doctrine
year.
in
a
that
is: they are deluded
answer
is
past
effected
tion
The
the
the
This
question of further improve¬
Such
at
are
been
If
to
trend
ments.
poses?
praised at the universities as the
most beneficial expedient of "un¬
orthodox,"
really
"progressive"
which have to be balanced against
amount
is
to inept
"New
happen
policies
has
capital
new
thereby
this
increase of
entirely
the
a
serious blun¬
a
that
continue.
mulation.
namely to accelerate
the increase of capital as com¬
pared with population. It talks
about technological progress and
productivity without being aware
that
no
technological
improve¬
ment can be achieved if the capi¬
tal
required is lacking. Just at
years
over
shape of pensions payable by the
the
fiscal policy
a
convenient
i
above the
potential market level. Even Lord
the
A
devise various
and disability, pen¬
sion. It is intent upon extending
the number of people included in
the government's social security
smaller
in
The
the
with
American
vicissitudes
are
of
money.
these
linked
inextricably
amount
the
that
Then workers
only
their
distant fu¬
too
not
it
can
to
speedy
saving, social security
pensions.
and
But it is
assume
progress
frustrates
American workers fail to
compromisingly fought against all
varieties of credit expansion and
Dollar
pension each
entitled to claim
higher
a
Purchasing
the
obvious
is
It
of the
the
or
the
As
ture.
for
the
of
Power
all
and
need
and
men
the workers
ready to work for this rate can
find jobs. There prevails a ten¬
dency toward full employment.
they
that
to
bound
Economics"
,
in
der
and
How
practice fashionable nowadays of
deficit spending
will be aban¬
doned
It
observe
we
produce
consume.
by the fallacies of what is called
unlikely
very
pur¬
to
any
away.
at
which all employers ready to pay
these rates
is
ity
the very founda¬
interpersonal rela¬
contracts.
years
steady progress of America's abil¬
Ill
budget properly.
It
money's
hundred
A policy of deficit
Pensions and
public finance. A radical change
of ideologies would be required
ployee is forced to use the incre¬
ment for acquiring a pension.
wage
benefits
balance
to
tion
kind of raise in wage rates.
all
of
and
all kinds of
our ex¬
and
freedom is expedient or not. What
ing to actuarial methods.
to
emphasize
is
The consequence of this state of. is; important
affairs is that the' incidence of all merely that the pensions are not
a gift on the part of the employer.
alleged "social gains" falls upon
the
wage-earner.
Their
effect They are a disguised wage raise
does not differ from the effect of of a peculiar character. The enu-
On
tions
under
may
paid out plus an allowance
for the pension, computed accord¬
any
the
hosts
If the
to
of
for their failure
them
It
lyorker plus the quota of the tax.
wages
the
of
power.
saps
tions
pansionist policy, viz., depression,
will appear. Then we shall blame
them for the disaster and assail
in¬
according
employer is bound to pro¬
vide for pensions, the sum en¬
tered
into
the
calculation
is:
shrinking
chasing
generate. Later, when our
adversaries will be in office, the
de¬
his total
use
come
the
money.
money
inevitable consequence
Correctly computed, the income
of
countries — collects a
percentage of each firm's total
payroll as a tax which the firm is
strictly forbidden to deduct from
wages paid to the workers, the
enters
happy
all
deferred
payments
stipulated in terms of
They
shrink
with
the
be
must
ity which the easy money policy
and a rich supply of additional
Not
European
that
feel
to
voters
society
Thursday, February 23, 1950
spending
the artificial short-lived prosper¬
calling
takes into account
not
only the individual's takehome wages, but all the costs of
employing him. If, e.g., the gov¬
ernment—as is the case in some
amount
the
the part of the
free gift on
employer
culation is: wages paid out to
popularity
our
spending. We do not
want to annoy our friends by cut¬
ting down expenditure. We want
ployment.
respectively, will not be hired.
In resorting to this calculation
the
enhance
by reckless
of
discharged or,
be
a
employer.
The
pension claims
they acquire restrict the amount
wages they could get without
the
enterprise
over
will
we
the . pensions are
other hand,
negative, the employment of
the man will cause a loss. As no
to
CHRONICLE
What the doctrine of balancing
budgets
swer
FINANCIAL
&
COMMERCIAL
THE
(814)
New York 7, N.
25
Y.j
should
COM¬
FINANCIAL
Park
Place,
Volume 171
Number 4884
THE
COMMERCIAL
&
FINANCIAL
\
.CHRONICLE
(815)
'
23
Continued from page 3
$2.65
barrel) has been main¬
during the past year, chief¬
per
tained
Oil
Industry in Transition
ly by drastic
production.
all
Hemisphere oil
reserves to satisfy I
./The Marshall Plan \ countries
European and Eastern Hemisphere
themselves, however, have much
needs. Anxiety on this count was
more
ambitious plans "for
expan¬
raised to fever heat
during World1 sion
War II when war demands
ceeded
total
With the
ex-J
productive
blessing and
capacity.
I
in the Middle East was un¬
dertaken by American
capital and,
since the close of the war has been
of
the
oil
few
should,
supply
years,
the
the
for
reserves
and,
more
wark
in
of
tion.
of
fields
to
the
refineries
Africa,
the
Americas
as
bul¬
a
future
our
To this end,
built
from
been
and
in
use
isola¬
pipe lines have
the
Near
East
Mediterranean
constructed
in
North
France,
Southern
England.
and
Spain
Because of the ter¬
purchases from the "dol¬
area.
able
They
■
surplus
markets
Hemisphere
particularly,
case
%
estimate
that
plans, and those of the Dutch, in¬
volve not only
self-sufficiency in
oil products, but a
large export¬
Europe and much of the Far East
thus leaving Western
1
which
expenditures will result in
increase of about one billion
dollars a year in their
output of
crude
and
refined
oil.
Their
next
needs
of
of
an
growing
within
30%
these
spectre of conflict with Russia. It
is also contemplated that Middle
East
refining
expenditures
billion, only
lar"
ment
because
2
to
involve
and
The British alone have
programmed
ing of these divisions of govern¬
ment, exploration and develop¬
pressed
production
capacity.
the urg¬
at
of
credits
to
and
for
invade
build
the
foreign
foreign
up
purchase
of
sup¬
plies in which Europe is
ways has been deficient.
and
al¬
As
an
illustration,
already
Britain
negotiated
has
agreements
with
the
Argentine and Sweden providing
the supply of the oil in their
for
markets in
iron
ore.
exchange for moats and
By this agreement, the
rific
American
Middle
ing there have been relegated to
productivity per well in the
East, the .relatively low
drilling costs and low tanker rates,
this oil enjoys in the Mediterran¬
ean and Western
European area a
considerable price advantage
Venezuelan
and
American
over
oil.
There are, therefore, both
strategic
and
economic
ing
that
to
for
reasons
Middle
continue more
less
or
oil
will
indefinitely,
companies
operat¬
position of distributors of British
Inasmuch as American oil
a
oil.
companies
supliers
have
of
been
the
major
markets,- it is
world
their
product which may
surplus.
All
expect¬
Eastern
oil
indications
British
cut-backs
become
would
the
intend to push their pro¬
problem
a
to
the
in¬
increase
be
at
at
of
and
prospective high in¬
ventories, to find crude oil selling
at
$2.00
largely
usual
than
effect
is
earnings.
upon
clear
evidence
in
the
pendent
are
price
upon
price levels than
more
trends
and
East
that
appears
affiliates
companies
tribute
of
less
recent
probably
to
past.
parent
in
in
number
of
of
more
have
-
one-third
years,
Venezuelan
been
African
British
U. S.-Foreign Conflict of Interests dle
Government, as
direct interest infMid¬
a
markets
where
East
existed in' Canada and
oil
discoveries
in
the
the
order.
been
Within two
type
eco¬
A hard-pressed Socialist
government, with extravagant se¬
curity plans at home, and moun¬
de¬
tainous debts to its dominions and
there.have
reserves
'members
cent years,
At home the Admin¬
istration is committed to the main¬
tenance of high oil production and
situation;
high prices within
if
an
between
United
States for¬
eign and domestic policies. Abroad
we
committed
are
nomic
to
world
rehabilitation
and
the
velopment of foreign oil
for defense.
aries.
joined
bound¬
our own
Already the battle has
in
hearings ..before
House
of
been
been
ordered.
The
independent "producers,
smarting under drastic cutbacks
in
Texas,
the
inveighing against
import plans of the
companies and predicting
are
"cruel"
large
ruination
for
the
oil
industry in
the
United
States.
The
major
companies, upset by the determi¬
nation
of the British
Government
to exclude American oil from sale
in
the
sterling
national
tion of
the
state
area,
security
and
that
conserva¬
domestic resources dictate
advisability of maintaining
minimum
flow
of
oil
from
a
their
foreign fields and deny that such
operations
best
home.
It
profits
of
stake
in
their
ceeds
inimical
are
interests
the
to
the
industry at
might be added that the
of
these
domestic
their
companies
business
interest
in
ex¬
foreign
fields by considerable
margin, but
in order to retain their conces¬
sions
in
Arabia and
elsewhere,
production
The
there
must
continue.
controversy will be heated
interesting but a thorough re¬
and
view of the situation leads
the
conclusion
States
does
that
not
high cards.in this
tations
tinue
are
and
inevitable
for
one
the
hold
game.
of
oil
prices
regardless of the
protection
by
the
Impor¬
almost certain to
lower
to
United
all
domestic
con¬
it
is
The
of
to
note
of
that,
West¬
Hemisphere * oil reserves for
defense, the plan of the European
Recovery ■ administrators involves
increasing reliance by the Mar¬
shall Plan countries upon oil from
non-dollar
sources.
E.R.P.
been- allocated
in
funds
large
amounts for producing and refin¬
ing equipment.
Gibraltar.
this
writing
further
for
to
With
have
Standard
(Special
at¬
average
PASADENA, CALIF.—Bernard
Livingston has joined the staff of
appreciation
Standard
present high
of
rates
fornia,
Investment Co. of
117
East
ritt
question.
& Co.
of
Southern Pacific
major
a
in
oil
the
which
past
zuelan
there
one
been
costs
greatly in re¬
largely because Vene¬
have
increased
siz-
ably and steadily.
The world's
largest. producing oil company is
Creole
Petroleum,
Oil
of
New.
of
to
the
proposal
It is
a
long time since
market—the
last
one
a
Jersey,
their
oil
noted
markets.
that
Tt
the.
should
United
be
States
Treasury Department, openly, and
the
State
Department, covertly,
urged the British to take this step,
the objectives being that of
giving
Britain
at
least
a
temporary ad¬
vantage in the world markets; to
dollar
procure
credits
.and
to
lighten the dependence of Western
Europe
and
Britain
upon' the
American
mists
of
taxpayer.
the
Departments
been
of
sources
Treasury
hardly have
of the fact that
Middle
and
that
trators
potential
credits lay in
concessions in
East, and their action
the
of
must
the full
one
greatest
foreign
her tremendous oil
the
econo¬
and
could
unaware
Britain's
of
The
State
E.R P.
have
adminis¬
been
taken
in
knowledge that in reliev¬
ing Britain's critical unbalance of
trade,
certain
made
America's
upon
markets
inroads^would
for
oil
and
be
foreign
other
prod¬
ucts.
It.,was a question of the
lesser evil, and decision could not
have been taken with eyes closed
to the consequences.
If there is
to
be
an
acceptance
of
the igen¬
eral
a
principal, there can hardly be
rejection of the particulars.
area
convertible
bution
as
contributed
upon
a
profits for the oil group
whole
and
for
units.
*
the
as
individual
;
It .appears
certain
that
the
re¬
striction of American oil
company
foreign markets will
ert
serve
increased pressure
mestic
pointed
crude
out
graph, - the
in
oil
an
existing
to
convertible railroad issue has come to
sold just about 13 years ago.
In
ZVts,
These bonds, however, were sold for the
1952.
1937 (February) Pennsylvania sold $52,670,000 of con¬
3y4s, 1952 which are still outstanding. These bonds were
issued to meet in part the costs of the road's electrification pro¬
gram.
The only other convertible bonds since the depression of
the early 1930s were the two series, aggregating roundly $100 mil¬
lion, by Great Northern in 1936 for refunding purposes. Partly
through conversion and partly through redemption these have also
mate¬
In estimating earnings for oil
companies in 1950, after allowance
for
dislocation
of
markets,^
been eliminated.
culations
upon
$2.00
a
,
In
or
gasoline prices, oil company
earnings for 1949 apparently aver¬
aged about 30% under the peak
earnings
numerous
earlier
As
para¬
(about
new
issue
the
Southern
Pacific
.
manage¬
pointed out that expenditures for road and equipment this
estimated at $107 million. Of this, $30,245,000 has been
provided by previous equipment trust financing. Proceeds from
the sale of the convertible bonds will also be applied toward the
1950 program.
The bonds will be offered to stockholders, under
subscription rights at the rate of $10 par value of bonds for each
year
similarly reduced
prices for gasoline.
Without any
appreciable break in either crude
In
announcing the
ment
crude
and
levels of 1948.
"
it
would appear prudent to base cal¬
structure
Southern Pacific.
full.
vertible
company
affected
of paying off other maturing debt and not for the purpose
Also in
more
rially.
are
share of stock held.
The offering will be underwritten through competitive bid¬
ding, with the interest rate and the subscription price to stock¬
cases,
will
probably be under
1947 figures when crude oil was
holders set by the successful bidder. The bidding will take place
on March 9 and the bonds will be offered to stockholders of record
marketed at $1.86 per barrel. The
decline in 1949 can be attributed
March
solely to production cuts in Texas,
Time. March 31.
With
vertible, at the holders' option, at the rate of $55 a share. If so,
the holder of each $100 par value of bonds will be entitled to con-,
vert his holdings into two shares of common stock on payment to
their
attendant
effect
upon
cost, and the reduction in fuel oil
prices.
Reliable analysts early in
1949 made a good many estimates
of probable earnings by leading
oil
Qf
companies
should
fall
crude
to
$2.00.
It
significant that, without
crude
mates.
prices,
a
ther
ing
prices
serious
could
make
To
power.
date
fur¬
been
generally
felt
to support
existing oil stock prices
that
earnings on
$2.00 crude would be high enough
and
rates
of
dividend
payments
but consideration of the foregoing
facts may lead to some doubts of
these estimates.
!
In
summary,
the
tent
of
the
is
oil
industry faces a de¬
teriorating profit outlook, the ex¬
which
is
not
subject
bonds,
equipment trust obligation if the company had chosen to d.o addi-r
tional financing through such a medium.
;
•
As has been
pointed out before in these pages, the compre¬
hensive rehabilitation program of Southern Pacific, and particu¬
larly the installation of diesel road power, has been paying hand¬
some
dividends
in
been the downward
recent
months.
trend of the
Particularly noteworthy has
transportation ratio. This ratio
in the first nine months of 1949 declined 0.6 points while that of
of
inference
issue and
a
whole remained stable.
The decline widened to
nearly three points in October and in each of the final two months
Summary
that
new
a
the industry as
*
con¬
the $21,405,000 of 2V4S, 1961. As a matter of fact, the bonds will
be outstanding no longer than would the final installment of an
'
it has
It is expected that the bonds will be
due before the earliest of the Southern Pacific 1st mortgage
that
earn¬
1950.
small $622,000 mortgage issue in 1951, the new debentures
will constitute the earliest maturity of the system. They will fall
and
cut in crude and
in-roads upon
rights will expire at 3:00 p.m., Eastern Standard
Considering the short maturity of the proposed
be
1949
This-would .suggest
The
the closeness of the present market price to the proposed conver-:
sion price, it is expected that the
company should get very favorable terms on the financing. Except for regular serial equipments
price
-
may
10.
the company of $5.00 a share in cash.
any cut
results are
actually below most of these esti¬
in
ex¬
ori the do¬
price.
price
parent
be
may
gasoline
changed
outlook for the industry and there
is good reason to
attempt some
appraisal of the probable effect
a
suffer
to
that
»
outlined above
to
the
to
in
and Creole's contri¬
the impact of
Changed Outlook
Developments
likely
seem
than average
earnings
products
•
was
of property improvements as is the case with
The Central bonds have since been paid off in
developed,
are
last
planning to
March, 1937, New York Central sold some $40 million of secured
tional markets for Venezuelan oil
stepped up the
tempo of British efforts to extend
surprise
was
pean currencies has
pound
a
more
the
subsidiary of
a
somewhat
issue of $37,727,600 of
an
Reaction
risen
taxes
got
10-year convertible debentures.
highly favorable, being viewed as
step in the long fight to rehabilitate railroad credit.
Railroad analysts have for some time felt that one of the weakest
links in the railroad picture has been the inability of the general
run of individual companies to raise new capital on any reasonable
basis (except equipment trusts) for property improvements. Suecess of a convertible issue at this time, while perhaps not quite so
favorable as straight equity financing, may well pave the way for
similar operations by other roads;.
market
during
Production
community
week when it was announced that Southern Pacific is
sup¬
has
<
demand
less
year.
financial
The
purpose
the
Cali¬
Colorado Street.
King Mer-
He was formerly with
sterling and other Western Euro¬
of
Investment
to The Financial Chronicle)
which operates in Venezuela. Un¬
til such time as new and addi¬
pro¬
Non-Dollar Sources
interest
for
increasingly
Standard
devaluation
cries
ern
have
elections.
ruary
have
aside from conservation
conservative government
to power in the- Feb¬
a
returned
of
this may
recent
this, Venezuelan
oil is predominantly of the
heavy
seem
ducers.
Oil> from
Commonwealth,
the
Prairie
"
.
has
the
hardly fail to exploit such a
nor
for
that
matter
would
,the
Representaives' Small
Business Committee and the usual
investigation
will
of
at
their
three years,
or
others.
gest
terest
was
company's slogan
Strength
in
Beyond
very
the
be di¬
now
self-sufficient
developments sug¬
increasing conflict of in¬
of
Another large market has
almost
these
Co. of America and
"The Prudential Has the
Middle
products will
plies.
of
ance
the
or
Eastern
production through its
extensive ownership in An¬
glo-Iranian Oil
Co.
shares' and
All
in
dividend distribution may even be
as
pipe lines and refineries are
completed, Canada may become
the
Mr. Baright
oil
provinces have
such, has
of two months.
ness
the
a
aggressively.
In this con¬
nection, it is to be remembered
gram
from
exports
European and
the
to
withdrawn
George F. Baright, manager for
Graham & Co., New York
City,
died at the age of 72 after an ill¬
value, and their ability to^con-
tinue
the
For
a
traction
oil
seems
question.
greatest
having
busi¬
Co., 52 Broad¬
City, Michael J.
George Barigit Dead
more
or
investment
&
the firm.
industry
period of price disturb¬
However
appear
that the position of Venezuelan oil
is
units
considerably less than
company
Particularly, it
balance,
Brady
New York
Brady
Integrated
produce
of
be, the
leading companies in the industry
con¬
they have in
way,
creator
ance.
Middle
American
will
earnings than
the
on
continue the
ness
own
stable
during
therefore, almost cer¬
price rather than volume
will be the major determinant of
earnings during the current year.
also
to
for 25 years had been advertising
director of the Prudential Insur¬
more
tain that
It
M. Cryan and Maureen
Cryan have formed a partnership
is
keting function, will turn out as
they have in the past, to be the
de¬
sales vol¬
upon
which
their
purchasers
It is,
ume.
oil
companies which have only a mar-
long trend record of the oil indus¬
try, as in other extractive indus¬
tries, that its profits
foreign
Frank
refinery require¬
ments would also appear more vul¬
nerable than average.
It may be
that integrated companies who are
to year gain.
A re¬
price trend would have
serious
a
There
time
prospect.
companies
year
in
Brady & Co.
to
regulate rate but
into American markets
up
attractive
upon
increased price, even though con¬
sumption has enjoyed about the
versal
same
Volume of
continue
supply has outrun consump¬
tive requirements with pressure
upon prices as the inevitable con¬
sequence.
The purely producing
companies seem to face the least
The
extraordinarily high earn¬
ings of oil companies in 1948 and
1949 have been built
the
the
will
and
barrel by late Spring.
per
at
backing
that
present
dustry.
!
not
consumption
presence
surprising, in the
current
oil
Texas
rected.
that
are
It
in
precise measurement.
to
the
the decline
more than four points.
Early 1950
comparisons with a year earlier are expected to be particularly
good in the light of the very serious operating problems presented
a year ago by -severe winter weather conditions that have
not been
duplicated so far in 1950.
year
was
,
24
COMMERCIAL
THE
(816)
Continued from page 4
city,. I asked a fair and square
open question of LaGuardia, 'Why
did he leave Bridgeport in 1919?'
Unique
01
"He
In Sellina Securities
that
intimate.
that
They
are
sub¬
so
could
you
hardly
lodk at them objectively.
However,
proach
whenever
you.
ap¬
prospect, with a quick
glance that prospect analyzes you.
a
He rates you and files you away,
somewhere.
Now,
that
fellow
(doesn't
have
check
charts
which
that this salesman dresses
well, or that he does this or that
say
the
or
other
anything,
thing,
the
to
if he had that
but
as
degree
same
chart,
sure
as
you are com¬
pletely tabbed, and he has formed
opinion of you.
an
These
successful
salesmen
are
successful in their ability to have
;the right opinion formed of them.
That
would
would
be
factor
a
determine
•confidence
that
the
which
degree
would
of
to
accrue
the salesman.
there
considerations
that
reactions
are
some
influence
if
and
time
per¬
mits I .would like to discuss with
you
of them.
some
just
course,
a
slugging match.
He said, "But what shall I do?"
"I'll tell you what to do.
To¬
night, at the end of your address,
you merely say to the audience,
at the conclusion
of your talk,
'Why did LaGuardia leave Bridge¬
port 1919?'"
Walker said,
These are, of
personal opinions
my
and I offer them for what
they
a
very
he
dentally, and when he was about
to sit down, he turned around to
"If you are interested in
all, these salesmen
I indicated originally, in
as
terms
of
the
prospect's
They do not try to sell
to
a
who
man
needs.
size
a
needs
12
size
a
six
shoe, or vice versa.
They streamline, and they pat¬
tern exactly what they have to
offer, to meet the requirements of
the prospect.
tain
amount
That calls for
a
cer¬
self-effacement.
of
the real
in this cam¬
paign, let Mr. LaGuardia answef
one
question: 'Why did he leave
Bridgeport in 1919?'."
up
involved
Well, the newspaper men came
to Walker and said, "What was
that
reference
and
so
went
him
in
it
about?"
with
LaGuardia!"
LaGuardia
asked
and
why he had left Bridgeport
1919, and he said:
"I
have
at the
statement
no
LaGuardia
to
make,
Bridgeport
have
to do
The
to
more
you
Wnd
will
you
be
able
to
question to Mr. LaGuardia. First
he has no comment. Now.
he has the audacity to deny any
recollection
of
having been in
a
If that is the
Bridgeport in 1919.
man
you
want for your Mayor,
.," and so on.
it's too bad
.
.
he used that at
least half a dozen times, and each
time he used it LaGuardia was
I
know
lastly, I found that all of
of which
men
I
speak have
ability to communicate an
idea, to communicate their think¬
ing. It isn't what you think, your¬
You
can
and
salesman
be
have
figures at
good
a
all
the
believes it.
That calls for
ability to
an
salesman.
If
had
no
statement
sult of
mother
Walker
I
assume
very
pect; and, third,
closing, or selling
Now,
for
the
first
I
most
likely to
the
course,
•Fiorello LaGuardia.
may
;1924, and the result
Ting
victory,
at
Walker.
Well, it
ish campaign.
•LaGuardia.
the
This
was
that
was a
who
J.
selling lies in getting good,
logical prospects for whatever it
is that you
Your
be induced
to think
there is a
natural tendency to suspect the
worst. That is something to bear
a
person,
because
mind, in terms of a customer's
prospect's reaction. You have
to provide them with a positive
reason
for them to like you, to
have confidence in you, to
not
only see you, but to listen to you,
or
and
believe
to
in
to
manager
by the
name
is
out
now
of
promotion
for
man
"Joe,
prospects.
feel,
"I
Very
friends.
This is
sition,"
and
a
so
bonds,
right, Mom."
do
know
you
a
lot
that
of
your
money
"Sure."
"Well, what do you know!"
Here is
often
they
on
my
and
so
on.
a
guy
who's been in the
business for six years and he has
prime
prospect,
he
and
has
given Uncle Julius the cold shoul¬
der all this time.
business propo¬
on,
and
invested?"
amaz¬
salesmen
impose
can't
securities."
stocks
Julius has
Uncle
a
Run
through
friends
and
That's
highly specious reasoning.
The only thing that would justify
Three
the
list
relatives,
Continued
on
of
your
and
find
page
l
Major Problems
Now, there
are
in
my
of his
T extile—I ndustrials
as
the
Bai*ks—Utilities
your
business, three major problems,
far
NEW
ENGLAND
business
II OVERT,'
so
New York Bank
selling of securities is
COUNTER
CONNECTICUT
MARKETS
J
Associ/uion of Securities Dealers
75 Federal
Street9 Boston 10
Schirmer, Atherton & Co.
Members New York and Boston Stock
50
PRIMARY
TRADING
Congress Street, Boston 9
MARKETS
New York
ON UNLISTED SECURITIES
•
Exchanges
Liberty 2-8852
Teletype BS-144
Telephone—BArclay 7-3542
Portland, Me., Providence, R. I.— Enterprise 4280
Private telephone wires to New York.
Springfield, Mass., Hartford, Conn.
T elephones:
New York—CAnal 6-1613
Bell
Boston—HUbbard 2-5500
Primary Trading Markets
System Teletype—BS-142
Providence, R. I.—Enterprise 2904
Hartford,
Portland, Maine—Enterprise 2904
Conn.—Enterprise 6800
Industrial Stocks
Natural Gas Issues
Public Utilities
late
Railroad Securities
Bank & Insurance
Investment Trust Shares
in
was
spark-
a
•
DEALERS IN
good
a
a
West
often
means
"That's
you.
New
Municipal Bonds
Coast,
of
one
a
England Securities
AND
fellow
Coast-to-Coast Wire Service
Rickenberg, who
the
on
was
"That
pros¬
It has been
how
me
"Selling
say,
doesn't it, Joe?"
B.MAGUIRE & CO., INC.
at LaGuardia, and his
away
campaign
You
pects would be your friends and
acquaintances.
me,
is sell¬
vestments?"
for
market
neighbors
They ask
"Uncje Julius has money in in¬
have to sell.
prime
the
to
Sure, you're selling securities.
your success
for
of
to
his
gave
Members of National
campaigner, was slugging away at
Wdlker, and Walker started slug¬
ging
of
it
people.
ing,' and I don't know what you're
doing."
us—but, of
escape
essence
where
his
and
"By
is it your son, Joe,
'What
Industrials—Insurance
time, for
hot, fever¬
was
fundamen¬
in
much.
time
explain
other
tal, primary stuff, but sometimes
the obvious is the thing that is
against the late
ran
can
prospect
your
says,
and
your
all very
home
comes
the way, Joe,
what is it that you sell?
I never
problem of
prospect.
a
locating
on
this is
—and
This occurred during a mayor¬
alty campaign in New York City
James Walker
first
your
happen,
it
seen
son
& Insurance Stocks
true'story—and
a
me
that
problem would be to locate the
prospect. You would then have
a
problem of seeing your pros¬
1
some
when
getting together today.
our
But
well
have to
friends and acquaintances.
have
I
the
this
a
story—it is
your
overlook the most obvious market
and, I assume, therefore, in
night,
and at the conclusion
to the
moment, to show you
people sometimes get
'preconceived ideas, I am reminded
(a
something
gain
through that so that we will get
some
reciprocal benefit as a re¬
com¬
municate, which is essential
it interested
will
I
watered,
some
issues, but if you
have a decent, honest proposition,
then the people whom it is most
natural
to sell, the people who
most naturally should be calcu¬
lated to be interested in it, are
blue-sky
or
Specializing in Brokerage
Services for Dealers
Ability to Communicate
of
Maybe
your
a
salesman, but it is
alone, it is the ability to
project that, so that the prospect
'how
will cooperate to the ex¬
asking me some questions.
facts
in
digress for
that you
tent of
ing
not that
successful
that at the conclusion of this talk
I cite
merely to show that people
security
command, you
can
be a person who
is, poten¬
tially, everything that is to be
desired
much of this is pre¬
sumptuous on my part, because I
am
only surmising, and I hope
selling
were
you
Of course,
thinking would be it
that sort of
prospects.
fussing and fuming more.
be
the
and
Walker said, at
put
that, the greater the extent
which
self.
in
is
first problem
The
your
able
are
helpful to him.
these
being
he says
You almost lose your own
identity
and try to think in terms of
your
prospect.
of
of his talk, "I
conclusion
locating
in
record
no
The next night
the
that
make.
Next
a
concerned.
present time," and so they
oublished in the newspapers
talk
you
in
the reporters immediately
after
give
can't
1919?", and
he answered, "Well, I have looked
my
records over, and I wasn't
even
in Bridgeport in 1919," or,
leave
Well,
the audience and said:
"Discuss
think,
shoe
was
it was, for Walker,
gentlemanly speech—and
a very fine speaker, inci¬
and
are
of
who
man
So, again he went back at La¬
Guardia and said, "Why did you
"I
said, "Never mind that, you
just say that to the audience, and
don't ask any questions."
So
Walker
got
through
his
worth.
Third
the
straight answer?"
He
speech,
Is that
did Bridgeport in 1919."
why
"Well,
men
newspaper
comment.
no
he?"
questions
incidentally,
these
really have liked, to have had
has
Is that the man to vote for,
fair?
jective
the
tells
he
Thursday, February 23, 1950
CHRONICLE
talk, he said: "Last night, in the
interests of the electorate of this
Nothing Exotic
very
FINANCIAL
&
Corporate Bonds and Stocks
Paul H. Davis & Co.,
jthrough direct private lines to
Chicago and to Morgan & Co., Los Angeles
the
studios.
He said to
Walker, "Jim, this is
not the way to fight that bird. Let
him
rant
and
rave—",
he
said,
Estabrook & Co.
Founded
"—if you behave yourself, you are
in, .and I would just let all that
talk flow
a
duck's
"Just
over
me
like water
over
keep
jabbing
never
mind
him."
Well, that
medicine for
away,
and
slugging it out with
was
Walker.
pretty tough
He
would
Incorporated
15 State Street
40 Wall Street
Boston q
120
Broadway, New York 5
89 Devonshire St., Boston 9
New York 5
Telephone WOrth 4-2300
Springfield
back.
J. Arthur Warner & Co.
1851
Hartford
Members New York and Boston Stock
Providence
Exchanges
twx-ny
1-40
Direct private telephones
Telephone LAfayette 3-3300
twx-bs
208-9
between New York, Philadelphia, Boston, Hartford,
Providence, Portland, Me., and Jersey City, N. J.
29
Volume
171
Number 4884
'
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
(817)
•
23
Boston Securities Traders Association
J. B.
Maguire, J. B. Maguire & Co.; Tom O'Rourke, Stroud & Co., Philadelphia;
John Maguire, May & Gannon
Emil
Kumin,
Estabrook & Co.; Bob
Goldman, Sachs & Co.
Adams,
Hubert
H. D. Knox &
Co.;
Harry Crockett, Coffin & Burr, Incorporated
Bernard, Jr.,
Schirmer, Atherton & Co.f Presi¬
Association;
Whitcomb, Blyth & Co., Inc.
dent of the Boston Securities Traders
Burton
E. C. McNulty, H. D. Knox & Co., New York City; H. D.
New York City; James Galvin, F. L. Putnam &
Wilfred N. Day, Chas. A. Day & Co.; Alvin A. Dykes, du
Pont, Homsey &
Knox, H. D. Knox & Co.,
Co.; Jim Durnin,
Hal
York
Murphy,
Commercial & Financial Chronicle, New
City; William T. Skinner, Walter J. Connolly & Co.
Bob
Pope, Raymond & Co.; Malcolm L. Saunders, Raymond & Co.;
Rod Kent, J. Arthur Warner & Co.; Joe Rinaldi, Lerner & Co.
Co., New York City
i. ■
Ed
Hormel, du Pont, Homsey & Co.; Ray Chamberlain, A. W. Smith & Co.;
Fred Carr, Tucker, Anthony & Co.
Louis
Zucchelli, J. E. Moynihan, and John L. Daly, all of J. B. Maguire &
Co., Inc.
1
26
THE COMMERCIAL &
(818)
Thursday, February 23,
FINANCIAL CHRONICLE
Annual Winter Dinner February
Larry
Connell,
Wellington Fund, Boston; Andrew
Corp., New York City; Philip Kenney,
Dominion Securities
Frank J. Murray,
Raymond, Dominion Securities
E. M. Newton & Co.; Walter Saunders,
Corp., New York City
Day, Stoddard & Williams, Inc., New
Murphy, Blyth & Co., Inc., New York
City; Sumner Wolley, Coffin & Burr, Incorporated
Haven, Conn.; Ken
George
Jim
Securities Corp.; Edward
the
York
Russell, Edelmann & Capper, New
Security Traders Association of
Frank Cogghill,
Corp.;
& Co.;
Adrian Frankel, Seligman, Lubetkin & Co., New York City; John
Mayer, Merrill Lynch, Pierce, Fenner & Beane, New York City, President of
York City;
New York
Herb
Herbert H. Blizzard & Co., Philadelphia;
E. R. Hussey, First Boston Corp.
Mirageas, J. H. Goddard & Co.; Henry Larson, First Boston
Lindsay, J. H. Goddard & Co.; Henry Armington, Amott, Baker
J. H. Goddard, J. H. Goddard & Co.
M.
10 th
Fant, Penington, Colket & Co., Philadelphia; James Sullivan, Baldwin,
& Co.; Wallace Mossop, Barrett & Co., Providence; Cliff Barrus,
Barrett & Co., Providence
Duffy, Paine, Webber, Jackson & Curtis;
Blizzard,
Herbert N.
Calvin Clayton, Clayton
Jack
James
1950
A.
Kelly,
Tifft
Bros.,
Springfield, Mass.;
Tifft Bros., Hartford; Aaron
Putnam & Co., Hartford
Robert Calvert,
White, Weld & Co., Boston; Bert Burbank,
White
Cook,
White, Weld & Co., New
Clive Fazioli,
City; Harry Walker, White, Weld & Co., Boston;
White, Weld & Co., Boston
Michael Schneider, L. F.
Rothschild & Co., New York City;
Ernest Megna, Carl M.
Loeb, Rhoades & Co., New York City; Charles Hartley, Bankers Trust
New York City; Henry J. Dietrich," L. F. Rothschild & Co.
Co.,
Volume
171
Number 4884
THE
COMMERCIAL
At The
&
Ralph F. Carr & Co.
W. B.
Gannon, May & Gannon; Lou Walker,
Bureau, New York City
Gorman, Harold C. White, and Francis J. Daly, all of Massachusetts
;J"
'
-
..
State Division of Investigation of Securities
(819)
27
Harry Welch, Lilley & Co., Philadelphia; Dayton Haigney, Dayton
Haigney & Co.;
Curtice Townsend, Weeden & Co.; Robert
Weeks, Coffin & Burr, Incorporated
National Quotation
Perham, R. H. Johnson & Co.; Leo F. Newman, J. Arthur Warner & Co.;
Timothy D. Murphy, Chace, Whiteside, Warren & Sears
Frederick-G
yj.i'C
Joe
CHRONICLE
Copley-Plaza Hotel
Philip E. Kendrick, James M. Lynch, Commissioner Paul R. Rowen, and Joseph A.
Turnbull, all of the Securities and Exchange Commission
Henry Lahti, Matthew Lahti & Co.; Ralph F. Carr,
FINANCIAL
Ed
George Kilner, Brown, Lisle & Marshall, Providence, R. I.;
Gronick, Gilbert J. Postley & Co., New York City
Sam
Hurley,'Wise, Hobbs & Seaver; Nicholas Lamont, Lamont & Co., Inc.; Francis V.
Ward, H. C. Wainwright & Co.; Arthur C. Murphy, A. C. Allyn & Co.
Jim Lynch, Shea &
John
Co.; Jack Honig, Wm. E. Pollock & Co., New York City;
Gahan, Schoellkopf, Hutton & Pomeroy, New York City
28
(820)
THE
COMMERCIAL
&
Pronounced A
FINANCIAL
Huge Success
Ed Hines,
Jerry Ingalls, Adams & Peck; Carl K. Ross, Carl K. Ross & Co., Portland, Maine;
Louis Lerner, Lerner &
Tucker,
Anthony
Jos. McManus
Fred
&
&
Co.; Graham Walker
Co., New York City
Harson, Fraser, Phelps
Chairman
Co.; Henry F. Griffin, A. C. Allyn & Co.
George Stanley, Schirmer, Atherton & Co.; Bob Ingalls,
Edward
C.
Perrin, West & Winslow; Warren Donovan, Dayton Haigney & Co.,
of the Dinner Committee; Edmund Williams, Hooper, Kimball, Inc.
Edmund
A.
& Co., Providence, R. I.; Arthur E. Engdahl,
& Co., New York City; Rowe
Deposit & Trust Co.; Gustave
Levy, Goldman, Sachs & Co., New York City
"Duke"
Hunter,
Hunter
Boston
Safe
Felix
Maguire,
&
George Kealey, Second National Bank
Jack
Stroud
Smith, Sheraton Corporation of America, President of
Association; D. Crandon Leahy,
National Quotation Bureau, Boston
Hotel Sales Management
Pomeroy, Buffalo;
Whiting, Carl M. Loeb, Rhoades & Co.,
New York City
Schoellkopf, Hutton
Goldman, Sachs & Co.; John Sullivan, F. L. Putnam & Co.
Rowlings,
Bud
Elkan, Cowen & Co., New York City; Herbert
Stearns,
Thursday, February 23,,1950
CHRONICLE
&
Co.,
Inc., Philadelphia;
Ray
Murray, Tucker, Anthony & Co.; Col. Oliver J. Troster,
Troster, Currie & Summers, New York City
..
of Boston; Charles Smith, Moors & Cabot;
Altmeyer, Hayden, Stone & Co.
John McLaughlin, McLaughlin, Reuss & Co., New York
City; Jack Hunt, Stroud & Co., Inc., Philadelphia; Mike
Heaney, Michael J. Heaney & Co., New York City
Volume 171
Number 4884
COMMERCIAL
THE
Continued jrom page 24
Nothing Exotic
is,
again—if
or
tell
have
you
a
proposition which you decide
they could use. If that is so, then
by all
means contact them
to
man
in
here
The second
of
Influence"
fellows
thing in locating the
we have what we call,
general, "centers of influence,"
people who wield influence over
who
number
of
individuals,
have
represent prospects.
Cultivate
those
people.
Now,
sounds
some
sort
lot
a
deal.
If
going
selling, it is a
you
successful in
and
requires
are
You
not
may
sell
sell
Uncle
to
he
Uncle
will
Moe, and
so
down
on
that
the
line.
you
be very
diverse,
very
sold,
I
is
at a
fellows,
take
it
so
little
a
than most of
I'm entitled to
easy
I
now.
say-
to you
that I rarely contact a new
prospect anymore. I have been in
challenging.
Your golf pro
could, for example,
be a good man to know. He will
this
business
only
which
years,
is
about
about
a
four
normal
to
some
a
subtle
more
extent.
that
One
maybe
such
way,
"Yes,
sure,
"You
know, he could
NEW
YORK
&
BOSTON
STOCK
EXCHANGES
ing
is
pretty well
think
of
out
his
31
MILK
STREET, BOSTON 9, MASS.
and make
sell
and
pect,
New York—CAnal 6-3100
to
very
Fitchburg
Worcester
have
you
prospecting
you
those
terms
where
a
with
I
time
job
where
the
- on
prospects,
lot of the
pre-selling has
by virtue of the fact
done
that you have been recommended.
Chas. A. Day & Co.
Incorporated
LISTED and UNLISTED BONDS and STOCKS
NEW ENGLAND CORPORATIONS
invited
from
Dealers
Maintaining
with
a
and
Retail
Institutions
business.
business,
We
are
That
locating
in
ly
is
prime
our
the
my
prospects.
the direct mail adver¬
This is not strict¬
"plug."
a
We do not do any actual
through mail.
This
advertising the
is
a
Member Boston Stock
STREET
Exchange
Telephone LAfayette 3-0695
Teletype BS-165
same
as
buying
Of course, a lot of
enterprising
investment houses advertise in the
newspapers, which is
cellent medium; but
a
very
ex¬
when you
think in terms of how
many peo¬
ple
actually
reading
that
find that they are in a
small minority;
maybe one out of
50
people
who read
a
certain
you
England Markets
may
solicitation
Underwriters and Distributors
"Times"
•
•
ket,
Secondary Distributions
•
.
—
Stocks
Utilities
Tel
Franklin
Exchange
Street, Boston
Liberty 2-2340
Portland
actually in the mar¬
are
actually potential
a
10, Mass.
Teletype BS 497
Providence
A. G.Woglom
53 State
&
Co.
St., Boston 9, Mass.
La 3-8344
Teletype BS 189
Amoskeag Company
Common
(INVESTMENT
Asset Value
TRUST)
app.
$163
APP.
Dec. 31,1949
Price
60
DAYTON HAIGNEY & CO.
Incorporated
75
Tel.
much for locating
Second of all,
Federal
WOrth
Portland,
in
•
.
Street, Boston 10, Mass.;
Liberty 2-6190
of
about—I
Tele. BS 596
Me.,
TELEPHONE,
4-2463
Enterprise
7018 %
salesmen
see
Hytron Radio
a
Value
One
of
of
the
and Electronics
(Fourth
if it's the last thing I do."
Largest Radio &
Television
Manufacturer)
Tube
Smile
a
things that
Trading Market
find
I
often lacking is the simplest,
most effective thing that is
conceivable in any sales situation,
very
the
and
that
is
smile.
a
really feel
so
to
of
If
I
one
when
well
him
a
and
tell
I
have
my
that
him
that
I
was
Circular
Upon
Request
didn't
customers, if I
I couldn't give
smile, I would call him up
see
felt that bad
sick
something, and make another
pointment.
Every
can
Clayton Securities Corp„
82 Devonshire
Tel.
St., Boston 9
Capitol 7-7240
Teletype BS 30
.1
or
ap¬
one can
be
prospect, depending en¬
upon the validity of your
Assuming that you have a se¬
curity which will meet the re¬
quirements of the people in the
middle income bracket, or people
in
an
the
smile, it's
genial,
atmosphere
must create as a basis
friendly
which you
selling anything, and particu¬
larly something as personal as
Specialists in
securities.
you can always manage to
They tell a story about a
troop of soldiers who were pass¬
smile.
older age bracket.
You would have to think in
terms,
UNLISTED
ing through the desert and
saw
he
and
they
moaning in the sand,
crying out, "Water!
fellow
a
was
Water!"
They
bring
water for
over
drink
a
He
replies,
terrible!
band
We
of
my
"Oh,
off
young
my
son.
belongings
And,
sure
.
terrible,
by a
They raped and
wife. They slew
They burned all
.
stuck
a
v
INC.
when
saw
left,
spear in
Then, just be¬
said,
"They
27
my
Security Dealers
STATE
he
Ass'n
back."
STREET
BOSTON
9
Telephone CApitol 7-89SO
over
Btll
enough, there was a
piercing through his back.
terrific
"No
man,
you
System
11
must be in
Teletype BS
169
.
.," he said, ".
.
.
it only
imagine,
give them that smile,
you
can
der difficult conditions.
even un¬
I say
it's
YORK
4
Telephone DIgby 4-1389
Bell
possibly,
BROADWAY
NEW
pain!"
.
hurts when I smile!"
to
York
sure
spear
So
New
smolder¬
So they turned the fellow
and,
Members
the
they
around
a caravan
they
H. D. KNOX i CO.
."
ing and in ashes.
fore
it's
enough,
looked
the remains of
"What
attacked
were
Arabs.
carried
my
SECURITIES
of
him, and he drinks the
water, and then they say,
happened to you?"
"My God,
are
much
so
for
list.
who
isn't
have
valid
tirely
It
soldiers
at
prospect, you
100% coverage.
L. PUTNAM & CO., INC.
77
York
are
and
letter to
a
Member Boston Stock
New
least, if you
send a letter, just
considering it
in that connection, if
you send a
Inactive Securities
F.
the
Theoretically,
Banks and Insurance
Industrials
in
prospects for that security.
•
of
assets
of
in to sell me, and they
grim, determined attitude.
They are all tense, as if, "By
God, I'm going to sell this bird
adver¬
tisement represent valid
prospects,
New
since
year
quick
$8 per share.
over
Now,
selling
medium
in the newspaper. We con¬
tact the prospects
through mail.
COURT
a
Hutton,
interested,
of
AT
F.
locating prospects, and that is
space
WASHINGTON
every
net
paid
what goes with it, it is that
Department
Distribution in New England
$1
on
has
Orvis
customers
E.
employer and I feel somewhat
remiss to you, if I didn't
give you
one other very useful medium for
tising business.
Financial
both to
my
own
Particularly of
Inquiries
Now, I would be remiss
been
years.
so
if you
people,
in, really,
coming
are
equal
been
full
a
have
strongly
he
pyramid club.
a
here.
down
prospects.
have
valuable
business
in
1882—Has
coming
you
good, solid pros¬
thing snowballs.
that
It's almost like
say
Springfield
a
new
Company
selling prospects—and here is one
thing that I, personally, feel very
don't get from every customer
you
at least one
Teletypewriter—HS 424
Private wire
losing
potential for
Telephone—It A n cock 6-8200
—
dividends
good way of locat¬
houses
the
the
on
based
PRIVATE NEW YORK
telephone
appointment for you.
an
are
giving
introduction—or,
get
even
.You
9%
over
six cents
or
ly, a lot of work with Merrill,
Lynch. That is something that you
might bear in mind.
date.
dealers)
to
dividends paid last two years, is
E. I. duPont, and up until recent¬
like to meet
you
name"
my
of
five
doing business with quite
16
point
yield,
re¬
prospects, and it's been
I mentioned—we have
for
\'z
In other words,
as
a
en¬
say¬
"Use
may
It's
Now,
letter
cost
a
the
ours
I
30
page
letter of such-and-
your
Brothers
use an
You will find that he will take
the initiative, to the extent of
ing,
in
few
you
I don't think he has
gone over his
stocks
and
bonds
in
15
or
16
a
(less
Indicated
compelling,
a
the response to
date —."
a
apiece.
I know him."
portfolio.
new
have
proven, as
do
way,
on
with
Smith,"
been
say, "By the
so-and-so?"
"Well, would
PONT, HOMSEY & COMPANY
Mr.
is, "Dear Max, I'm
low
as
so-and-so
resist¬
Incorporated
message,
ceipt of
years."
MEMBERS
individual
each one has that personal appeal,
and those letters are available at
him?"
du
at
"Dear
can
which
way,
of
Rcece Corp. Common @ 11
"Dear Joe."
friendly
can
to your own customer's.
stuff
has a
that
is
letter,
a
very low
can have it
you
the
to
salutation,
or
do that sort
you can
fullest
tirely
available
across
I
prospects,
sorts
Continued
personalized
a
is
a
prospect, and he happens to
be in the same or a similar busi¬
know
offer
You
people
your
all
some
people's thinking
there is nothing lower than a se¬
curity salesman unless it's a life
insurance
salesman.
You
have
advantageous.
We are
only company with this
addressed
a
You
In
adver¬
It
appeal.
unit cost, where
man
into
run
ances.
offer, but many other direct
advertising companies have
which
it has
"Come
say,
me
learn
ness
Now, in seeing
you
mail
the
to
is
the
to
will find, invariably, the
who is willing to cooperate
you
your
am
advanced age
more
Now, these centers of influence,
again, in terms of securities, could
course,
don't
the
to
have
you
Of
not
you
man
It
personal
which
good
a
curities.
out well.
tell
and
customers.
you
have,
ability, sold
contact," but
of thing in
own
people
that
your
You
and
Customers
to
you
of
worked
"centers of influence," in
my mind, in my
experience, the most impor¬
tant, have been your users, the
how
the securities he needs and
of
Third, and to
matter
no
an
high
are
assuming
the
number
and
of
of
generic as would be
tisement in the paper.
his
answer
who
It is as important a
seeing the prospect as
anything else you do. Affability
goes a long
way
in selling se¬
part
addressing yourself to
prospect. It isn't cold. It isn't
a
war¬
the fellow loses money—
you're a bum, I suppose—but,
you
may
influence
large
to
are
which
people
to
disinterested.
means
doing
have sold the
you
waste. You
with
important
if he has made a buck
it—of course, sometimes
you're
wrong,
Keep Up Relationship With Your
if
and
can
a
job, if
you
speaking
them
no
as
have
you
of
one
29
important.
direct mail for locating prospects
—a letter is a
highly personalized
purposes,
on
it, but think in terms
of
all,
where
Moreover, there is this other
consideration, through
have
relation¬
a
each
not
are
customers.
my
securities
man
general.
Julius
recommend
people who
end to
people,
something
which is
well designed for his
needs, he will buy from you again,
and
no
thinking
hence he will buy, then
you have
you
banker—well—there
that sort of
Again, if
good
a
him,
are
into
is, a corresponding
always available, and you
hit
100% effectiveness,
conscientiously attempt
of
it.
rant
best
of
more
Uncle Julius
tomorrow, but if you
of Uncle Julius a
prospect
so
that maybe in three months
something,
First
He's led
man.
I
ship with
start
be
make
accomplished
create
and
Your
cus¬
issue
an
to
you.
be
career,
building up in terms of
tomers, which is very much
important.
they
in
who
that
market
is
can
by customers, and
that has been possible
reason
that
lot of people right in the matter
of
securities.
He's very good,"
and he'll turn these leads over to
building,
making sales, but
of
confidence
list
a
customers
translate
your
cus¬
referred
is
real
be
a
third generation,
cases the fourth.
some
have
the
of
a
constant
much of
so
if
of
smart, very astute
your
to
in
I
could sell se¬
would
then
some¬
by
me
(821)
again, of who this security is
going to appeal to. If you could
Any¬
is
now
to
and
you
lot
a
canvassing.
contact
might call
been
talking about
securities, he will say, "I have a
patient, Joe Murgatroyd, a very
like
Well, this is
lot
a
and
Rotary Club, and Lions Club
of
career.
not
awful
an
up
I
referred
you
these
may
this
pick
CHRONICLE
tomer, and it isn't that alone, not
only those, but I am now on what
bar,
Exchange,
you
to—that
the
at
that
body
selling, I imagine.
But there are
people, and
maybe your
dentist
has
some
patients who
in
large
Curb
whom
curities
prospect,
a
the
probably
can
"Centers
Down
know.
"cold"
mean
one
Maybe
bartender would be a good
your
first.
I
what's going on.
you
FINANCIAL
cycle in this sort of work, for this
to happen.
Pardon me, when I
say that I don't contact prospects,
Unique
In Selling Securities
out—that
&
System Teletype NY 1-86
30
(822)
THE
FINANCIAL CHRONICLE
&
COMMERCIAL
Continued
Continued from page 29
revolutionary in the bank¬
industry, but it should be
welcomed,
because there is po
use in
kidding ourselves, the of¬
fering of banking services is £
competitive function, today, and
must
be met competitively.
Ii
must be met by promotion anc
good, sound salesmanship.
Thursday, February 23. 1950
from
That is
8
page
ing
Nothing Exotic
In
those little barriers.
Unique
Selling Securities
or
You encoun-
"Well, they're shoes!"
That's all
you know about them, huh?
All
right,
now,
I'm
selling
these
Rather, hang up. Call
him again, possibly, but don't be
led into
selling over the tele¬
phone.
Tell him that you want
an appointment with him
to ex¬
plain this to him, that he can have
old-age securities or get that mink
coat for his
sell.
that you
is
,
have to
presuming, because
something which is
accepted in your
business.
If you find it a little
difficult to refrain from doing
Maybe I
this
am
be
may
less
or
more
the telephone,
have your secretary call up and
make an appointment for you.
business
your
put
you
it's a little "pat," but the
explanation he gives his boss ii
that the fellow was probably-
him about.
see
I
for
I say
Say that it's something you
must
Suppose
style so-and-so and 2G
barrels of this other style."
But don't tell
wife.
for?
down
down
over
broken
In effect,
up.
worth
"The parts
that the whole."
more
However, there is no way to know
Mann Vice-chairman
"whole"
the
what
might
split.
been worth if not
Of New York Curb
have
since
Evidence is lacking
that
enterprise
was
particu¬
larly injured by these actions.
These suits required some years,
if contested by the company, and
February, 1948, was elected Vice-
cution
of
without
this
important
suit,
doubt, will affect the
a
vigor with which it enters future
litigation and by the same token
;he vigor with which corporations
will resist.
the economic and financial forces
(4)
free
How many do I put you
counters.
appointment, the man is al¬
ways under somewhat of an obli¬
gation to see you.
If you are
going to use the telephone to get
an
appointment, I would say at
any cost, and particularly in sell¬
ing securities, don't try to sell this
man over the telephone, no mat¬
ter how he might tempt you, or
an
Investment Values
were
"Yes, they're shoes!
appointment is always highly rec¬
ommended because, if you have
lead you on.
the man
these shoes.
sees
There may be certain ways of
circumventing that. Of course, an
him what it
this newspaper and
up
ter certain resistances.
Anti-Tzust Suits and
John J. Mann, a
and
1933
since
regular member
Curb Exchange
New York
of the
Governor
a
Chairman of the Board for the en¬
suing year at the 40th annual or¬
ganization meeting of the Board,
well, everybody has something on Francis Adams
Truslow, President
his
conscience
and
he
thought
of the Exchange, announced.
Mr.
maybe this fellow had something Mann succeeds Mortimer Landson him, and he wanted to get out
Derg, who was named Chairman
Well, don't try that sort oi of the Board at the Exchange
thing, but that illustrates one election held Tuesday.
drastic
method
of
getting pasl
Mr. Mann entered Wall Street
your barriers.
as a page on the floor of the New
Now, another thing, one that York Curb Exchange during the
would be particularly important summer
of
1925.
Returning to
in the case of selling securitiesFordham University, he received
it is not often so much what you
bis A.B. degree in 1928 and was
say—I mentioned, before, com¬ employed as a clerk in the office
municating ideas—very often just of Emil Mosbacher, then a Curb
what you do is communicate an Exchange specialist.
In Septem¬
idea.
You
create
a
stimulus
ber, 1928, he was appointed one of
which will call for a certain re¬ the first specialist's clerks on the
Curb trading floor and just five
sponse on the part of your pros¬
years later became a member and
pect.
a specialist in his own right.
It
isn't very
often what you
affecting
normally
values
and
market
[Editor's Note: The foregoing is
fourth and last installment of
Vultee's article.]
the
Mr.
Roggenburg Gov. of
NY Security Dealers
investment
prices domi¬
period. The
nated in much of this
position of
industry
a company or
At
in its
growth cycle also appeared
greater consequence to the in¬
of
than
vestor
the
of
outcome
anti¬
a recent meeting of the Board
Governors, of the New York
of
Security Dealers Association, Stan-
action.
trust
(5)
While
impact of anti¬
the
trust
development on the market
prices in more recent suits has
been
less
earlier
in
than
severe
the
broadening of
scope of our anti-trust laws
through legislative action or court
decisions
might again heighten
market
sensitivity.
Also
any
wholesale
or
intemperate drive
could seriously affect confidence
cases,
any
the
and values.
I recognize
(6)
in
ard
consent
possible haz¬
a
decrees
such.
as
Settlements arrived at between
an
The
Board
of
Governors ap¬ inspired and driving Department
it's what your prospect
Stanley Roggenburg
just, finished a mystery last
proved the reappointment by Mr. of Justice and a harassed, tired
says to you as a result that counts.
night, and got all excited because You want to
philosophical
management
get the facts, be¬ Truslow of Edward F. Barrett, or
ley L. Roggenburg of Roggenburg
in part of it there was a sales
cause
if you don't, if you go off President of Long Island Lighting might well damage the investor &
Co., was elected by unanimous
story, and I said, "Well, this may
half-cocked, you are not going tc Company, and Benjamin H. Namm, and the economy although it is vote
as
a
Governor
for
the
be something to tell the group
of
Namm's,
assumed, as in the past, year 1950.
Inc.,
as to be
give your prospect the benefit of Chairman
I'm going to speak to tomorrow."
Public
Governors
of
the
Curb that managements as a whole will
any intelligent guidance that
But this incident was very far¬
use
the consent decree form of
would otherwise be possible, so Exchange.
can
say,
I
fetched and overdrawn, but, any¬
how, it will give
fellow
been
detective
a
worked very
a
in
work.
out of
was
idea. This
you an
who
He
had
had
never
try to get that man to open up.
That, very often, is your prob¬
lem—to get him to talk—on the
basis of which you can make a
hard, even at being
detective, and he gets this job
a "factory, for
the reason that
if he doesn't
get this job at the
factory he's just not going to eat,
and while he
like
is there he doesn't
this
all
and
work,
through
various devious methods which I
won't
of
the
business
of
to
the
take
him, and he tells
that he
owner
compels
he
this
notice
some
;
into,
go
owner
wants to be
a
salesman.
He has had
sales experience,
no
but he thinks that this is the only
job that probably will be
cinch
a
for him in this organization where
everyone
else
probably
the
hard
works
salesman
but
doesn't.
"The boss gives him a very tough
customer to sell, not only a tough
customer, but somebody who for
12 years has hated the boss.
So this fellow goes over there.
He is selling parts for shoes, and
in
this
particular
going to
counters,
try
to
instance
sell
something
the
he
is
fellow
that
rein¬
forces the heel of the shoe.
made
by the people he is going to
call
He has them wrapped up
old newspaper and then he
in
on.
an
enters
the
office
furtively
and the girl at the reception desk
stops him.
very
"I want to
"Well, do
see
you
an
appoint¬
ment?"
him
mind
Mr.
the
appointment.
Fletcher
is
here.
He'll.see me!"
So the girl calls up on the telephohe and then returns. "Mr. Soand-so doesn't know you.
What's
the nature of your business?"
"twit
ujw.
rwlnnli
personal.
package
the
i.u:
•_
.i
~
1S,
Now, he s
in
time.
front
So
he
of
himself
gets
into
all
the
very, profusely and he
"What is. it that you want to
see me
"I'll
tracks.
about?"
show
you."
So he opens
Chairhien
named
include:
(7)
to
there
you
have all
track, for a game of poker,
or the
policy racket, or for a sav¬
ings bank, they all represent ?
potential sale of investments.
If
you can only appeal to them the
race
a
bookie does,
or
insurance company does.
But that calls for constant pro¬
from
Director of
the
old
type
an
cm
same
Building Dep't.
John
bond department, which will
in U. S. Government, state
H. L. Allen & Co. for many years;
that precedent.
interested
to
—down here
I was very much
see.
on
breaking with
also,
one
bank
Church Street-
when it opened up, gave out car¬
nations to everyone who came in
from
forced
activity
by
business
reason
shares created
normally
of
and
attendant
on
if attacks
and
a point that dam¬
break-ups,
but
break-ups reach
or the economic
investment business
company
a
the
system,
BALTIMORE, MD.—The South¬
Group of the Investment
eastern
Bankers
(9)
It
Melvin
appropriate to ob¬
of our large cor¬
under more or less
porations
are
study
by the Attorney
General's office. While there may
some
general idea as to what
companies and industries will be
attacked,
considerable
prelimi¬
nary investigation work, physical
limitations
length
the
and
unknown
litigation would seem
out
specific time¬
any
of
rule
to
table
as
to
new
actions. Also po
litical pressures,
tors
and
to
MacKay
some
continual
be
hold
With Putnam Fund
seems
that
will
Spring Meeting April 28-30
at the Sedgefield Inn, Greensboro,
N. C.
Albert T. Armitage, Cof¬
fin & Burr, Inc., Boston, President
of the I. B. A., will address the
meeting.
suffers in the long run.
serve
Association
its
securities
benefited
be
stock
resulting
hardships
the additional
ages
common
break-ups.
The
(8)
could
competitive fac¬
considerations
other
have
bearing
a
on
SYRACUSE, N. Y.—Melville G.
MacKay, has recently joined Put¬
Fund Distributors, Inc., the
nam
general distributor of .the George
Putnam
Fund
of
Boston.
Mr.
MacKay is now the firm's sales
representative
in the states of
New
York, Pennsylvania, Ohio,
Michigan. He will make his
headquarters at 1361 Teall
Avenue, Syracuse, New York. For
a
number of years, Mr. MacKay
was
associated with Moody's In¬
and
vestors
Service
of
New York.
the
T. J.
work for
the
J.
business
from
Bulkley Bldg.
firm
D.
are
offices
and
Wire to
off in
but these suits can take
unexpected directions. Di¬
visions of many companies
domi¬
nate the particular field that they
are in even though the company
itself may not
dominate its indus¬
try.
R.
C.
some
"rule of reason"
time,
or
may
the
the
and the concept
quite clear at
further clarifica¬
were
some
modification
of
these
be seen in the future
Miller
in
Principals of
Howard) W>
&
South
of the
Philadelphia-Baltimore Stock Ex¬
Broad
Street,
Co.,
123
members
change, have installed a wird jto
Harry M. Sheely & Co., Keyger
Building, Baltimore, also mem¬
bers of the Philadelphia-Balti¬
more
of
regarding
(11) Although
precedents
basic
of "bigness"
Harry Sheely
PHILADELPHIA, PA.—E. W. &
Stock
Exchange.
With William Blair & Co.
(Special to."The Financial Chronicle)
;
CHICAGO, ILL.—Elzie C. Paftlow
has
become
associated; -with
William Blair & Co., 135 South La
members of the New
(12) I consider the present du
proceeding to be particu¬ York and Midwest Stock Ex¬
Mr. Partlow was for¬
larly important in that the out-- changes.
come
of the suit may do much merly with Kidder, Peabody J &
to clarify the limits of existing Co. and Smith, Barqey & Co. and
anti-trust legislation. The degree prior thereto was with the City
of success, achieved by the De¬ National Bank & Trust
Cov !of
Salle Street,
Thomas J.t Paisley;
Paisley
Domeck.
a
ideas
CLEVELAND,
OHIO —T.
J.
Paisley Co. is engaging in a se¬
curities
Miller Co. Installs
a
company,
tion
Paisley Co.
(Special to The Financial Chronicle)
the
portion or a di¬
rather than to
complete break-up of a
separation of
the
verware,
are
the
serious
vision of. a company
American Trust Co., 70
Wall
Street, New York City, announces
that John W. Sweeney is now as¬
sociated with them in charge of
their
newly
opened
municipal
advertising, never
illustration of a piece Of
iiiubu duuu ui a piece
"Jewelry."
No prices
quoted. No sale advertised
necessary,
of
owner
for
of
today they
reasonable
may be
to protect
(10) For the more immediate
future, the pattern; of many of
these suits is likely to be to drive
Sweeney Joins
American Trust Co.
verwatw"
were
seem
Southeastern Group ;
Of I. B. A. to Meet
selections.
jewelry—just their product, "SilBut
would
seem
Goodrich
deal
You know, only recently
and
Tiffany, one of the old-line, pres¬
municipal bonds.
Mr. Sweeney
tige houses, dared put a price in
was
formerly manager of the
their newspaper ad.
During the
entire period of the depression municipal department for Tilney
& Co. and prior thereto ?was with
they made no compromise with
Tiffany standards—just the
It
modified, if
the
Wilmont H.
only when a good com¬
be reached.
can
hope that the tax laws
berg;
lations and
sorts
of people with money available
and
everybody who has money
available, whether it is for the
even
even
.
thing very |
holding this
anc* ?e T3n to*T
cSXw
spiring
says,
Smug and
motion.
"Never
Tell
Become
the way a
banker does, or the way that an
so-and-so."
have
promise
of
the year were
committee, Mr. Landscommittee
on
securities,
Self-Satisfied"
Howard C. Sykes; committee on
In all of your considerations of outside supervision, Charles Moselling, don't ever become smug ran, Jr., Francis I. du Pont & Co.;
and self-satisfied.
I think that committee on floor transactions,
Mr. Mann; committee on finance,
smugness was most characteristic
Edward
C.
Werle,
Johnson
&
up until not too long ago of most
of the investment houses.
You Wood; committee on admissions,
Charles J. Kershaw, Reynolds &
might call it "reactionary," "ultracommittee
on
arbitration,
conservative" smugness, but they Co.;
Thomas
F.
Fagan,
Moore
&
were
dying, down here, for the
Schley; committee on public rela¬
reason that they just had lost en
thusiasm.
They lacked promo¬ tions, Edward A. O'Brien; com¬
mittee on business conduct, An¬
tion.
They didn't get behind
drew Baird, Josephthal & Co., and
what they were selling.
realty committee, Carl F. CushNow, I see that that, fortunately,
ing, W. E. Burnet & Co.
is coming to an end, because there
Curb Exchange officers appoint¬
is a tremendous opportunity, un¬
ed by the Board include Charles
tapped, for the sale of securities.
E. McGowan, Vice-President and
Look at the amount of money that
Secretary; Christopher Hengeveld,
is in the banks.
Look at the
amount of money that is tied up Jr., Vice-President and Treasurer;
Martin J. Keena, Vice-President,
in insurance.
Look at the money
and Joseph R.
Mayer, Assistant
that is spent—and I mean this
Treasurer. H. Vernon Lee, Jr., was
in
gambling, and at the race
appointed Director of Public Re¬
way
"Who do you want to see?"
the Exchange for
also approved. Com¬
settlement
Executive
"Don't
Now,
So he goes to a junk shop and
finds a very old pair of shoes
committees appointed
ministration
mittee
diagnosis.
proper
Standard
by Mr. Truslow to direct the ad¬
Pont
partment of Justice in the prose¬
Chicago.
Volume
171
Number 4884
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
(823)
31
Business and Finance Speaks After the Turn of the
Year
We
able to accommodate in this issue
are
another
of opinions
group
the
on
outlook for the current
year.
•addition
to
those
which
Our
business
These
appeared
must
in
are
in
our
continue to
As
In
have
The
deposits have held
fairly steady during 1949, with a slight decrease in sav¬
ings, which appears to be a shift from Banks to Savings
and Loan Associations because of the
higher interest
rate.
Loans
are
expected to remain about the same and
a decline.
Wholesale trade for 1949
change would be
any
was
on
a
par with 1948, while
retail volume indicate that it is
Holiday retail trade
was
tentative
reports about
slightly above last year.
reported to be higher than last
year.
-With
construction
million,
without
any
of
approximately
$6
in
government
expenditures now
anticipated for this year, this activity has
and
progress
expenditures
furnished craftsmen of the
community with steady em¬
ployment. As the work will continue
during 1950, with
portion into 1951, the outlook is good.
In addition, the
a
Anaconda
lion
over
a
Copper Mining Company is spending $20 mil¬
five-year period for the installation of a low-
grade copper
the
present
mining project, which will supplement
ore
operation
and
assure
stability to the community.
steady employment, there is
labor for
greater
a
future
and
Despite
a
high wages and
shortage of experienced
might
the
repeal of certain
taxes.
This
also
would
most
heartening effect not only on business but
individual taxpayer.
Business, generally, will be
hensive until these matters
the
prospects
steel
industry this
that
means
we
for
this
under
our
business.
the
present schedules of
graduated personal income tax and the
corporate income
tax are not bright. Nor do I see
prospects of the imme¬
diate reduction of these taxes so that
our present
capi¬
be met.
can
is
tax
replace and modernize
our
plant, equipment and re¬
serves of raw materials.
Present prices for these
things
so far exceed the
original cost that profits which have
been subjected to
corporate income taxes must be used
in very
large
tiplied the problems of aircraft design and production
fold.
Our research laboratories will be expected
many
to find
measure to pay
for replacement and mod¬
ernization. Although proposals for
elimination, or par¬
tial elimination, of the double
tax on dividends and
other
than
are
settled and many
President, Jones & Laughlin
bring
have
so
in
many
the
on
increased productivity and
earnings brought
additional
capital
investment
would
quickly provide a basis for increased
revenues, without
any change in tax rates, which would more
than offset
about
by
this
the revenues
I
believe
maintain
appre¬
such
measure
is essential if
healthy steel industry which
in peacetime
economy
foundation upon which to build
JOHN
Most
Steel
and
can
be
very
getting
costly for them¬
they represent.
the
effort.
war
K.
NORTHROP
good.
at
a
are
After
with
steelworkers.
our
-The general economy of the
state. The indications are
Ben
titled
"America's
The Twentieth
output in
by
Needs
we
a prosperous
avoid serious
can
one
be
22%
by
a
Resources"
humans
1850
and
was
27%
survey
en¬
published
by
work energy
2,335
per
year
during those 96
Labor
Review
worker
per
years.
The
The
23.2
work
decreased
from
3,530
to
According to the Monthly
energy
millions)
was
I
346
was
output
12
in
billion
1850
(U.
S.
horsepower
billion horsepower hours.
cite these statistics to demonstrate the fact that
reduced our hours of work and raised our
have
and
we
wages
standards
of
living by continuously increasing
productivity through the use of machines.
that
the
talents
and
facilities
of
great
our
reflection
no
the
on
thinking
action
or
un¬
of our
military
men.
They have been the first to realize the
benefits in better, higher performing airplanes
originate
with paintaking, time-consuming research.
One of the great lessons of World War II was provided
by the misplaced faith the German Reich Placed in the
Stuka
at
the
the
President's
budget,
level
for
The
however,
means
that
program
needed
to
not
at
John
and
the
K.
our
peace
Navy's
programs
that
Northrop
and
Bureau
will
of
provide
These
keep
new
air planes
airframe
are
manufac¬
At the
same
time,
defense.
A
use
curtailed
of the
budget,
some
elements of the well-rounded
keep
American
strong
in
the
air
neglected.
being fully utilized.
present
our
Several
is
only
of
a
bottlers
aches
the
in
of
soft
peaceful-
drinks
somewhat analogous
preceding
years
have
inflationary
head¬
to those in the gold mining
industry. The traditional, rigid nickel price for a bottle
of pop in the face of all too flexible increasing costs
of production and distribution have
put severe strains on management
ingenuity to eke out profits.
000
cases
a
bottles
per
solace
to
ing
direct
a
a
rate of
1,000,000,-
over
over
150
capita have been small
the
industry.
Increas¬
costs
have just about
point for most bottlers
or
year
well
bottlers to break
even
to
or
meager
a
be
bottlers
high-performing, advanced-design
air
conceived
individual
military services have made judicious
available
to develop better aircraft than
from the
long-range research
R. W. MOORE
tense
this program provides the
United States with a nucleus
of defense
production possible of expansion in time of
emergency.
Our
its Allies
stemmed
World War II.
bottlers, but in almost
rec¬
busy through 1950.
funds
and
Several
sporadic, discouraging
attempts to
increase
prices have been made during the past two years by
is
by these two fact-finding
complements of
S.
Germans
taken by members of the
R. W. Moore
early in 1950 if they are
to operate profitably on any kind of sales volume.
Increased prices on soft drinks offer some ray of hope.
essential to
new
U.
the
industry
Behind the immediate
protection of our peace looms
the spectacle of lagging research in the
highly special¬
ized field of aircraft
development.
The first signs of
this lag showed up late in 1949 when
it became apparent
that research facilities available in
this country were
and
published
estimated
in
used
must
must be
tools
hours, whereas in 1944 (U. S. population 138 millions)
it
in
average
population
fact
university aeronautical laboratories should remain
profit.
Recent soaring sugar prices on top
of a growing burden of other in¬
creasing costs have brought the in¬
dustry to a crisis.
Drastic action
by
by the U. S. Department of
hourly earnings of workers has in¬
creased from 190 to $1.22 in the
period from'1909 to
1947 alone. ' '
Labor,
slip from its
may
portation.
operate at
supplied 51%
machinery. By 1944 the work energy output was sup¬
plied 2% by animals, 4% by humans and 94% by tools
and machinery. According to the same
source, the hours
of'work
seriously hampered, and the U. S.
former pre-eminent position in air
power and air trans¬
enables
recognized
aircraft in limited
quantities.
now
in production and will
turers reasonably
which gives me
Century Fund, the estimated
the United States in
animals,
ques¬
where increased sales volume at best
bodies,
security.
U. S. Air Force
Aeronautics have initiated
According to
and
was
and
I shall not attempt to
predict the activity of the steel
industry for the second half of 1950.
concern.
to
answers
research continues, development of air¬
planes in this last half of the twentieth century might
reached
The people of the United
States
have indicated
they believe a strong
well equipped air arm is
Moreell
the first half of 1950.
more
manufacturing facili¬
ties
which
supply engines, acces¬
sories, equipment, and parts for the
boards.
country is in
picture for the long pull is
the
ommended
disruptions resulting from labor difficulties in the coal
industry, the current conditions should hold, at least for
The
in
considerably less than the
The
that, if
flected
lined
settlement was made in a
spirit of
good will and mutual understanding
which holds good promise for our
future relationships.
considerably
busier
Sales of the last few years boom¬
facturing level, including that out¬
coming in
a
costly strike of about six
duration, a contract has been
signed
the
Ordi¬
be
advent of these higher performing
Instead, valuable and useful facilities i-eport
ing along at
will
by two
the President's
Policy Commission and the Con¬
gressional
Aviation
Policy Board,
which evaluated United
States de¬
fense needs in 1947.
It should be
pointing out that our current manu¬
satisfactory rate.
weeks'
manufacturers
Air
now, our prospects
orders
airframe
begin 1950
fairly healthy backlogs and with the
prospects of a
productive year in which moderate
earnings may be ex¬
pected to result.
This condition also is
likely to be re¬
planning as
fact-finding
Our order book is in good
new
S.
Aircraft development and
produc¬
tion should be
keyed to long-range
continuing high rate of produc¬
tion for at least the next six months
are
U.
major airframes.
of
course
a
shape and
for
would
to
properly
provide
can
successful
a
are
we
can
with
Corporation
a ^picture
of current conditions and
let the reader draw his own conclu¬
sions.
things stand
searching
problems.
President, Canada Dry Ginger Ale, Incorporated
capital
that the best that can
be
done by a prudent man is to
present
As
labs
dearth of work and activity.
temporarily lost.
some
a
our
the
events
for
these
our
programs
limited time,
very
serve
uncertainties
future
that
and that the
a
a
"Predictions of things to come" is
always a risky busi¬
ness, especially for those who are
responsible for
are
before,
of
most
dive bomber.
A formidable, destructive weapon
the outbreak of hostilities in Europe, it was eclipsed
in a few short years by much better airplanes built by
the Allies.
The research and know-how that enabled
BEN MOREELL
There
to
follow
tions raised through
President, Northrop Aircraft, Inc.
involved
ever
proposals would be very helpful, I believe that
limited period at least a
provision in our income
tax laws for accelerated
amortization of investment in
productive facilities presents the
quickest, most prac¬
ticable and effective method for
providing the funds
necessary' for modernization and improvement of our
productive facilities.
Although the government would
probably experience a temporary reduction in
income, I
am satisfied that
this would be for a
for
expenditures will be held in abeyance until the
problems
are cleared away.
results and whose mistakes
selves and for those whom
the solutions
narily, it would
If this lag in
deductions for depreciation, depletion
and obsolescence fall far short
of the amount required
to
The advent of higher
speeds and airplanes that operate
higher altitudes and over longer distances have mul¬
at
cur¬
situation.
Allowable
and
latter advances occurred
only because of research begun
more than a decade
ago.
a
solution to the
a
result of gas turbine
a
development and aerodynamic refinement. These
airplanes.
However, I believe that there
rent
miles per hour per year as
rocket
keep our plants modern and
competitive, and
enough left after payment of all taxes and other
tal needs
II, speeds of airplanes increased an aver¬
of 10 miles per hour per year.
Since World War II,
speeds of miltary aircraft have been increased 100
age
we
living,
investment in tools and
our
and World War
to
•
mining operations.
Because of increased
costs, business, including finan¬
cial
institutions, is being forced to reduce expenses
where possible and much future
profit may be the result
of savings.in operation.
While the local outlook
appears favorable, it will be
influenced greatly by the work of the
National Congress.
A balanced
budget would eliminate deficit financing and
the necessity for a tax increase and
about
ever-
an
continue
of
charges to attract the investor's capital to
Co., Butte, Montana
area
to
take in enough
money to pay the high wages and
salaries necessary to attract men and
women of
compe¬
J. J. BURKE
particular field in this
our
increase
applied to the
tence,
& Trust
increasing, and there is
must
—Editor.
President, Metals Bank
is
machinery.
issues of Jan.
19, Jan. 26, Feb. 2 and Feb. 9.
.
population
increasing demand for goods. If we are
raise our
productivity and our standard
This decline in research
activity
trend, but it is a dangerous one.
large universities maintain wellequipped facilities for research in the field of aero¬
dynamics. These are now being employed to
only a
our
have
forced
been
competitive
back
exploitation
to
by
every instance
former prices.
bottlers
who
these
In¬
main¬
tained lower prices and the reaction of consumers against
higher prices played havoc with sales.
Local franchise
bottlers in low wage-rate areas protested to parent com¬
panies that higher prices in their areas would be com¬
petitively ruinous and affect profits adversely.
The competitive situation in the soft drink business
is
unlike
increase
that
in
other industries where
many
decrease
or
by
of
one
several
a
price
leading
com¬
panies would be followed quickly by all others in the
industry.
The soft drink industry is so intensely com¬
petitive that, up to now, individual bottlers who in¬
creased prices somewhat in line with costs became
sitting
ducks under the exploitive fire of their competitors.
Even if the industry were so constituted that bottlers
could and would increase their
prices all along the line,
uniformly, bottlers are fearful that the net
profits would not be entirely favorable.
They
have observed with some misgivings the severe decrease
more
effect
in
on
sales
brought
to
less
or
six
volume
in
Pennsylvania where a one-cent tax
uniform price in small bottles up
It is likely, however, that with adequate
enforced
an
cents.
and consistent promotion, consumer resistance to
prices would soften in
brought back to
more
a
short
higher
time and volume could be
profitable levels.
It is logical to expect that, in view of the crucial situ¬
ation brought on by soaring sugar
costs, a wave of price
increases early in 1950 is inevitable.
It can be expected
believe
that almost all bottlers will follow those who do take the
lead in raising prices.
Few, if any, bottlers will want
better aircraft must be an
unrelenting
this decline in the use of university facilities is a
warning signal to be viewed with alarm.
to gain a competitive advantage in distribution
and sales
volume at the expense of those who increase
portion
the
of
search
their
normal
usage.
To
those
who
for
one,
Research in
is of
aircraft, guided missiles and allied fields
continuing and increasing importance. Phenomenal
advances
in the
in
aircraft
past three
or
performance
four years.
have
been
recorded
Between World War I
to maintain present low prices, as they did
before,
merely
prices.
would
can
be
be
brought
too
costly
anticipated
on
by
with
that
these
eight to
the
price
It
sugar.
It
nine-cent
sacrifice
in
sales
increases will be
Continued
volume
somewhat
on
page
32
22
Continued
disheartening, but
inn
from
It
been
has
11994342708
to
what
overcome
already been opened
when
It
prices advance beyond
is
firmly believed that Zl/<>,
the nickel-a-bottle level.
7V6 anc* 1214-cent coins
facilitate an increase in prices more in
line with reasonable operating levels.
If the movement
would
greatly
.
the soft
industries that would benefit,
Washington officialdom might be stirred to action.
A glance at statistics on cost-price-income relation¬
ships is sufficient to indicate what bottlers of soft drink
•beverages are up against with a prewar price on their
drink industry, and other
products.
"Whole¬
Com-
posable
^Bottled
Soft
*Cost of
*Hourly
modity
Living
Wages
Prices
Personal
Income
Drink
Sales
100.0
10D.0
100.0
100.0
100.8
104.4
101.9
107.8
105.8
115.2
113.2
131.1
100.0
113.8
153.1
117.2
134.8
128.1
165.5
124.3
151.8
133.7
187.5
126.3
161.0
134.9
207.4
145.5
160.5
172.4
1945,.,
129.2
161.6
137.2
212.8
160.1
•1946,
140.1
171.2
157.1
226.8
163.0
sale
1944i
tDis-
160.1
192.9
197.3
247.3
209.6
214.0
274.4
development of interest to the graphic arts
the Fairchild Lithotype, a composing ma¬
which produces low-cost composition in actual
is
chine
machine.
this
for
since
in
sales
Actual
will
1950
small
be
production units will not become avail¬
the first
the
medical
field, the
Corporation expects to announce
of new design by mid-summer.
an
artificial respirator
power
c.f
three
changes are expected to show up in 1949 data.
It will
be observed, also, that soft drink sales in the last few
about twice the 1939 volume, but that consum¬
have about two and a half times as much to spend.
years are
ers
the
On
holds
the
of
concern
the
correct
side
cost
the
of
picture the most immediate
is sugar.
Official Washington
bottlers
key.
A
price
a
liberal off-shore quota could
that has gotten severely out
situation
more
equipment,
servo
years.
To
summarize, the acceptance of several new products
introduced by Fairchild during the past few years has
now been established to the point where full realization
of their potential appears to be assured. The additional
business anticipated from these varied products plus a
moderate
increase in government
same
modest overall
or a
of business
for
1950
business indicates the
gain in the total dollar volume
1949.
compared to
as
Ron
The
tons.
established
quota
deciding factor for the
Several
many
packaging developments
new
b,y several
under
are
South Bend, Indiana, and the industrial zone of
ex¬
riot
It
and dealer who would share in the advan¬
consumer
It is only in the 24-30tages of the "one-way" bottle.
ounce
sizes that the "one-way" bottle might ever be
economical.
ated
packaging of carbon¬
home market.
Should
development is the
beverages
in
for
cans
the
this prove feasible it would seem to offer economies well
worth considering, particularly, in handling and trans¬
This form of packaging would also tend to
portation.
extend
the profitable market area for the
The long-run
ijti
the
that
Indications
decrease
in the
the
decade
last
of
shows
pattern
sumption
point to
costs
the
weather
can
levelling off
a
materials.
some
conservative,
a
present
for soft drinks.
In
or
rougheven
trend
The
increasing
a
of
con¬
disposable personal income the products of the industry
have
tieen
not
over-sold.
sales remains favorable
will
and costs
is
The
potential
pay
off.
The
be and
can
the industry
overcome
can
problems
solved.
be
Invest¬
promotional and sales
immediate
will
increased
for
at increased prices.
even
continuous and adequate
ment in
effort
a
bound
of
price
When this hurdle
look forward to
a
brighter
profit picture.
J. S.
to
for the
in
buyers'
ments for
1950
for the
These
in 1949
on
or
several
possibly
a
factors, the
Corporation's
most
This is based
important of which is the
regarding
U. S. Government business. Through¬
its
out
30
of
years
/greater percentage
lion's business has
velopment
Armed
of
been
in
the
equipment
Services
compasses
tronic devices.
existence, the
the Corpora-
manufac tu
military
special
radio
and
of
signs,
—
aerial
available,
smaller
and
industry
the
the
area
war
ment
elec¬
the
funds
availability of
equipment, it is reasonable to
formation
to
government busiCorporation is looking to¬
the
ward
increased
business
in
its
were
somewhat
commercial
lines,
espe¬
the
to
exactly
costs
variance
at
half.
in
with
All
public and
While the momentum of previous misinformation still
continues to depress air line securities and to cause pes¬
simistic
in
some
attitudes
government quarters,
the
achievement of the industry is so startlingly good that
considered by government.
In the writer's judgment,
influencing the air
Further cautious testing of the low-fare coach market,
steady increase in dependability of winter operations,
modest (5%-10%) increase in standard fare traffic, and
continued
in safety, efficiency, and economy of
top management's list of objectives for the
coming year. Air transport still climbs toward its golden
age, to begin in the last half of the new decade with the
progress
operations
of
aircraft
jet
in
business
economic
Committed
in
five-hour
and
transconti¬
in
have
for
is
there
time
some
work
to
whenever
a
within
of
K.
the
Patterson
operating
on
a
less
during the coming year.
financing
on
the part of gov¬
hence with normal employ¬
wholesalers
well
sales-volume formulae and accounts re¬
proper
considerably higher than a year ago,
have not yet reached alarming proportions. In the retail
field, store modernization seems fairly well completed
ceivable,
while
pocketbook
plans and
of the
a
market for homes which fit
low-income group, and in this
1950 are about on a
commitments for
with those of 1949.
half
attained during the latter part of '49.
of
the
The
develop some
resistance which could slow down the pace. Giving due
weight to this uncertainty, it appears that sales and
profits for 1950 will at least compare favorably with
those
of 1949.
year,
words,
more
than sufficient to
This
means
relies
A. Raterman
J.
allowance
half
another
at
can
be
that
entirely
for
however,
may
a
company
depreciation
its
time.
purposes,
ante-dated
these
of
this
at
where
replacement
less
or
replaced
cover
replacement cost.
on
Or,
put
to
it
that part of its plant, which can operate
profit will get smaller and smaller—and the com¬
a
way,
will wind up having only half of the capital assets
plant and equipment it had in the beginning.
pany
in
The company today that relies solely upon established
depreciation procedure for replacement purposes is, in
effect, giving
It
is
away
large
a
almost literally
giving
share of
away
its
capital assets.
half its plant.
The manufacturer who faces his replacement
squarely
has first to make
up
problem
to use a sub¬
after taxes, for
his mind
stantial
summarize—it seems logical to believe that busi¬
during the first half of 1950 will continqe at about
same pace
in
of
many
not much
machines
are
so
about half of their
implication of available buying power
and
lies
production.
this means
scraping the idea that the purchase
of new, more productive equipment
must wait upon old established de¬
preciation procedures.
Take metalworking machines, for
example. Today, depreciation allow¬
ances
on
most such
equipment are
machinery
In
in
basis, and from available inreason to
believe this condition
retailers
materials
and
manpower
buying mood strikes the public.
Inventories
than
more
Administration
raising still further the efficiency of
Speaking of bank deposits, inciden¬
heartening to note that the
increased individual
savings continues,
toward
national
a
czars, the only defense Business has
against the constantly rising costs of
it is interesting and
trend
depends
year
Under
making "forgotten men" of all but labor
week
no
new
taking stock of political as well
on
trends.
em¬
been
RATERMAN
A.
the
opinion,
our
ment, bank deposits may be expected to increase slightly
while interest rates should remain about the same as
second
James s. Ogsbury
cost
Congressional opinion at the time.
find it necessary
curtailment
ernment is already assured,
the
assume
addition
cutting seat-mile
some¬
are
A continuation of deficit
So
production orders will be received.
In
in
these facts
by mid-year
be much improved
ness
JJiat a fairly substantial volume of
ness,
ceeded
as
crossing the desks
our loaning
officers indicate that profits, generally,
were lower in 1949 than they were in
1948.
aircraft
accessory
investigation also disclosed that the
change in the value of the dollar, has declined 65% in
the last decade, and that air line management has suc¬
Good
Financial and operating statements
govern¬
for
The
government of carrying air mail, after adjusting for the
ever,
of
of the
development pro¬
initiated since the close of the
and
that
may
some
40-hour
than
field,
completion
a
reserve
capacity, for one-third the price, or 12 times as good an
investment for the taxpayer, even assuming it were the
only benefit the country derived from the air lines.
JEROME
B.
par
equivalent categories with
mechanics, and spares, in
President, The Monarch Machine Tool Company
certain
indicate
Manufacturers of durable goods
will
Putnam
Carleton
activity..This is four times the
ployment.
the
some
grams
orders
builders continue to find
of
cameras,
special
and
With
for
with
together
are
of
make
this
,
nental service.
and, locally at least, there is no indication of much im¬
mediate commercial or industrial building.
Speculative
de¬
r e
lines operate 1,083 planes of
full complement of pilots,
a
definitely offer more
or less money.
Ad¬
backlogs
what
amount of business
moderate increase.
position
benefit, to take but
which the nation de¬
many,
Transport Service is $82,500,000, and this service oper¬
ates 263
major transport aircraft.
The scheduled air
and
which
that
to
mail,
post¬
penny
incidental
of
inauguration
is at
daily
promotional effort in
this field is being stepped up to pre¬
war volume and buyers are growing
more
selective and temperamental.
vertising
this
mail.
fourth-class
to
same
with the pleasant
During 1950 the Fairchild Camera and Instrument Cor¬
as
is
market
second-class
obvious. New model announce¬
more
tally,
President, Fairchild Camera and Instrument Corporation
same
outlook
sale of automobiles.
a
year's subsidy
one
of
rives from this minor subsidy to the
users of air mail became clear in the matter of
military
defense. The annual appropriation for the Military Air
a
largely dependent
That the automobile industry
last
half of
users
they were in 1949.
OGSBURY
poration anticipates about the
An
one
a
be based upon the
one
the
$82,000,000; and to the
card $57,000,000.
which
are
forecast of
to rising
relation
of the
incor¬
users
(heretofore
Moreover, while the current subsidy
to air mail is $27,000,000; the an¬
nual subsidy to third-class mail is
economically upon
industry. For that reason
business conditions for the coming year is
part,
a
facts
bottler.
outlook looks promising for those units
industry
going.
is
it
car
under
Also
service
this will be the greatest single factor
line outlook in 1950.
the fortunes of the automobile
of the added initial costs'can be passed on to
some
the
Its success will depend on a
is yet to be learned whether or
bottlers.
of factors.
number
PATTERSON
K.
President, St. Joseph Bank and Trust Co.
bottlers.
perimentation and offer some promises of cost reduction.
The "throw-away" or "one-way" bottle is being tried
out
B.
for 1950 will be the
existence of
very
to
are
The pressure of domestic producers
The quota in 1949 was 7.5 mil-
million tons.
is for 7.2
subsidy to the
mail
dawning realization of the truth must now inevi¬
tably change the atmosphere in which air line problems
the last few months.
Industry spokes¬
have argued in Washington for an off-shore quota
of 8.1 million tons.
air
the
of joint during
men
The
that the
constant state of
Increased developments in
of the dollar in 1948 the consumer gets his bottle
soft I drinks for a -three-cent nickel.
Only minor
on public atti¬
Congressional action.
Postmaster General testified
$139,000,000;
new
angiography and gall bladder studies. Orders for the
Corporation's 70 mm x-ray cameras and accessories for
routine and mass chest-x-ray work is expected to con¬
tinue in moderate volume. Also in the medical field, the
purchasing
will have their effect
about
puting
be noted that in terms of the 1939
It will
year.
All previous records
both volume of business and net,
profits. It was also a good year in a less publicized area.
Facts were developed by the Senate Air Line
Investiga¬
tion which, when more fully known,
to
as
production is expected to start soon.
Offset printers,
publishers and industrial concerns operating their own
offset printing plants will comprise the major market
equipment by other manufacturers. At present it is being
used
in
connection
with angiocardiography,
cerebral
of Commerce.
good air line
a
rectly called a "subsidy to the air
lines") has mounted, in 30 years, to
further research and the availability of associated x-ray
Bottlers of Carbonated Beverages.
was
exceeded,
printer's type for offset reproduction. Extensive service
testing of 10 machines is now in progress and limited
the field of electronic com¬
mechanisms, etc., by other
manufacturers indicate a growing market for Fairchild
Precision Potentiometers which have enjoyed wide ac¬
ceptance for such applications during the past two or
tU. S. Department
tAmerican
1949
were
tudes and
Fairchild X-Ray Roll
Film Cassette appears to have a promising market, al¬
though full development of its possibilities must await
226.8
CARLETON PUTNAM
Chairman of the Board, Chicago and Southern Air
Lines,
Inc.
Another
industry
In
of Labor Statistics.
•Bureau
opened during the year.
able before the last quarter of the year.
206.9
172.2
have
areas
addition to newspapers.
coinage had the full support of
fractional
for
service
and
and other areas are scheduled
up
The introduction of addi¬
tional models is expected to widen the field of applica¬
tion of this direct engraving process to include com¬
mercial
printing plans and magazine publishing in
to b
resistance
to be an innate buying
seems
sales
Seventeen
basis.
rental
urged by several executives in
adopted
strongly
the soft drink business that fractional coinage be
Thursday, February 23, 1950
The
example, has been
widely accepted in the newspaper field and to date
more
than 200 installations are in use on a monthly
Fairchild Photo-electric Engraver, for
resistance is likely to soften
consumer
CHRONICLE
FINANCIAL
&
cially in the graphic arts and medical equipment.
31
page
reasonably short time.
a
COMMERCIAL
THE
(824)
portion of his net income,
replacement purposes. Unless he does this the chances
are
very
nor
he
neither
the
the
strong
that
will
have
money
when
credit required for replacement of equipment
finally his loss of business to competitors has made
such
replacement
Looking
to
the
a
matter
of
immediate
survival
future,
it
itself.
is
our
opinion
that the greatest resistance to
purchasing new machines
businessmen, particularly
company's finances, that there is
stems from the belief of many
those concerned with
security in the
emphasis
upon
mere
a
possession of dollars.
This over¬
cash position, plus a hesitation to venture
Volume
171
Number 4884
THE
behalf of the future for fear of stockholder
combine to stop many an executive from
on
than in 1949 if the
criticism,
the
approving new
equipment purchases which^ from an operating stand¬
point, he knows full well he should make.
Nevertheless, the end results of failing to buy cannot
be
avoided
matter
no
what
is
excuse
presented.
company's plant equipment continues
to
As
a
business
to
more
progressive
Failure to modernize because
cash is clearly a
policy of
to disaster.
It is
desire
a
dicate
pete,
dissipated.
are
conclusion such
and
measure
a
The
company
machine
tool
industry
has
in
many
cases,
Continued,
from
the
production
all want
can
without
want Welfare.
state
a
of
increased
well-being. You and I would like
to see people earn much
more, get
bigger pensions, just as much as
the
gentlemen
of
the
opposition.
But the question is, how shall
we
accomplish this?
Shall we do it
by paying over, say, 50% of our
national
ment?
income
the
to
And then
let
govern¬
the govern¬
like poppa, decide what
ment
we
shall have, and in what measure?
Or
shall
limit
we
the
power
government and employ our
return
a
machine
business
change
of
be
in
of
the
Q.
the
business
the
Let
note
farmers and hands out billions of
votes.
the
unions
plays
who
And in the end it becomes
captive of these
very
groups
whom it has favored.
the
lead
to
excessive
does
do to
the
taxa¬
economy? Does
greater
production
it
and
greater wealth for the people,
the
or
contrary?
A.
Mr.
Coudert,
production.
If
production
then
his
recent
asked
afraid such
would lead to
Mr.
a
Coudert:
Truman
a
so
in
help
for
plain that I
a
competitive
price
consumer
possible.
seek, but the highest efficiency of
producers, and the lowest possible
price for consumers.
Stabiliza¬
tion is
delusion.
a
Q. Would
air
you like to repeal the
Thati is
matter of
a
question
a
for
the
mercial
A.
in
used
any
I
than
more
favor farmers
in
am
or
I
say
very
grave
make
vocated
a
was
I
in
errors
favor
of
some
so¬
of
goods
and
a
depression
unemployment,
opposed to relief
you
...
to
A.
When there is
the
relief.
mistakes
a
great crisis,
government
No
question
must
give
about
that.
The
greatest
mistake
that
Mr.
Hoover ever made was when he
starving
a
man
in
a
great
national crisis is not the responsi¬
bility of the government, because
it is.
assuredly
.
.
we
Q. It kind of looks to
ever
seriously ad¬
that
tariff
question
have
a
much
is
Welfare
welfare
not
State,
you
me
as
whether
but
want.
if
to
how
Is
not
always advocated a
reciprocal relinquish¬
ment
of all tariffs.
subsidy to
Tariffs
are
manufacturers just as
are a subsidy to
I
am
not
in
favor
of
subsidies and therefore, I am not
I
certainly
A.
is
That
definitely
not
am
to
as
reestablish
their
com¬
receive
to
con¬
emphasis in the
more
coming year than for
Progress along this line will be aide*!
by the availability from many companies of new models
past.
years
of machines.
The machine tool
industry, by and large,
will also have better trained sales forces on the
job and
will
make
strate
increased
the
of
use
advantages of
motion
pictures to demon¬
equipment.
new
.
No efforts will
be spared by the
industry in hammer¬
ing home its conviction that good business in the
year
ahead—not only for itself but for all
more
the
on
industries—depends
machinery in the plant than
new
on
ir»
money
bank.
trade?
Q. You
run
are
not prepared
to
let
free?
certainly would if the So¬
cialist nations of the world would
content
with
bottom
at
the
great
human
and
top?
We
A.
Mr., Berle,
ex¬
fact
that
I
a
the
fact
policeman
that
want
the
on
give it
want 10
or
to
present
our
A.
you
quite
are
is
Isn't
name.
not
it.
A
little
bit
get sick
on
Q. Are you quite clear it
to
I don't want the nation to
get
of the welfare state.
I
do
our
cornea
that?
to
not quite clear it cornea
am
that.
It
may
to
come
great
a
deal more.
•
lot of chocolate.
a
to
or
you must answer how yo*%
will pay for it.
aggregate
you
bad
a
of chocolate may be good, but
you
can
taxes
If you want theses
things
A. I
That
20 billion dollars addetl
present deficit.
that it?
the welfare
state
I
not
that
was
#
sick
THE
not
sfc
sje
COURT:—You
step,
may
down.
favor
than you
of
the
To
busts
Bankers Trust
so-called
welfare state would abolish
sions.
Funds
reces¬
under
The welfare state recession
would
mean
sion
more
controls, and
inevitable
socialism.
May
I
answer
the question more
fully,
fact,
ing
As
Fertig
matter
a
finish
may
of
The
(Continued)
by
saying
I would
that
I
sum
it
by next
bank
believes
ures
the
productive efforts in order to pay
for the type of program that you
demand for
below
that
this
of
everything.
I
A.
not in
will be within
would
in favor of
mini¬
a
$1.00
hour
an
has
been
proposed by Mr.
Tobin, the Sec¬
retary of Labor. Why not
be
really generous about it and legis¬
late $1.50 as a minimum wage?
Q. I
personally
believe
that
a
minimum wage adapted to indus¬
try—
hour as
a
how
I
stand.
favor
against
insurance
of
am
some
any
an
health
not
the
on
of
you
this.
Are
reasonable health
You
Medicine,
understand.
the
year
I
talk
about
which
The
insurance.
bonds
and
Q. I ask,
posed
ance
I
do
proposal
Are
is
you
are
somewhat
in
funds
of
corporate
expected to decline
1950,
available
while
for
new
investment
will be augmented by the growth
in pension funds. The bank hence
foresees
of
stocks,
this to be
The
emphasis on
preferred and com¬
but does not expect
more
than
declining
private
a
issues
supply
may
be
of
new
offset
to
by larger offerings of
municipal bonds. How¬
there will be stronger rea¬
state and
ever,
are
you
for
to
health, pensions, or any¬
else.
It is an established
I
am
I
is, are you in favor of more
Ross
has
become
Raggio-Reed
American
&
—
Stuark
associated
Co.,
with
Bank
of
Building.
Mr. Ross has
recently been Stockton represen¬
tative for Mason Bros.
he
was
a
partner
in
In the pasl
Greenwood-
Raggio & Co.
With Blunt Ellis Simmon*
(Special to The Financial
Chronicle)
CHICAGO, ILL.—Willis B. Berblinger has become associated with.
Blunt Ellis &
La
Salle
Simmons, 208 South
Street, members of the:
New York and Midwest Stock Ex¬
plans
Joins
Paine, Webber Staff
(Special to The Financial Chronicle)
Employees
most
for
Chronicle)
a
nancing
Present Drive to Add Five Million
opposed?
(Special to The Financial
changes.
He was formerly with
change in Treasury fi¬ Allan Blair & Co. and Sills, Minto
include long- ton & Co.
term bonds in order to satisfy the
sons
the question?
certainly am not op¬
the principle of insur¬
future.
near
Stuart Ross Joins
minor fac¬
extent
some
be
com¬
greater
a
purchases
requirements of non-bank invest¬
answer
against the perversion and exag¬
tion
plans in the
will
expanded
STOCKTON, CALIF.
stocks, and real estate
financing,
groups
Raggio-Reed & Co.
issues
new
these
new or
two
or
capacity of the
ors.
May I
I
pany
Outlets
Net
in
included in
avail¬
tor in the market.
Apparently
plan?
Socialized
not
$1.50
minimum?
Q. Frankly,
witness
about
of
number
many as one million more em¬
Greater Demand for Investment
mon
Well,
in
securities,
as
ployees
♦
this program.
you
the
groups,
a
large number are al¬
ready covered by retirement pro¬
visions, and it seems doubtful thai
capital markets.
What do you call a minimum
A.
the
to
made
during the next
am
wage?
you
amounts
wage?
mum
add
investment
of the inflation that
follow
to
The present drive for
pres¬
Division finds
growth will
but that the
more
the
stratospheric fig¬
by some observers.
Pension
bank's
able
favor
that
Analyzing the impact of industrial
pensions on the capital markets,
cine, the Brannan Plan
and
added
year or two.
year,
the
advanced
people advocate—Socialized Medi¬
.
be
accord¬ pensions is concentrated on the
just re¬ manufacturing field, where there
by Bankers Trust Company. are 14 million
employees. Here arv
well
.
will
memorandum
a
breaking the back of the
average
man
with
high taxes,
crippling the producer by placing
a staggering tax burden
upon his
favor of
.
pen¬
minor factor.
a
by $500 covered employees within the next
annual rate of about
an
in
not
am
trusteed
increase
buying
tablishments, only about 5 million
ent drive for
However, make sure it is
responsive to the question.
We
are wandering
pretty far afield in
both the question and the answer.
up
stock
investment
increase of covered employees
by
pensions may extend about 4 million is
expected. The
coverage to another five million
remaining 29 million employees
employees over the next year or are in
government, transportation,
two.
public utilities, trade, service en¬
The bank notes that its estimate terprises, and other nonmanufac-r
of the growth in pension funds is turing fields.
In some of these
his
answer.
A.
to
and
may
$1.7 billion
leased
COURT:
Mr.
insured
plans
Upset Investment larkets
sees
available for
million to
Honor?
your
Likely
before
And I do
are.
that
concede
Pension Fund Rise Not
invented.
in
not
am
any more
misery
inflation
great
the
government
re¬
and
more
with
geration of all these principles into
a great big balloon known as the
corner does not mean that I want
welfare state.
Every welfare pro¬
the city to control everything. The posal must have a tax. My ques¬
of
them you
ap¬
had
thing
principle in American life.
that.
have
vidually, but when
controlled
functions are in
quite
you
the
A.
A. I certainly
am,
and every¬
thing I have said would indicate
approve
with their quotas and
I
would you
or
Q. Apparently
func¬
that
mean
taxes,
tax, and
inflation?
content to accept these things in-
qualify
government
all
at
A.
Q. Unemployment, for instance?
Q. You would like to have free
do away
still
my
against high tariffs.
A. I
siderably
many
to
more
The fact that
against that?
point.
it
fuse
income"
a
payments
in favor of tariffs.
substantially
first rate competitors.
as
The selling of machine tools is bound
and more
a
that
centrally
busts,
for
that your point?
have
and
so
his seven-year cycle of booms and
are
did, and
.
you
relinquishing
farmers.
free
a
them.
said that
high tariff system?
slow
crop
to
subsidy to industry which can't
then
system?
A.
great
employ
the
Q. Have
want
subsidizing the unemployed? It is
a subsidy
to the unemployed and
the 1926-1929 period.
may
I
labor union lead¬
production
would be
by
No, I do
I think that we
Mr. Berle.
Most
military
subsidies in any group in society.
I do not want to favor manufac¬
ers.
1
Q. Are
Answer by Mr. Fertig.
A.
of
case
emergency.
Whether
you
talk
about planes or ships or tariffs or
farm products I am not in favor of
turers
the
THE
Developing plans
commercial use helps develop
our
capacity to mass-produce fast
planes. Furthermore, these planes
for
be
the
where
services.
Witness:
consider that the country
pretty well run?
a
commer-
I.
am
and
year
Q. Are
airplanes.
So
in
mean
—
the Navy to decide.
Your
you
we
Military
Q. I am talking about
cient
Question by Mr. Berle: Mr. Fer-
Q. Did
national
defense, not of economics. I think
is
a
approve
A.
subsidy and shipping subsidy?
further recession.
tig, prior to the period of 1932, do
in having
is
greatest energy to the most effi¬
Examination
some
It
of action
he
Mr. Berle
made
costs
panies
concerned,
the hands of the government.
gets
should
we
distress
"middle
tioning does not
Would
it
have
to
in
for government aid.
Mr.
prove
"stabilization" that
with
not,
down,
state
Q. In the event of
Cross
are
who, according to some
could earn as much as
people,
$15,000
even
because he
course
produce
builders,
continuance
people
houses
ciety in which people are unham¬
pered by government controls and
subsidies
and
bend
thus
their
have
But
taxes.
more
help
would
message
for
cripples
taxes
Mr.
said he could not do
was
it
more
also
tool
building of
Tariffs should
make
me
lowest
not
can
Q. What
tion
are
stabilization.
would like
up
control
which
world in which the
and
powerful
machine
national crisis does not
I should approve the
like to repeal that?
A.
always plays up to big vote-pro¬
ducing groups. It plays up to the
It
for
even
years, wilt
cut
fact
I
of
our¬
jury to
subsidies.
inherent in new equipment which,
where it cannot be written off in one or two
that, while these European countries have
severely restricted their purchases of standard American
whittled
Sugar
you
that the so-called "Welfare State"
dollars.in
advantages
had
Berle.
it
to
European production men haven't been as quick—o*
quicker—than their American counterparts to seek the
tool
prospects for export business
as
credit
in
1950
controls
slowly
A.
like
their purchases of special machines has
been substantial
to raise
the
question
as
to
whether
some
equipment in the
considerably higher than it
is
buying standard tools because these
are—being built abroad. But the extent of
enough
practically stopped machine tool buying
European countries even before the devalua¬
tion took place. However, there
may be food for thought
tool
than tariffs.
worse
selves?
would
machine
special
our
not
are
can—and
from most
on
three years
or
The
more
earn¬
ings to buy these services for
I
be
makes
cars
circumstances.
any
groups
the real question is how much
We
new
manufacturing business should
The Welfare State "In Court"
burden
of
age
industry
to
you
opinion,
my
for
33
18
page
crippling it? We all
in
machine tool buying
a
the devaluation of the British
pound has simply made a
situation worse.
The shortage of dollars and lack
machines
many
earlier.
even
should,
demand
tools, they have continued to buy
machines.
bad
his investment that will pay off it in two
industry could do at least 20%
sustained
volume
So far
heap.
manufacturer
a
machine
and
of the present
high
The farm equipment
industry,
the other hand, will without a doubt
reflect the nar¬
on
company's ability to com¬
through to its logical
can have mcney in the bank
scrap
economic
rowing spread between cost and selling prices of most
farm products.
a
designed and built to offer
and,
good
If followed
plant ready for the
a
by
level of national income.
may remain
unimpaired, the plant
until the physical assets, which represent
goes down hill
industry
particularly with
balance
working assets and
that
General
a
capital values. It is a policy which, instead of con¬
serving resources, consumes them by dry rot.
While
bank
The
should be under
conserve
of
the
who hold
concerns
gripped
financing out of profits easier for this industry than for
others.
Then, too, surveys made in recent months inr
stagnation that can only lead
policy of obsolescence and destruction
a
industrial
(825)
They
automotive
automotive
to
in
not
are
CHRONICLE
fear.
program.
competitors.
of
FINANCIAL
of the best customers for such
one
hill,
as
it fails to take advantage of technical
advances, the
end results will be
higher costs, and an increasing loss
of
The
,
&
men
strings
purse
political
down
run
COMMERCIAL
BOSTON,
Vaillancourt
The bank
of the
near
new
assumes
that the bulk
pension plans
over
the
term will be the result of col¬
lective
larger
bargaining between the
companies and the large
industrial
unions, and that few in¬
dustrywide, unionwide or "local¬
ity" plans will be adopted.
Webber,
MASS —George
is
now
Jackson
&
with
G.
Paine,
Curtis,
24
Federal Street.
With Lamont & Co.
(Special to The Financial Chronicle)
BOSTON,
MASS.
—
Jere
M,
there are 43 million Carmichael is now with Lamont &
employees in nonagricultural es¬ Co., Inc., 89 State Street.
Although
34
Continued
jrom
7
page
invited
desirable.
is
and
Thursday, February 23, 1950
CHRONICLE
FINANCIAL
&
COMMERCIAL
THE
(826)
Banks
have
themselves
It
properly.
something like install¬
Treasuries have
learned from experience that they
should be
safely keep fractional reserves
against their note and deposit lia¬
lapidated and dangerous railroad
and
Contentions oi Advocates
government
can
bilities
Of Irredeemable Currency
in
ities
is, to exchange their Fed¬
eral Reserve notes for their de¬
—that
posits and their deposits for
their
notes.
There
is
valid
no
reason
the Federal Reserve banks
be
why
should
permitted to meet a liability by
substituting another if the demand
against that
is for the reserve held
The
scarcity-of-gold argument
An
able
behalf of
in
vanced
ad¬
sometimes
argument
irredeem¬
an
is that there is
currency
not
to go around if all
who would have claims upon it
should decide to exercise them at
the
same
time.
That contention
enough gold
to
seems
that
imply, often
or
the belief is that
usually,
currency
a
a
redeemable, safe¬
contention lies in the failure to
requi¬
site of value; that all goods hav¬
When Federal Reserve bank of¬
ing value are, of necessity, scarce;
ficials advocate a continuation of and that people practice economy
our
of irredeemable cur¬
system
rency,
they are asking for special
themselves
privileges for
It may be doubted
responsibility.
that
valid
any
found
of
same
could be
reason
which
on
granting
the
corresponding
without
privilege
for
—
defend
to
at
without
privilege
exacting
time
the
a
corre¬
same
time.
causes
of
crea¬
unless
we
demands
which
and
lead
to
to
provide
proper "fire escapes" to meet such
demands
should
they arise. A
well-organized clearing and col¬
lection system for notes, checks,
and drafts, combined with what
We commonly call "sound" bank¬
ing procedures and a readiness to
pay
out reserves upon demand,
tends
to
serves
As
the
reduce
to
relatively
a
for
need
low
re¬
in the
of
a
a
level.
consequence,
goods
gold and silver.
as
Fears
of
inordinate
an
facts in hand
ratios and the
for
demands
correct
gold,
redeemable money,
destined to continue with
deemable
currency
the
as
fears
should
be
which
value
future
expected
,
irre¬
an
under
its
to
be
may
we
become
to
greater rather than less, the con¬
being that
sequence
and
may,
we
probably shall, end up in the pit
of
Socialism
is
such
since
and
both
demand
for
gold,
which naturally and
properly characterize life under an
a
use
not
scarce
goods.
bridges,
enough
expected demand—not the full de¬
mand that could be made at a par¬
ticular time.
Fire escapes, excep¬
of
irredeemable
profligate spending and
deficit financing be continued—
and these are made easy and in¬
vited by an irredeemable currency
—the present very safe ratio of
gold stock to non-gold money
and deposits can soon be reduced
to a point which will make the
institution of redeemability risky
if not impossible. It is for this
reason that we need to hurry into
sensing quite correctly the desires
to get gold because of distrust of
irredeemable currency, seem to
find it difficult to realize that re-
an
A
noteworthy fact is that ex¬
of fear of hoarding of
pressions
policing are
gold, or predictions that hoarding
employed to meet unusual, emer¬
would be very heavy, if redeem¬
ployment of a standard of ethics gency, or unexpected demands.
deemability
is
a
repellent
of
ability
were
instituted,
come
hoarding.
for Federal Reserve officials that
Gold, being scarce, has value.
chiefly from the advocates of an
They
seem
unable
to
bring irredeemable currency rather than
ranks far below that required of Therefore economy in its use is
sponding responsibility or the em¬
.
tional
and
devices,
I
themselves to
Ratios of Gold Stock to Money and Bank
United States:
Deposits in the
redeemability invites and
results in dishoarding of gold, and
1915-19492
(Money and Deposit Figures in Millions of Dollars)
Deposits!!
Money Stock
Money
Bank
and Bank
and
Stockt
Detfositst
Deposits
Bullion§
2,064
19,410
1916
2,097
1917
2,458
22,863
27,140
1918
f
>
9.2%
1,986
21,474
example in our history: When
we instituted
gold redemption in
1879 there was more gold turned
9.8
3,220
10.9
3,163
33,399
9.5
than
in
that
in
for
year
paper
4,576
33,953
38,529
3,113
8.1
That
5,293
37,729
43,022
2,865
6.7
the
1921
4,900
35,837
intelligent
37,545
3,275
3,785
gold,
9.0
wish
to
1923
4,491
4,653
40,737
42,036
8.0
1922
40,938
45,591
4,050
8.9
volved in holding gold.4
1924
4,359
42,925
47,284
4,488
9.5
1925
46,959
49,210
50,897
53,192
1927
4,010
51,072
55,082
1928
4,010
53,434
1929
4,215
53,951
1930
3,772
1931
4,125
5,086
53,475
51,736
57,444
58,166
57,247
55,861
4,360
4,447
4,587
4,109
8.6
1926
3,938
3,982
42,827
47,913
39,413
45,175
51,220
57,311
1932
1933
1934
5,762
5,780
1935
5.997
1936
6,794
1937
7,058
7,134
7,645
60,395
66,639
1940
8,495
75,466
1941
10,151
81,812
1942
13,105
84,984
1943
18,481
108,369
1944
23,631
1945
27,797
1946
1947
1938
1939
45,440
51,314
56,415
a
is
money
people
the
incur
as
do
not
in¬
expense
Another illustration
that
good
as
is
8.3
found
7.2
converting
7.4
8.2
deposits into silver despite the
very low ratio (1.2%) which the
Treasury's silver reserve bears to
the currency that could constitute
9.6
a
a
in
of
lack
our
our
paper
interest
in
and
money
demand for it. In the face of this
7,856
15.3
9,116
10,608
12,318
15.9
fact, we have widespread opposi¬
tion to a provision for redemption
16.8
in
12,963
19.2
16,110
21.7
gold which equals 13% of our
non-gold money and deposits.
convince a
majority of Congressmen, disposed
to act on facts, that the institu¬
The
problem
is
to
19,963
23.8
91,963
98,089
22,624
22,737
24.6
23.2
22,388
17.6
130,677
126,850
154,308
21,173
13.7
154,875
182,672
20,213
11.1
nate
29,378
162,927
10.5
multiple quotations for our dollar;
156,904
192,305
186,236
20,270
29,332
11.4
1948
29,068
162,413
21,266
23,532
1949**
28,388
160,635tf
24,584
13.0
191,481
189,023
tion of
redeemable currency, in¬
a
of
stead
demands
all
should
12.3
for
provide
End
of June,
generally June 30.
by Treasury and Federal Reserve banks, and in circulation.
gold coin, gold bullion, nor gold and silver certificates.
f Held
include
$ Adjusted demand
banks).
and time deposits of all banks
§ Gold valued at $20.67
!! Average ratio
**
Oct. 31,
per
fine
ounce
Does not
1934
on.
nation
lease
ers
ftOct. 26
of
data
for
the
years
1915-1948
were
compiled
by
Mr.
F.
R.
Ottman,
by that office in Monetary Notes of Jan. 2, 1949. The data for 1949 were
compiled by this author from the Federal Reserve Bulletin of December, 1949.
The sources of the data for the years 1915-1948 were as follows:
lished
Money Stock: Amounts for the years 1915-1947 were compiled from
annual figures for currency and coin reported in the Annual Report of the Secre¬
tary of the Treasury, 1947, U. S. Treasury Department (Washington, D. C., 1948).
The amount for 1948 was compiled from the Federal Reserve Bulletin (August,
Total
1948).
Total
Deposits:
Figures
for
deposits
of
Federal
Reserve
banks
were
generally taken from the August number of the Federal Reserve Bulletin in the
given year. 1915-1941 figures for banks other than Federal Reserve banks were
taken from Banking and Monetary Statistics, Board of Governors of the Federal
Reserve System (Washington, D. C., 1943), Table 9, pp. 34-35.
1942-1948 figures
for deposits of banks other than Federal Reserve banks were from
the Federal
Reserve Bulletin (August, 1948).
Gold Coin and Bullion: For 1915-1946,
Table 410, p. 399.
Statistical Abstract of the U. S. (1947),
For 1947-1948, Federal Reserve Bulletin (August,
1948).
the advocates of
expansion in
an
and
new
confident
and credit be-
money
Report of The Secretary of The
for
1879,
ix:
p.
"The
total
notes presented
from Jan. 1 to Nov. 1,
$11,256,678. . . . Meanwhile
coin was
freely paid into the Treasury
and
gold bullion was deposited in the
assay office and paid for in United States
notes.
The aggregate
gold and silver
for
coin
of
United States
redemption,
1879,
was
and
creased,
bullion
during
the
in
Treasurv
in¬
that period, from $167,-
to $225,133,558.72,
and the
balance available for resumption in¬
558,734.19
net
from
$133,508,804.50
to
From
the
of
the
valid, then
should have
we
redeemability
some
and that we should rush
time ago
it into effect at the
fact
The
earliest pos¬
of
Secretary
of
for 1880, p. xiii:
"The
presented for redemption
for one year prior to Nov. 1, 1880, was
$706,658.
The amount of coin or bullion
deposited in the Treasury assay office,
and
the mints, during the same period
was
$71,396,535.67."
is
course
that,
if
ratios have any sig¬
nificance, there is no good reason
to suppose that hoarding would be
any
heavier
than
would
be
healthy in the light of the govern¬
ment's fiscal and monetary poli¬
cies and the large volume of sur¬
plus reserves held by the Federal
Reserve banks.
Since provision
gold
reserve
redeemability is
for
repellent to
a
hoarding, it is possible that there
would
of
be
an
insufficient
hoarding to
amount
inject the proper
amount of fear into our Congress¬
since they might be¬
easily frightened, or wish ,to
speculate, or because they might
fear currency depreciation, or op¬
pose government spending, and so
come
on.
The
that
is
that
if
with
this
is
It
provided
for
reason
doing
so.
that
fear
people might
redemption that would
demand
Congressmen, the Treasury,
cause
and
a
the banks to exercise
care
in
what they do. It is in this manner
that the people can keep a con¬
trol
and
use
people's
govern'ment's
the
over
banks'
exercise
this
and
of, the
abuse
They
money.
not
may
when <they
power
should
or they may not exercise it
well; but the fact that they have
the power to do so, regardless of
whether the monetary authorities
think
the reasons for doing so
bad, is a wholesome
enabling the people to
good
are
or
in
keep a rein on their
and monetary
government
authorities.
should not
.
Moreover the people
be
questioned
to their reasons
redemption.
If
as
demanding
for
they hold a promise to pay upon
demand, that promise is supposed
to be met by the promisor with¬
quibbling; otherwise, the
is not what it appeared
out any
to be when it was issued.
Presumably, if our money were
to be made redeemable in accord¬
with
ance
some
of the notions be¬
by
expounded
ing
Federal
other
of
some
authorities
Reserve
our
and
irredeem¬
of
opponents
the paper money would
promises
something like
this: "We promise to pay the face
value upon demand provided the
holder is not acting upon an in¬
stinctive or speculative urge, or
is not resisting large government
carry
expenditures, or does not ' fear
currency
depreciation, or is not
suffering from panic caused by
unsettled international conditions
fright concerning the business
or
one's individual se¬
or
outlook
curity."
Federal Reserve
One
the
advanced
has
idea
authority
that
our
should not be made re¬
deemable in gold coin because "no
currency
government should make promises
to its citizens and to the world
which it would not be able - to
keep if the demand should
arise."
socialization. But the definite and
correct answer is that no one
liability.
of
respect to
their
continuation
spending and
a
profligate
can
possibly know what the holders
of non-gold dollars would do in
respect to exercising the right to
demand redemption.
But, what¬
might be, that would be,
it
ever
their proper right.
No
government should be free to use
the people's money and credit in
a manner that would make it de¬
and
is,
and
sirable
to hoard a
profitable for people
relatively large amount
of gold.
I
The test of our
our
and
fiscal
be
should
people's attitude
Federal Government's
monetary
made
at
the
policies
earliest
date by providing them
demand redemp¬
possible
with the right to
tion of Federal Reserve bank and
"promises"
Treasury
Moreover,
ways
our
to
pay.
people should al¬
have the right to make that
test. We
cannot, with consistency,
our
belief in opportu¬
nity and freedom for our people
Treasury
amount of notes
to
answer
people in general turn to a hoard¬
ing of gold it is because the gov¬
that provision for
redeemability is not defensible
unless the reserve is 100% of the
in
men
talk about
Report
is that
answer
instituted
con¬
ability,
If their contention is
$152,-
737,155.48."
the
are
made redeemable.
the
have
currency
redemption
irredeemable
an
implying that this
nation's monetary and fiscal af¬
fairs are in such bad shape that
our people would not readily ac¬
cept non-gold currency if it were
currency
because
that the people cannot be
trusted with the right to demand
promise
significance of this is that
toward
creased
Bank
our
4 From
amount
2 The
potent force in
a
life provided the manag¬
on
Treasury
Statistician, Department of Economics, School of Commerce, New York University,
for the office of the Economists' National Committee on Monetary Policy and pub¬
all
should tend to open
a
1915-1932, inclusive, is 8.6%.
and counting all non-gold currency other than gold certificates.
and
foreign trade; and should give
this
(including Federal Reserve
prior to 1934; at $35 from
up
them
for
of
elimi¬
should
gold,
causes
direction
the
inordinate
encouraging
production;
*
.
The
of the fact
provision for redeemability
repellent to hoarding is to be
8.4
18.6
redeem¬
a
sible date lest matters grow worse.
4,318
66,105
67,529
74,284
83.961
59,047
is
paper
4,324
4,535
4,956
3,919
63,209
urge
money
in for gold.
proper expectation.
If
1920
7.9
who
able currency for this country.
turned
paper
1919
8.9
those
from
*
to
tended
of
2,445
24.960
29,598
29,655
3,744
one
to Total
Gold Coin
Total
1915
Money and
irredeemability, or fear
it, that causes hoarding.
That
has always been true, both in this
country and abroad.
To cite but
Gold Stock
Total
Year*
that it is
Ratio of
Combined
Total
realization of the
a
fact that
deemable
factor
fear, of hoarding
or
>
people ■'
behavior
them
Should
and
currency
redemption
ernment and banks have
consequence.
There
irredeemable
currency,
are
as¬
ships,
sumed, by many people, to be
trains, airplanes, elevators, or any¬
That is our best
characteristic of a period of re- redeemability.
thing else of value to accommo¬
deemability in which such fears protection against profligate
date all people if they should all
deficit financing
and
should no longer exist since their spending,
decide to demand their services
Socialism.
causes should have been removed.
at the same time. All scarce goods
People, while living in a period The implication of the prediction,
are
designed to meet the usual
are
'
the
permitted
Some of the opponents of a re¬
cur¬
a
wide-open gate
invitation to that particular
rency
be
and
thinking and attitude in respect to
a
'
that
not
of their possible "undesirable"
confused
our
our
The fear-of-runs contention
should
our
reserve
is to avoid the
conditions
of
get
we
'
'
1
demand
Unless
regarding
affairs.
'
contention
The
structure.
all
fractional re¬
serve systems have become an ac¬
ly and properly, unless the gold or
and
defensible
method
silver
reserve
is
100%
of
the cepted
throughout the world for econ¬
liability.
omizing in the use of such scarce
The untenable character of such
cannot be made
recognize that scarcity is
liability.
payment at the
unusual
upon
liability. They wish to continue
to operate with liability currency
mand
under
point is that the Federal Reserve
authorities
do
not wish
to be
not
holders of these liabilities will de¬
private individuals and enterprises
tion
our body of contract law.
larger in amount than the
only asset cash they can pay out
under
the present
system.
The
to meet their liabil¬
anything except another
ordinarily,
The problem
times
called
since,
and strong rails in a di¬
ing new
management of the people's fiscal
and monetary
and at the same time
deprive
our
That
suggests
The fallacy in that con¬
in the failure of its
lies
tention
to recognize the
author
principle
employed in the use
of all scarce goods.: The use of
fractional
reserves
is defensible
of
economy
bankers proceed
desirable if
and
Insurance companies, for
example, could not function if an
attempt were made to apply such
an uneconomical principle.
'
wisely.
.
argument also ignores the
discrimination
involved
in
the
That
that
fact
the
Federal
Reserve
the
foreign central
governments, while
denying the same right to other
holders of dollars.
That practice,
banks
will
dollars ' held
banks
in
redeem
gold
by
and
which is
regarded
as
appropriate^
Federal Reserve official,'
simply means that in his opipion
the Federal Reserve banks should
be free to redeem for some and at
that
by
the
same
time have no
to redeem for others
should
be
to
state
people of the power to hold our
that
If our
notes were made
equally valid.
Federal Reserve
Federal Government and Reserve
obligation
whose claims
accurately the theory of
follows:
banks
to
an
accounting
in
the
face
official, they would read as
"We promise to pay the
value in gold on
demand to
Volume
all
171
central
Number 4884
banks
and
THE
become
govern¬
ments; to all other holders we
promise nothing because we might
hot
be
-
able
redeem
to
redemption
If
-
keep
should
the
the
exceed
the
promise to
demands for
a
of
authorities,
should
are
not
printed
defensible,
hesitate to
on
our
paper
and
our
deposit books. As matters
stand, the legends (promises and
deemability)
either
are
to
as
security and
on
our paper
volume
re-
outright
on
accurately
our
paper
of
in
of, this
banks, who
issue
fairs,
fiscal
should
tential
be
free
people in the
accountable
but
and
to
-
control
of
manner
in
desire
:
eral
Reserve
of
the
v
of
no
and
to
in
meet
the
Federal
and
Treasury
gold
Reserve
banks
reserve of
promises
demand
of
redeemability
would
minimum
maintain
a
100% against their
pay on demand all
to
problems
could
be
upon
reduced
to
a
or
system of fractional
and
proper
serve
safe
depends
ization
of
this
The
the
upon
organ¬
the
and
tices
of
the
banks
and
their
de¬
ing which operates
reserve
on a
system cannot
fractional
be
solved
properly by excusing the Federal
Reserve
banks
from
meeting in
gold their promises to pay on de¬
mand.. Nevertheless Congress has
freed those banks from that
prop¬
responsibility and they
been, and are, fighting with
er
device at their command
this
positionof
privilege which is
have
every
to
keep
unwarranted
now
free of
a
and corresponding respon¬
proper
sibility.
Proper banking procedure and
pro'per banking responsibility re¬
quire that bankers understand the
problems
and
appropriate
prac¬
tices that go with a fractional
serve
that
because
withdrawal
that
they
except
and
reserves
to
are
frac¬
not, subject
are
by all
not
are
claimants
They do
imply that bankers should be
silver
terms
ways:
their
in
(1)
of
nor
central
three
they
abroad;
liability
to
banks
(2)
for
gold
Federal
have
proper
ex¬
and
not
required
reserves
anyone
and
they
domes¬
other than
governments
substitute
one
another in making
payment, except for the small per¬
This
irredeemable- currency in so far
as
the use of gold for domestic
curren^v
is
concerned.
This
situation, defended by the
Federal Reserve
authorities, has
did
not
be¬
observe
the
part
far
of
twelve
banks
as
in
that
reserves.
a
eight
covery
was
for
de¬
so
in¬
were
in¬
the
a
1929
and
in
monetary
gold
peak
for
stock
1929—and
reserves of
serve
banks
to
One
was
the
low
at
was
at
the
ratio
notes
and
from
year
accuracy,
ratio
reserve
of
the nation's gold and reserves of
Federal Reserve banks
against the
wide
ami:
greatly expanded credit as
portant proximate causal
contention
implies that
thing as a single
im¬
an
factor
among all that were operating to
precipitate a sharp drop in prices
price fluc¬ and a
contraction in business in
tuations and that this single cause'
.1920.
But, even as one of the
can be, or has
been,
there
is
for business and
such
a
gold stand**
a
ard
and
redeemable
Neither
assumption
find
can
support in fact. Our most compe¬
tent and careful students of busi¬
and
ness
price fluctuations have1
accumulated
to
proximate causes, it was
symptom of a situation
currency.
sufficient
evidence
justify the conclusion that the
■
In
respect
1929,
even
to
ratios
and
over
no
single-cause
be
theory
that
can
supported by fact.
Those who assert that the
gold
standard is defective because it
did
not
do
this
or
prevent
that
are
offering an indefensible con¬
tention not only for these reasons
but for others
a
collapse
have
United
of
no
the two
no
came
con¬
prevent
and
drop in prices that began in Oc¬
tober, 1929.
The
simple
is
answer
depreciation
helped recovery."
that
no
been
sible
and
that
the
The
knows,
ness
author
that of preventing busi¬
price fluctuations; To ad¬
or
such
vance
this
sumption
unwarranted
an
would
as¬
be
analogous to
assertion that laying good steel
an
rails
railroad bed. would pre¬
vent wrecks despite^ the
quality
of the rolling
equipment and the
on
a
behavior
The
tion's
to
of
the
operating,
per¬
..
functions of gold in a
monetary structure are
proyide
na¬
(2) to provide
standard for de¬
a
ferred payments; (3) to serve as
a reliable storehouse of
value; (4)
to
serve
as
medium
a
change; (5) to serve
against promises to
serve
as
a
settler of
of
a
pay;
of
Although this is
gold, the
gold is
that
fact
ard
while
fail
to
not
a
(6)
to
adverse bal¬
confined
be
in
goods
safety,
to
to
balance
response
or
to
the
of
to
services,
escape
buy another
-
settlement
of
some
they
desires—to
payments;
many
to
seek
currency
currency,
a
may
buy
place of
depreciation,
and
so
the
same
time
they
part played
by money managers and the fact
that the greatest fluctuations that
the world has ever seen have been
those associated with irredeemable
currencies.
able
contending that the gold standard
and
a
is
science
is
whereas
automatic
aged
in
a
are
of
managed
nature.
Out
of
this
assertion is developed the
that a man¬
contention
currency
be
can
managed
properly whereas a gold standard,
being automatic, not only cannot
be managed but brings disaster
upon a people.
The
fact
including
managed.
is
that
all
on.
and
of
Federal
Reserve
many
contributing causes, of which
following may be regarded as para¬
(1) We recognize, of
course, that
Great War;
(2)
national,s municipal,
and
inefficiency and in¬
difference of labor, resulting in
lessening
production; (4) a shortage of transporta¬
tion facilities, thus
preventing the normal
the
first
cause
is
the
great
extravagance,
individual; (3)
movement
circle
of
Seventh
of
commodities;
the vicious
wages and prices."—
Annual Report of thev Federal
increasing
Reserve Board
(1920),
p.
602.
notes—which
them
upon
wnat
tary
people's
money and
irredeemable
an
provides
brake—chiefly
With
the
Federal
an
effective
no
managers
Reserve
the
of
in
1914,
System in this
the currency
managers were
a
given
a
ated
not ultimately, bring. Dur¬
ing World War I and up to May,
1920, the managers of our fiscal
may
and
all
monetary affairs, along with
the
other
business
control,
which
and
were
credit
forces
prices
part of
operating
picture in
ran
to
a
point at which the brake of goldreserve ratios began to take hold.
When the crash of 1929 came,
,
such
managers have
when
these
have
even
halt
a
oper¬
on
when these
worse
strictions.
today
The
is to
man¬
free of these
common
re¬
practice
ignore these facts
as
though they do not exist.
We
living, in
are
the
money
great,
7 As
a
part
or
to
use
way
direct
8 An
account
in
The
Reserve
tional
1
31
a
of
also
Madison
gave
authority
obligations
the
indefi¬
of
security
the
for
manipulation is
by this author en¬
Manipulation
Bank
abso-
this
pamphlet
Notes
Committee
in
who
of doing things
United States as collateral
Federal Reserve notes.
given
period
practically
of the
current,
Congress
Federal Reserve banks
nitely
a
managers,
then
titled
a
well
in
mone¬
given
are
restrictions
to call
infinitely
on
outside their
expansion
answer
their great
expansion of credit; but the
story
monetary management has been
redeemable currency can, but may
or
re-
of
large field
gold standard and
its
Monetary
done
agers have been
accelerator.
introduction
not
finds
tends to happen when
ultimate
a
un¬
and
currencies,
whereas
were
deemaWlity could ultimately place
deemable currency provide brakes
that can operate on the manage¬
of
re¬
reserve
and
Treasury authorities that theyt
should be free of
any restrictions
which gold reserve ratios
freedom.
ment
credit.
banks
as
(fiat) money—to their re¬
they were able, at the^
ference in respect to management
is that a gold standard and re¬
credit
notes
$9,900,000,000.8 It may be doubted
that this manipulation could
have
been undertaken had our
currency
been redeemable.
The plea of our Federal
Reserve
standard, are
Perhaps the chief dif¬
gold
a
for
reserve ratios then
prevail¬
ing, to support an additional ex¬
pansion of bank deposits in the
banking system to the extent of
want
credit
notes, the Federal Advisory Council made
the following statement
to
the Federal
Reserve Board on May 18, 1920: "There
mount:
these
serves,
cur¬
gold standard is
a
not
legal
al¬
irredeem¬
an
notes
Reserve
these
secured
to the
not
was
they should have been
liabilities. By adding
$660,000,000
and
common
it
whereas
in academic cir¬
even
of
ceived
gold
a
which
those
Federal
strictions that
pansion of
ex¬
of
the Fed¬
on the books of
the Federal Reserve
banks by de¬
which
continued
when
legally entitled,
of management even with the re¬
the
were:
By this manipulation, the Treas¬
received $660,000,000 of de¬
the
of
We
ury
country
causes
irredeem¬
an
illustration
an
posit credit, to
redeemable currency either
or at least did not prevent,
caused,
in
der the law these notes
could be
issued legally only
by the Federal
Reserve bank as a bank
liability.
automatic
are
currency
rency
currency
The common practice of advo¬
cates of irredeemable
currency, of
are
of the functions
should be recognized
one
perhaps the most readily
commodity in foreign- trade.
consequence, gold
movements
are
adverse
at
point out the
ex¬
reserve
marketable
As
some
quite correctly, that prices fluctu¬
ated widely under the gold stand¬
the
5
One of the prac¬
defenders of irre¬
operations of
fulfilled, that
ways
deemable currency is to point
out,
6 On
as
of payments.5
ances
of
supposing that it
should.
any
Treasury issued,
$660,000,000 of
these
notes
as
Treasury currency, although un¬
and
:
(1)
standard of value;
a
tices
no
In
in the issuance of
Federal Reserve
bank ndtes. The
irredeemable
^responsibilities
where
or
as
and
all.
attempted
Treasury, in col¬
lusion, engaged in a manipulation
or
managed
are
contention
widespread,
could
far
so
business
with
1942-1943
positing
standard
included, in
for
at
eral Reserve and
investigator.
that
currencies
reason
Furthermore, there is
if
not
manipulation.
in
The
valid
in
careful
argument
prices.
recessions
expansions
redeem¬
currency
that
factual basis.
The
rency,
as
presented by careful
scientists in the field, have never
prevent
currency
was
provided
Nevertheless, unsupported asser¬
tions, contradicted by the Tucker
evidence,
are
commonly
pro¬
pounded as though they had a
further
and
can
cannot turn the clock
what might have been
the
ease
it
invites
successfully challenged nor
by any equally respon¬
common
man
Al¬
gives money man¬
agers not only makes possible ex¬
tremely bad management but it
refuted
type of monetary standard known
well. The func¬
as
a
in*
ours
„
to
of
as
procedure.
The freedom that
able
cur¬
caused
such
such
of
ex¬
cur¬
1920.
coun¬
that
they
in
event,
Apparently the evidence pro¬
duced by Dr. Tucker has never
gold standard, of gold
money, and of a redeemable cur¬
tions
conclude
rency-:
stated
the severe business recession
;
to
reason
see
with
It
country, Palestine,
together. There is
one
In
gold at that time, logic
suggests, at least, that Congress
might not have taken those steps
tries recovery came first; in six¬
teen countries depreciation came
in
one
were
able
the countries had
In seventeen
which
irredeemable
sort
back to
countries—Latvia and Japan.
usually
came
either
before
abandonment, or at least seven
months later.
that
though
of
after
An
done
1932,
gold standard.
25%
structure
vites
two
standards
not
the
be
reserve
free to go on with their
rency
of
months
the
Congress to lower the1
to
pansion.?
It
cles
did
persuaded
were
the
August,
when
ratios
plain that recovery fol¬
lowed quickly on the abandon¬
ment of the gold standard in only
sideration, that the gold standard
or
the
the
ex¬
against
Federal Reserve notes and
35%against their deposits, they
simply
the
of
when
high to
of 40% of gold certificates
clear
in
and
too
ratios in
the Federal Reserve banks
began
to fall close to the
legal limits
also
either
caused
1945,
re¬
countries
or
not
or
abandoned
validity.
serious
in
came
July,
is
nine
and
industrial
whether
though the ob¬
as
deserved
"It
1920
was
record;
currency
point
ratio
money managers wish to
free of any
braking influence.
and
factors,
it
States
June,
is
said:
turning
demonstrate
our
not supported by the
He
the
leading
Europe
proximate
hears
one
over,
servation
gold
on
several
would
causes,
Nevertheless
combinations, and that there is
than
causal
as
of
one
as
the
emphasis
any
reserve
are
and operate in various
a
.
causal factors in such fluctuations
many
more
basic cause.6
l
that
first;
might, with much
stress
1929,
the Federal Re¬
their
deposits ranged in that
89.3 to 73.3%.
the
in
came
relatively high level—it
•its
cur¬
other
crash
&f the
;gold
business
the
evidence.
ratio in
reserve
sup¬
prompt turn toward
cases
ercise any influence in 1929.
In the face of such a
that the suspension of
specie payments and depreciation
the
two
currency managers have
been able to prevent nor to
serve
S.
a
of
country;
sharp swings in produc¬
activity and prices even when
they knew they were running into
the braking influence of
gold re¬
assertions
devaluation
the
apparently
control
Standard," in The Annalist (Au¬
gust 21, 1936).
The net result
of his study was that the common
or
And
was
tive
evidence
and
the
as
our
not
the
Rufus
the
observations
caused
But, in
money and credit
his
In
Reserve
penalties
Dr.
examined
our
that
caused
were
the
concerned.
crash
These
study called
"Business Recovery Not Brought
About by Suspension of the Gold
fall
1920.
year
in
of
was
far
of the worst ever
experienced
one
and
quickest with,
porting statistics in
We had
Federal
paid "tax
Wnen
gov¬
our
lished
low
a
to
provided by the experiences of
thirty-four countries and pub¬
re¬
the
state of affairs in
a
first
of
an-,
prevent
cause
centage of
non-reserve asset cash
which they may use; (3) all their
notes
and
deposits and all the
asset cash they can pay out are
the
prices
Re¬
managed
responsi¬
such
Reserve.,
that
fluctuations
sonnel.
fundamental
are
out their
pay
tically
our
authorities,
bilities
to
>
;
Nevertheless,
escape
not
meeting their demand
in
reserves.
serve
or
paid out
central banks
foreign
cused from
to
to be
governments.
liabilities
to
re¬
system. They do not imply
tional they,
Federal
contention
crash of
positors, and many other factors.
The problems inherent in bank¬
gold
decline in business.
a
ficiencies
Federal
our
and
rency
re¬
banking structure,
effectiveness of the clearing
collection system, the prac¬
and
circles today.
The
the
of
people
recoveries
ly-accepted notion,
level,
and fears may lead to
widespread
liquidation and to a fall in prices
irredeemable
standard and redeemable
reserves.
size
as
standard
no
gold-reserve
currency,
car$e
Tucker
to
volved as causal
factors, the trou¬
irredeemable currency ble
lay with the over-expansion
of the huge Federal- of
credit, not with some defect in
morality in
business
gold
a
was
so
brake
also culti¬
persistence, during and
early 1930's, was that
the
by, and
longer support the
no
of
ratios
reserve
Management had
functioning
this widely-expounded and wide¬
face
ernment
Treasury
extent—operate on the
to : some
can
evils
as
be
credit
that the
of the reserve ratio to
vestments, and so on, is an arrest¬
ing commentary on official ethics
disappear.
or
ened
deprecia¬
pensions, savings accounts,
nuities, fixed incomes from
But the Federal Reserve banks
all banks—and the
and
extend
may
of
85
restraints upon it in
introduction of irredeemable cur¬
rencies.
To test the validity of
invariably
brake
inoperative,
persistently
that
clear
the
have
closely-related doctrine
since
superstructure of credit.
Confi¬
dence in the credit
may be weak¬
already
'
an
the
will
to
ecohomic
redeemable
country's
important
an
quite
seems
extent
an
serves
willingness of Federal Re¬
Treasury authorities to
and
A
so
debt owned by our
people, to say the gold standard, or in;
gold as
nothing of the great volume o£„ a money, or in a
redeemable cur¬
savings stored up in the form of rency.
be
system
reserve
obligations
in
Fedto
promises to pay
If
The
serve
it has been cultivated
A government and central bank¬
the
increased
an
currency.
one
inherent
this
are
employ
we
it
trouble
such
of
depreciation
cause
ask for
officials
problems
fractional
and
\
of
>
of Treasury
free
•
prices,
the
of the fact that the risks
nor
our
dictators,
practice to
themselves.
The
tion
monetary af¬
these "agents"
buyers
a
In
beginning in
seems
since.
found in people's
mismanagement
of paper
money and other forms
of credit.
experi¬
has
of
becomes
Every
debt
broken.
or
nature
ing system
that
abroad,
developed early in the 1930's. And
element among the causal factors
in the flucutauons of business and
people's investment
Federal
the
as
currency
to impair
knows
trophies
vated with
far
huge
already
recession
severe
the
strained
(827)
1929 in this country and the catas-
gold
years.
the people's
are
whether
or
to
are
this
the
the
as
often been pushed to
great lengths
the proper connections with
seriously impaired in recent
Despite this fact, our Fed¬
eral officials, as they ask
people
to buy more
and more Federal
securities, do not apprise .the po¬
is
agents in the management of their
national
of
such
and economy
in
of valuable gold. The em¬
use
represented <,by
debt.
substitutes
and
the
power
as
person
value
have power to control their Fed¬
eral Government and Federal Re¬
serve
great
enced
lucidly
and in our
not the people
or
of
debt
of
ployment of these substitutes has
been
essence
whether
the
people
our
this
deposit books.
The
and
greatly, and even to destroy com¬
pletely, the value of the savings
and
money
face
Federal
within itself
non-redeemability, advo¬
by these Reserve authorities,
printed
the
of
CHRONICLE
convenience
the
sold and still being, sold to our
people. Because of its nature, an
irredeemable
currency
carries
money
or
cated
in
rency
dishonest, or
misleading, or meaningless.
It
would
be
interesting
indeed,
though perhaps catastrophic, to
see the
principles of redeemability
Reserve
variety
of
officials for privilege
corresponding responsi¬
bility, are further high-lighted by
the fact that they advocate and
fight for an irredeemable cur¬
in
Statements
to the people of
inherent in the de¬
Federal
FINANCIAL
paper; i siiyefy, minor-coin money
and bank deposits in the interests
without
them
money
a
dangers
of
&
On top of a gold
money is built
Treasury versus
people of the
the
Treasury
they
have
of
country,
mands
ability or non-redeemability, be¬
ing enunciated by these Reserve
and
States.
The
this
redeem-
of the Federal Re¬
case
welfare
United
reserves."
our
principles
a
banks
serve
COMMERCIAL
on
Avenue,
of
Our
Federal
(Economists'
Monetary
New
York,
Na¬
Policy,
1944),
pp.
Continued
on
page 36
•
:
36
Continued
jrom
35
page
I
ing from 6.7% to 10.9%; that we
a redeemable currency
maintained
spect
were
not
what
is
good
who
set
01 Irredeemable Currency
freedom from any ultimate
on
themselves, have
majority of
by man. Because there are limits
to the abuse which gold will take
restrictions
able to make a
been
of our people
their shortcomings in
Congress and many
believe that
management were not
their
shortcomings but
rather a manifestation of the evils
inherent in a gold standard and
currency
really
redeemable currency. They ask
for freedom to regulate the peo¬
a
but they do not
have any ef¬
to put any brakes
ple's
currency,
wish
the people to
fective
power
places where greatest value is
to
its services—people
condemn it rather than the abu¬
to
attached
practices that cause it to
places of
safety.
Among
varieties of money, gold stands at
sive
seek
in value; but, like a fine
automobile, its best and
the top
watch
or
intelli¬
rather than abuse. When
The
headed
nation
people of a
into trouble
are
they
when
reside
permit any such powers to
in the hands of money managers.
that procedure has
The lesson on
repeated many times. If we
not intelligent enough to un¬
been
are
and to profit by it, we
destined to learn it by
first-hand and bitter experience.
derstand
be
may
abuse,
its abusers with silver,
to
safety
it
-'
presupposes
use
proper
gence,
time.9
them at any
©n
man—it will flee, if it can,
from
seeks
it
leaves
escape
not
the event
unless
us
arrive in due
arrives promptly and in
proof that the event will arrive!
Until it occurs, we pretend that
we have no satisfactory proof; the
interest
printing presses can run, begin to
argue that this is proof that an
irredeemable
is
money
paper
which the world attaches
cies to
the
The
of
advocacy
of
institution
delay in the
redeemability
satis¬
Many who seem to find no
factory grounds on which to de¬
fend our system of irredeemable
probability does not
currency
wish to retain indefinitely never¬
that we
one
as
convinced only when the unpleas¬
theless advocate
We seem to
be inviting that sort of result for
the people of the United States
by continuing to adhere to a sys¬
should
stitution of redeemability.
standard
can
the
gold
only
under favorable conditions
is often
It
stated by opponents
redeemability that the gold
standard is a fair-weather stand¬
©f
conditions
ard and that since
they
as
futile
are
it is both unwise and
a
redeemable
are
institute
to
propitious,
we
States under which it could oper¬
that
redeemability
do exist and
bave existed since the reopening
they
Evidence
of the banks in 1933.
to ratios demonstrates that to
as
be
fact.
But, in general, opponents
of redeemability ignore such fac
a
tual
data; their arguments
are
fundamentally and essentially a
defense of
aged
governmentally-manof which an irre¬
a
economy
deemable currency is a necessary
part.
the
Their basic position is that
people should not have the
over
power
a
a
redeemable
government which
places in
currency
their hands.
have
cannot
when they point
out that the gold standard cannot
stand
all conditions,
they rarely if ever deal accurately
with the logic involved in that
contention.
For
instance,
they
9 Some
Governors
far
co
serve
any
under
up
as
of the members
of the Board of
and their staff have
to
urge
that
even
gone
the Federal
banks not be curbed
or
requirements.
Occasionally one can
Re¬
hindered by
reserve
10
the
contention
advanced
read
or
the
that
standard could and did operate only
most
of
faire
basis.
the
countries
Laissez
on
were
faire
is
a
a
hear
gold
when
laissezconcept;
It
apparently never operated in pure form
any
important degree; there has al¬
ways been government control or regula¬
tion
in
some
degree.
That variety of
argument or straw man is of the same
class as the common assertion that the
In
gold
standard
was,
or
is,
an
standard.
currencies, we
redeemable cur¬
automatic
a
until other countries adopt
a gold standard too, we must first
reduce Federal expenditures and
balance our budget, we must wait
until we have the conditions which
successful
would insure the
ation
must
gold
with
differences
our
oper¬
standard, we
wait until we have settled
the
of
stir
agents
lest
Russia
up
runs
on
of $13,-
as
in 1919;" and that, in
foreign central banks
we
fine
for
ounce
of
period
a
from
more
stituting redeemability
a
very
in¬
invit¬
are
ing that danger and result.
[EDITOR'S NOTE:
The foregoing is the second of three instalments
seating
in
Dr.
concludinng
which
we
are
pre-
Spahr's paper. The
instalment will ap¬
in the "Chronicle" of Mar. 2.]
pear
5
page
Observations
standard and redeemability at $35
per
the
That sort of statesman¬
ship has been lacking since 1933,
and, unless it emerges, our people
are
apparently destined to con¬
tinue
with the
poison of irre¬
Continued
governments are concerned,
have been maintaining a gold
and
.
.
.
seventeen years.
has
author
This
of
advocate
yet to
in
delay
loss of freedom.
an
see
kind
hand, Food Minister Strachey writes
appealing caption "Less 'Liberty' and More Life" (in
You Should Be a Socialist"): "When our contemporary
"Why
ar¬
an
On the other
the
under
return
our
redeemability produce
to
of
enterprise despite the fact
conventional standards
many of these people are com¬
monly rated as among our most
responsible
leaders.
They un¬
doubtedly have fears regarding
redeemability — perhaps in many
cases arising from a confusion of
those attitudes of people, includ¬
ing their own, which characterize
a
period of irredeemability with
what
these
of
None
has
arguments
validity. In general they seem
as excuses by those
any
be offered
to
required
to offer proof as to their validity.
In part, they are the common ma¬
terial of those who employ hit-
who
cannot
readily
and-run tactics in
be
opposing prompt
provision for redeemability.
In
part, they seem to be the tools
of those afflicted with what might
be called
of
case
a
pernicious in¬
ertia but which is apparently re¬
garded
field of
The
ments
manifestation of wise
the
psychology seems clear.
as a
caution.
That they belong to
propounders of such argu¬
not
seem
we
would exist if
scious
teen
that
to
this
24.6%
of
that
years;
ample
in
to
consider
period of
a
the
1941
seven¬
gold ratio is
redeemability;
our
support
ratio
has
to
13%, and that,
a
fallen
from
present ratio
in the face of
Federal
government's profli¬
gate spending and deficit financ¬
ing, the sands of time are running
out on this country with danger¬
our
rapidity; that the delay they
ous
advocate is
tinuation
an
of
invitation to
wasteful
con¬
Federal
the introduction
thorough-going statism in this
spending and to
of
country.
as
that
redeemability were
these
of
clutch
irredeemable currency, they
argument that would
at any vague
state
them
enable
to
seem
with
to
oppose
respectability a change to a
of affairs they obviously fear
not, produce evidence in sup¬
do
port of the vague arguments they
offer as an excuse for delay seems
brushed
be
to
They ignore such facts
we
maintained
a
gold
them
by
relative
with
side
to one
This is
ease.
apparently because those who re¬
to this procedure cannot be
held to an accounting before a
competent jury able
"You
stultify
yourself unless you produce facts
to
publicly,
say
that will support your
assertions."
of
continuation
The
deemable currency in this
is
a
irre¬
an
country
dangerous undertaking. Every
supposedly
-
far
less
'liberty' of this particular, one-sided kind, in
than there was 140 years ago. There are literally
things which employers could then do, and which
workers could agree to, which are now against the law. For in¬
stance, 140 years ago you could agree to work sixteen hours a day,
and you could start doing so at six years old. Now the law pre¬
vents you doing that.
When the laws were passed which for¬
bade that, men got up in the House of Commonsfand said that
this was a gross and unpardonable infringement of the liberty of
of
the subject."
That
electoral
The
for
that
clear
reasonably
It seems
possible.
many
people the battle over redeem¬
ability versus irredeemability is a
sort of game in polemics or poli¬
tics rather than a matter of scien¬
procedure in dealing with
principles. Congressmen
facts and
seeking facts in respect to re¬
deemability versus irredeemabil¬
will not get help in support
redeemability
from
that
ity
of
active
group
economists
of
Socialist
are
who
of
advocates
or
governmentally-managed econ¬
omy in some other form since an
instrumentality
sary
of a dicta¬
is
It
that
true
today
redeemable cur¬
a
For the first time
we
in
our
history
have had, since 1933, a govern¬
ment that has been
willing to take
advantage of the ignorance of
the
regarding the
principles involved in a redeem¬
of
mass
able
versus
time
we
be
irredeemable
an
Similarly,
rency.
to
people
a
had
have
for
the
what
cur¬
first
appears
majority—or at least an
aggressive minority—of the aca¬
demic
profession in the social
science fields rushing into,
and
giving
to,
support
movement
in
the
governmentally
-
a
political
direction
of
a
managed econ¬
omy.
During past suspensions of spe¬
the
and
Reasoned
logical
condemnation
Recently
with
a
of
finding
the
ism.
ernor
Recognizing
Dewey in
Republicans that they must try to prove the
"Fair Deal" is not
"Welfare" but ruin.
Precent Versus Bread
"Man cannot
live by
bread alone" is a
wonderful and valid
precept—but awfully difficult to put over to the voters! In addi¬
tion to "Santa Claus-ism," other continuing difficulties face the
anti-Socialist liberals in all countries.
Chief of these are popularsounding slogans and fetishes.
For example, take the term
"Full
Employment" which here as well as in England, has been master¬
fully concocted as a wonderfully-effective catchword to justify
infliction of government controls. If a candidate realizes that as
a true fact in objective economics, full employment per se should
not constitute a first charge on the economy, that the concept is
inflationary; and that instead, the emphasis should be on full
production—nevertheless, he cannot say so, any more than he can
be for sin, without committing stupid political suicide. To do so
lays him open to the effective "go-back-to-McKinley-or-Hoover"
taunts.
something sacrosanct
It has marvelously re¬
connotations—friendly, comforting, and brimful of emo¬
In the same way,
that
the term "Welfare" is
political candidate must be "for."
a
assuring
tional security.
Quite
p.
apt
is the
(Feb. 18, 1950,
London "Economist's"
350) following description of one of the three "essential
a voter's decision:
"If the success of democracy
elements" in
depends upon the ability of the people to reach sound con¬
clusions on a clear view of the facts, is it better to put into
office a party that dares not say in public what it believes
in private, or one that really believes in private the nonsense
it talks in public?"
Complacency too is a foible difficult to overcome. Similar
to the chidings of one drunk to his mate for worrying about his
doctor's forebodings of stomach ulcers which have not yet ma¬
terialized,
was
President Truman's last week's
chastising of the
Republicans for having "erroneously" predicted financial ruin be¬
cause of government spending since 1933.
And the foreign issue is difficult to make a live one. The voter
resident in the British Isles doesn't realize that his country's stock
in
international relations
Arabia to Israel
has
*
Thus
the
never
stood so low; from
India to
to San Francisco.
British
*
❖
election will constitute
a
landmark in the
weight of
subjective material
and psychological self-interest on the other, in the electorate's
choosings. And, incidentally, it will give light on the conjectures
whether anyone other than Governor Dewey could have defeated
Mr. Truman in 1948. Perhaps it will prove that the only trouble
course
the
of the democratic process in
showing the relative
objective issues on the one hand, and of
with the Dewey mustache was
type of John Sherman who recog¬
by a Santa Claus beard.
on
their task has been most
the difficulty of anti-Welfare-ism here, Gov¬
his recent Princeton lectures cautioned the
gold reserve ratios rang-
1933
that
difficult, with the inevitable compulsion—as it is on the Repub¬
licans here—to resort to "Me-Tooism," or "quasi"-Welfare state-
during World War I and down to
country,
lobby" wins
England this columnist discussed individually
Conservative M.P.'s their campaign strategy
in
number
reelection—with
for
there have been statesmen of the
this
of rent control on the
But the offer of material
protection against "that unconscionable real estate
cie
in
tax¬
elections.
standard and redeemable currency
payments
Man is the
Forgotten
real
broad merits can win a handful of votes.
governmentally - managed econ¬
that the proponents of delay
find themselves.
A
rebuttal.
who is expropriated to do the supporting and the subsidizing
—and not, as depicted by Mr. F. D. Roosevelt Sr., the undersubsidence level recipient. But in the political arena, the decisive
fact is that the receivers outnumber the givers.
omy
instituting
ex¬
payer
government.
It is on the
side of Socialists, Communists, and
advocates
of other forms of a
rency
argument
at heart.
torial
in
of
kind
anti-Socialist position in any democracy
the man-in-the-street, irrespec¬
tive of the verbiage or the logic, to give in to the "glandular"
feeling that only the "Fair Dealer" genuinely has his inteiest
a
irredeemable currency is a neces¬
this
side, versus the security-necessitates-regimentation
responsible person
as
Appeal
is that he must combat the urge of
speaks out in public on this
matter has the obligation to
be
accurate
Deal
between
great difficulty of the
who
as
Fair
is
battle
pounded by the solicitor-for-the-underdog candidate on the one
sort
and
is
hundreds
suppose
Being thoroughly con¬
fears under an
instituted.
have already delayed
redemption for
incorrectly
they
liberty'was at its greatest, the oppression of the wagewas so terrible as to amount to almost complete slavery.
workers
by
tific
banks, and so on.
fact that
Furthermore,
not
rency
our
maintain
is
time
the
should wait until European coun¬
Russian
of
far
so
critical
that
question of whether the con¬
ditions now prevail in the United
the
Advocates
delay in the in¬
The common assertions are
currency.1** That contention raises
ate.
363,000,000
tries stabilize their
operate
that
contention
The
budget
the
might be undesirable.
The fact that they cannot, and
greatest value.
convince us; we are
tem of irredeemable currency.
with
1919
and
unbalanced to the extent
once
Britain today,
on
ant event engulfs us.
balanced
political and
and
old and oft-repeated lesson.
The advocates of delay in
ciples.
gerous
nor
evidence
during the period of un¬
Federal budget in 1917,
currency
1918,
redeemable
a
that
predicted date as
advance of the
maintained
we
oning teaches
to
money
give
permeating
currency
economy
social system until a day of reck¬
people a good money despite the
inability of the mass of people
to distinguish the good from the
bad in money and monetary prin¬
cheap paper money, which can be
manufactured as rapidly as the
that is supposed to
course
of
world
a
and
factor of stability
great instability;
their
re¬
as
in
to
about
deemable
un¬
currency
guides
bad
or
There
one
regularity for others need
concern
in
that
regarded,
was
so, as a
reliable
gument that is supportable. Such
advocates are engaging in a dan¬
superior and preferable to gold
of our great since it can stay with them de¬
difficulties in respect to profiting spite any abuse. The simple facts
from lessons experienced
many are that an irredeemable currency
times by others is an apparent not only stays with those who
conviction on our part that we abuse
better
currencies but it
are- exempt
from such experi¬ tends to expand and to grow with
ences.
We like to deplore the cry abuse and to carry the abusers
of Wolf! Wolf!
We like to say, to their destruction.
"Well, it hasn't happened yet!"
Irredeemable currency is man's
Indeed, we seem to take the posi¬ monument to his abuse and poor
tion that a sequence of unpleasant management of gold and a re¬
events that recurs with a high de¬ deemable currency — the curren¬
gree of
properly
to
nickel, or irredeemable
paper. Then, by a peculiar process
of
reasoning, those left with a
copper,
"
Undoubtedly
dollar
our
neglect to point out that anything
devised by man can be destroyed
1920's
the
in
and
I
War
World
and
popular
attitudes in
irredeemable
de¬
preciating,
that
well
full
nized
derstanding and
being devalued, and
collapsing; that while Europe was
experiencing such chaos during
while currencies abroad were
Contentions of Advocates
lute,
Thursday, February 23, 1950
CHRONICLE
FINANCIAL
&
COMMERCIAL
THE
(828)
that it should have been
supplanted
Volume 171
Nurhber 4884
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
^829)
37
Continued from page 6
work
may
United Nations Experts Propose
mist"
Subsidized
provide
tain
free
a
view
employment
society.
that
means
ment
a
to
and
We hold the
maintain
the
Mrs.
Joan
of
Robinson,
myth, makes the following
teresting statement:
in¬
only
example known to
of
full
employment
'history
under
partially planned capital¬
ism
(except in wartime) is the
Nazi regime. The Nazis succeeded
coopera¬
tion.
The report, like the I.T.O. Char¬
ter, shifts the emphasis from the
pursuit of freer trade to the pur¬
suit
of
national full
employment.
Employment is not, for these ex¬
perts, an aspect of a well-func¬
tioning economy, but an aim in
itself.
It is evident that trade is greater
among
among
countries than
prosperous
depressed
ones.
It
is,
also true that employ¬
increases with the expan¬
however,
in
overcoming the problems cre¬
by full employment because
they had first broken the labor
ment
ated
sion
movement.
which
of
istic
trade.
But
the
national¬
socialistic-minded
Discipline in industry
by substituting ter¬
ror, along with a mystical propa¬
or
countries
issue "trade through
ganda appeal, for the fear of
ensured
was
employment.
cut
was
The
at
the
vicious
root
un¬
spiral
by
fixing
Charter
U.
S.
Full
Employment
Pledge
report
ginning
right from the be¬
attempts to demonstrate
that the
United
States is pledged
to
a full
employment policy by its
signature of the United Nations
Charter.
However,
on
side,
one
the U. N. Charter does not define
full
employment; and on the other
side, Articles 55 and 56, read to¬
gether, state that the United States
pledges itself to take joint and
separate
with
action
the
ing"
of
U.
N.
full
cooperation
for
the
for
"promot¬
employment.
Charter
action
in
clear what
very
of the
the
meant
the
It
is
drafters
by "taking
promoting
of
full
employment." No country or gov¬
ernment
likes
widespread
and
prolonged unemployment. There¬
fore a policy against
unemploy¬
ment is, so to say, a matter of
We
course.
how the
fail to
United
see,
however,
States could
action to eradicate
have
unemployment,
perpetual
full
and
of
payments
pledged
itself to do
something that it can¬
not possibly do and maintain a
free society.
Besides, a pledge "to
take action designed to
achieve
maintain
full
employment"
London
made
"Times"
carefully
worded
possible
safe¬
actions
of
the
government in matters of employ¬
It is also interesting to
ment.
that
"The
Employment Act
of 1946" was passed by
Congress
after the signature and ratifica¬
the
United Nations Char¬
ter.
(3) The report published by the
U.N. states: "In the successful at¬
tainment of the twin goals of full
employment and the creation of a
relatively free multilateral trading
system, the former must certainly
take precedence over the latter:
countries
employment
can
pursue
policies
even
full
with¬
multilateral trading system,
of multilateralism
without
the
attainment
of
in¬
a
the restoration
ternal
economic
trading
It is
no
ment
countries
stability in the
is impossible."
wonder that such
should
be
found
in
a
state¬
the
re¬
20
following statement
Mr.
Harold
Wilson,
by
Board of
Trade:
"Basic controls, such as those of
location of industry, foreign
the
exchange, and the volume of in¬
vestment,
will
the
be
maintained
instruments
permanent
maintenance of
to
full
As
if
this
enough-to
one
clinch
the
trade
to
now
on
points
in
the
(a)
The report states, in para¬
75, "this stabilizing influ¬
ence,
moreover,
will be all the
greater
the
larger
the
normal
graph
share
of
in
ture
diture."
view
governmental
the
expendi¬
total national
We
is
believe
prices.
this
erroneous.
High government taxes
high
expen¬
that
completely
High
by
in
the
make
for
government
the
ern
"Little has been said
and
between
socialism.
.
We
.
form
required
incentive
the
essential
to
with
the
minimizes the
of, inflation in countries
danger
which
report
make full
employment the
objective
of
economic
over-all
policy.
the
We
are
referring not only
economic
essential for the
cure
of
one
country
which
the
in
case
The report is
the
causes.
propose
but
The
not
with
experts,
ours
The
to
report
the
a
of
problem
recognizes
demand
Unions
the
in
are
a
up,
to
form
of
higher
But, as prices rise, the
demand
still
higher
prices..
First
ex¬
to
the
of all, the
forget that
greatest depression we have
perts
seem
known
started
after
ever
relatively
a
long stability of the price level.
point of fact, it is this stability
In
economist
an
liv¬
were
ing in
a
vor
government policy for the
a
Those who fa¬
new era.
stabilization of the price level are
an
prices in¬
First,
arbitrary and
The fact
and its role in an
has for most economists
mysterious character leads them
money,
economy,
a
to
believe
that
they
system
manage
can
to
as
so
se¬
stability of prices. They
to realize that the level
of
prices is influenced by money
also by production, and that,
therefore, even if we assume that
they could manage the money side
of the equation they would also
but
it
in
the
world.
Professor
Charles
Risfy one of the greatest
living economists, recently stated:
"One should say without hesi¬
tation
that
the
stabilization
of
prices is like squaring the circle.
There is even an unwitting de¬
ceit to let the public believe that
the
economists
ment
have
the
and
available
means
able
of insuring the stability of
prices, either in the world or in a
particular country.
achievement
It would be a
if we could
great
only
convince
to
not
the
themselves
bility of prices
create
the
insta¬
in the world
creation of paper
maintenance
their
by
and
money
disorder
of
in
In the discussion of the in¬
ternational aspects of full employ¬
ment
policies the national
of what the
quences
conse¬
calls
report
stressed
national¬
getting
The
loss
have
their
the rest. The
the mid-
are
bondholders
may
and
of
salary
their
serious
good
political
as
out
a
full
em¬
after the last
a
in
occurred
on
the
the
Continent
war.
in
bounds,
and
but
an
ap¬
the
remains,
position
highly
has
pre¬
carious."
Dr.
Nourse,
as
President's
who
resigned last
Chairman
Council
of
of
the
were
strengthen further their legal po¬
or to supplement their in¬
sition
they seem willing to
accept dollar gains on the basis of
comes
'
the
.
again the
with
.
Federal
therefore
imports,
given
a
deficits
that
experience
countries
decline
a
in
with
compared
as
selected
year, shall de¬
posit with the Monetary Fund an
amount
of
their
currencies
own
equal to that decline, less any fall
in exports.
These funds would
made
in
available
exports and
would
countries
which
manage
their
maintain
to
as
to
experienced
full
decline
a
assumedly
economy
may
ment
ence
kind
a
which
be suffering from unemploy¬
and therefore may experi-'
a fall in their
imports. This
proposal
for
so
employment.
This proposal amounts to
of penalizing of countries
would
involve
potentially
liability
large
and inde¬
terminate payments.
No country
will be willing to commit itself
of
economic
with
than
proposal,
to
seems
that
the
imports and exports. In¬
stead of
thinking in terms of soli¬
darity of world economy, they ar¬
gue in favor of insulating nationalistically planned economies from
are
certain degree of eco¬
or
such
by
such
a
a
the
a
is the
about
least
this
un¬
employment is primarily ad¬
dressed to the United States. The
"Economist" in its issue
Jan. 28, with reference to the
of
proposal
for stabilizing the flow
international trade, states that
"the report clearly has the United
of
States
in
plates
mind
when
it
contem¬
reduction of
a
imports
unemployment."
result of
as a
Main Recommendations Slanted
At
It
is
U.
obvious
S.
that
recommendations
are
directed
On
the
of
the
the
mail*
report
the United Stateai
at
argument
that
our
coun¬
try
is pledged to maintain full
employment constantly, the United'
States is requested to make read¬
justments and material sacrifice:*
so
to enable other countries to-
as
isolate
themselves
world
the
in
from
order
the
to
real
pursue
nationalistically planned economicpolicies.
This
conception
world economy and
of
a
international
cooperation seems to us simply
fantastic, particularly so from ex¬
perts selected by the United Na¬
tions.
Taylor & Company Is
Formed
can
BEVERLY
&
Pacific Coast
CALIF.—
HILLS,
Co.
has
been
formed
offices at 170 South
Beverly
Drive to act
ment,
dealers in govern¬
and corporation
Partners
are
Gifford
as
municipal
securities.
Phillips,
Howard
L.
Taylor
and
Roland Maroney.
Mr. Taylor watt
formerly associated with Sutrn
Co.
a
Davies &
its exports,
SAN
of
country, but by close eco¬
cooperation
with
other
Mejia Add
(Special to The Financial Chronicle)
be solved not
insulation
economic
on
(Special to The Financial Chronicle)
depression,
a
reduction in
problem
this
said
London.
&
recession.
opinion that if
country, pursuant to
suffers
not be able
may
of the
be
full
with
We
that
is too
new,
(e) The London "Observer" of
Jan. 22 remarks that the
proposal'
for the maintenance of domestic*
Taylor
a
that
us
can
ism and the market place for the
reestablishment
of
equilibrium
avoid
while
"Times""
think
realistic proposal.
They hardly take notice of
the existence Of the price mechan¬
to
London
Economist"
theoretical and over-ambitious. Ifc
causes.
countries which
the
"The
this
concerned
are
symptoms
rather
Both
and
proposed. Here
are
experts
the
disorder
FRANCISCO, CALIF.—
P.
Kimbley is wit!*-
Frederick
Davies &
Mejia, Russ Bldg.,
countries and by the flexibility of
bers
its cost-price structure.
mem¬
Francisco Stock Exchanges.
"International"
of
the
New
York
and
San-
and
are
not
Recommendations
Now Sole
Unrealistic
generally looking to
the Federal Government either to
the
machinery oJf
Monetary Fund.
Economic
Advisors, recently stated that "the
unions
and
istic remedies
nomic
November
if
international propagation of
nomic depression
remarkable extent
peal to the patriotism of the Trade
Unions during and since the war
has kept the 'vicious spiral' with¬
been,
the
plan provides
between
for the government
carry
such
through
of
economies."
(d)
un¬
governments
succeed
as
The
cap¬
are over-
fast
trade
the International
govern¬
cyclical fluctuation"
as
experts' report
proposal for sta¬
bilizing the flow of international
a
tude.
that
"the
in
The
areas.
contains
blindly, in advance, to payments
of
possibly considerable magni¬
are
not
oped
also
aspect of this question.
the
dangers.
great inflations
world.
fying the difficulties of the prob¬
they propose devices which
lem
in
serious
money
root
that
the
to
Trade
is
a general expectation
rising prices may lead to a
complete collapse of the value of
Great
as
labour
"Second,
therefore,
is
When
of
economic
mechanical
by
tendency
ployment policy.
various
were
created
consequences
gadgets, mainly
of an automatic
nature, to cure
unemployment.
The whole ap¬
proach
re¬
attempting to
em¬
the
we
is the
relatively
it the
will
mainly concerned
of
problem
inflation.
earners.
Symptoms Not
symptoms
which
employment
dleclass
Roots
with
her
problem of full
to
"Another
full
"To
disorders
in
ferred before:
Britain.
Concerned With
of
goods
remarks
most vocal sufferers
ployment by inflation and thereby
becomes unable to
pay
for its
necessary imports of raw mate¬
rials,
which
is,
for
instance,
presently
the question of stabilization
on
have to control the production of
wages up
sort
case
maintains
as
do
of
particularly the
United States (a diagnosis on the
usual
Keynesian
pattern, com¬
pletely inadequate).
But the re¬
a
in¬
ing
pensioners, and the
workers who are ill-organized and
country,
port (joes not consider the
much
so
suffers
mainly directed to
depression in
price
fixed in terms of money suffering
a loss of real income.
The worst
malady is to have a clear
diagnosis of its nature.
Admit¬
tedly not all depressions are alike.
sort of
gov¬
the
Joan Robinson makes the follow¬
brings about
any
report is
danger of inflation created
by full employment policies. Mrs.
the
the major contribution to the eco¬
nomic development of undevel¬
which had
seem
socialistic
on
everyone, that private capital and
not our government should make
be
which
on
don't
brochure
strong conviction in the United
States,
shared
by
practically
their
genuity and ink have been used
result
employment
a
subjects
the
pertinent
economic develop¬
underdeveloped areas.
believe, however, that there iu
level. They believe in panaceas to
solve our economic problems.
In
the last fifty years, there are few
cure
of
the
of
stabilize
the monetary
fair change in the distribution of
income, all those with incomes
It ought to be obvious that
first
to
balance of payments diffi¬
culties
which are an inevitable
the
to
"A continuous rise of
capitalism."
(4)
responsibility
ernment
for
of
ment
We
thinking mainly of the monetary
individual enterprise.
volves
incompatible
survival of competitive
Stabilization Theories
many
as
is
the
ernment,
which
Price
that they
'wages and prices sets in.
socialists believe that the type of
economic planning and social re¬
bility of the price level are en¬
hanced by their adoption of full
employment policies."
belief
workers
western
a
.
the government's general
respon¬
sibilities for maintaining the sta¬
fooled
wages, and the "vicious spiral" of
about the
it is nevertheless true that
.
the
prices.
ment:
.
which
them to pass on extra costs to the
Ground, a Study of West¬
Union," the following state¬
ing with full employment and in¬
flation:
in
mean high govern¬
High government ex¬
penditure is disruptive of the flow
of savings at its source and de¬
stroys
or
rises that induce equal or
greater
price
advances."
It
is,
therefore, strange, to say the least,
to find in the report the follow¬
ing statement in Para. 84 deal¬
ment taxes.
consumer
the
on
inflation¬
deficits
expenditures
raising wages since it is easy for
a
at the
either
wage
is
comment spe¬
few
a
in
(c) The experts consider that it
strong position to force wages
and employers do not object
not
were
argument,
publication is¬
Labor Party, "Feet
read
can
sued
statement
infancy, and yet by over-simpli¬
cifically
for
methods proposed are still in their
state control of economic activity.
wish
scarce
our
employment programme."
tions,
plea
(mastering
ex¬
report:
to
economic
our
port published by the United Na¬
which fundamentally is a
for planned economy and
just
are
Specific Objections
We
as
ensure
position and the fulfillment of
one
to
Jaii.
of
the
President of the
ployment Act of 1946" which
vided
governments
to the
The
guards
Policy and Full
concerned
results
his
The
instruments
reported
(which,
by
the
way,
is
the
language used in Article 3 of the
I.T.O. Charter) was hotly debated
and turned down by Congress in
1945 (the so-called
Murray Bill),
and Congress adopted "The Em¬
pro¬
in
planning for full employment, as
proven recently by Great Britain
and by Sweden: we are
referring
employ¬
has
and
they
cycles."
trade
Hansen
threshold of this great
(b) The
difficulties
the
that
against in¬
ternational economic cooperation.
diabolic
relationship
out
na¬
requires exchange con¬
trols and import quotas, the most
union
while
of
therefore
Government
of
favor
economic
planning of economic
activity inevitably creates balance
We doubt that the United
tion
in
Germany had full employ¬
but also exchange controls
import
quotas.
Socialistic
ment,
States
note
the
employment"
through trade"
solved
ment.
and
that
over-confi¬
much
ary
cycle). We are, however, still in
the kindergarten stage."
tionalistic economic planning.
pos¬
sibly have pledged itself to take
and
I.T.O.
Nazi
Assumes
not
decided
were
be
the
on
"employment
should
wages."
The
worked
the
Alvin
"Modern
periment
economic
in
"Economic
at the
international
(the full employment
mastered
book
present
Employment" states:
in
as
greatest
governments
Professor
in also precedence is given to na¬
tionalistic economic policies over
who is the spiritual mother of the
"full
employment"
doctrine
or
"The
have
employ¬
full
employment, the author
study,
thinking
same
the
lies
of
the Havana I.T.O. Charter. There¬
England by the Workers' Educa¬
tional Association on the
problem
of full
this statement by the
the
experts
policy)
dence
by U. S. A.
in
may
economic
puts it:
"Perhaps
no
has
government
except in a totalitarian so¬
In a brochure published in
ciety.
We find
main¬
social
our
As the London "Econo¬
threat to it
Nationally Planned Economies
not, and which
or
undermine
structure.
The
recommendations
full
"international"
so-called
related
employment policy
unrealistic.
For
perts recommend
the
to
are
most
instance, the
a
ex¬
stable flow of
international investment by
gov¬
Proprietorship
(Special to The Financial Chronicle)
QUINCY,
Lagemann is
of
ILL.—Frederick
now
sole
A.
proprietor
Lagemann & Son, Illinois Na¬
tional
Bank
Bldg.
38
(830)
COMMERCIAL
THE
Continued from page 19
Whether
costs
and
taken
labor
income has
nonwage
nonwage
place.
A recent
study of these
compre¬
expand. Dr. Palyi
says: "Institutions on the political
level are subject to the dynamics
of the political arena."
In 1929,
about $1 billion was expended on
subsequently
hensive
supple¬ a needs basis and by 1947 this
benefits and costs indi¬
figure exceeded $12 billion,. 6% of
they average about
all personal income, and almost
15.4% of payroll 20.5c per hour,
twice as large as the dividends of
or about $424 per worker per year.
These figures include only em¬ all American corporations.
ployers' expenditures for private
The accompanying table indi¬
pensions, cash sickness benefits,
cates the prospective growth of
paid vacations and many other
items, as well as compulsory so¬ social security. The actuaries of
cial security expenditures.6
Tliey the Social Security Administration
mentary
cates
needs
would
to
must
borne
be
is true of
same
whether
1947
on
Since
data.
make estimates from time to time
then, these items have grown sub¬
stantially, and are destined to
grow still more. To a large degree
they are a part of our social or
economic security programs. They
these
of
security
erally begin
on a
programs
"high
table
gen¬
cost"
in
is
of
many
uncertain
fac¬
This
estimates.
part
based
such
on
estimates.7
modest basis and
BENFITS
Because
and
make both "low cost"
tors, they
and
must be financed.
Social
costs.
indeterminate
COSTS
AND
Estimated Aggregate Cost of Major Social Security Programs and
democracy
this
1980
1990
2000
$
All benefits under H.R. 2893
1970
$
$
$
$
10.07
12.15
13.24
4.65
cept Temporary Disability
7.54
1.45
1.56
1.65
1.75
6.90
7.20
7.30
7.40
Unemployment Compensation
$Workmen's Compensation.
2.95
3.12
3.30
3.50
3.74
_ _
...
...
...
Total
15.65
19.12
22.22
24.70
.80
.70
.60
Veterans' Benefits
5.00
6.00
7.00
6.00
6.00
Total Low Cost..
25.92
21.55
*"Cost and Financing of Social
ington, 1950, page 149.
$No satisfactory data available.
II.
Security,'
29.92
Brookings
31.30
Institntion,
isted
duction,
they are, the more will the em¬
ployer be constrained to disemploy
labor.
Only in the case of oldburden
beneficiaries and employers.
Em¬
bulk
of the
other
systematic
fits
tem¬
programs.
job
1960
1980
1970
1990
2000
$
All benefits under H.R. 2893
$
ex¬
7.16
_
__
10.91
14.69
18.27
20.60
2.18
cept Temporary Disability
Temporary Disability-
Compulsory Health Insurance.
Unemployment Compensation
£34
2.48
2.63
2.81
15.50
16.30
17.00
17.20
17.30
4.43
4.68
4.95
5.25
5.64
do
major insur. programs..
34.23
39.12
43.35
46.35
Public Assistance
1.50
1.20
1.00
.80
.60
Veterans'
5.00
6.00
10.00
9.00
8.00
Benefits
High Cost
35.77
our
They cannot be destroyed or even
reduced substantially without,
29.27
Total
41.43
50.12
53.15
concurrently, creating unemploy¬
ment because they are payment
for an indispensable function.
In
54.95
will
be
noted
could absorb
that
for
the
labor
force
in
and
the
economy
If
cost" estimate for 1960 is approxi¬
Allowing only for existing and
urgently proposed plans, one study
$22
billion.
The
"high
cost" estimate is $36 billion, not
far
below
budget
our
for
all
present Federal
activities of the
course,
estimates
a
this
certain
assume,
growth
Cost
in
of
the
growth
will
high
not
be
then
the
place,
as
as
high,
it
or
does
seem
from
as
this
vantage point.
indicates
that
compulsory
the
to
be
The
total
cost
of
programs will amount
to from 20 to 23%
borne
following
this analysis:
Percent of Covered
as
takes
relative burden 10 years from now
bulk
government.
These
is
of payroll, the
by employers.8
a
summary
of
costs about
employers do not come out
profits, but rather find their
into
the
wage-cost-price
of
way
Most economists would
either
or
aire
burdens
these
that
retarded
by
ab¬
wage
by price increases, or
combination of the two.
hour,
able
we
rise'in
steady
his
up
personal
Employment Security, is vigor¬
ously
promoting
relaxation
all
This will
along the line.
mean
a
further shift of incomes from the
working
The
elements
working.
penchant
society
of
to
look
to
only
prevalent than is commonly
at
sup¬
posed.10 Government bureaus have
generally understated and under¬
leaders
Labor
costs.
public and private
frequently ignore the
cost side completely.
Thus, L. S.
Buckmaster,
President
of
the
United Rubber, Cork, Linoleum
seeking
benefits,
mare
and Plastic Workers of America—
in comparing
CIO,
and
to
were
politician
missionaries
prom¬
their
for
We
(6)
subsidizing impor¬
our economy.
We
are
sectors of
tant
expanding the
are
of
scope
producing
revenue
non-
governmental
activities.
(7) With the excessive pressure
tax
revenue,
it remains an
for
question
open
whether
expand our job-making
at an adequate rate.
we
can
facilities
(8) The syndicalistic policies of
labor unions are to a consid¬
our
erable
degree
Their
expanding
the
on
will
antiproductive.
encroachments
freedom
thwart
of
management
production.
(9) Even if
get the kind of
we
economic expansion for which we
hope, there is little reason to be¬
lieve that governmental expendi¬
constitute
will
reduced
a
national income.
our
The
growth of the population and the
expansion of new regions will
entail heavy public outlays for :a
wide range of facilities and ser¬
vices.
Undoubtedly,
can finance a
basic protection
we
minimum layer of
for
people in need, but there can
be
doubt that
no
with
fronted
to
as
the
we
more
will be
con¬
testing
severe
priorities of public
"ex¬
penditures.
For these reasons,
Institution goes
so
the Brookings
far
as
to sugi-
gest that we abolish old-age and
survivors' insurance entirely, and
substitute
modest
a
fi¬
pension,
nanced
by a flat-rate income tax,
people in actual need. This
for
is
not
solution
attractive
an
to
people, but it is of some
significance that this research in¬
a
rubber tire
would
stitution
a
comprehensive
the total pressures upon
survey of
our
a
such
to
come
conclusion after
<
economy.
The basic characteristic
of "the
welfare state" is the separation of
income
individual's
the
economic contribution.
from
his
The theory
is that
people's income should not
or at least should not be
too closely tied, to their economic
value to society.
This means a
be
tied,
potential
destruction
of
company's private plan with OASI,
growing
said:
incentives—incentives for benefi¬
cost for
month under the private
"Significantly,
the $37 a
the
program amounts to almost 6%
of the employee's earnings, where¬
under the Federal program
the
cost of the $48 pension amounts
to only 2%."
This is an under¬
statement of costs by several hun¬
as
work
ciaries to
save,
bear the tax burden.
This
is
grim prospect.
We
sight of the fact,
a
not lose
should
however,
how, and
incentives.
The
automatic.
but
commendable outlook,
history will probably demon¬
strate it to be unrealistic for some
combination of the following rea¬
vitality, knOw-
for
almost defy the
But progress is not
imagination.
eral tax burden.
not
abun¬
potentials
economic progress
we
history, and asserts that when
get over this difficulty the
normal growth of the economy
will make bearable our present
social security program and gen¬
is
an
considerable range of
a
in
a
America
that
We still have
dance of resources,
Conclusions
incentives to
productive capacity for those who
Europe.
President Truman has repeated¬
This is
and
to invest and to expand our
The hurdles are great,
but not insurmountable.
of
But
than
far
importance
greater
social security
dynamic,
effectively
economic
society.
is
-
healthy,
a
functioning
This will mini~
mize the economic
hazards, reduce
the number of people
in need, and
sons:
maintain
output
the
most
benefits and ignore costs is more
estimated
if
Sunday dinner.
rea¬
The Department of
Labor, now housing the Bureau of
per
a
man-
the workers not
(1) We cannot be certain that
prewar rising
trend of per
capita production will be resumed.
the
(2) Our nostwar prosperity
unduly persistent in pressing wage
was
provide
the
only
foundation
on
which security can rest.
6 The
Hidden
Commerce
of
Payroll, Chamber
of
Washington, 1949,
USA,
50c.
increases, there is no inherent rea¬
son
5%
why financing
benefit
of
scale
on a
the
moderate
major
nomic hazards such as
be
done
through
these
23%
inflationary buoyancy.
(3)
a
care
Formalized
care
somewhat
of
people
social
of
these
more
in
security
needs
liberal,
or
on
a
some
to
"cold
war"
continue
is
(4)
That Western
almost
by
sub¬
Robert
J.
Committee
on
Ways
?
and
for
the
Means,
May
'
of. the
formulae
and
see:
American
.
presentation
of
benefit
state laws
Security,
Chamber of Com¬
USA, Washington, December,
1949, p. 30.
10 Fcr
a
little-known but important
standards
in
Economic
merce
of
(5) Governmental expenditures
virtually
for Expanded
of H. R. 6000,''
prepared
Business, Washington,
1949, p. 54.
9 For
a
tabular
liberalization
self-supporting is doubted
Myers,
1949.
8 Nation's
Europe will
of H. R. 6000, sfee
Cost Estimates
Liberalized Benefits
House
without
by many.
of
7 For cost estimates
"Actuarial
and
stantial let-up.
need.
may
plethora of liquid assets
The
certain
become
Anglo-Saxon society has always
taken
1%
by
and
payroll
levies.
1%
fed
eco¬
unemploy¬
ment, old age, illness, etc., cannot
take
payroll levies
upon
Were
2%
foregoing
"suitable"
gives
ly asserted his dislike for delicit
financing.
He argues, however,
that we are at a critical period
into the cost and price struc¬
ture of the industry. For this rea¬
son
it must be concluded that,
a
(4) Workmen's Compensation—The cost, because of expe¬
rience rating, varies widely:
as a rough average,
however, this protection costs
(5) Cash Sickness Insurance—Our limited experience sug¬
gests that this program costs at least—
(More, if cash maternity benefits are provided.)
who
by payroll levies must find their
way
increases
would cost ip the United States.
Certainly statements
|
by proponents cannot be taken as a guide. However,
foreign experience and some domestic studies suggest
that such a system could not operate on less than
(3) Unemployment Compensation—More than 12 years of
of experience indicate that this type of protection
pro¬
undoubtedly
part of these payroll
as
output of the
by and large, these
them
tures
liberalizing bene¬
dred percent.
sorbed
14%
test still
high-cost producers (marginal) is
required to meet the total demand
for the product or service, the in¬
creased labor costs as expressed
say
Program—
low-cost
and
former
Insofar
costs.
structure.
Payroll
(1) Old-Age and Survivors' Insurance — Under existing
benefit provisions cost will come to 6 to 8% of pay¬
roll.
Pending proposals to increase benefits and to
add to disability protection, along with other pro¬
posed liberalizations, will more than double these
figures. So—and it's a fair estimate—let's say
(2) Socialized Medicine—No one knows what a system
Total of the
The
ducers.
following major hazards: old age,
temporary disability, compulsory
health insurance, unemployment
compensation,
public
assistance
and veterans' benefits, the "low
mately
line of business there
every
high-cost
are
$No satisfactory data available.
It
insur¬
perform an essential function
economy and are a cost.
in
^Workmen's Compensation.
Total
social
for
is strong.
those not
of
The real
worker
for
sons
premiums or taxes is com¬
plicated and uncertain. The levies
upon workers undoubtedly for the
most part rest on workers.
The
levies upon the employers initi¬
ally tend to drain the employer's
working capital and reduce prof¬
its.
While profits are generally
defined as a residual income, they
High-Cost Estimates
2.7%.
and
the
to
show that em¬
finance
three-
incidence
ex¬
form
relaxing the qualifying
standards
are
persistent.
These
programs began with the idea of
compensating
short-run
unem¬
ployment of 13-15 weeks. Today,
22 states compensate five months
or
longer, and a recent bill in¬
troduced in Congress would ex¬
tend benefits for two years.9
The
pressure for financing strike bene¬
fits and for payment of benefits
income groups.
The
of
that
constituents, he would
ise
share of
Relief needs are
financed by general taxation rest¬
ing heavily on business and upper
Wash-
has
program
substantial
Demands
of the cost of all
more
or
This
in
lies in the future.
finance
unemployment
compensation; they finance work¬
men's compensation.
Under most
voluntary programs, the employ¬
the
unemploy¬
compensation (1.5% of pay¬
1948) to date is no proof
in
mum
ployers
finance
of
high employment. Several states
are
already forced to raise the
tax rates, New York to the maxi¬
and survivors' insurance is the
divided equally between
age
cost
only
during the post-depression decade
of unprecedented prosperity and
higher
the
and
labor,
modest
continue.
ance
Program—
For
his
programs
more
they are a penalty on job-making.
They are a tax on a factor of pro¬
by the workers.
32.75
of these
that this favorable condition will
ment
compulsory and voluntary insur¬
ances.
The remainder is paid for
.50
programs.
all
contributions upon employers. But
fourths
26.25
.90
major insur.
reason
likely to be
The
r
Public Assistance-
of
roll
probably would
ployers
today
___
...
__
relaxation
a
disposition in
this country to levy a very high
proportion of premiums and tax
a
insurance, hospital insurance,
and, to some extent, surgical in¬
surance to their employees with¬
out cost to them. A close analysis
1.87
6.60
_
Contributions
life
Compulsory Health Insurance._
Temporary Disability
for
said
once
found that he had cannibals among
the
Many employers provide pensions,
ex¬
are
costly over
long run than is initially or
commonly assumed.
Incidence of Payroll
There has been
or
1960
resources
other
administration.
standards and qualifications.
disability
costs
either
through wage continuation plans
Low-Cost Estimates
I.
Program—
to
our
Furthermore, because these for¬
social security programs set
up some presumption as a matter
ox ngnc in lavor of
replacing wage
losses or providing other benefits,
there is a constant tendency in a
porary
(In billions of dollars)
and
ad¬
to
of
mal
are
ers
Veterans' Benefits, 1960-2000*
and
diverted
programs.
The
pushed with much force. H./L.
Mencken, the sage from Baltimore,
human
of the other
some
expensive
thus part
an
on
are
minister,
security or not.
Compulsory health insurance, or
"free" medicine, will lead to more
expenditures on health.
But, in
part, this program would take the
place of what is now and would
be expended by private individ¬
uals without health insurance. The
extravagant,
just embarked on public housing.
Federal aid to education is being
say,
programs
social
have
Thursday, February 23, 1950
Some of the social security
level.
on
that
based
are
It
financed.
is
burdens
Aspects of Social Security
large expansion of
great deal
a
be noted that to some extent these
we
while the cost of living has risen
about 69%.
But, in addition, a
it
how
CHRONICLE
absorb this bur¬
we can
will depend
den
financial and Economic
FINANCIAL
&
every
variety
are
pressing for expansion at Federal,
State, and local levels.
We have
critique of the 1949 Steel Industry Board
decision
see:
"Some Anomalies in the
Steel
Board's Report," by T. R. Isermari,
Volume 171
Number 4884
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
(831)
Continued
from
might be driven to the banks for
holder
than
and the small stock¬
whose
that
notice
rate
and
An
tax
gets
increase
income
tax
this
dividual
tax
refund.
rate
taxation
is also
corporation
increase
an
in
undistributed profits tax. Yet
undistributed profits constitute a
for expanding
and mod¬
ernizing industry. It is also a re¬
for
increasing business
during
18,
tributed
1943)
the
and
as
the
to
corporation
The
and
to
private
year
tax
come
were
It
dries
tax
most
foreign
tax
countries,
is
either
non-existent and taxes
dividends,
on
profits
tries
the
low
or
undistributed
not taxed. Some coun¬
are
even
prohibit
paying
un¬
keep
the
to
accounting
have
a
Who
the
pays
and
for expansion.
reserve
tax
come
conservative
corporation
but
the
Studies made for
in¬
com¬
panies under varying corporation
tax
rates
come
show
sales
on
that
the
was
fairly constant.
In other words, the tax was con¬
sidered
item of cost, and like all
an
costs, passed
The
to the
on
corporation
sales
tax
in
making
consumer.
income
disguise.
essential
tax
is
a
Companies
goods,
like
shirts and shoes, would under the
Treasury proposal
the tax
pass
on
to the poorest while consumers in
the
highest
income
brackets
would
obtain
"relief"
taxes.
Why
excise
sales tax
open
the
crease
economies
rise
an
luxuries and in¬
on
Pressure
arises
tax is open, not
A
decrease
disguised sales tax
necessities?
.
luxury
on
in
for
when
on
budget
the
sales
disguised.
the
come
rates,
As
groups.
taxes
come
which
constitute
the
on
lowest
in¬
corporation
in¬
increased, utilities
are
should be allowed to adjust their
rate schedules so as to shift the
tax to the consumer as
they now
tjass on local taxes, either by add¬
ing a percentange to the total bill
or
as
merely acts
agent
as
revenue
a
between
the
collect¬
consumer
shipper and the Treasury.
or
by
the
as
true
a
United
was
sales
States
tax
Supreme
Court when it ruled that
tax
a
on
a,public utility should be deducted
in
figuring its net return from
rates charged to the cosumer. See
Galveston
Electric
veston
U.
If
of
258
the
S.
customer
tax
is
(1922).
income
on
not
but
Gal¬
v.
388, 399
increased
corporations
the
Co.
shifted
falls
on
to
the
stockholder, share prices will fall
and
issues
new
will-be
common
expansion
necessary
both
of
difficult to sell.
for
of
stock
Thus the
industry,
and defense, will
be hampered. Is not this too
high
a price to
pay for a small increase
in revenue?
peace
tax
on
is
When
mal
on
the
was
original
rate
of
tax
dividends and
come.
not pay
income
passed in 1913,
Therefore,
was
the
1%
"ability
"ability to em¬
than
rate
British
does
stockholder.
the
small
Uniting
the normal tax which
surtax
income
net
ally
pays
rata
share
of
of
the
of
his
pro
in¬
corporate
come.
come
brackets
the
receipts
1919
the
were
and
in¬
The burden
holder
the small stock¬
on
budget estimates and the
the
that actual receipts ex¬
debt
European
from
$26
Several of
countries
World War I had
to
cut
was
$16 billion.
after
similar experi¬
a
of lowering income tax rates
collecting more revenue due
the
stimulation
of
business.
limits, rate reductions may
increase total tax receipts.
W. L. Crum in the
sor
Journal
of
Capital Gains Tax
Capital
gain
income.
1950.
ruary,
based
It
and
Feb¬
analysis
His
for
was
by
—
corporations,
is
higher than the tax rate
1940
—
derived
from other
sources.
by
taxpayers
This
inequity
is most striking at very low levels
of income. In the range from zero
$10,000, the rate of federal
is several times, as much
twenty times, the tax rate
from other
on
increase
taxes
would
-in'
in¬
accord¬
sources,
ing to Professor Crum. The
posed
as
pro¬
corporation
aggravate
this
in¬
high corporation
discourages
stock
income
financing
tax
and
thus checks the
expansion of in¬
dustry, for risk capital is needed
cushion
a
for
bonds.
The
greater the cushion, the safer the
bonds.
If
too
are
yields
on
old securities
high due to heavy taxes,
buyers will not buy
prospective
lic
risk securities. Where
utility
return to
of 6%
commission
5%,
a
pub¬
limits
the
6%, stock yields
or
to 7% deter
Again,
tional
new
financing.
stockholders,
educa¬
as
and
philanthropic
tions, which
are
institu¬
their incomes, actually pay the
tax through the corporation.
A
rising corporation income tax
depresses the price of shares and
thus reduces the inheritance tax.
When share prices are thus re¬
duced, yields are very high com¬
pared to government bonds.
But
in England where the
corporation
tax is a
withholding tax on the
stockholder, stock prices did
much
as
stocks
are
bonds than
and
closer
in
the
the
to
yields
not
on
government
The
United
States.
higher the corporation in¬
tax, the greater is the in¬
Heavy debt is
sions.
must be
danger in depres¬
Besides, because the tax
a
paid in cash, corporations
.
1938
+
12
1937
+
41
1936
+ 171
The
turns
above
over
89
—
—47
—30
77
—
—19
36
—
+ 135
table
7
—
+ 23
shows
the
re¬
period of prosperity
and depression.
The average re¬
a
ceipts for most
and
the
for
average
with
1946-1948,
not
yet
when the markets
returns
for
published,
were
declining.
next
recession.
Of
if the law were ethical and
equitable and treated losses and
gains alike, instead of limiting de¬
duction
of
losses,
the
figures
would prove that the
capital gains
unproductive.
It always
expansion,
deters investment and
and is
deceptive.
unequal
Over
Even under the
treatment
losses, little:
of
capital
gains
period
losses
capital
gains
is
revenue
long
a
offset
and
and
received.
of
years,
almost
for
short
all
pe¬
riods, capital losses greatly exceed
capital gains.
The
distinction
long
short term gains is
arbitrary
meaningless. By waiting one
day,
a
taxpayer
in
the
high
and
can
his
cut
capital gains
tax from 80% to 25%.
That is
fiscal nonsense.
The capital gains
tax does not reach the rich.
Per¬
sons in the high income
brackets
take
practically
gains.
short
no
term
Only the taxpayer in low
income brackets
can
afford
to
do
so.
On
not
high
sell.
duce
A
but
low
"As
to
holders
the
produces
flat
revenue.
stated,
rates,
Therefore,
fluctuates
nue.
tax
the
of
tax
tax.
is
The
tax
no
would
Senator
capital
do
market
reve¬
pro¬
Connally
gains and
in
following
analyzed
in
quired for
the
securities
until
death
in
money
starting
instead
fields.
new
the
from
Tax
a
has
$110,000
taxable
a
would
estate
if
changes in the
regarding the
rates
and
Gains—Losses.
receipts.
receipts.
tax
from
other
We should
tal
gains
income.
receipts.
try for
one
experiment of reducing
tax
to
the
year
the
capi¬
10% after three
months holding and record the
of
sults in
be
he
re¬
meaningful appraisal
a
Deductions
Net
subject to a
paid a 25%
capital gains tax, shifted into new
securities, and then died, for his
tax
I
as
again
are
Total tax
inheritance tax is 25% at
$110,000
of taxable estate.
Thus, an invest¬
who
ceiling.
such
Tax receipts.
Long-term Gains—Losses.
beginning grows greatly, then the
25% capital gains tax is virtually
25% of the value of the estate. The
or
law
tax
data
1942
Short-term
modest
a
in¬
short-term
holding period.
of
If
a
it
Years 1948 to 1950—
a
the estate of the
taxpayer.
Therefore, investors tend to hold
business
low
brackets, the gains taken
generaly
months for the 50%
on
risking
the
brackets does not have to wait six
risk
It
take
category, for the taxpayer in these
markets.
movement
were
in
tries.
surely
be
transfer
rise.
tax
There
great
a
re¬
Revenue would
revenue.
undoubtedly
first
would
increase
receipts,
in
increase
in
income tax receipts from brokers,
increase in the number of new is¬
estate would have to pay another
inheritance tax.
25%
and
sues
The
country is in the midst of
inflation. All prices have risen
ket for
reopening of the
a
new
mar¬
stocks.
Midwest Exch. Members
As real estate and shares
rise in value
and
are
sold, the in¬
crease
represents a paper profit.
Taxing this increase at 25% as a
tive
capital gain is unsound and unjust.
First the government
depreciates
the election to
dollar
to
and
then
reflect
the
when
CHICAGO,
Stock
the
of
Exchange
has
Execu¬
Midwest
announced
membership of the
following:
values
decrease,
ILL. —The
Committee
Richard
the
J.
Buck, R. J. Buck &
Co., New York, N. Y.; W. Power
W. P. Clancey & Co.,
Cincinnati, Ohio; Cecil J. JDowns,
government proceeds to expropri¬
! Clancey,
ate part of the fictitious increase
;
j Chicago, 111.; Thomas
Graham, The
Bankers Bond Co., Louisville, Ky.;
| Paul B. Hanrahan, Hanrahan &
Co., Worcester, Mass,; John B»
exposed.
In several countries of !
Joyce, John B. Joyce & Co., CoEurope, the government permit¬
lumbus, Ohio; Burney J. Simpson,
ted rewriting the income account
Webber-Simpson Co., Chicago, 111.;
tion.
In countries where the
currency
fell very greatly, the real evil was
I
■
.
1
the balance sheet in terms of
and
gold instead of depreciated paper
currency and basing its taxes on
values.
tax
Laborite
and
There
in
is
Canada
and
capital
no
or
Y.; John E.
Welsh, M. W. Welsh & Co., InC.,
Vincennes, Ind.
in
even
regimented
William F. Van Deventer, Laidlaw
& Co., New York, N.
Britain
To Be NYSE Members
most other countries.
On
the
record
rate
capital
shows
gains
that
the
tax,
lower
the
On March
the
of
of
ernors
tax, the greater are the
gains realized and the greater the
tax receipts.
The higher the tax
fer
rate, the less is the gain realized
John F.
and
continue
the
proved
less
are
the
receipts.
I
this
2
the
the
Board
New
of Gov-
York
Stock
Exchange will consider the trans¬
of
of
the
the
Exchange membership
late
Carl
F.
Bunn, Jr.
as
R.
Hassold
to
Mr. Bunn will
partner of Bioren &
a
Co., Philadelphia.
conclusively
from
Treasury data, available
in 1942, by comparing the
heavy
transfer of the
volume
ship
abundant
of
short-term
capital
The Board will also consider the
Exchange member¬
William M. Walther to
of
gains taken in various low income
Maurice F. Summers
on
with
the
insignificant
long-term gains taken. But in the
highest
brackets,
capital
gains
date.
Mr.
it
stood
will
groups,
Summers
act
as
the
is
same
under¬
individual
an
floor broker.
were
practically nil at high shortterm rates and very substantial at
low long-term rates.
Comparing the capital gains t*x
at the peak of 1936 with the
peak
of 1945 (the latest
figures avail¬
able),
between
and
bracket
prices
tax
come
to
Similarly,
that
1942
gains
course,
is
low
stock
rise,
gain.
show
of the effect of the
real
A true picture of
capital gains re¬
ceipts will not be available until
tax
at
stabilize
wild
afford
capital from mature situations to
new
enterprises and new indus¬
entire
the
the
the
encourage
a
the
prevents
minus
years were
period was insignificant. The re¬
turns for 1942-1945
during the ris¬
ing market must be analyzed in
after
would
would
check
cannot
short-term
brief
capital
gains
tax
makes investors hold rather than
sell, it freezes funds, which thus
rise
Average
93
—
4
exempt from tax
on
fall
+
and
high
brackets
were
resulting from currency deprecia¬
7
conjunction
equity.
as
lative
rate
buying
thus
Because
the
r
,
86
1939
period
but snort-term gains
probably de¬
A taxpayer in the
because the value of the dollar has
of
source
Curau-
tax
stockholders' corporate net in¬
a
($ Million)
1941
income
as
low
gains
the
creased.
violently than
capital
taking,
declined.
For example, the
receipts from
capital gains were as follows:
stockholders,
sharply
year may
capital losses for
Actual
A
holding
an
revenue.
produced
by
one
How¬
It is undependable
unpredictable
Year
A
minus.
a
followed by
"Quarterly
the tax returns filed
on
be
than $750 to more than $5 million.
At all levels of income, the rate
of tax on income for
to
essentially not
regular and
decline, but it
is
may
becomes
never
millions of taxpayers at 42 levels
of
income
in
ranges from
less
on
is
Income
recurrent.
several years.
Economics"
before
tax
in
demand
records.
The
figures
probably show that in the
high income tax brackets, longterm gains taken, increased
greatly
rise and, therefore,
subsequent decline. The
taxable.
50%
IV
by Profes¬
described
was
did
working
should
Treasury
market's
moves more
They
would
high capital gains tax deters tak¬
ing profit, it tends to exaggerate
the
Congressional
are
the
fac.s brought up-to-date
from the
difficult and expensive feature of
the tax law to administer. Because
the
present,
dark.
a
also
further.
At
committees
most
duplicate inheritance
ceeded
to
is the
in¬
so
national
It
capital gains tax is a form
of capital levy or an
advance or
creased
billion
nuisance.
re¬
taxes
months to three months
should in¬
the yield still
crease
admin¬
an
The
higher in¬
of
more
1929,
steadily
volume
ever, capital gain in
centive to finance by bonds in¬
stead of stock, because interest on
bonds is
a
deductible
expense.
was
tax
in
rates
shows
reduced, the
are
of
tax
duced,
experience
Between
creases.
a
$2,000 actu¬
50%
over
both
paid and deducted at
source.
Dividends continued
theory that the
receipts rises with
But
volume
income
the
come
corporate in¬
dividends
did
total
and
the high corporate
reason of
istrative
encourage
the
on
volume of tax
ence
nor¬
on
considered
the
tax
a
The
•
law
tax is based
corporate income tax and the in¬
dividual
income
tax,
a
stock¬
new
The corporation income tax
thus revealed
A
corporations
a
surcharge to the pre¬
scribed rates. The utility company
ing
of
funds
producer but often
and
Within
come
even
prior charge.
a
individual
present
again
tax on utilities,
electric, gas
railroads, will cause a rise in
burden
The
in the United States
pays a much
come
consumer
as
corporation's
Individual Income Tax
higher
in¬
come
or
a
By
on
corporation
enterprise.
employment.
to pay" is also the
in¬
net
of
source
nue
profit
when
higher rate than if
holder in the United States with
consumer?
series of
a
of
It taxes the little
a
the
up
income
on
risks
income tax, the small stockholder
out
liberal dividends and
require
distributed profits so as to
the
ploy."
levied
are
but
An in¬
partner in the business.
a
private
payable.
In
govern¬
consumer.
increases
buying stocks.
he
the
•
the
plus the graduated individual in¬
period; otherwise the tax becomes
corporation
taxable income
that if tax rates
of
five
enterprise.
in the corporate income tax
be
a
the
the rates.
stockholder at
within
deductible from
it
premium to hold." The capi¬
tal gains tax is not a
steady reve¬
it
bonds, ought to be
on
make
a
like interest
were
complete double
taken by
money
crease
enterprise.
should
we
market
on corporate
dividends are a
on
spent in expansion or the tax due
could be impounded
by the cor¬
poration in a separate reserve, to
spent
when
ering costs to the
■
state
ing
To offset the adverse effects of
the corporate income
tax, the divi¬
dends
on
the
preferred stocks,
ment would be available for low¬
an
when
of
m
deterrent
incentive to private employment
during depressions. The tax pre¬
viously paid could either be re¬
funded
double
dividends
.
favor
tax and their bondholders
pay no
income tax on their bond interest.
even
1936
In
tax
particularly true of utility
companies
where
state-owned
utilities pay no Federal income
High rates of tax
income
undis¬
profits tax be used
began.
Thus
in
taxation.
depressions.
that
it.
to deliberate and
Therefore, the proposal was made
by the London "Economist" (Sep¬
tember
rate
income
This is
made taxable under normal rates,
the same income became subject
Source
serve
tax
above
rose
stockholders'
the
employment
and
though the corporate income tax
the
a
in
income
corporation
operates against private enterprise
exempt only from the normal in¬
liability is less
presents
attractive to sell, instead of offer¬
The
Treasury Tax ProposalsAnalysis and Suggestions
source
losses,
financing to replenish cash.
at the
39
9
page
over
the
400%,
million.
and
receipts
range
from $171 to
or
Before
Means
predicted
the
House
Committee
a
of
increased
rise
$200
in
to
by
$721
Ways
in
1942
I
With
bers of
were
now
firm
in
as
effect.
is
in rate
for
this
rose
only 1.6
times, from 15% to 25%.
Was it
the shortening of the period
not
from 18 months to six months?
If so, a further reduction from six
with
B.
the
Representing Courts
(Special to The Financial Chronicle)
GREENVILLE,
W.
Swope
the
rise
associated
Ex¬
Irvin
registered representative
office, 1441 Broad¬
way, New York City.
my
The increase cannot be due to the
that
in its midtown
& Co. of
quent statistics even exceeded my
forecast.
What
was
the cause?
mem¬
Stock
as a
The
Treasury spokesman thought
estimate "extravagant." Subse¬
York
announce
aver¬
eliminated
against 18 months then
New
Blum
age for the decade 1931-40) if the
holding period
the
change,
receipts to a
$600 million
(compared with $30 million
Zuckerman, Smith
Zuckerman, Smith & Co.,
N. C.—Darrell
is representing Courts
Atlanta, Ga., members of
New York
Stock
Exchange.
With Westheimer & Co.
CINCINNATI,
Dennis is
now
OHIO—Paul
bers
of
the
C.
with Westheimer &
Co., 322-326 Walnut Street,
New
York
cinnati Stock Exchanges.
and
mem¬
Cin¬
>
40
THE
(832)
Continued
from first
As
workers, farmers and businessmen.'
Now let
often afflicted with a "meinfluential elements in the party
some
be rather proud although, of course,
the
time
that the New Deal
policies
or
or,
the notion
which take direct issue with
work of Presidents Roosevelt and Truman
by definition mere obstruction¬
the President puts it, an effort to return
as
days of McKinley. Such a notion is not fanciful
sense that no one, or almost no one, entertains
to the
in the
essence of virtually all
politicians by whom he has
surrounded himself have to say. It was the burden
it. On the contrary, it
President
the
and
is the
the
Hundred
conspicuous
even
sively
President had .to
say 1
bit
the
economy
responded to those vigorous measures.
Income
began to
grow;
confidence returned, business ac¬
tivity mounted. This was the response of the economy to
our
farm and labor and business programs—our programs
for
resource
development and public works and the build¬
ing of homes.
"As this miracle of recovery unfolded, what was the
attitude of the Republican party?
"In 1934, the Republican National Committee issued
a policy statement. And in that statement
they said:
"
in
'American institutions and American civilization
greater danger today than at
dation of the
"In
Republic.'
any
are
time since the foun¬
field of
their
policy statement issued 10 days ago, the
Republican National Committee declared: 'The major do¬
mestic issue today is liberty against socialism.
.
Basic
American principles'—they said—'are threatened by the
'Administration^ program.
.'
"It's the same old story—the same old words and
music—the same empty and futile attempt to scare the
American people. ..."
,
,
HAZEL ZIMMERMAN
When
Republicans wholly destructive
and unworthy of trust for the reason that they (or
of them)
some
thing.
For
are
our
on
record
a
opposing this sort of
part, incidentally,
could have said that all of the
such
as
we
only wish he
Republicans had taken
stand, but such considerations aside, let
us
see
what the President really did say:
"Today, we are proposing further development of our
resources, further strengthening of our economy, new
for the welfare of the
people. And what do we
hear? The same old story. It is all repeated in that latest
statement of the Republican National Committee:
'This program'—they said, and they were talking
about the program of the Democratic party— 'this pro¬
measures
"
25
when the current
price level and the
things in the past
to
are
market
from
from
$2.50
The
has
company
An
no
25
excellent
financial
position
is consistently maintained.
has
It
dividends continu¬
paid
ously
for
world
wars
62
through
years
and
two
major depres¬
a
sion.
If
investor
an
West
Point
had
purchased
Manufacturing
stock
at the very
ket
peak of the stock mar¬
in 1929, and readers will re¬
call that that
was
no
time to buy
stocks, he would have paid $14,000 for 100 shares at $140 a share.
Without
additional invest¬
today have 2,000
any
would
he
ment
shares worth about $36 a
the
1939)
Hazel Zimmerman
income
at
bought
times
have
could
stock
Point
advantageous
the peak of
more
than
been
during
select that period as a
starting point for obvious reasons.
How
come
the
2,000 shares?
There was a five for one split in
I
1937 and
In
the
a
four for
one
meantime,
in 1946.
1930 to
inclusive, the investor would have
received $39,800 in cash dividends,
making a total gain of $97,800.
The $39,800 in cash dividends,
divided
when
the
by
20
years
(1930 through 1949) equals $1,990
year,
turn of
The
or
an
average
yearly
re¬
14.20%.
same
original
100-share
received
an
the
would
have
first of this month.
West
ended
Point
its
Manufacturing
fiscal
year
Aug.
Co.
Total Assets of—.
.
Working Capital of
—$48,587,000
proper
Equipment at a cost
$35 487,000 was carried at a de¬
preciated value of
only $15,903,.-
has
World
War,
world
met
agreed
anniversary of the
nations
the
in
of
the
Washington
and
Life
in my career
portfolios employ
some of the best brains iq the fi¬
nancial field for the selection and
politan Life Insurance Company,
America's largest investor, is a
shows, out of an investment in
a
the
World
the
come
of
War,
and
tures
pria-
basis for many
of
but
happy about
the
unmis¬
takable fact exists that such large-
expenditures
mean
of
the
the
76 years,
Indians
burned
like
Boston
why
I
guaranteed,
husband
could
a
but
afford,
widow.
Her first
"I want 200 shares of
Albany Guaranteed, and
thing else. I have seen my sisterin-law
cashing
her
dividend
checks from Boston & Albany for
years
and I always said
if I ever
This
had my own money,
without
aircraft
manufacturing industry and allied
companies.
Cen¬
guaranteeds that
that is what I
activity would have." What a joy to find
a
new
client agreeing with you
types of business.
true
York
New
please do not try to suggest any¬
(
There is little to be
especially
reason
Albany
Boston &
George Weiss
previous
peacetime pe-
for certain
since
words were,
all
situation,
generations. I call
of
one
paid dividends for
ever
here
riods.
this
mind
not suitable to
dwarf the fig¬
ures
.
other favorable factors, in¬
has been on a guaranteed
especially
for widows, was summed up for
me
by a new client sent to me
from San Diego the other day. She
was
recently widowed and had
some $50,000 left her in securities,
many of them in speculations that
expendi-
appro
.
.
The
Second
the
in¬
are
preferreds and guaran¬
Rails
possibly because,
teed
&
of
hostilities
dollars
in
among
or
ces-
n
$100 million, all but
over
thousand
few
Buffalo!
almost
tio
In its published
portfolio holdings
example.
good
years
after
s a
these
supervision of their funds. Metro¬
has
program.
Today,
early
them
to
tral's other senior
armaments
of
Com¬
Insurance
Fire
and
portfolio ownership of the
guaranteed Rail stocks attracted
pany
to
upon
limitation
a
Albany,
run.
stocks of
WEISS
following the First
23,554,000
Plant and
&
statement of its
On the third
armistice
scale
12,694,000
this guarantee
almost 50 more years yet to
vested
is
000.
recom¬
amount
in
the
of any investment
GEORGE
in
Cash & Gov't Securities
of
I
in
Partner, Bache & Co., N. Y. City
27,
1949 with
of
and
inclusion
tions for arms
additional $1,500 in dividends
holder
prior
prompt
it
five
1949,
to
as
and
Central
York
New
tween
The stock is traded
over-the-counter
equity part
portfolio.
more
then it be¬
.
.
without competition, the
like best!
This is the
of
the oldest guaranteed rail stocks
carrying
New
York Central's
guarantee of dividend payments
for 100 years.
By the terms of the
lease, drawn some 50 years ago
by Commodore Vanderbilt,
be¬
because
proportionate
.
security I
me
for
of
in
record of Boston & Albany, one
Boston
20 years and because of
company's current position I
believe
there
are
many
good
it
in¬
an
returned
than its total cost
lowing
mend
(since
225 shares has
the
ahead.
.
ten
past
vestment
had reached ma¬
turity.
I have just given a pic¬
ture of what happened in the fol¬
years
.
.
over
years
it
say
years
comes,
such
were
to
one
share or
While it is true that West
$72,000.
1929
to
for
those
of
when,
of such
West Point's achievements
funded
no
to
share,
ruption
each
taken into account.
preferred stock.
$2
a
without inter¬
Securities I Like Best
debt and
quarter,
every
2
page
panics,
dividend
a
Opposition to such "programs" as these seems to us
be per se the quintessence of constructive statesmanship.
Continued
a
it is far ahead of where
you bought it;
and it has paid
and today
significance
course
a
through
years,
several
and
war
lived : with
have
you
for
security
programs.
cites about national income lose much of
a
And he finds the
Angeles, Calif.
Los
The President, instead of
poking fund at the Republicans, had better start ex¬
plaining what the American people (other than
farmers, of course) have gotten or will get for these
astronomical sums of money. Federal expenditpres
and taxes are mountainous, and whatever any figures
may show, business is being obliged to work out its
own salvation in an atmosphere definitely deleterious
to its progress. The figures the President so proudly
,
.
jet controls.
today before Congress to add another $2 billion
price support
1929,
...
indus¬
engines and recently is becom¬
of
"In
1933, this country faced some of the greatest
problems in its history—the problems of providing food
and work for millions of jobless persons and their families,
of saving millions of farms and homes from foreclosure,
of restoring a banking system that had collapsed, of placing
the entire economy on the way to recovery.
"The Democratic party rolled up its sleeves and went
to work. It took steps to provide relief and jobs, to save
farms and homes, to restore banks and businesses. Bit by
exten¬
automobile
the
by
is
used
ing increasingly important in the
that be in the Democratic
lieve. Here is in part what the
choke
As the name implies. Pierce
also makes governors for all types
staggering figure. Washington dispatches esti¬
by the end of this crop year, the national
Government will have "invested" some $6.3 billion
in
is
the
on
bread-and-
The
mate that
Taft-Hartley Act was designed to amend; the
largesse to the farmers running into many billions of dol¬
lars; the various laws through which the banking system
of the country has become hardly more than a door mat
for the Treasury, as Senator Glass was fond of saying; and
all the rest of kindred legislation—to suggest that any of
this vast mess of paternalism, statism, semi-socialism, and
anti-Americanism be repealed or replaced is now day by
day made to appear "reactionary," backward-looking,
almost incredibly out of touch with the world in which
we
live today, indeed not very far from treason itself.
And thoughtful persons have reason to be almost daily
astounded how successful this type of propaganda appears
to be among large segments of the American people.
compa¬
field
this
traded
try.
to that
which the
at the half-a-million-dollar dinner last week:
owned
-
in
Curb.
automatic
the
Commodity Credit Corporation, and another measure
is
the
butter business of this company
do know is that funds in the amount
we
publicly
Governor,
New York
$4.75 billion have been appropriated to the
some
in
more
This will apply to the
important
large a mountain all the potatoes and eggs that have
been destroyed would make if placed in one pile!
What
question that is what the powers
party would have us be¬
the
nies
Pierce
how
Social security and all that it implies; the set of laws
surrounding the Securities Acts of 1933 and 1934 as well
as those Acts themselves; the labor pampering legislation
no
rather
the word "jet"
and
more
jet plane and perhaps as well to
the self-propelled projectile.
One
boastful.
few
be
headlines.
facts about that
miraculous farm program. Word comes from Washington
about the Government offering potatoes at one cent per
hundred pounds, potatoes which it originally bought from
the farmers at $2.15 per hundred pounds. But not even
that much is being obtained for the dried milk and eggs
being given away wholesale--at the same time that the
prices of these products are being "supported" by the
Federal Government. It would be interesting to know
Strange Ideas
be
As time goes on,
will
of
of
can
"
so
of the Rooseveltian song.
There
Sperry
of this magical program about which the
a
American Aviation
North
independent look at the rec¬
President is
Take
the Fair Deal have been or are
or
and their associates is
ism,
challenge
do
we
forward-looking and that any set of
programs
or
most of the
an
Potatoes at 1 Cent Per
same
constructive
take
us
ord of parts
they resent
the term itself.
At
Boeing
and whose proposals are
wholly out of accord with the true interests and real
uncertain of itself, and all too
appear to
orders:/
the true
foundation of American progress,
wishes of the
their share of record
ceive at least
of persons
gram is dictated by a small but powerful group
who believe in socialism, who have no concept of
page
We See It
too-ism" of which
Thursday, February 23, 1950
CHRONICLE
FINANCIAL
&
COMMERCIAL
In this category, the
following should continue to re¬
From
a
word on your part.
the ledger side,
let's take
quick look at Boston & Albany.
Debt maturities coming due in the
a
next
ten-year
period
are
com-
Volume 171
Number 4884
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
DAILY WHOLESALE COMMODITY PRICE
INDEX SHOWS
MILD ADVANCE
in
1952, $1,368,000 31/2% mortgage
bonds, or a total of $2,010,000.
Against which Boston & Albany
the
following:
The State of Trade and
In
consumer goods are
jumping back on the conversion
merry-go-round, too. These include appliance and farm implement
agreed
to
purchase
But the wild
element that
with conversion in
came
market three years ago is not present this week.
is on an even
keel, and the scramble for
Ingots
are
conversion market.
$9,602,041.
"The Iron Age," who has just
eye-witness inspection of U. S. Steel's sensa¬
discovery in Venezuela, reported that the fabulous ore
bodies in Venezuela and Quebec-Labrador are vital to American
security. They will be used to augment and conserve domestic
Tom
pointed
out
"Chronicle"
in
good
cash
in
shape
hand.
on
the
is
ago,
$50
tional
million
ore
Free Treasury as¬
sets sufficient to
lion
in
months
with
was
as
article
an
some
secure
loan, if needed, and
current
of
to
run
of
American
that the
the
United
Iron
a
will not
States
third world
Steel
and
be
dependent
on
Institute
operating rate of steel companies
wheat belt where moisture had
with most jobbers and bakers
capacity for the
Buying of soft wheat flours
little
a
having 93%
entire
decline of 1.9 points from last week's rate of
Operations
have
fallen
steadily
since
the
Jan.
16
steel
to
„
1,729,000 tons
93.9% and production amounted to 1,790,000 tons; a year ago it
stood at 100.3% and 1,849,000 tons, and for the average week in
1940, highest prewar year, at 1.281,210 tons.
next ten years, such as
depreciation of road prop¬
erty
of equipment
of shop
property,
runs
to
$29,435,000,
such
charges,
as
debt
which
take
.
cash,
due
maturities
will
be
It
All
honored
In
fairly active trading both futures and spot quotations advanced
than 50 points to reach new
high ground for the season.
Early strength reflected mill and export
price-fixing, and the en¬
couraging outlook for future exports.
Other bullish influences included
reports that the CCC
has already disposed of its stock of
low-grade cotton and that
it will sell 1948 pooled cotton at
105% of the current loan price
plus full carrying charges.
quality
with
share) income
levels,
tral's Boston
priced,
for
and
widows
New
the
generous
on
a
anteed-basis
of
its
and
in
guar-
past
decrease
of
43,683
a
mated
ume
high.
divisions
The total output for the current week
and
and
22,898 trucks built
South
of
J.
La
the
Stock
O'Brien
Salle
New
&
York
With Hornblower & Weeks
(Special to The Financial Chronicle)
O'Brien
with
has
become
Hornblower
South
La
Charles
Salle
&
L.
associated
Weeks,
Street.
previously with Doyle,
& Co., Inc.
He
134
and
5,717
rose
to
218
in
the
week
preceding week, Dun & Bradstreet,
Although more casualties occurred than in the com¬
parable weeks of 1949 and 1948 when 180 and 170 concerns failed,
the
total
was
26%
lower
than
the
prewar
total
of
293
in
the
PORTLAND,
has
ME.
—
become
Earl
with Bowers &
Co., Bank of Com¬
merce
Building, members of the
Boston Stock Exchange.
'
Small
ago.
casualties
with
liabilities
as
Manufacturing and construction
under
numerous
as
$5,000
rose
to
last year.
accounted for the week's in¬
crease.
Retail failures decline in the week. More businesses suc¬
cumbed than in the corresponding week of 1949 in all lines
except
wholesaling.
tion
where
and
were
The sharpest relative increase appeared in construc¬
failures reached their highest level to date in 1950
almost twice
as numerous
The Middle Atlantic, the East
as
last year.
North Central and
States reported increases for the week.
the
Pacific
An increase from the 1949
CHICAGO,
ILL.—Lewis A.
has joined
the
staff
H.
of
Chesley & Co., 105 South La Salle
Street.
1.
HIGH
The
The
continuation
of
unseasonal
weather
in
reflected in generally apathetic
localities
many
sport
general; suits and formal attire did not receive much
despite intensive promotions.
Men's sport jackets and
slacks were in increased
demand, while socks and neckwear wereclothes
in
attention
slightly
more
popular than in the corresponding period
a year ago.
The previous week's
drop in the retail volume of
was
reversed last week as over-all dollar
SIX MONTHS
price
index, compiled by Dun & Bradstreet, Inc., rose another 6 cents in the latest week to stand at $5.86
on Feb. 14, the highest level since
Aug. 16, 1949, when it stood at
$5.89. The latest figure shows a gain of 1.7% over the comparable
$5.76.
higher prices for flour,
wheat, corn, rye, oats, beef, hams, bellies, lard, butter, cottonseed
oil, beans, eggs, potatoes, hogs and lambs. Declines occurred only
in sugar, cocoa and steers.
The index represents the sum total of the
price per pound of
31 foods in general use.
were
durable
sales
bedroom
and
cushioned furniture
dining-room furniture.
were
rose
for
large
large sellers
Watches and rubber-
featured in scattered promotions.
Record
buying dipped slightly.
Total retail dollar volume for the
period ended on Wednesday
of last week was estimated to be
from 2 to 6% below that of a
year
ago.
Regional estimates varied from the levels of a
year ago by
the following
percentages:
South
and
Northwest
to —5
and
New Eng¬
-f 2 to —2.
Wholesale orders
rose slightly in the week as
an increase in
apparel bookings brought the aggregate dollar volume
to a level
slightly above that for the comparable week in 1949. There was a
slight drop in the number of buyers at the various wholesale cen¬
ters last week with attendance
the similar period last
year.
Department store sales
moderately below the figure for
on
a country-wide
basis, as taken from
the Federal Reserve Board's index for the week
ended Feb. 11,
1950, showed no change from the like period of last
year.
In the
preceding week a drop of 1% was registered from the like week
of 1949.
For the four weeks ended Feb.
11, 1950, sales reflected
no
change from the corresponding period
year to date show
Retail
a
trade
a
year ago,
but for the
decline of 5%.
in
New
York
last
week
suffered
from in¬
clement weather thus erasing in part the
lift usually afforded
by a step up in shopping volume on Lincoln's
birthday.
According to the Federal Reserve Board's
store
food
was
buying.
Apparel purchasing increased slightly last week as
many shop¬
pers started their buying of Spring
clothing spurred on by prevail¬
ing mild temperatures in many parts of the
country.
Gingham
dresses.,and light lingerie were popular with
women, as were
re¬
PEAK
wholesale
Aiding in last week's advance
(Special to The Financial Chronicle)
Caldwell
WHOLESALE FOOD PRICE INDEX ATTAINS
1949 index of
With Chesley & Co.
Although February promotions were numerous, the volume
buying, dollarwise, was about the same in the
period
on
Wednesday of last week. Total retail sales volumecontinued slightly below the level of the
corresponding 1949 week,
according to the current trade review of Dun &
Bradstreet, Inc.
land
involving liabilities of $5,000 or more increased to
159, exceeding the .151 of this size which occurred a
England, South Atlantic and West South Central States
ported fewer casualties than a year ago.
C.
HOLDS AT PREVIOUS WEEK'S
LEVELWHOLESALE TRADE DOLLAR VOLUME
SLIGHTLY
ABOVE COMPARABLE 1949 WEEK
from
166
New
affiliated
only 90,600 bales, the smallest for
season.
East and Pacific Coast —3 to
—7;
—2 to —6; Midwest and Southwest
—1
1939.
(Special to The Financial Chronicle)
Laidlaw
early this
Failures
similar week of
average-
RETAIL TRADE
cars
level prevailed in five areas, with the most noticeable rises
ap¬
pearing in the West. North Central and Mountain States. The
Bowers Co. Adds
any week since
were
was
O'Connor
daily
a
goods
52 from 36 and were almost twice
—
made up of 95,434
States
Inc., reports.
Midwest
on
slightly above those for the similar week in
1949.
Much of the increase was
registered in a demand
appliances, television sets and case goods. Some other
year
CHICAGO, ILL.
was
in the United
ended Feb. 16 from 195 in the
231
members
and
January
BUSINESS FAILURES ALTER LOWER TREND BY MODERATE
ADVANCES
R.
Exchanges.
week ended Feb. 2 amounted to
1,887 trucks built in Canada.
Co.,
Street,
during
The week's total compares with 114,207 units
produced in the
U. S. and Canada in the like 1949 week.
Smith has been added to the staff
John
SLIGHT GAINS
Studebaker, Nash, Ford, Mercury,
were
keeping the output vol¬
Motors
cotton
of consumer
production in the United States and Canada is esti-
General
of
estimated by the New York Cotton
Exchange at 37,400
bales per day, as against 36,700 in December
and 32,100 in
January
a
year ago.
Last month's daily rate was the
highest since Mayr
1948,
when it was 37,900 bales.
Loan entries reported for the
was
ended
con¬
Nadine
Consumption
18.7% below
125,936 units compared with the previous week's total
of 125,737 (revised) units.
Despite the Chrysler shutdown and curtailment of Gen¬
cars
Chronicle)
—
further reduction in coal
*
John J. O'Brien Co. Adds
of
The ten spot markets reported sales of
180,300 bales last week,,
compared with 209,800 the previous week and
147,100 in the corre¬
sponding week a year ago.
Exports of cotton during December
totaled 657,000 bales, according to the Bureau of
the Census.
This was the heaviest
monthly volume since February, 1940,
and compares with
434,000 bales in November and with 522,000 in
December, 1948.
in 1949 and 165,029 cars, or 22.5% below
Commercial and industrial failures
ILL.
below
at
and
investment firm in
("Special to The Financial
7.1%
or
eral Motors overtime due to the coal
strike, vehicle production
is still hitting a 6 million unit annual
rate, the agency stated.
It said record production by
Syracuse.
CHICAGO,
cars,
According to "Ward's Automotive Reports" for the past week,
motor vehicle
Syracuse
the
a
IN LATEST WEEK
Building, forming the
firm of Smith-Bishop & Co.
Mr.
Bishop has been associated with
own
was
freight for the week ended Feb. ,11, 1950,
to the Association of American
AUTO OUTPUT MAKES ADDITIONAL
State Tower
Smith
Electric
corresponding week in 1948.
Cen¬
SYRACUSE, N. Y.—Wesley M.
Bishop has been admitted to part¬
nership with Edward J. Smith,
Mr.
Edison
according
the corresponding week
Smith-Bishop & Co.
ducted his
cars,
This
preceding week this year, due to
the
.
in
the
to
It also represented a decrease of 130,601
cars, or
income provisions.
Formed
according
shipments.
guar-
York
revenue
5-38,841
Railroads.
& Albany is underis especially suitable
because
kwh.,
REDUCED COAL SHIPMENTS
Loading of
the "Bigs," I continue to feel that
these
5,931,351,000
was
totaled
anteed-basis, because I distrust the
pension plans and the inroads
they will make on industrials,
plus the anti-trust suits against
at
electrical energy distributed by the electric
industry for the week ended Feb. 18 was esti¬
CARLOADINGS DECLINE FURTHER AS A RESULT OF
Central, under Vanaerbilt
ownership, has, for generations,
been
a
great institution among
major railroads, because I like
a
DECLINES
basis
cause
($8.75
power
at
live hogs continued to show
continuing falling off in receipts.
values continued to climb
during the past week.
a
more
of the output reported for the corresponding period two years ago.
Because I believe firmly in the
survival of private enterprise, be¬
proven
FURTHER
39,568,000 kwh. lower than the figure reported for the
previous week; 281,072,000 kwh., or 5.0% above the total output
for the week ended Feb. 19, 1949, and 677,349,000 kwh. in excess
written in the bond.
as
SHOWS
of
Institute.
.
obli¬
gations total only $16,642,000.
bond
.
.
grade crossing
OUTPUT
amount
light and
mated
equipment-
.
.
certificates coming
average
was also
slow; rye flours showed
prices continued to weaken as the
buyer resistance,
some
Raw cotton
IN LATEST WEEK
The
maturities (funded
average
coming due)
trust
and
ELECTRIC
...
Cocoa
large
strength aided by
average
...
recent
Despite
week,
1,692,800 tons
ingots and castings for the entire industry compared
one week ago.
A month ago the rate was
of
the
improvement.
of
arrivals, substantial quantities reported
afloat, and indications that the Gold Coast crop would be
larger
anticipated.
90.7%.
This week's operating rate is equivalent to
Charges which will produce cash
showing extreme caution in making
than
a
steel-making
due to diminishing coal reserves.
Equipment
to $17,325,280, but
at 249.20
been deficient exerted a depress¬
ing influence in late dealings. Corii prices finished higher than a
week ago.
Increasing tightness in the cash market was attributed
to a recent decline in
prices which resulted in more grain being"
pledged for loans than had been anticipated.
Oats showed rela¬
tively more strength than other grains, aided by smaller
receipts
and some improvement in domestic and
export demand. Domestic
bookings of hard wheat bakery flours continued in small volume
this
announced
The index closed
Strength in wheat reflected a scarcity of country offerings
although reports of rains over the week-end in parts of the Winter
commitments.
war.
re¬
support program.
result
Treasury bonds.)
while
commodity price index last week.
markets
daily whole¬
14, as compared with 247.09 a week earlier, and with 258.61
the comparable date a year ago.
Grain markets displayed a somewhat firmer
tone the past
week despite continued uncertainties
surrounding the farm
is
Central
obligations run
by 1958 these will be reduced to
$3,920,000.
for
that the
so
pressure in food and grain
further mild rise in the Dun & Bradstreet
a
Feb.
industry will be
88.8% of capacity for the week beginning Feb. 20, 1950. This
$60 million. (Lessor Com¬
hold over $20 million of
panies
U. S.
assets
an
in the event of
ore
week
years!
Net
reserves
The
large
no
Campbell, Editor of
from
ore
foreign
$30 mil¬
a
bond maturities occurring for the
next 50
C.
returned
Central,
on
steady upward
on
the steei
with which to meet obligations to
York
sale
The scrap market
ingots is much more
reported selling in the conversion market
for $60 a ton, which is a lot better than the former "circus" market
prises. Lining up rolling space is currently a big bottleneck in the
restrained.
a
pier from Boston & Albany for
$3 million cash, bringing the total
New
The
sulted in
makers.
or
addition, in May, 1949, Port
Boston
of
Industry
facturers of
$5,500,000
New York Cehtral
bonds, $82,713
A. T. T. bonds.
$943,234 U. S. Gov¬
ernments, $76,094 other bonds,
a total of
$6,602,041.
41
Continued from page 5
posed of the following: 1951, $642,000 in term
mortgages 3V2S, and
owns
<833)
sales
in
1950, fell 6%
week
For
a
the
New
York
from
the
drop of 3%
four
weeks
was
index, department
City for the weekly period to Feb. 11
like
period
last
year.
In
the
reported from the like week of last
year.
For the
volume decreased
by 8%.
NOTE—On another page of this issue the
most comprehensive
preceding
registered from the similar week of 1949.
Feb. 11, 1950, a decrease of
2% was
ended
year
to date
reader will find the
coverage of
business and industrial statistics
showing the latest week, previous week, latest
month, previous'
etc., comparisons for determining the week-to-week
trends
conditions, by referring to "Indications of Current
Business
activity."
,
year,
of
42
COMMERCIAL
THE
(834)
FINANCIAL
&
Continued from
optimistic. By the same rea¬
soning, the holder of a stock
that
keeps dribbling down
Tomorrow's
is dull
or perhaps even strong
naturally pessimistic.
It
always depends upon where
is
Whyte
Says—
L===By
of
stocks
dence
sits.
one
❖
❖
J
WALTER WHYTE
Action
steel
and
motors
will provide
good evi¬
of market's likely trend.
*
Summing up all the fore¬
going, it begins to look as if
nothing has really been set¬
tled
York.
New
left
I
since
The Dow Industrials still meet
Having just returned to a
support around 201 and re¬
temperature, I am
record low
still
confused.
short
few
A
are
on.
that the main
move
will
be down.
production and devaluation of the
soft currencies probably will pref
labor,
and
(4) The intensification of com¬
petition is almost sure to make it
considerably more difficult for in¬
their
hold
dividual
concerns
positions
in the markets and
satisfactory
levels
maintain
to
to
of
profits.
The
probability is that 1950
will bring a continuation of the
''long readjustment" from the war
is in the
offihg.
•»<
The
me
impress
particularly important
as
for
does not
news
the
coal
The
moment.
strike
"work-stoppage"
or
a
I
makes excellent headlines.
general decline sets in. The
doubt that its impact
second point is something else
curity levels will go
completely.
*
beyond that.
*
*
sis
*
*
and
there
on se¬
much
*
are
sustaining this theory are the ond came in at 16 with a stop
leaders, particularly the steels at 14V2. The former is now
and motors, but before we de¬
about 26, the latter is about
cide it is a "bull market" we
on
im.
So
long
as
these stocks
minimize
inherent in
of
"shot
or
stimulants
are
situation where the
demand is de¬
such temporary, arti¬
pendent on
ficial
risks which
the
a
level
present
sell Cooper-Bessemer at 28
penetrated the long-term
support levels and now indi¬ better and Mead at 19
prices for the im¬
or
such stocks
bullish in¬
a
terpretation is Pollyanna-ish.
For that matter, being a bull
or a bear
always depends on
the stocks
long of
ing up,
in
one
holds.
A trader
stock that keeps go¬
or at least holding up,
down market is obviously
a
—Walter
in
-
the
-
-
arm"
[The
article
time
views
do
not
coincide
Chronicle.
those
in
expressed
this
necessarily
at any
with
of the
They
those
are
presented
as
would
therefore
in
prudent
present
the
exercise
to
ment
environ-,
caution
more
the use of the
describing the
financial budgets and
ules and
setting purchasing, promotion and
Two With W. E. Bell Co.
might appropriately be made
for the following:
(1) No Boom and No Bust—The
1950 is not expected to wit¬
major depression compara¬
ble to those experienced in the
early 20s
or
the
the early 30s and, in
extensive readjust-
view
of
ment
now
tural
incomes,
of
some
substantial
demand
and
markets,
no
expan¬
be
to
appears
individual indus¬
decline sharply while
may
continue to expand,
likely.
tries
in agricul¬
foreign trade
major
and
in
sion
under way
our
sustained
Some
may
others
but the chances
seem
to be heav¬
S. Jones
with
W.
E.
are
now
Bell
asso¬
and
Co.,
Per 100 Shares Plus Tax
Members
New
York
San
York
Curb
Stock
Exchange
Exchange
Francisco
Stock
14 Wall Street
COrtlandt
Private
San
Trade
New York 5,
7-4150
Wires
(Associate)
Exchange
Chicago Board of
Richfield Oil... @
Southern Pacific @
38% Mar. 31 $187.50
52% July 25 425.00
Schenley Indus. @ 33% 5 mos. 237.50
Int'l Nickel.... @ 28% July 21 175.00
Allis Chalmers. @ 32% May 8 237.50
Crown Zellerbach® 32
5 mos.
275.00
Intl. Tel. & Tel. @ 12% 5 mos.
175.00
duPont de Nem. @ 62% May 13 375.00
Yn»stown. Sheet @ 77% Apr. 26 375.00
General Motors. @ 75% Apr. 12 325.00
U. S. Steel
@ 29% May 9 212.50
Subject to prior sale or price change
Teletype NY 1-928
to
Principal Offices
Francisco-—Santa
THOMAS, HAAB & BOTTS
Members
Barbara
Rosa
Put
8i
Calls
Dealers Assn.,
Monterey—Oakland—Sacramento
Fresno—Santa
brought
50
be
ready
Brokers
an
How¬
the
for
unbalanced position in
certain commodities
able
outlook
lor
the next
two is clouded by inevit¬
year or
uncertainties, several devel¬
opments of
provide
1949
is slowly but
solid
a
surely being set for
another of the
sion,
exports
our
felt.
It
is
signs
the
which have
of this
(1)
agencies and distin¬
students (the Brookings
guished
sociation
and
6s
Inc.
Broadway, New York 4, Tel. BO 9-8470
the
that
that
course,
downturn
election
will
occur
months,
use
the
its disposal in an
prevent
a
politically
to
initial
the
decline
might
and
sure
impact of the
well
its full
that
be
mod¬
force delayed.
it is not possible to
a
sharp decline will
experienced in the last half of
the
it probably is prudent
prepared for one if it does
year,
be
come.
(3)
trast
have
others)
Deflation—Commodity prices
or
are
expected to be mixed but gener¬
ally steady in the first few months
of
the
year
with
toward weakness for
the
a
a
tendency
time there¬
This is not to say that over
years
ahead the inflationary
influences inherent in the Nation's
labor, fiscal and monetary policies
are unlikely to bring one or more
prevailing fear a
that the Nation was
ago
inexorably
moving
toward
eco¬
nomic^ maturity and
industrial
stagnation. Optimism is again be¬
coming fashionable.
(2) The Upsurge in Population
The postwar re¬
Has Continued
been
In
—
formation has
much smaller than expected.
in
duction
family
accomplishments
addition,
in
during the past
two decades have extended the life
research
medical
expectancy of our people and cut
the number of working days lost
due
illness
to
—
developments
pressage
a
substantial
tial.
(3)
Rate of Technological
Accelerated—More
The
Progress
Has
and
money
more
is being spent by
concerns,
associations,
institutions
ernment for
and
gov¬
productive re¬
more
search, which provides a fabulous
scientific frontier of new indus¬
tries and the
can
means
by which costs
be reduced and markets wid¬
ened.
recom¬
now
to
as
vital
in
what
done.
consideration
in
long-range outlook is that
now
sub¬
no
our
we
are
uniquely favorable posi¬
tion
since, with population in¬
creasingly rapidly and with the
a
nation in the midst of
a profound¬
ly significant revolution in indus¬
trial,
agricultural
and
medical
technology, there is little reason
to doubt that if the recommenda¬
tions
of these organizations
werp
adopted, the risk of a serious de¬
pression would be virtually elimi¬
nated
and
of
for
many
of the
one
to
years
would be at the
we
come
beginning
greatest periods of
industrial expansion, business
prosperity
people
any
rienced.
increased
and
The
unpleasant
public
ever
expe¬
alternative
is
however,
one,
an
for
if
fail to make the moderate but
we
essential
changes in
our policies,
running the risk of
debilitating economic instability
and of general stagnation both of
shall
we
be
development
of
our-
economic strength.
j
.
what
people
hear
there
pay
is
to read, see and
that they
evidence
susceptible to the flimsy
less
are
promises of Welfare Socialism and
are
of
returning to the middle road
Progressive Capitalism.
backlogs, higher efficiency in the
Eastern Harness
-
Racing Club Slock
Public
shares
offering of 1,000,000
of common stock
(par 5c)
Racing Club,
Inc.
(Steubenville, O.) is being
made by Tellier & Co. at $1 per
of
Harness
Eastern
An unusual feature of the
share.
underwriting agreement, Tellier &
Co. states, is-the fact that certain
directors
controlling
and
stock¬
in
holders have deposited $30,000
the
with,
cash
is canceled.
that the deal
underwriter
the
,
to
commissions
to
dealers in the event
ahd
"brokers
agent
escrow
full
guarantee
•commitments
Unless
firrri
secures
for the purchase
of
this stock prior to
April 10, 1950, all subscriptions
will be canceled, subscribers will
be returned their full payments
of
$200,000
offering will be discon¬
the
and
tinued.
'
Eastern
to
'
r
-
*
present intention of
Harness Racing Club, Inc.,
.the
is
It
assume
directly
active
the
operation of the Fort Steuben
Raceway to carry out property
additions
and
improvements
in
addition
to
those
made.
already
Proceeds from the sale of the
of¬
fered stock would be used to pay
existing indebtedness of Fort
Raceway Corp., to fi¬
nance the improvement program,
while the next two or
will doubtless bring
of difficulties, per¬
plexities and danger and while it
Steuben
purchase the raceway situated
to
on
a
land
of
comprising
.
.
Randall Keator Co.
years
quota
tract
approximately 51 acres, which is
now leased, and to provide addi¬
tional working capital.
;
>
Thus,
their
is
quite improbable that we have
a depression-proof econ¬
omy,
the longer trend
in the
achieved
United
States
is
likely
to
be
so
as again to pro¬
opportunity for accom¬
plishment
and
satisfaction
in
building successful business enter¬
prise.
strongly upward
vide
RUMSON, N. J. —Randall M.
Keator is engaging in a securities
business from
offices on Ward;
Avenue under the firm name of
Randall, M.
Keator was
Keator & Co. • Mr.
formerly, a represent-,
Abbett & Co.
ative for Lord,
an
With Slayton &
•
(Special to The Financial
ST.
in the price level.
But
the coming year agricul¬
tural surpluses, exhaustion of the
Tellier & Go. Offers
off
(4) The Trend Away From Rad¬
Is Gaining Strength — In
icalism
upsurges
during
The
various
disagreement
be
must
the
there is
re¬
the
to
decade
three
No Pronounced Inflation
after.
between
stantial
optimism which is in pointed con¬
embarrassing recession, in which
event
and
cently appraised the Nation's eco¬
nomic potential with a degree of
educational
likely, of
at
They have been spelled out in de¬
tail by many national business or¬
ganizations and research agencies
Institution, the Twentieth Century
Fund, The National Planning As¬
business
-
or
Considerably—Sev¬
Has Improved
be
of
a
is very
mysterious
controversial about these changes.
maximum
Psychological Position
on
of
there
either
periods of expan¬
which would make for economic
and
prosperity! weakness in a world where we
punctuated the history
cannot afford anything less than
Country.
The
devaluation
pre
,
and
Administration
the
little that is
And
progress
and imports will
effect
adverse
to
...
N. Y.
While the
change in
monetary policies
correct.
welfare
1950
Beyond
inventory accumulation will have
be
•
-
New
their
up
growth in the consumption poten¬
will
Even though
SPECIAL CALL OFFERINGS
Schwabacher & Co.
reduce
which
be
Coast Exchanges
to
ever^ before the year is out it is
likely that some of our major in¬
erated
Federal Securities Bldg.
•
Pacific
volume has been laid.
effort
Securities
1949
in
started
increase efficiency, limit
exposure to risk, strengthen pro¬
motional effort and, in general,
costs,
policy toward busi¬
and
eral research
year
powers
(Special to The Financial Chronicle)
ciated
efforts
personnel policies for 1950 allow¬
ance
won't
taxes, a
labor laws and
our
moderate
a
fiscal
our
1949
basis for confidence that the stage
production sched¬
in
In making up
in
OMAHA, NEB.—Amon J. Dean
on
in
was
are
appear
Guideposts for Planning in 1950
if
of the author only.]
and John
Orders Executed
it
business managements
business.
It
and
ness
will be more diffi¬
than
1950
,
transition to buyers' markets, that
Whyte.
a
Pacific Coast
tion probably
dustries
or
better.
mediate future. For those who
own
(4) Intensification of Competi¬
tion—In general the ^profit situa¬
the disbursement of, "button
as
of government
mendations
organizations."
veterans'
insurance
funds,
the Such policies may be essential not
rapid expansion in instalment and, only to meet the sharper competi¬
mortgage credit, artificially high tion which clearly seems to be in
agricultural price pegs, level of prospect but also to take full ad¬
exports supported by foreign-aid vantage of the opportunities for
grants, a large deficit, abnormally expansion
which
will
develop
when the readjustment finally has
easy money policies, and a high
level of capital expenditures by. been completed.
,'r
;
ness
have
cate lower
check
serious declines in some markets.
to
the
ily against either a boom or a
down-side there are equally stay in these ranges, there is bust this year.
(2) A Set-back in the Second
respectable stocks. For ex¬ little to do except hold on.
Half of the Year—With the order
ample, such blue chips as Should either of them have
books as full as they are the basis
American Viscose, Union Car¬
for several months of good busi¬
bide and American Tobacco advances, the suggestion is to
recognize that
variety
likely to find it either desir¬
able or necessary to accelerate the
ness a
signs
You are still long of two
that instead of a major dis¬
stocks, Cooper-Bessemer and
tributing zone the market is
Mead. The first came in at
building up to a new up move.
The stocks in the forefront 24 with a stop at 22. The sec¬
have to
a
subsidies, etc., to hold in
what otherwise might be
in
%
with that
before
to be determined to use
of pegs,
many
outlook for the next year or so.
one
On the other
hand, the Administration appears
effective.
cult
didn't have
well i be the last
inflationary forces from be¬
coming
and
early postwar booms and,
therefore, it would be a mistake
than is implied by
word
"good" in
something to do
opinion. The market
shows two conflicting factors.
The first points to a major
distributing area which may
plants recently brought into
new
Holding at current
levels will not be enough.
In my previous column I
indicated that the long-await¬ They have to creep up every
ed
reaction
was
at
last a day, even if only fractionally,
to stay out of the danger area.
promise. In going over the
If that occurs, the indications
market, I now have serious
will be that a new up move
doubts that wishful thinking
:[:
Here
modification of
stantly in fear of onerous restric¬
vent
anything the
ernment expenditures and
tions by government agencies and
crippling strikes by organized
isn't
matter with this nation's
economy
a moderate reduction in
gov¬
How "Good" Win 1950 Be?
of
there
for
ture
that
and
A break¬
sistance around 204,
through either figure would
hours ago I was looking for
be significant.
shade to avoid a broiling Flor¬
*
*
❖
ida sun—now I am looking
Bringing this down still
for a place to get in out of
closer, I suggest a close watch
the cold.
I realize all this has
of the more positive stocks
nothing to do with the mar¬ like the motors and steels. If;
ket, but it serves one purpose
these start breaking through
—it allows me to hem and
their recent lows, the chances
haw until I see what has been
going
page
while the rest of the market
Markets
Walter
first
Thursday, February 23, 1950
CHRONICLE
There
is
no
reason
LOUIS,
Clements
Conclusion
for
deep
pessimism about our economic fu¬
Slayton
Street.
MO.
—
Co.
Chronicle) "
William G:
with
Olive
is now connected
&
Co.,
Inc.,
408
f
...
u.j
Volume
171
Number 4884
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
(835)
43
Continued jrom page 12
breakdown
working
Register Opposition to Frear Bill
of
the
the
panies
is
in
1933 act.
cases
all
companies under the jurisdiction
ojH the SEC which have not sought
national
a
registered
are
on
security exchange.
It
should be recalled that the Secur¬
ities Act of 1933
originally
re¬
quired the issuer of securities in
an
aggregate
$100,000
statement
could be
limit
amount
file
to,
before
of
over
such
was
of securities
have
been
excess
in
an
the
For
offered
:
the
purchaser of
the
of
a
of the
bought
securities
position
in
panies because they
mended to them
dealer
by
because
or
were
an
make
these
it
with
fected
by
the Frear
summed up as
serving
have
the
a
legal
or
the
of
require¬
protective
result
confused in many
so
they could not under¬
the simple facts about the
citation
nancial
upon
From
soli¬
proxy
companies since it would be
comply with
regulations
as
Commission may prescribe.
and
regulations
and
changed
was
the
These
have
been
times
many
since the Commission
created.
an
example, when the first
rules were
adopted by the Com¬
mission
Dec.
on
comprised
On
pages.
24,
three
Aug.
Commission
1935,
they
mimeographed
11, 1938, the
revised
its rules
and
they then comprised 11 mimeo¬
graphed pages. The present rules
now
comprise
printed matter.
prising
full
pages of
This is not a sur¬
development
which
one
21
the
but
is
not
smaller companies
by the proposed bill
with
comfort.
companies
can
this
and
benefit
Moreover
to
the
executives
employees would be required
to'
divert
of
their
with
the
considerable
a
time
toward
amount
complying
the provisions of the bill
expense
of their regular
at
and
A
large
Certainly
been
no
evidence
affected
are
wide
sequently
imposition
on
smaller businesses.
(a)
Experienced outside spe¬
cialized legal advice would be re¬
quired
in
practically
every
in¬
stance since most of the compan¬
ies
of
coming
the
under
the
provisions
proposed
legislation are
relatively small; their local law¬
although well versed in local
statutes, have not had
occasion
to
study
and
advise
clients concerning the many ram¬
yers,
and
state
ifications
change
of
Act.
the
Securities
Specialized
the
Securities
and
Exchange
tional
of
companies, the expenditures
the
government
would
be
in-
cerased
materially as a result of
the employment of additional
per¬
sonnel required to administer
the
Act.
This is particularly
when
ernment is
deficit of
the
Federal
operating at
Gov¬
an annual
$5 billion.
over
be
raised
ology
of
objections
regarding
but
since
the
we
would
pose
in
be
phrases such
lion
or
in assets"
persons"
are
not
definitions
power
take
"held
directly
than
defined.
300
is
conclusive
pleases.
find
we
evidence
to
The other is
light
This
that
has
that
demonstrated
companies
would
financially
of
passage
of
is
no
(Special
the
distribtuiqn,,,gnd
a
con¬
of slight'"'public in¬
national viewpoint.
to
The
BOSTON,
Hill
is
income
regulations of
such
com¬
panies, it would seem, should be
a matter to be
determined by the
statutes of the individual
states.
Ill
Many of these companies have
built up
able
over
the years
an
amic¬
relationship with their
things
on
and
as
companies.
The net result of the
proposed bill would be to
penal¬
ize such stockholders
because of
the financial burden on
the com¬
resulting from
reports required.
the
detailed
IV
a
Various types of information of
confidential nature, such as a
excise
taxation.
are
that
smaller
hampered
burdened by the
bill.
Elmer
of
84 State
P.
&
Street, members
of
and
taxes.
different
levied
are
For
Boston
Stock
Excise
merely different
stop
kept
more
the
useful
and
it is
part,
out
of
Tax
down.
it
should
you don't care
what you have to
to
about
worry
the
On the other
excises
the
government
be
to
buy
were
income
on
even
to
tax,
everybody
though
the
price
had
able,
so
at
making the
receipts something
from
these
dollar
of
methods
income
probably
not
maintain
tax
But this
attain¬
counse
substan¬
a
tial contribution from excises. The
reasons are these:
excise
taxes
stable
are
They do not vary
at given rates, in boom
and depression years.
Therefore
they tend to support the budget on
an
keel.
even
tax
come
boom
must
we
and
less
have, if
we
excise
on
emphasis
on
in¬
taxes.
By
yields
periods
With Brand, Grumel
courage
aim
to
a
Hewitt, WolM
necessary
sound
finance
the best practical
be
greater emphasis
the
get a dollar of excise tax.
would
tag
It would
received
political
is
that
get some
is
spent
of
standard
if
depend
business, better for
consumers, better for production,
saving and invest¬
come
is
sufficient
tax
amount
repealed and
were
didn't have excise in it.
be better for
In
to
we
should
for
revenue
it
as
understanding
Federal
much
pay
be poor and wouldn't
buy,
and would have less
inclination to
taxes
used.
get
income
as
Ideally, if
so
hand, if all
would
are
proper
also
is
tax
Take-home
had
System
proper
income
revenue
rev¬
income
better for the
opinion, both kinds
my
are
contrast,
in¬
unreliable.
they
rise
that cannot be carried in
firm
name
Company.
depression
icit.
In
In
Brand,
Grumet
&
Tenser,
150
Broadway, New
bers
change,
Hewitt
and
York City, mem¬
New York Stock Ex¬
of the
announce
has
with them
that W. Wilson
become
as
associated
manager of the bank
insurance
stock
department
and that John H.
Wolforth is also
associated with them.
Mr. Hewitt in the past was a
partner in Fransioli &
Wilson, did
business as an
individual floor
broker
and
conducted his own
firm in New York.
Wolforth was with Ward &
investment
Mr.
Co.
and
Prince
&
Byrne
the past did business
vidual dealer.
as
and
an
in
indi¬
rapidly
Emerson & Co. Opens
Branch in Tampa
receipts
rapidly,
is
Co.,
now
300
CAL.—Lon
with
First
Montgomery
Street.
making deficits and debt increase
more
likely if there is too great
reliance
on
partment
total
this form of taxation
of
billion,
Carl Lough Opens
Lough is engaging in
gap
L.
a securities
business from offices in the Cali¬
fornia Bldg.
Commerce
income
the
is
opened
to
reportec
of
taxable
almost
income
was
be
the
two
excise
only by
system.
a
certain
in
the
.
'
'
E. M.
Bradley Dead
Edward Mix Bradley, President
of Edward M.
New
14,
85
Bradley & Co., Inc.,
Haven, Conn., died
after
years
a
long illness.
on
Feb.
He
was
old.
income
as
With Waddell & Reed
(Soedal to The Financial
Chronicle)
broadly based
Third, payment of excise
to
only
considerable,
a
'
■
it is still true that the
wide and that it can be
is
office
Bldg. under the manage¬
ment of J. Edward Jones.
are,
covered
branch
a
Henson
not
Granting the differ
between
concepts
they
(Special to The Financial Chronicle)
Carl
TAMPA, FLA.—Emerson & Co.,
firm, has
San Antonio investment
large pool of
which
reported in tax returns
$65 billion.
—
a
income
personal
$175
ences
COLO.
tax
thereby
reached by the income tax.
For
example, in 1946, when the De
(Special to The Financial Chronicle)
FRANCISCO,
income
years
shrink
Second, there is
First California Adds
ordinary
years without a def
lean
individual
DENVER,
excise
ment
Ideal
or
Street, New
City, under the
of Charles W. Merrill
Garrett
getting
the
thus provide a temptation to
enter
upon
spending
York
California
Income Taxes
vs.
and
Elizabeth L. Merrill is conduct¬
ing an investment business from
offices at 36 West 10th
S.
be
solely
ways
excise taxes.
In
and
year
about Jan. 15
something.
That is my own in¬
terpretation of consumer
psychology.
If everybody has a roll of
spending money, when they want
something they get it. They don't
programs
SAN
worry
by
from
of tax.
instance
greatly,
Bright
York
are
and dependable.
Chronicle)
H.
as
of taking taxes out of income. For
the present
purpose, therefore, we
shall classify all taxes as income
or
no
March 15.
or
increased,
a
property tax, a gasoline
sales tax, and so on, but all
a
bias paid in full for the
need have
about
have
we
50-50
Charles W. Merrill Co.
adequate in¬
has
been
furnished.
Such stockholders have
been kept
well informed and able
to evalu¬
ate the financial status of
these
legal
of
every
be
Financial
One is
given the names
different
methods
or
many
forms
tax examiner
looking
his shoulder.
By Dec. 31 he
own
of
have
like
Exchanges.
formation
pany
these
to
and
hundreds
which taxes
For
stock¬
holders inasmuch
taxes
are
Parties"
is increased.
Here's my
philosophy. I think that when
i;he income you can take
home is
in¬
ways
taxation
of
Tea
income
the income
as
would
once
Boston
income
can
Thus the two
been
MASS.—Kenneth
with
New
citizen's
two
to collect the tax
forms
public
the
With Elmer H.
Bright
companies
the
are
principal
There
an
over
enue
to
the income is spent.
own
interest will be served
by the pas
sage
of S. 2408.
Instead it has
been
of
and
summary
income.
government
received, that is, by income tax.
but
Instead
make its
example of unnecessary
given
an
administrative
brought
part
There
to take out the tax
we
In
a
started
the
by taxation is
revenue
listing
commission.
and
get
the
way
of
.out
business, and
affairs, merely
tax.
a
Fourth,
come
.
the place.
In paying ex¬
cise tax the citizen does
not have
kinds
or
he
have
over
use.
only
can
remain
kind
enforce
;he kind of thing that
cut
no pur¬
in
fewer
can
it
as
The
still
what
For
and
by
the Commission
another
no
example
"less than $3 mil¬
as
indirectly
phrase¬
bill,
served
detail.
coulc
find
can
need for the proposed
them
of
taxes
of them
VII
number
would
All
to
We
our
private
our
have
we
to
tax.
i
country when we
strangers pry into
aspect of
all
and
$35 or $36
stop deficit financing.
taxes to
tax,
..
Ex¬
com¬
There
Congress
down
and
income
There was a
time when people would not
have
stood for it.
We have become so
regimented that we put up with
financing.
that
has
.
income
lot in this
often
the
deficit
a
suppose
persuade
question
of
incurs
complete
;o
On\
choice
minimum,
income
pay
a
every
to
out
came
tax.
no
paying
any person
the exempt
et
by
excise
about
ost
Government
taking taxes out of income.
Commission to nearly 2,000 addi
must
Byrd
whenever
on
so,
budget
billion
come.
The
counsel would have to be retained
which for remotely located
any ex¬
VI
owned and controlled
are
terest from
has
forthcoming to justify such
the
it
Commis¬
M.
inflationary
even
First,
number
iricome producing business activi¬
ties.
But
could
the
By expanding the jurisdiction of
the
would
of
II
meet
financial
the
can
always withdraw
emption granted.
have
proportionate
investors.
bill
Moreover
sion
out
substantial
bill.
goes
government
practically impossible to
not
that
resumes
Commission would be inclined to
exempt it from the provisions of
Co.,
proposed
a
bery
discre¬
or
A.
if
the
If
above
needs to spend in 1951.
This would keep us well in the
black and stop the concealed
rob¬
the
viewpoint,
N.
option
tax.
ernment
ad¬
upon
the
And
Senator
without
time his buy¬
cheaper article,
he objects too
hand, there is
Senator
1951.
budget for
coincidence
a
to
or
lion
Commission.
whether
organ¬
with
or
do
can
less for
tne other
similar figure of $35 to
$36 bil¬
dollars as all that the gov¬
a
the
burden
wide
company's
a
would be
burden upon these concerns with¬
The
impose
leaving
powers in the
anticipate
locally or primarily within the
confines of the state in which lo¬
cated.
Their
securities
do
not
point.
entire
exemption
company,
tionary
A
here again an added fi¬
burden would be
imposed
necessary for them to
such rules and
rules
the
for
tionable
making
and
if
objec
purpose,
of
(c) With respect to
be
accounting stand¬
now
preparation
that
stand
requirements of the bill either
from
or
conditions
itself,
puts
proof
business of their company.
af¬
do not have the facilities to
the
and
stipulated,
meet
the
stockholders
view
smaller
annual
commission, far from
any
affected
"Most of
the
to
had
cases
smaller
I
in
in
as
pay
seriously
you
N. A. M. bud¬
own
1951
Spending Committee
the
certain
information
of
reports
ments of the
Thus
may
the
to
type
statements
Business
bill
regulations
multitudinous detail which is
own
follows:
tion,
the registration state¬
on
the
required
a
be
andl^
details required under
proxy reg¬
As a matter of
fact, the
recom¬
would
led
ulations.
by an investor the
is not directly involved
and has played no part in the sale
of the security.
which
not
Byrd's
ministering the act and, in addi¬
There
studerusTof the many
respect
quarterly
bought
businesses
be
has
under
if
and
increase,
our
for
sheer
in respect
recognizes
many attendant difficulties in
outside
burden.
start with
get
the
proviso,
qualified, depend¬
experience
ment,
marketed
the
engage
pre¬
public interest or for the
protection of stockholders.
This
in
necessary
been highly acceptable both
stockholders and to banks but
required
company
of
empt
was
financial
As
objections
be
to
many well
him to risk his funds in the enter¬
prise.
When existing securities
The
again
without
Commission
by rules and regulations ex¬
may
proxy
accounting stand¬
requirements
issuing company approaches a
potential investor and encourages
Small
an
would
cases
altered
Objections of
answer
a
which
person
in
From
the
are
The
of
or
it
see
really interested
income
individual
or
you
security, transaction,
required
to
comply
bill, which is another ad¬
com¬
their
are
He
adopted by the commission either
have
investments.
securities
new
preparation
them to
knowledge, analysis and volition
they believed it worthwhile to
when
the
to
investment
of
"NO."
was
commission
visions shall not
apply
of an.y issuer,
asked if any of them had
advised a client with respect
ever
t
of
these
Exchange
years
issuers
they
answer
adminis¬
an
to
the
ing,
ization representatives and
organ¬
ization leaders, I suggest that
ards.
able
new
Instead
Securities
to
power
If you are
take-home
want
scribing adequate statutory stand¬
For example, the bill
states,
peculiarly enough, that its pro¬
ever
certified public! accountants
whose certificates have for
many
companies affected
capital.
had
ditional
by the proposed Frear bill, recent
buyers of their securities, in the
main, have not contributed any
new
population
them
registration statement
a
the
The
legislative
trative
further
are
security and
existing security.
In
an
case
bill, in its present form,
definitely tends to grant further
procedures
they would currently
be registered with the SEC.
It is
important that a distinction be
the
of
in
The
re¬
with the
the
to
otherwise
that
under
whose
part
members
our
500,000
any
prepared
Act.
many
by. the Frear bill are
relatively small companies which
in a great
majority of cases have
enjoyed close, friendly and satis¬
factory relationships with their
security holders.
They are com¬
panies which have not sought new
capital above the limit provided—
between
much government do we need and
how much do we have to
pay for
the kind of government that we
want?
firms to set up the
principles and
of the limit pro¬
commission.
most
of
of
if
(b)
affected
made
upwards
asked
point
ag¬
tion statement had been
prepared
in accordance with the
require¬
the
burden¬
"NO."
vided, unless privately placed or
exempted, have been
distributed only after a
registra¬
of
Taxes and Take-Home Income
accruing
to
security
holders outweighs the
competitive
disadvantages to the smaller com¬
panies affected.
and
This
otherwise
ments
obtain
cently in conferring with four of
the largest legal firms in a
city
subsequently raised to
public in
to
financially
one
statement.
securities
gregate amount
of
$300,000 or
iriore. Consequently all securities
which
instance
to
registration
a
sold to the public.
affect sale
difficult
10
page
to
counsel
far beyond
goes
the original concept of the SecurL
ties Act of 1933 and would
place
nor
Continued jrom
and
have
Even in larger urban areas such
is difficult to secure. For
Congress
Frear bill
capital
would
disclosed.
We again raise the
question whether the alleged ad¬
some.
Frear Bill Contrary to Intent of
new
inventories
vantages
original provisions of
The
Of
capital,
be
BEVERLY HLLS, CAL.—Frank
tax is
A.
Wurster
is
with
Waddell
degree optional, for Reed, Inc., 8943 Wilshire
Blvd.
&
:
44
THE
(836)
COMMERCIAL
The
Indications of Current
Business Activity
week
Indicated
Feb. 26
—Feb. 26
90.7
88.8
1.692,800
(percent oi' capacity)—————.
steel operations
Week
Week
STEEL INSTITUTE:
and castings (net tons)——
—
or
month ended
that date,
on
1,729,000
in
or,
1,849,000
1,790,000
oil
condensate
and
output
daily
—
(bbls.
average
of
domestic
Total
5,386,750
*4,924,800
5,487,000
5,447,000
18,422,000
17,754,000
oil output
(bbls.)—
Feb. 11
Feb. 11
17,330,000
2,327,000
2,513,000
2,679,000
2,485,000
and distillate fuel oil output i.bbls.)—_
Feb. 11
Residual fuel oil output (bbls.)
Feb. 11
Stocks at refineries, at bulk terminals, in transit and in pipe lines—
6,741,000
7,596,000
7,786,000
8,693,000
7,335,000
8,121.000
8,059,000
8,974,000
11
11
129,362,000
127,437,000
118,844,000
119,780,000
of
17,120,000
18,095.000
19,217,000
20,389,000
Slab
11
60,602,000
64,039,000
71.075.000
57,496,000
11
52,865,000
54,590,000
60,003,000
61,264,000
Gasoline
(bbls.)
(bbls.)
output
Kerosene
daily average
—
output
(bbls.)
—
—
—
———
_____
Gas, oil,
.
Finished
(bbls.)
Residual
(bbls.)
gasoline
at__
Feb.
Feb.
Feb.
____-Feb.
at_
—
and distillate fuel oil
oil (bbls.)
at—
oil,
Gas,
unfinished
and
Kerosene
(bbls.)
at
fuel
Indicated
§568,841
Revenue
§612,524
of
§571,508
§545,833
618,412
U.
construction
S.
,
Public construction
:
;
municipal—
and
State
..Feb.
Feb.
Feb.
—Feb.
Feb.
—
Private construction
——
—
Federal
16
$120,000,000
$141,900,000
$182,177,000
of
end
at
69,400,000
103,902,000
112,800,000
16
16
85,100,000
35,000,000
21,600,000
72,500.000
78.275,000
66,800,000
55,613,000
31,300.000
16
13,300,000
22,662,000
2,700,000
of
lignite
and
anthracite
Beehive coke
33,900,000
Feb. 11
Feb. 11
Feb. 11
2,500,000
6,540,000
7,420,000
703.000
660,000
748,000
5.400
*16,600
28,500
238
.Feb. 18
5.931,351
(tons)
——a
end
at
of
COKE
coal
coke
and
(net
coke
75,858
$106,636,000
$118,177,000
$105,192,000
31,277,000
34,838,000
47,802,000
2.907,000
2,746,000
3,722,000
*80,000
657,500
5,617,906
*3,504,656
6,770,400
3,471,060
SYSTEM—
MINES)—Month
ignite
(net tons)______
(net tons)
tons
(net
of Dec.:
—
tons)
79.965
*33,596
6,100,300
670,100
1,713,836
2,017,301
1,560,581
$258,000
$257,000
$268,000
$17,823
*$17,220
10,450
*10,162
8,322
5,894
♦5,661
4,310-
3,095
*2,986
1,922
2,799
coke
(net
RESERVE
Jan.
of
end
PAPER
As
*226
*2,675
2,388
4,556
tons)
stocks at
coke
31
,
of
month (net tons)
*4,501
4,012
OUTSTANDING—FED¬
BANK
NEW
OF
YORK—
(000's omitted)
238
233
CREDIT
CONSUMER
OUTSTANDING—BOARD
GOVERNORS
THE
OF
SYSTEM
SERVE
FEDERAL
Estimated
—
RE¬
short-term
.
(in 000 kwh.)_.
5,970,919
5,650,279
6,041,158
credit
millions
in
INDUSTRIAL)
—
DUN
BRAD-
&
195
218
Feb. 16
STREET INC.
;
—
credit
Automobile
Other
Finished steel
iron
Pig
(per
(per
torn
:
.
1
(per gross ton)
Scrap steel
METAL PRICES
M. J.
(E. &
$3.837c
3.837c
3.837c
3.717c
$46.38
$46.38
$46.05
$46.74
Charge
$27.25
Feb. 14
Feb. 14
Feb. 14
lb.)
gross
$27.25
$26.42
$37.58
Single
Domestic
Export
refinery
(New
Bead
York)
(New
Bead
Zinc
18.200c
18.200c
23.200c
18.425c
18.425c
18.425c
23.500c
Feb. 15
74.500c
74.500c
76.250c
103.000c
Feb. 15
12.000c
12.000c
12.p00c
21.500c
Men's
Feb. 15
11.800c
11.800c
11.800c
21.300c
Feb. 15
at—
9.750c
9.750c
9.750c
17.500c
at
-i
(East St. Louis)
at
,
PRICES DAILY AVERAGES:
MOODY'S BOND
101.63
Rayons
104.57
116.41
116.02
113.12
121.46
119.00
Cotton
Feb. 20
120.02
120.02
119.82
117.20
Feb. 20
116.02
115.63
112.19
Feb. 20
108.70
108.70
107.98
104.83
110.88
108.70
Aa
——
A
.
Baa
,
.
Railroad
Industrials
Government
117.40
117.40
117.20
113.50
120.43
120.43
120.02
117.20
2.23
2.16
Feb. 20
2.83
Aaa
;
2.58
2.58
2.58
2.70
2.66
2.79
Aa
.Feb. 20
2.65
2.65
A
.Feb. 20
2.85
2.86
2.87
141.8
144.8
130.8
132.4
134.6
136.1
146.9
133.2
133.2
138.7
140.5
140.3
141.3-
139.5
139.5
140.2'
152.3
152.3
155.8
129.5
129.5
132.1
127.4
127.4
128.1
130.9
131.3
132.2"
168.0
168.0
169.3:
130.4
130.4
131.5-
119.1
119.8
and
brassieres
.Feb. 20
3.24
3.28
3.08
3.08
3.12
3.24
.Feb. 20
2.78
2.78
2.79
2.98
Public
.Feb. 20
COMMODITY INDEX
MOODY'S
Feb. 20
«
2.63
2.63
Underwear
Shirts
Hats
and
358.9
352.5
caps
including
_
children's
and
Underwear
Production
Unfilled
orders
(tons)
248.603
198,135
155,095
209,827
202,942
207,624
177,390
93
91
94
144.2
144.9'
146.5
150.4
Floor
156.4
155.4
Radios
117.7
117.7
123.2
Luggage
128.3
128.3
131.1
365,243
383,173
388,173
319,066
138.8
138.8
143.8
133.1
134.0
136.2:
.
at
coverings
Electrical
household
appliances,
China
OIL,
PAINT
AND
DRUG
PRICE
REPORTER
INDEX —19
.'Feb.
AVERAGE=100
STOCK TRANSACTIONS FOR THE
DEALERS
LOT
120.9
120.9
140.1
122.3
sales
by dealers
(customers'
ON
THE
N.
Y.
Month
STOCK
of
orders
of
Feb.
Dollar
value
33,790
27,823
27,570
62,243
172,178
33,868
31,186
1.014,757
822,964
833,663
2,761,679
2,348,222
41,687
40,112
$710,829,884
$704,805,862
$806,596,673
563,291,720
537,354,373
649,012,986
79.95
76.24
______
$57,508,091
Net
railway operating income before charges
69,309,386
$77,190,410
75,582,128
$81,535,82564,501,945-
Net
income
82,000,000
54,000,000
45,000,000'
$75,582,130
$46,878,473
$84,067,642
21,754,801
97,336,931
17,529,984
64,408,457
104,834,865
3,818,574
2,706,615
4,867,907
93,518,357
61,701,842
57,743,306
26,962,378
99,966,95865,066,542'
654,909
of
Customers'
short
other
total
4
$39,840,155
$33,473,610
$31,554,124
—
4
35,523
28,330
28,152
317
267
167
sales
Number
of
Customers'
Dollar
short
total
4
—Feb.
shares—Customers'
Customers'
—Feb.
4
35,206
28,063
27,985
Feb.
'
4
998,842
770,638
Feb.
Number
4
10,014
11,036
245
t
!
20,250
537,377
5,892
8,772
sales
Feb.
•,
4
987,806
760,624
785,888
528,605
Feb.
other
value
Round-lot
20,495
791,777
sales
sales—
4
$35,505,730
$28,919,865
$27,165,478
Feb.
sales
Number
4
307,570
269,550
238,150
164,810
Feb.
4
Feb.
4
307,570
269,550
238,150
164~810
Feb.
sales
•
——
Round-lot purchases by
of
EARNINGS
Operating
4
340,560
303,470
291,480
247,310
NEW
SERIES
ratio—per
after
S.
DEPT.
OF
LABOR-
Farm
of
152.2
151.6
150.9
158.5
.Feb. 14
159.2
157.2
153.4
169.5
Net
Metals
_
figure.
158.6
198.4
Federal
155.0
161.4
Dividend
215.5
211.5
210.0
208.3
145.3
145.1
145.2
151.7
137.2
137.4
—
130.5
130.5
130.5
169.3
169.4
175.6
191.2
191.2
190.3
Feb. 14
115.4
*115.6
116.0
.
tThe weighted finished
product shipments for the
effective Sept, 1, 1949,
^Includes 481,000 barrels of foreign crude runs.
years 1941 to date.
The weights used are based on the
1946 to 1948 inclusive.
§Re£lects effect of five-day week
average
I
Commission)—
fixed
fixed
for
income
charges
charges
.
2,949,756
3,318,190
defense
of
income
&
equip.)__
3,369,937
23,592,441
62,116,786
35,130,793
34,064,427
32,277,112'
1,396,566
41,338,248:
1,367,669
21,379,133
36.2?3,051
5,245,742
4,371,855
52,961,970*
6,853,158
2.61
1.78
2.86
$6,577,800
,
1,360,623
30,383,515
projects
taxes
$131,450
appropriations:
On
common
preferred
of
20,767,223:
54,425,116
(way & structures
On
Ratio
from
stock
stock—
income
to
;
fixed
1
charges
5,240,956
137.0
169.3
Feb. 14
—
materials-^—_
and allied products
Chemicals
♦Revised
159.6
190.6
156.0
Feb. 14
Building
158.5
199.2
156.9
Feb. 14
deductions
Amortization
161.1
202.6
Feb. 14
CLASS
income
.Feb. 14
lighting materials
and metal products
S.
deductions
.Feb. 14
and
OF U.
Commerce
available
Depreciation
.Feb. 14
145.2
ITEMS
80.46
November:
after
.Feb. 14
137.5
(est.)
income
-Feb. 14
Fuel
36,997
2,925,798"55,141
Dec.:
income
Total
Other
.Feb. 14
products
151,267
(ASSOC.
railway operating income
Income
192(5=100:
All commodities
of
cent
charges
RYS. (Interstate
Other
U.
ROADS
expenses
INCOME
Income
PRICES
I
RRS.)—Month
Taxes
Net
—
—
revenues
Total operating
Month
dealers—
shares
CLASS
—
operating
Miscellaneous
WHOLESALE
ounces)—
AMERICAN
OF
Total
SELECTED
shares—Total sales
of
Other
.
(in short tons)
$19,547,124
sales by dealers-
Short
.
tons)
fine
(in
tons)
ounces)
$26,219,172
Feb.
sales)—
sales—
sales
Customers'
..
(customers'
orders—Customers'
short
Zinc
RR.
purchases by dealers
Number
fine
(in
Silver
24,046
4
Feb.
.—
4
50,668.
62,565
(In
Lead
—
OF MINES)—
167,850
short
(in
Gold
shares
Odd-lot
(BUREAU
of December:
Copper
purchases)—
Feb.
Number
Number
OUTPUT
METAL
158.4
Mine production of recoverable metals in the
United States:
ODD-LOT ACCOUNT OF ODD-
SPECIALISTS
AND
17
EXCHANGE-SECURITIES EXCHANGE COMMISSION:
Odd-lot
120.7
143.9
146.4
;
86
Feb. 11
—
activity..
cf
201,511
.Feb. 11
—
(tonsi
Percentage
.Feb. 11
.Feb. 11
(tons)
received
wear—
Furniture
Shoes
Orders
overalls
Socks
373.6
ASSOCIATION:
PAPERBOARD
NATIONAL
<
Shoes
Infants'
356.5
neckwear
and
Clothing,
2.79
2.65
apparel—
Hosiery
3.46
.Feb. 20
;
Men's
3.05
3.24
107.2
141.8
Shoes
3.00
Feb.20
Average corporate
141.4
102.6
Underwear
2.38
2.85
180.6-
142.5
130,8
housedresses
and
Corsets
2.83
166.0
102.8
Aprons
2.24
140.7
158.3
143.0
comfortables
Hosiery
Feb. 20
139.3
144.6
apparel—
111.62
Bonds
129.5
167.1
and
Blankets
MOODY'S BOND YIELD DAILY AVERAGES:
S.
114.5
145.2
goods—
Furs
U.
149.8
114.0
Sheets
Women's
111.62
Feb. 20
Group
130.7
145.4
139.T
Domestics—
Feb. 20
Group
129.7
141.0-
138.9
wash
Feb. 20
Group
Utilities
Public
115.82
134.2
129.4
-
Woolens
121.46
103.54
140.5
130.3
145.6
wear
silks
and
103.75
116.41
121.46
Feb. 20
138.7
goods—
Feb. 20
Bonds
i
127.9
130.2
children's
and
Feb. 20
Government
137.0
138.6
968
(COPYRIGHTED
apparel
Aaa
S.
2,892
137.0
J 00
=
apparel
Average corporate
U.
3,557
*997
1):
furnishings
Piece
7,417
PRICE
RETAIL
goods
Home
♦7,058
*3,197
*2,864
7,373
index
Composite
Piece
'
127.7
FEB
OF
•
997
1935-39
—
Infants'
j
AS
.
3.454
PUBLICATION
Women's
at
York)
Louis)
(St.
18.200c
Feb. 15
at
refinery
Straits tin
INDEX
Feb. 15
,
$15,730
2,922
loans
credit
FAIRCHILD
at—
credit
accounts
payment
Service
QUOTATIONS):
i
Noninstalment
Electrolytic copper—
-
credit
Loan
PRICES:
IRON AGE COMPOSITE
•
30:
Nov.
credit
Sale
130
231
of
as
credit
consumer
Instalment
AND
(COMMERCIAL
RESERVE
tons)
(net
Beehive
Oven
Total
FAILURES
42,625
GOVERNORS
OF
OF MINES)—Month
(BUREAU
OF
Electric output
20,429
52,941
(tons)
January:
Beehive
ELECTRIC INSTITUTE:
EDISON
period
(BUREAU OF
COMMERCIAL
SYS¬
AVERAGE=10©
TEM—1936-80
76,234
*94,221
5,537,941
of
(in thousands)——
ERAL
RESERVE
INDEX—FEDERAL
SALES
STORE
DEPARTMENT
75,813
*66,125
81,593
i
153,800
—
(tons)
*71,327
82,576
(tons
lbs.)
period (tons)—
Pennsylvania anthracite
11,440,000
701,000
Feb. 11
(tons)
185,260,000
115,376,000
4,555,000
INC.—Month
grades
all
2,000
January
Bituminous
Oven
(U. S. BUREAU OF MINES):
coal
Bituminous
Pennsylvania
1*7,845,000
100,600
output,
FEDERAL
THE
Production
COAL OUTPUT
*185,350,000
4,449,000
INSTITUTE,
DEBITS —BOARD
BANK
$145,600,000
16
5,600,000
195,988,000
28,000
12,923,000
'
export
(bbls.)
(tons of
COAL OUTPUT
RECORD:
Total
9,080,000
lbs.)
2,000
Shipments
OF
ENGINEERING NEWS-
—
8,051,000
.
smelter
zinc
30,000
*15,242,000
69,948
ZINC
January:
Month
CONSTRUCTION
ENGINEERING
CIVIL
12,888,000
30,000
699,442
§631.018
§542,099
_Feb. 11
freight received from connections (number of cars)Feb. 11
(number of cars)—_____
170,242,000
13,935,000
.
—
stocks
Unfilled orders
freight loaded
183,158,000
*154,908,000
——
consumption—domestic and
(bbls.)
Decrease—ail
Stocks
Revenue
*163,873,000
12,938,000
1_
products imports
AMERICAN
ASSOCIATION OF AMERICAN RAILROADS:
(bbls.)---,—-—
Refined
115,362,000
17,887,000
stills
to
runs
170,550,000
156,285,000
42-gal-
—
—
(bbls.
Feb. 11
Crude
Ago
14,235,000
of
(bbls.
production
each)
gasoline output
Benzol output (bbls.)
Crude oil imports (bbls.)
4,945,100
5,420,000
4.951,250
YeajJ
Month
November:
lons
42
*———1——Feb. 11
Previous
INSTITUTE—Month
PETROLEUM
AMERICAN
Natural
_______——
of that date:
Latest
100.3
93.9
either for the
Month
Ago
Ago
are
are as
Year
Month
AMERICAN PETROLEUM INSTITUTE:
gallons each)
of quotations,
cases
Domestic crued
Crude
production and other figures for the
cover
Dates shown in first column
month available.
of
Equivalent to—
8teel ingots
or
Previous
Latest
AMERICAN IRON AND
following statistical tabulations
latest week
Thursday, February 23, 1950
CHRONICLE
FINANCIAL
&
was
revised
TREASURY
MARKET TRANSACTIONS IN DI¬
201.7
RECT
AND
121.8
»'
OF
S. A.—Month
for
the
U.
Net
Net
GUARANTEED
sales
purchases
*Revised figure,
of
SECURITIES
January:
—
$8,758,000
,
tlncrease—all stocks
(bbls,)
Volume 171
Number 4884
THE
COMMERCIAL
Continued from page 16
Confidence in
is
tem
the
you
United
happen
man
Sound Fiscal
ings, of all income classifications,
another
the fact
tional
have become
acutely conscious of
that we seem to be
world's
spending beyond
lot
a
more
record
who
get around to thinking of
these things, are
uneasy. What is
the
result,
and
where
do
lar
We have
national
increased
at
the
five billions
the seat
of
a
fit
some
this
rate
is
of
year and
being
four
no
authority in
saying; it is
to
be
placed
our
an
enterprise.
den
is
under
anything I
do, tonight
can
will
to
are
the
then
To
inscription—we
but
do
we
I
for
am
that
enough
political
has
and
always
pretty
year
next
or
planned
your
of
In
future
short,
must
vice
to
accept
the
debtor:
debt—stay out
Volumes
by
For
had
the
in
classic
Get
and
semi-experts
nation.
situation
ourselves
Admittedly
tain very
are
find
we
we
on
our
interested
government fiscal
to
the
realm
programs, armament programs of
both the domestic and
interna¬
tional variety, social
make
and
are
and
labor program. No man
his right mind, who is
depen¬
dent upon votes for his continua¬
tion in office, is ever
going to be
disinterested in voters. We are all
responsible for
all involve the
application of sub¬
stantial technical
tives
are
claim
a
to
the
on
best
our
delicate
policy, all have
efforts—but
when the experts and
policy mak¬
ers
and politicians have all had
their say, there remains one
hard
and realistic consideration
which
no
argument
republic
is
is
I
a
the
as
a
capable
of
to
do,
because to
attempt any more is dishonest,
improvident, and dishonorable.
The
Senator
Tax
Taft
Burden
recently
pointed
out
that
was
estimated to produce in
$41
some
billion
the
cent
of
federal
tax
system
1949
billion, plus about
for
ernments.
state
President's
and
local
This represents
the
not
by
sure
and
sys¬
work
good
necessarily
mo¬
accom¬
infallibility, and that
conservative statement.
you
do
President's
not look
economic
upon
report
political document. It is not
party platform; without ques¬
a
tioning the motives
of
its
free
chief
to
our
own
or
good faith
protagonist,
examine
it
in
experience
we
are
terms
and
of
beliefs.
national
request
$15
Statement
year
sentence, "re¬
confidence prevails in the
American economy." I find
that
newed
equivocal
an
statement,
per
The
for
because
it is not clear whether it
is meant
that
business
men
have
confi¬
dence in their own
activity,
that
government
is
has the confidence.
is
the
latter,
as
the
says:
"We
are
one
or
that
Presumably it
the
able
report
to
then
continue
and advance the domestic
and in¬
ternational
programs
which
modest
that
national
debt,
determination to
unable
to
meet.
And
if
meeting them for
the
to
ernment,
are
As
and
finding
of
of
to
tap
has
said
in
of
process
To
quote
"There
no
need
cline
is
his
for
the
There
this
funds available
who want to
men
to
ness
aided
men,
by
policies,
reverse
and
is
all very well.
But
257-billion-dollar debt, an
a
unbalanced
tax
budget,
during the
rate
and
high
a
time
of
our
greatest prosperity add up to any¬
body's idea of "proper govern¬
ment
policies?"
As
David
Law¬
rence
has said, is an economic
downturn met "when the govern¬
ment pours billions
into
the
eco¬
nomic
stream, and doesn't heed
warnings of history about na¬
the
tions that live
beyond the
means
of
governments to collect enough
taxes to pay for its
spending?"
The
that
economic
tions
in
1949
helped
its
put
would
.living
be
can
based
on
the
ments
by Federal, state, and local
governments :were
conclusion
cash
about
the
result
for
of
larger
defense programs. This is
statistical
tures
to
a
tinues
money
we
that
afford
things? Can
do not have?
do
The
or
all
of
planned failure
meet
con¬
of
it,
a
or
if
no
in this
one
I dare say, who would not
one
an¬
to
this
statement
from
an
environment in
businessmen,
act
can
achieve
labor,
most
economic
and
effectively
growth
is
a
United
essential
are
helping
economy. It must
natural
resources
to
economic
The
fundamental solution
real
very
called
non-profit
The
is
that
travel,
and
which
we
more
tent
politically,
of the most
spectacular and
expensive
experimentation
attempted
we
ever
from
dent
now
seem
solution. The
a
calls for
in
his
is
the
lows
one
this
have been
on
the
cause
!
that
of
the
like most of all
immediately fol¬
printed in
of
states
The
the
that
'It
red
should
letters'!
report,
"The
be¬
fiscal
policy of the Federal government
than
Presi¬
shift in
a
em¬
administration's
particular
support
The
reasons
We
are
of
are
-
commodities
farm income.
not hard
currently
a
to find.
giving
a
very
land of
plenty,
embarrassing plenty, in
to
certain
proud
items.
possessors
million
but
dollar
-
the
continued
its
of
We
a
are
hun¬
surplus
in
government
price-support
haa
pur¬
chase program for another
month*
and will continue to
buy. The De¬
partment
lion
of
the
Agriculture
now
equivalent of two bil¬
seven
in dried
paragraph.
cover
it
not even had
ever
farther
policy, from the support of
prices
to
po¬
or more
costly to
taxpayer. Yet, in the face of
the
lion,
bargaining.
no
Probably no other seg¬
our
economy so fully jus¬
tifies special
handling by govern¬
ment. Few problems are
holds
collective
is
farmer.
dred
must
there
ment of
eggs,
initiative."
ven¬
complex problem which our
economy has to face—and it haa
a
wide choice—than
that of the
the
are
housing
Farm Problem
likely
respect
collective
no
more
in fact of
must
our
to be found in rent
controls
it is to be found
in the so-
more
It
of
housing problem is
good imitation of
It
are
very much mistaken.
only to look around
document that statement.
phasis,
the
States
small business
am
have
farm
up
estate
to
some
"To promote
sentence which I
an¬
gives
to
shape. Yet there is
free
Can
what is the
You
If the
real
you
vironment. We have
just
report
budget
measure
total debt continues to
rise.
Under such
rules, American fami¬
lies will be in
very much worse
these
do
I
pro¬
man.
of
predominantly
have not yet traveled
very far.
We have not
yet had such an en¬
with
to
part of them,
swer?
defenses
afford to
a
worthy objectives.
They light the road down which
classic
we
we
be
the
our
we
exemplary. But can we afford, in
the
long run, to support farm
prices and help other countries
our
if
or
to
These
course, The motives be¬
hind each of these
programs were
build
not
men,
expendi¬
continues to rise
output
often
consideration
owners
the
for private
of
and
every
millions of
for hire in
bargaining, and
encourage expanded opportunities
chicken-and-egg situa¬
tion
or
jealous
tures.
annually,
government
for the small business
free
ex¬
a
and
such
keep open the
channels of competition, promote
and
of
loudly
its
security.
compen¬
international
strange under the
progress, and expand the protec¬
tive measures
against human in¬
sation and agricultural
price sup¬
ports,
and
the
remainder
was
mainly
has
if the same
proportions are drawn
in taxes as is now
the case,
or if the ratio of
federal
which
rise, the report says,
resulted from the impact of re¬
cessionary forces on such pro¬
penditures
of
more
administrations
that
claimed
improve
standards
else, and yet he has
clearly
discriminated against. This*
been
effi¬
off
build
bil¬
half of this
unemployment
necessarily
adversity.
every
segment of the
been permitted to
level under
postwar in¬
is all the
ever
value of
little
a
has
its
one
demon¬
agriculture
this
flation except the man
who has a
house or an apartment
to rent.
His costs of
doing business have
certainly matched those of
every
must perfect measures for
to stabilize the
pay¬
$8
seek
deliver the goods
to do so. But no
or
even
against
Practically
economy
consistent im¬
productive
extending
bear, and
protection
major task of the government. It
is
lions higher in 1949 than in 1948.
Federal
cash
payments
alone
were $6.2 billions
higher. Nearly
as
is
than
to
the
that.
that
do
distribute
its
their
Industry has been freed of
price controls. Farmers have not
only been set free but have been
given special consideration and
I
services
from
free market
a
more.
an
the report:
judge of
fact
to
are
the
gain
to
properties
we
traffic will
American family five
years hence
stabilize
a
expense.
to almost every other
kind of business. Labor
has been
set free to obtain
whatever
ex¬
goal
a
guarantee the
the
room,
of
considerable
public
privilege
a
those
dollars.
That
is
govern¬
ment's task and its
duty. I do not
see that a
300-billion-dollar out¬
farmers,
You
in
can
subscribe
definition
The
such
of
industry
group,
ity
economy.
equal
with
allowed
which
stable
a
and
and will
economy—one of those halftruths that depends for its valid¬
your
dollars,
desire
pattern
it is
labor,
the
upon
that
widely,
transac¬
to
is
at
what
rental
while
can
in
income
real
declares
report
fiscal
government
that
out
Unfortu¬
one
right to operate in
nearly $1,000 for every
products
task
a
if
gov¬
Which
we
output
ciency, will put its back into
should
the trend of business
with
us
that
annual
300 billion
provement
op¬
part,
of
has
the end of this
believes
an
strated
business
proper
can
provided
it
Industry, with its splen¬
technological
performance,
more
portunities. The initiative of busi¬
ernment
because
still
its
.
seize these
now
believe
with
nearly every segment of
the economy. There are
suffi¬
cient
Plan
advertised, the Presi¬
national
did
to
in
.
and
increasing
my
coupons.
de¬
immense op¬
business invest¬
.
with
with
not know, for
special kind of
adjustment we can make
that justifies
keeping the owners
the
dealing in dollars at the
end of five
years, and not in cigar
are
for
down
know,
of
are
words:
(in business investment)
continue.
bring
capacity. But I believe that in the
doing we must take care that we
business
the
have
carried
are
and
beyond the capacity of our econ¬
omy; in fact it is well within that
dynamic
is
of
concern
physical
your
family in the United States.
he
forces
investment.
temporarily
situation, but at
you
average of
dynamic forces
expansion for his
economic
which
simultaneously
they
common,
stabilize
he
cess
the
purposes,
and that one
most important of these
Agriculture
themselves
an
well
time
latter
that
instance, are
Department
moral
achieve
gov¬
the
for
thing in
that they
of
dent has
not
Truman
Such,
nately
five-year plan. At
wanting.
Mr.
tentions.
of
and
Samson
been
of speech—it is
business
can
be ex¬
the grounds of
good in¬
fire in your house with
blood.
It would
un¬
a
cost
readjustment
on
increasing production
limiting
production.
The President's Five-Year
simply applying the principles of
business
this is
but
those activities of the
about
several
without foundation. This
idle figure
no
1949. If
economic
did
them, you are a very poor
indeed, and your confidence
in your ability to obtain
indorsers
be
of
probably entitled
limited amount of im¬
which in a period
a
vast
cused
temple.
meet
grams
"As 1950 opens", said the
Presi¬
dent in its
opening
gov¬
25
income.
last
The President's Equivocal
judging
can
afford
can
political
live
Nevertheless
very
am
our
must
we
can
only do what we
have the strength to do and what
we
and
panied
get around, and
which the humblest citizen of the
wisely—we
there
political advantages
this farm program
to
it.
overall
be pointed out, and
in
with
weighed
national
our
a
of
contradictions
policies
with
condi- j But the moral issue is not
so
tion. "These
facts", concludes the clear here as it is, to take an¬
distinguished author of the re¬ other
example, in the recommen¬
port in the next
sentence, "show dations for the continuation of
our
tremendous
rent
economic
controls.
So
many
of our
strength."
To
which
I
am
fellow citizens
pay rent and that
prompted to add: You take your any
policy of discontinuing con¬
definition
and
I'll
take
mine. trols is bound to be
widely un¬
With such
tremendous
strength popular. Yet I do
risk
ele*>
that
resources—
of
and
reason
the
meeting
deficit
have
of
pf these
surplus
many
are
of stabilizing the
then it makes sense to
doubtedly
you are not an attractive
risk. And if you announce in ad¬
vance
that you do not intend to
does
policy restored
execute
proved
attaching
tion
be
not
soon
seeing
mentary arithmetic, there is little
nothing to be gained in ques¬
tioning the motives of those who
tem
ability, all are
pregnant with
controversy and
honest difference of
opinion, all
of
mean
or
security sys¬
tems, development and conserva¬
must
of
in
all
investment."
I
interminably, that
cracking at
Money and banking,
international credit, price support
scales
and
it will be
we
on
Department alone.
purposes,
can
and
but
much
policy. It
economic sphere from
the seams.
national
government,
that
we
for the
cer¬
have
tough jobs to do if
our
ago
year
a
as
going to keep the social
of
years
a
lose
we
sincerely
of
written every day
complexities of the
which
out
50
for the purposes of all
Americans
ad¬
of debt.
are
experts
that
Federal
now
the Post Office
genera¬
have
we
ago—that
whole
that
tax
times
before World War II
times what is was 20
ten
years
five
was
spent $500 million
enough. It is long past time when
we
be
portunities
is
it
on
to
we
patience,
own
your
years,
which
dramatize
be
have been making a practice
you
ment
and
mortgaging of the
our
and
government
what it
of
enterprise, enough of
the nightmare schemes to
dig new
money, enough
pinpoint
see
dollars, you end up by spend¬
ing promissory notes which you
eral
decade,
with
observations
not
would
some
begin
your
When you
spend confidence instead
this whole business when he said
that the present cost of the Fed¬
words,
productive
up
those
to
serve
enough economic
enough frustration of
them
govern¬
University, passed along
of
one
the
on
to
put out
inter¬
20
cent
are
government
which
to
way
economy,
of
eye
in transmitting
ago,
made
not to mention
tends
report
do
cash
approved
There
in
government,
which
$8 billions in 1948,
to
a
designed to contribue to
the growth of the
economy."
ratio
per
result
a
cash
federal
$1.7 billions in
first balance his budget.
is
as
I
as
the
amounted
advance¬
man
1948 to 231/2
1949. And
became
in
the
payments
increased from
output
the
product,
government
changes
to
it
on
and
drawing
had
set out to
may
reorganization
program,
Dr. Robert L. Johnson, of
Temple
money,
fill
a
in
provision
appar¬
unpracticed
time
progress
ment
with
devaluation
vicious,
as
despair.
Some
a
party. It
men
is
the
prosperity and free spend¬
instead of those of hunger
ing,
enough vague promises to do bet¬
resources
and creates
increased regula¬
of
ners
we
tions.
for
the depression
cycle, but it is
actually much more vicious, since
it is accomplished under the ban¬
purpose, who have exhausted
the softer remedies
to
no
avail
and who will now
resolve that
holes and
investment,
climate
is
owe
a
confusion,
initiative and chokes off
programs."
he
may
govern¬
to
is the combined force
of
sound
a
faced
that
tide.
been the American solution
which
worked best. Political action
need
not wear the label of
a
enough
then
are
ently,
because
next
We
cycle
this
conse¬
ter
of
turn
the
had
less
number
situation where
a
business
that
ourselves to keep on
trying.
If we have to choose
between po¬
litical action and economic
have
and
of
bank
and
"domestic
257-billion-dollar
bur¬
tion and socialization. This is not
only people,
action,
the
and
tax
ment policy of excessive
spend¬
ing progressively narrows the tax
base, progressively penalizes in¬
it to
quences,
the
in
is
profits.
the
all
total
advance, to the
prudent
a
until
pri¬
operation
less
its
of
warranted
the
of
personally say or
at any other
time,
or
serve
paraphrase
As
becomes
shrinks.
with
achieve¬
illusion
no
from
comes
in
national
45
must be
payments
slight decline in the
per cent in
produced
realized
in
on
not
continuation
how
together with
machine
it
of
you
it
a
with
gross
of
have.
must
planning to draw
ment
that
people and enterprises paying the
dustrial
am
figure
a
increased,
profitable,
ment.
I
revenue
economic
business-
tax
ready
facts, because most of
great
inscription,
economic
other
tax
vate
gov¬
is
examined
in
in granite and
the grave of financial
integrity, and
this
or
one
carved
over
be
must
we
ernment has yet shown any real
intention of paying it off. It's
only
money, as the saying goes, and
we owe it to
ourselves! That's no
mere
national
Even
is
money
drawn
if
government
and
business¬
investor,
you
when it states that with in¬
swer
extent that this government is al¬
cent of the national in¬
per
come.
which
debt
be
na¬
income. The Brannan plan,
is
nor
not
the
257-billion-dol¬
a
the
is
of 33
never
quite
stand?
cent of
per
goods,
It
the
that
confidence
compulsory health insurance, and
universal military training would
add another 6 per
cent, or a total
on
income. And
our
people,
increases
But
And
small
a
small
a
something
Policy
billions
figure to 27
try¬
new
$4
or
be
(837)
creasing
President
States.
to
through¬
thing to have
the
are
CHRONICLE
economic sys¬
an
splendid
a
when
Of No Benefit Without
a
FINANCIAL
the hope of free peoples
out the world."
High National Income
ing for
&
hundred million eggs
form,
as
well
as
189 mil¬
pounds of dry skim milk. It
has other
problems, also, suchaa
the lowly
potato, of which it now
holds 50 million bushels. It
hopea
to
make
from
25
to
40
million
bushels unfit for human
consump¬
tion by dyeing them
purple
Continued
on
and
page
46
46
(838)
COMMERCIAL
THE
Continued from page 45
his
He can vote, he
his Con¬
gressman, he can nudge his fel¬
low man. Tnese things, small as
they may be, we must do. I be¬
lieve with all my heart that we
must
seize
every
weapon
and
wield it with all our strength to¬
at
High National Income
Oi No Benefit Without
for livestock feed
hundred pounds.
very worthy no¬
selling
them
for
cent per
one
It also had
have
all
day and tomorrow and every day
Policy
laugh
good
a
until
it
not
were
for
the
this
at
which
solution
that
fact
will
in¬
be
tion of
the
fare
vestigated next, if Congress ap¬
proves, will be even more costly.
And it is our money, some of it
giving them away to wel¬
agencies, but the welfare
groups are unable to kick in the
cost of transportation. Mr. Brannan-estimates that transportation
will cost the government an ad¬
ditional
million
20
dollars.
still unearned.
It is difficult to
of
You
obtain
is
little
administration
the
the
on
wonder
is
and make
to
gram
for
approving or disap¬
judgment, as he de¬
a
sires. As
an
pected
to
amateur he is not
propose
tions.
to
sit
as
as
ex¬
solu¬
expert
he
Nevertheles
right
has
every
examiner
of
broad moral issues, and with that
that
right goes the privilege of pass¬
ing judgment and the obligation
to implement his decision, with¬
to
change from
gram
specific
as
proving
open
seeking
the
of Federal operation in this
a
exciting, demanding, 'and
extravagant of all centuries. As
an
amateur, the citizen taxpayer
is entitled to take as long a look,
buying choice Canadian po¬
tatoes, paying shipping charges
and import duty, and still doing
better than they could if they
bought Maine and Idaho potatoes.
That is because the government
guarantees the farmer a price that
It
of
few
even
areas
were
cannot
keep a promise
begin to in¬
a price-support pro¬
income-support pro¬
the farmer. We could
an
in
the
somewhat
limited
powers
terizes
Inc.,
Lafayette, La.
Feb.
6
stock
(letter of notification) 5,876 shares of preferred
(par $20) to be offered in exchange, on a share
share
for
basis, for the stock of The United National
Insurance Co., Atlanta, Ga.
No underwriter.
•
American
Feb.
17 filed
Business
Shares, Inc., N. Y.
3,000,000 shares of .capital stock.
Selling
Agent—Lord, Abbett & Co., New York. Business—Diver¬
sified, open-end management investment company.
•
American
Foundries
Israel
Corp., N. Y.
Feb. 16 filed 5,000 shares of common capital stock (no
par). Price—$100 per share. Underwriter—None. Pro¬
ceeds—To erect, equip and operate a foundry in Israel.
Business—Non-ferrous foundry products. To be offered
"as a speculation."
•
American Mutual Fund, Inc., Los Angeles
3 filed 2,000,000 shares of capital stock (par $1),
of which 910,000 shares will be issued in exchange for
Feb.
Security Co. stock, 790,000 shares will be reserved for
non-transferable rights under merger plan, and 300,000
shares are to be offered publicly.
Underwriter—Kidder,
Peabody & Co., New York. Business—Management in¬
vestment
company.
Ampal-American Palestine Trading Corp., N. Y.
sinking fund deben¬
•
tide
of
deliberate
the
calcu¬
and
policy of this govern¬
ment. This is a hard duty to per¬
form because the subject is dull
and
complex. We are in no dan¬
ger of shedding our blood, just
our national integrity. But some¬
how we must unite in political
We
action.
will
that
raise
must
be
heard
before ft is too late,
will
out
drum
with
and
words
the
voice
taxes
factories, in taxand in
hordes of
people,
tramping
the
and seeking jobs in vain.
workers
votes.
Balance
paid in the sweat of
who labors. If those
excessive, they are re¬
are
share.
Proceeds—To be used for economic develop¬
•
Appalachian Electric Power Co.
(3/21)
Feb. 17 filed $25,000,000 first mortgage bonds, due 1980.
Underwriter—To be determined by competitive bidding.
Probable bidders include: Halsey, Stuart & Co. Inc.;
Kuhn, Loeb & Co. and Union Securities Corp. (jointly);
Harriman Ripley & Co. Inc.; First Boston Corp. Proceeds
—To
finance
construction
program.
Expected about
and
accrued
was
awarded
on
Proceeds
shares of
interest.
from
applied to pay
provements to
Beverly Gas & Electric Co.
Dec. 20 filed 33,000 shares of capital stock
(par $25)
% shares
held, at $30 per share. No under¬
writer. The proceeds will be used to pay off $575,000 of
offered
to stockholders at the rate
for each two shares
notes
held
of
1
Feb.
($1
Co., Denver, Colo.
Proceeds—To
Power
Co.
(letter of notification)
common
stock
Underwriter—None.
(par
10,690 shares of $10 par
$10). Price—$28 per share.
Unsubscribed shares will be taken
by a group of dealers for public offering, who will
probably include Woodcock, Hess & Co.; Bosworth, Sul¬
livan & Co.; and Boettcher & Co. Proceeds—To finance
construction, develop facilities, and for other corporate
by the New England Electric System and
Fund of
10 filed
Boston, Inc.
100,000 shares of capital
stock
(par $1).
Columbine
Development Co.
Feb.
9
(letter of notification) 965 shares ($10 par)
common stock at $10 each.
No underwriter. Proceeds—
To establish wood pulp and paper industry. Office—614
Rood Ave., Grand Junction, Colo.
•
Committee for
Incorporation of Urban
Redevelopment Corp.
Feb. 13 (letter of notification) pre-organization certifi¬
cates for 1,000 shares of 5% non-cumulative preferred
stock
(par $100)
and for 1,000 shares of common
stock (lc par) to be sold in units of five shares of pre¬
ferred and five of
writer.
common
for $500 a unit.
No under¬
Proceeds to be used to
rent land areas
Office—1757 K
plan, finance, build, and
in Washington to rid the area of slums.
St., N. W., Washington, D. C.
Credit
Acceptance Corp., Rochester, N. Y.
(letter of notification) $239,000 of 5% debenture
bonds.
Each $100 bond has stock purchase warrants
Feb. 9
New York
Boston
Philadelphia
Pittsburgh
San Francisco
Private Wires to all
offices
Chicago
Cleveland
attached to
per
share
before Dec.
bonds
'
Armbrust
with
has
Pohl
become
&
Co.,
associated
Inc.,
Dixie
the
sale
stock
of
are
previously with Weiss, Work
was
16
With R. H. Johrison
(Special to The Financial Chronicle)
the
BOSTON, MASS.
Ireland
to be
Co.,
or
the electric
Mr. Armbrust
firm
Feb.
is
70
with
State
R.
James
—
H.
W.
Johnson
&
Boston
9,
Street,
Mass.
With Barrett Herrick
prop¬
>
(Special to The Financial Chronicle)
&
Co., New York.
capital.
•
INDICATES
ADDITIONS
SINCE PREVIOUS ISSUE
Proceeds—To be added to working
Cretshire
Corp., Philadelphia, Pa.
voting trust certificates for 2,815.6 shares
value common stock. Voting Trustees—George
E. Roosevelt, Ernest L. Davis and Clayton McElroy, Jr;
16 filed
Feb.
of
no
•
par
Daniels &
Fisher Stores Co., Denver, Colo.
~
(letter of notification) 2,404 shares of common
stock to be offered at $32.50 per share, the proceeds go¬
ing to the estate of Arthur H. Bosworth, deceased. Under¬
writer—Bosworth, Sullivan & Co., Inc., Denver. Office—
Feb.
13
16th and Arapahoe Sts., Denver, Colo.
•
Darwin Lead Consolidated
Feb. 13 (letter of
'
Mining Co.
notification) 863,000 shares of common
share). No underwrit¬
stock to be offered at par (25c per
er.
at
Proceeds to be used to expand lead
Darwin, Calif.
mining operations
Office—8350 W. 3rd St., Los Angeles,
Calif.
Deardorf Oil Corp.
Jan. 23 (letter of
notification) 375,000 shares of common
10c), to be offered to stockholders of record
stock par
Jan.
28
at
80
cents
per
shares
to
share.
Rights expire Feb. 28.
publicly at $1.12^
per share.
Underwriter—Tellier & Co., New York City.
Proceeds—For additional working capital.
Office—219
Fidelity Building, Oklahoma City, Okla.
Unsubscribed
be
offered
Co.
and refunding mort¬
bonds, series ,J, due 1985.
Underwriter—To be
supplied by amendment, along with offering price. Bid¬
gage
ders
for
the
buy four shares of common stock at $2.25
before Dec. 31, 1951; at $3 thereafter and
31, 1953; at $3.50 thereafter and before Dec.
31, 1954.
Price—$95 per $100 bond.
Underwriters—
CAC Associates, Inc., Rochester, N. Y., and R. M. Horner
series
I
issue
in
September, 1947, were:
Co. (jointly);
Halsey, Stuart & Co. Inc.; The First Boston Corp.; and
Dillon, Read & Co. Inc. Proceeds—To redeem on May 15,
a like amount of general and refunding mortgage bonds,
series G, due 1966.
Coffin & Burr, Inc. and Spencer Trask &
•
Development Credit Corp. of Maine
13 (letter of notification) 500 shares of
Feb.
stock, at
common
($100 per share). No underwriter. Proceeds
for development. Office—15 Grove St., Augusta, Me.
;
par
Dome
purposes.
now
bank loans.
Bond
D.
184,400 shares of common
per
share).
Underwriter—
build and equip an oil seed processing plant.
•
The
Detroit Edison
up
March 21.
to be
Price—At
value
Joins Pohl Staff
Feb. 14 filed $35,000,000 of general
Robert
Central
Ash¬
Beginning in 1951 the company
FLORA,
ILL. — Norman
E.
is required to retire bonds annu¬
Prince is now affiliated with Bar¬
ally and for this purpose the
bonds may be redeemed at prices rett Herrick & Co.
(letter of notification)
Colorado
and
(Special to The Financial Chronicle)
erties of the company.
Crops, Inc.
&
the
in
Michi¬
an
esti¬
Ironwood, Michgan,
land, Wis.
reimburse the
company in part for the cost of
additions,
extensions
and
im¬
Crops, Inc., Morrill, Neb.
3,060 shares of common
sold at par ($5 per share). No underwriter.
Feb. 8
•
the
common
(letter of notification)
par
and
upper
of
bonds and from the sale of 40,962
Chemical
Bowers
Wisconsin
portion of
The territory
sup¬
in parts of
has
mated population of approximate¬
ly 118,000 and includes the cities
its bid of 100.16%.
Paga Gold Co.
Feb. 10 (letter of notification) 175,000 shares of (lc par)
common stock to be sold at one
cent each and $35,000
of 6% promissory notes, with the purchase of each $1
note enabling purchase of five shares of common stock.
No underwriter.
Proceeds to pay obligations.
Office—
513 Hoge Bldg., Seattle, Wash.
Feb. 6
northern
Halsey, Stuart & Co. Inc. on
publicly offered $2,000,000
Casa de
stock.
Statement effective Dec. 9.
energy
western
Feb. 20
Proceeds for financing corporation.
ment of Israel.
Power
CINCINNATI, OHIO —John J.
Proceeds—To develop mineral resources. Statement ef¬
fective Dec. 9. Offering expected about March 2 or 3.
tures due 1958 and 200,000 shares ($10 par) class A stock.
Underwriter—Israel Securities Corp. may be underwriter.
per
District
principally in
Registration
Chemical
Superior
plying electric
Halsey, Stuart Offers
Lake Superior District
Power 1st Mtge. 23As
Mining Corp., Ltd.,
Vancouver, B. C. (3/2-3)
Aug. 29 filed 1,000,000 shares of no par value common
stock.
Price—800,000 shares to be offered publicly at
80 cents per share; the remainder are registered as "bonus
shares." Underwriter—Israel and Co., New York, N. Y.
to be offered at par and the stock at $11
100%.
to
be retired
from 103.75%
may
Co. is engaged
•
Feb.
are
100.80%
bonds
ranging
& Co.
Nov. 3 filed $3,250,000 10-year 3%
Debentures
Lake
a
pay.
gan.
Canam
stock to be
see
prices
to 100%.
land."
Broadway Angels, Inc., New York City
(lc par) common stock and
500,000 management shares of 0.1 of a cent par value,
to be sold at 50 cents and 12.5 cents respectively. Under¬
writer— Hugh J. Devlin, New York.
Proceeds — For
working capital. Business—To back theatrical produc¬
tions, distribute tickets and act as an agent for talent.
15
never
at
They pay
in deductions from wages, in in¬
creased cost of what they buy, or
in unemployment throughout the
Nov. 14 filed 2,000,000 shares
•
may
bill, but they
Underwriter—Vance, Sanders & Co., Boston. Business—
Open-end diversified management investment company.
•
ranging from
Additional
2%%, due Jan. 1, 1980 at 100.75%
with
man
are
streets
Our
idle
voice that
refrain
Roosevelt:
"Taxes
hungry
tax
in
farms,
Terminal Building.
been
every
sold
heeded
the debt. We
put off long enough.
Perhaps these leaders of governmen who have forgotten that they
are
also servants of the people
will
recall
these
other
words,
spoken in Pittsburgh on October
19, 1932, by a man I am sure they
have not forgotten; Franklin D.
have
flected
Thursday, February 23, 1950
Lake Superior District Power Co.
first mortgage
bonds, series C,
and
a
a
the budget—reduce
Securities Now in
All American Assured Securities Co.,
the
turn
can
lated fiscal
you
most
sonville, and other southern cities
he
once
vade
probably read the other day, as
I did, how food brokers in New
Orleans, Savannah, Tampa, Jack¬
market.
brevity
we
waste, extravagance, and moral
dishonesty which today charac¬
spectacle if it were not so tragic,
if
the
disposal.
speak and write to
can
Sound fiscal
FINANCIAL CHRONICLE
&
Exploration (Western) Ltd.,
Toronto, Canada
$10,000,000 of notes, due 1960, with interest
at 1% in the first year, 2% in the second year, and
3% thereafter, and 249,993 shares of capital stock (par
$1). To be sold to 17 subscribers (including certain part-
Jan. 30 filed
Volume
171
Number 4884
of Carl M.
ners
ment
THE
Research & Management
Proceeds—For general funds.
Business—To develop oil and natural
gas properties in
Western Canada. 1
of California
(letter of notification) 15,000 shares of
common
stock (par $1) to be sold
at the market
price of about
$3.75 per share by Woodrow G.
Krieger, President. Un¬
Virginia Electric
30
Natural
Gas Co.
Pennsylvania RR.,
Canam
filed
$2,800,000 of 5.2% series C interim notes,
April 1, 1951, and 250,815 shares of
common stock
due
(par $1).
The notes and 67,200
will be offered in
units of
and 0.6 of
share.
of
the
Price—To be filed in
Corp., Nashville, and Elder &
they buy in $619,500 of series
Underwriters—For,
dition
to
those
named;
March 8, 1950
Virginia Electric & Power Co
Southern Pacific
and
$161,400 of
"selling noteholders" and
series B notes from
unnamed
these notes into; the
convert
stock.
notes
183,615 shares of
the
note-stock
in
New
White, Weld & Co., New
& Co., Boston.
Proceeds—
York, and F. ;S. Moseley
Along with those from the sale to institutional
investors
of $8,750,000
of first mortgage pipe line
bonds, due
1969, will be used for construction.
Expected week of
Feb. 27.
Stores, Ltd., Los Angeles, Cal.
(letter of notification) 30,000 shares of class A
common stock, of which
22,778 are to be issued in ex¬
change for 3.254 shares of Roberts Public
Markets, Inc.
at the rate of seven shares
of Fitzsimmons for each
share of Roberts.
Any additional shares not needed for
the exchange will be sold at
$10 each. No underwriter.
Proceeds—For working capital.
Feb.
2
(letter
of
notification)
ington, D. C., at the
$16%
per
share.
shares
market price of
of
between $19%
Georgia Power Co
with
funds from additional bank loans
"to increase the size of
same time retain its
leverage
character and at the
same time to add further invest¬
ments to its portfolio."
the corporation and at the
Gold
Producers, Inc.
(letter of notification) 300,000 shares of
common
treasury stock (par 10c) at $1 each.
No underwriters.
Proceeds to equip mine at
Shoup, Idaho. Office: 501
'Peyton Building, Spokane, Wash.
2
Grand
27
Rapids Stadium,
ing
Inc.
(letter of notification)
cumulative
share.
1,004 shares of 6% nonpreferred stock at $100 per
Proceeds to pay costs of erect¬
Office—2500 Turner Ave., N.
W., Grand
participating
No underwriter.
stadium.
Rapids, Mich.
1
Granmesa
Petroleum
Co.,
Inc.
Jan.
25 (letter of
notification) 2,295 shares of common
capital stock at $100 per share. No underwriter. Pro¬
ceeds for oil and gas
leases, drilling equipment and ex¬
Office—874 Texas
Avenue, Grand Junction,
penses.
Colorado.
•
Mines
Corp.,
Ltd.,
British
Canada
Feb.
16
stock
100,000 shares of common
50c).' Price—35c per share.
Proceeds—To
buy
mining
working capital.
Gulf
/
shares
the
remaining
plus unsubscribed shares of the new
price of class A $5. Proceeds—To
for
135,000
-
Jan.
Gulf
24
These
States
Utilities
Co.
filed 350,000 shares of
part
are
unissued
Lehman
of
common
writers—To
Probable
Co.; The First
be
bidders
2,538,701
stock
held
determined
of
number
of
common
close
March
on
program
7.
for
Proceeds—To finance part of construction
general corporate purposes.
1950 and for
Hawaiian Electric
Co., Ltd., Honolulu
June 21 filed
150,000 shares of series E cumulative
($20
par) preferred and 50,000 shares of
($20 par) common.
Offering—Preferred will be offered to
preferred holders
at l-for-3 rate
and
common
will be offered to
common
stockholders at l-for-9 rate.
Underwriters—Dillon, Read
& Co. Inc. and Dean Witter &
Co. will buy unsubscribed
preferred; unsubscribed common will be sold either at
public auction or to the underwriters.
Proceeds—To pay
off short-term
promissory notes and to carry merchan¬
dise inventories and receivables
or to
replenish treasury
funds. The balance would be
used for other corporate
purposes or construction.
Expected early in March.
Feb.
Heat-O-Matic, Inc., Pittsburgh
10
•
new
notification) 99,800 shares of com¬
(par $3). Price—$3 per share. Underwriter—
Co., New York, and Pittsburgh. Proceeds—
Securities, Inc.
(letter of notification) 2,700 shares of
capital stock (par $100). Price—$110
per share.
stock
authorized
by the company.
by competitive
but
Under¬
Proceeds
Office—205
6, D. C.
Co.
—
For
expenses
W.
7th
&
of
funded
securities.
(jointly); Lehman Brothers and Bear(jointly); Equitable Securities Corp.;
Kuhn, Loeb & Co.; Salomon Bros. & Hutzler
and Union
Securities Corp.
(jointly); Shields & Co. and White,
Weld & Co.
(jointly); Smith, Barney & Co.
Kansas Gas & Electric Co.
(3/1)
6
filed
82,011 shares of $4.50 preferred stock
(par $100), to be issued in
exchange for existing 7% and
$6 preferred stocks on a share-for-share
basis, with 7%
preferred stockholders also
receiving $5 per share in
Jan.
cash. Offer is to
run
from Feb. 7 to Feb. 28.
Unexchanged
portion to underwriters at
$110 per share. Underwriters
—Kidder, Peabody & Co. and Merrill
Lynch, Pierce,
Fenner & Beane.
Proceeds—To be used
to
unexchanged
7%
about
1.
•
March
La
Crosse
Feb.
and
$6
preferred
shares.
redeem
Expected
Telephone Corp.
15 (letter of
notification) 839 shares of common
stock to be sold at
$10.12V2 per share. Underwriter—Bell
& Farrell,
Inc., Madison, Wis. Proceeds — To pay ad¬
vances from the
company's
Lake
Superior District Power Co.
Jan. 23 filed $2,000,000 of series C first
mortgage bonds,
due 1980, and
40,962 shares of $20 oar value common
stock (par $20). Bonds were
awarded Feb. 16 to Halsey,
on
and
common
Under¬
working
Commonwealth Building, Washing¬
Houston Diced Cream Co.
Feb. 1 (letter of
notification) 300,000 shares of common
stock at par ($1
per share).
No underwriter. Proceeds
to buy the business and
assets of Camellia
Inc., Houston,
(no par).
Co.
Stearns
10
capital.
ton
Langley &
Stuart
Housing
writer— None.
$20,000,000
bonds: Ralsey, Stuart & Co.
Inc.;
Corp.; Glorej Forgan & Co. and W. C.
parent, Central Telephone Co.
(letter of
stock
—727
bidding.
Dillon, Read & Co. Inc.;^
Merrill Lynch, Pierce, Fenner &
include:
Brothers and
shares
such
common.
(3/7)
common
Boston Corp.
Bids—Bids for the pur¬
shares as will yield
aggregate price to the company of
$6,000,000 will be
received at the
Irving Trust Co., One Wall Street, New
York, N. Y. at 11 a.m. (EST) on Feb. 28 and will
of
an
probably
bidders for
The First Boston
(jointly); Stone & Webster Securities Corp.; Otis
complete
ferry, to finance dock and terminal
facilities,
current obligations,
and to provide working
capital.
Bonds
equipment and additional
working capital.
and
ocean
pay
Common
1950
&
machinery
Kansas City Power &
Light Co. (4/21)
17 announced that it is
expected that United Light
Rys. Co. stockholders of record about March
20 will
be given the right to
subscribe for 1,904,003 shares of
Kansas City Power common stock at
$12 per sk^re on the
basis of three shares of Kansas
City stock for each five
shares of United stock held.
Rights are expected to
expire some time around April 20.
Company states that
additional public
financing will also be necessary by
Common
>-
Graham
Offering
to
&
chase
Juneau,
Feb.
&
For
subscription by holders on the basis of one-for-two at
25 cents per share.
Underwriters—Names by amendment
and may include John J.
Bergen & Co. and A. M. Kiddei
& Co.
Underwriters will
buy
Bonds
Underwriter—
Transportation Co., Jacksonville,
Florida
•
non-assessable
May 31 filed 620,000 shares of class A
participating ($1
par) stock and 270,000 shares (25c
par) common stock
Offering—135,000 shares of common will be offered for
an
Beane
buy Juneau Spruce Corp. property and for
caiptal.
Address: Box
1121,
Alaska.
mid-year,
Feb.
Atlantic
Bonds
Co
Inc.
operating
Probable
mon
filed
(par
None.
Columbia,
filed
Juneau Lumber
Co.,
.initial
1950
& Gas
16
Proceeds to
10, 1950
(EST)
Public Service Electric
•
Granville
a.m.
May 2,
Proceeds—Together
1950
*.
share).
selling stock¬
Feb. 8 (letter of
notification) 100,000 shares of preferred
stock to be sold at
par ($1 per share).
No underwriter.
&
•
Jan.
Co., 11
•
1950
April 21, 1950
Kansas City Power & Light Co
and
Parker
4,
to
ness—Investment management
company.
Equip/Trust Ctfs.
April
Schmid, Wash¬
Underwriter—Auchincloss,
Bonds
.Preferred
go
(George W. Todd, Chairman).
Mutual Fund, Inc., N. Y.
16,000 shares of capital stock. Manager—
Douglas T. Johnston & Co., Inc., New York
City. Busi¬
Bonds & Common
Co
common
per
Proceeds—To
Johnston
Feb.
1950
28,
Utah Fuel
holder
•
Northern Indiana Public Service
Co
common
General Public Service
Corp.
Feb. 17 filed 1,250,000 shares of
common stock
(par 10c).
Underwriter—Stone & Webster Securities
Corp. Price—
To be supplied
by amendment.
Feb.
21,
March
Inc.
5,000
Redpath, Washington.
•
Debentures
1950
23,
April
stock (par 50c) to be sold
by Mrs. Dee M.
Underwriter—None.
Common
March
Seaboard Air Line RR
Monongahela Power
Jeannette Glass Co.,
Jeannette, Pa.
2 (letter of
notification) 10,000 shares of
stock (par $1). Price—At
market (about $4.50
Feb.
Bonds
1950
Jamaica Water
Supply Co
& Co.,
other corporate
purposes.
Appalachian Electric Power Co
16
(Julius)
20,
March
V
Garfinkel
14,
March
Utilities Co
Texas
Fitzsimmons
Dec.
Corp.
M. Loeb, Rhoades
Expected about March 21. Proceeds—To redeem
as of May
1, 1950, $5,745,000 first
mortgage 3%% bonds,
series A, and
$1,250,000 first mortgage 3J/4% bonds,
series B, to repay bank
loans, and for construction and
Debentures
Jersey Bell Telephone Co
are:
by
(jointly); Kidder, Peabody & Co.; Carl
Preferred
Co
March
ad¬
& Co., Inc. will
& Co.
1950
March 13, 1950
Pennsylvania Power Co., 11 a.m. (EST)
common
units,
stock: Blyth
Probable bidders for bonds:
Halsey,
Stuart & Co. Inc.;
White, Weld & Co.; Blyth & Co.,
Inc.;
W.
C.
Langley & Co. and Union Securities
Common
March 9,
common
For bonds—Names to be
determined
competitive bidding.
7, 1950
International-Great Northern RR._.Equip. Tr. Ctfs.
a.m. (EST)
Bonds
Louis, Brownsville & Mexico Ry.__Eqp. Tr. Ctfs.
Co., Chattanooga, after
A
Underwriter—For
head syndicate.
.Equip. Trust Ctfs.
St.
The series C notes will be
payable at maturity by de¬
livery of 112 000 shares of $25 par value
preferred stock
on
an
equal ratio basis.
The other 183,615 shares
of
common stock
will be offered
by Equitable Securities
payment
Expected in March.
•
Jamaica Water
Supply Co. (3/21)
Feb. 17 filed 50,000 shares of common
stock (no par) and
$7,995,000 first mortgage bonds, series
C, due March 1,
1975. Price of common to be
supplied by amendment.
Mississippi Power Co., 11
amendment.
an
Co.
of bank loans and for
construction.
1950
Gulf States Utilities Co
shares
common
Ctfs.
Common
Common
March
$25 principal amount of notes
a
Lynch, Pierce, Fen¬
(jointly); Kidder, Peabody & Co. and Blyth
(jointly); Equitable Securities Corp.; Lehman
Brothers; White, Weld & Co.
Proceeds—For
&
1950
6,
Exchange.
Public
& Beane
ner
Ctfs.
Preferred
Mining Co
Iowa
Service Co., Sioux
City, Iowa
Feb. 21 filed 50,000 shares of cumulative
preferred stock
(par $100). Underwriter—To be determined
by competi¬
tive bidding.
Probable bidders: A. C. Allyn &
Co.;
Harriman Ripley & Co. and Merrill
(EST)__Equip. Trust Ctfs.
noon
March
Missouri Pacific RR
(2/27-3/3)
•
.Common
March 2,
Corp.
14
(letter of notification) 3,334 shares of
common
(par $5).
Price—At the market (about
$18 per
share. Proceeds—To
selling stockholder. To be sold on
Preferred & Com.
Kansas Gas & Electric Co
Louisville Gas & Electric Co
—
Interchemical
Feb.
working
Statement effective Feb. 9.
New York Stock
March 1, 1950
Chicago & North Western Ry.
Noon (CST)
Equip. Trust
Chicago, St. Paul, Minneapolis &
Omaha Ry. 11 a.m.
(CST)
Equip. Trust
on Feb.
14,
373,557 shares,
East Tennessee
Jan.
47
stock
Notes & Com.
Shedd-Bartush Foods, Inc
74.71% of the
outstanding 550,000 shares of Duval
capital stock, has agreed to
purchase at the subscription
price any shares of stock not
subscribed for by other
stockholders.] Underwriter
None. Proceeds
To be
used, along with a $2,500,000 bank
loan, to provide min¬
ing and milling facilities to mine
potash in Eddy
County, N. M. Name changed Dec. 30
by stockholders to
Duval Sulphur & Potash Co.
Statement effective Feb. 14.
—
•
Common
Corp
share for each share held
[The United Gas Corp., owner of
or
& Power Co
East Tennessee Natural Gas
Co
Lowell Adams Factors
Hammill & Co., Los Angeles, Calif.
Duval Texas
Sulphur Co., Houston, Tex.
Dec. 21 filed
375,000 shares of capital stock (no
par) to
be offered to
stockholders at $13.50 per share at the rate
new
capital.
February 27, 1950
derwriter—Shearson,
1950.
(839)
Banco Nacional de
Mexico, S. A. Proceeds—To reduce
outstanding short-term indebtedness and for
February 23, 1950
Belt Ry. of Chicago, noon
(CST)__.Equip. Tr. Ctfs.
Central RR. of
Pennsylvania
Equip. Trust Ctfs.
3
a
CHRONICLE
NEW ISSUE CALENDAR
Douglas Oil Co.
qf %ths of
FINANCIAL
Street
Underwriter—None.
Feb.
&
Loeb, Rhoades & Co., State Street Invest¬
Corp. and State
Co.)
COMMERCIAL
Creameries,
Texas, and for working capital.
Street, Los Angeles, Calif.
Office
&
Co.
Inc.
Feb. 20 at
on
new
special,
or
a
com¬
of
100.16%
Stock
and
was
reoffered
offered to
Co., Inc.,
as
principal underwriter,
with rights to expire Feb. 27.
Proceeds—Property addi¬
tions and betterments. Statement
effective Feb. 10.
Lone
Jan.
to
25
Star
Steel Co., Dallas, Tex.
592,185 shares of common stock
filed
be offered to
common
stockholders
on
a
(par $1),
two-for-five
basis.
Price—$4 per share.
Underwriters—Straus &
Blosser, Chicago, 111., and Dallas Rupe & Son, Dallas.
build
(estimated
bination of both. Holders of
"American shares" of record
Feb. 14 have the right to subscribe
on or before 12 o'clock
noon on March
1, purchases to be filed with The Chase
National Bank of the
City of New York. Underwriter-
bid
interest.
stockholders of record Feb. 9 at the rate of one
share for each four
held, at $22.25 per share, with
W. Baird &
Robert
Proceeds—To
Industria Electrica de
Mexico, S. A., Mexico City
Nov. 29 filed 250,000 shares of
6% cumulative convertible
preferred stock, 100 pesos par value
($11.5607). Offer¬
ing—This stock is to be offered at
par to holders of
common and
special stock at rate of five shares for each
12 shares held, either of
common or
its
100.75 and
common
cost
to
cast
•
iron
$1,250,000)
current indebtedness.
pipe foundries
discharge part of
pressure
and
to
Longstreet-Abbott
Feb. 14 (letter of
& Co,,
Clayton, Mo.
notification) not more than $217,700 of
"Commodity Syndicate Contracts." No underwriter.
"capital in the syndicate is used as margin for the
chase
and
sale
The
pur¬
of
commodity futures in a joint venture
between 'cash participants' who
furnish the capital, and
(the) firm."
Office—8135 Forsyth, Clayton
24, Mo.
Continued
on
page
48
43
Continued
from,
page
Price—To
Loomis-Sayles Mutual Fund, Inc., Boston, Mass.
17 filed 75,000 shares of capital stock. Investment
O
Feb.
Manager—Loomis, Sayles & Co., Inc., Boston.
Business
investment fund.
•—An
Gas & Electric Co. (3/1)
Feb. 8 filed 101,297 shares of common stock (no par) to
be offered publicly.
Price—To be filed by amendment.
Underwriters—Lehman Brothers; J. J. B. Hilliard &
Louisville
(Ky.)
Sons; Stein Bro. & Boyce; Almstedt Brothers; and Blyth
& Co., Inc. Proceeds—For construction costs and working
capital.
Expected about March 1.
Factors Corp. (2/27)
notification) 50,000 shares of common
10c) and 25,000 shares of 6% cumulative
preferred stock (par $4).
Price—For pre¬
and for common, $2 per share. Underwriter
Guardian Securities Corp., New York.
Pro¬
working capital.
Office—20 Pine Street,
Adams
Lowell
Feb.
(letter of
2
stock
(par
convertible
ferred, par;
.—The First
ceeds—For
55,819 shares of capital stock (par $25).
Offering—To be offered at $35 per share to common
stockholders at the rate of one new share for each three
30 filed
Underwriter—None. Proceeds—To repay
construction and to make further im¬
chares held.
loans, for
bank
provements.
Metropolitan Edison Co.
!jan. 20 filed $7,000,000 of first mortgage bonds, due
and 30,000
shares of $100 par value cumulative
$100).
Underwriters—Names to
1980,
preferred
be deter¬
mined by competitive bidding.
Probable bidders: Drexel
& Co.; 'Harriman Ripley & Co. and Union Securities
Corp. (jointly); Carl M. Loeb, Rhoades & Co.; Halsey,
Stuart & Co. Inc.
(bonds); Kidder, Peabody & Co.;
White, Weld & Co. (bonds); Lehman Brothers (bonds);
Kuhn, Loeb & Co. (bonds); Smith, Barney & Co. and
Goldman, Sachs & Co. (jointly on preferred); Glore,
Forgan & Co. and W. C. Langley & Co. (jointly on pfd.).
atock
(par
construction
Proceeds—For
for
and to
reimburse treasury
Expected mid-March.
past capital expenditures.
Mexican
Inc.
Village,
of notification) 24,000 shares of common
stock to be offered at par ($10 per share).
No under¬
writer. Proceeds to buy real estate and erect buildings.
Office—518 Goodrich Building, Central and Washington
Jan. 23 (letter
Streets, Phoenix, Ariz.
O
Mid-States
Equipment Co.,
Detroit
of notification) 300,000 shares of common
stock (par 10c).
Price—$1 per share. ^UnderwriterGreenfield, Lax & Co., Inc.
Proceeds—To retire debt
and for additional working capital.
Office—8641 Lin-
Feb. 13 (letter
Middlesex
O
N. J.
on
basis.
one-for-five
a
Underwriter
—
Clark.
Proceeds—To pay notes and for additional
Dodge & Co.
(3 7)
Mississippi Power Co.
$3,000,000 first mortgage bonds.
Bids—
.Scheduled to be opened at 11 a.m. (EST) on March 7.
Underwriters—To be determined by competitive bidding.
3
filed
bidders:
Probable
Boston Corp.;
Halsey, Stuart & Co. Inc.; The First
Glore, Forgan & Co.; Equitable Securities
(jointly); Otis & Co.:
Blair, Rollins & Co. Inc. and Carl M. Loeb, Rhoades &
Go.
(jointly); Kidder, Peabody
& Co.
Proceeds—
To finance construction program.
The SEC will hold
Corp., and Union Securities Corp.
a
Muter
13
Power Co. (3/13)
of first mortgage bonds, due 1980.
Underwriters—Names to be determined by competitive
Pennsylvania
Co., Chicago, III.
stock (par 50c).
filed 53,000 shares of common
50,000 shares are offered by Leslie F. Muter, President,
and 3,000 are owned by the underwriter. Underwriter—
Dempse.y & Co., Chicago. Price—To be filed by amend¬
ment. Business—Radio and television parts.
Probable bidders: Halsey, Stuart & Co. Inc.;
Lehman Brothers; The First Boston Corp.; Equitable
Securities Corp. and R. W. Pressprich & Co. (jointly);
Carl M. Loeb, Rhoades & Co. and Blair, Rollins & Co.,
Inc. (jointly); Drexel & Co.; Merrill Lynch, Pierce, Fenner
& Beane and Harris, Hall & Co. (Inc.)
(jointly);
Kidder, Peabody & Co.; Otis & Co. Proceeds—To reim¬
burse
treasury for construction expenditures.
Bids—
Mutual
Shares
underwriter.
vestment
O
Corp., New York
of capital stock (p?r $5). No
Corporation is a diversified, open-end in¬
15 filed 2,000 shares
Feb.
company.
National
Research Corp.,
Cambridge, Mass.
4,000 shares of common
(par $1), to be offered at the market price for the
account of Clara A. Coolidge and others. Underwriter—
Paine, Webber, Jackson & Curtis, Boston.
Office—70
Feb.
14
(letter of notification)
stock
Drive, Cambridge, Mass.
Memorial
Jersey Bell Telephone Co. (3/14)
Feb. 10 filed $15,000,000 of 40-year debentures, due 1990.
Underwriter—To be determined by competitive bidding.
bidders:
Halsey,
Stuart
&
Co.
Inc.;
Morgan
Stanley & Co.; Kuhn, Loeb & Co.; Shields & Co.; First
Boston Corp.; White, Weld & Co.
Proceeds—To pay off
indebtedness owing to
Co.,
parent.
the
American Telephone & Telegraph
Expected
March
14.
Omar, Inc., Omaha, Neb,
Feb. 6 filed 20,000 shares of 4 V2 % cumulative convertible
.preferred stock ($100 par), of which 16,933 shares are
first to be offered in exchange for 16.933
standing 6%
shares of out¬
preferred stock at the rate of one share
of $1 for each new share,
120,000 shares common stock (par $1) to be
conversion of the convertible preferred.
$103
per
share.
Otter
Tail
Power
Co.
(par $5).
Underwriters—Names to be supplied by amendment and
Feb.
14 filed
125,000 shares of common stock
Co., Conrad, Mont.
(letter of notification) 50,000 shares of ($1 par)
stock at $1 each. No underwriter. Proceeds to
Hoole County, Mont.
Ltd., Toronto Canada
April 25 filed 1.150,000 shares ($1 par) common of whict
1,000,000 on behalf of company and 150,000 by New York
Co., Ltd.
Price—50 cents per share.
Underwriters—
S. G. Cranwell & Co., New York. Proceeds—For admin¬
istration
expenses
and drilling.
Statement effective
develop oil leases in
Power
Petroleum
June 27.
& Television,
Inc.
Standard-Thomson Corp.
Feb.
of notification) not to exceed 2,600 shares
stock (par 100), to be offered at market
$2.50 per share) for account of selling stock¬
Office—244 Madison Avenue, New York 16, N. Y.
capital
(about
holder.
Ramie
•
Products
Pittsburgh, Pa.
Corp.,
by Reginald N. Webster (President), Lillian M.
Webster and
John M. Kimball, Lincroft, N. J., and
share
Audrey J. Webster, Greenwich,
(letter of notification) 21,000
10
$1).
(par
Roanoke Pipe
•
New York.
Sudore Gold Mines Ltd., Toronto,
Line Co.
stock to be sold at par
offering 15,202 shares and Roanoke Gas Co., the parent,
offering 2.000 shares. No underwriter. Proceeds will be
used to construct and operate a pipe line from Gala, Va„
to Roanoke.
Office—123 Church Ave., S. W., Roanoke,
share (U. S. funds). Underwriter — None. Proceeds
be applied to the purchase of equipment,
road construction, exploration and development.
per
—Funds will
•
Sun
& Mining Corp.
200,000 shares of com¬
Engineering
(letter of notification)
stock at $1 per share. No
25
Sentinel
15
Radio Corp.,
underwriter.
(letter of notification) 40.000 shares of common
Service Finance Co.,
19
stock.
•
Underwriters—
and ten indi¬
& Co., Los Angeles.
Proceeds—For working
Office—607 S. Hill Street, Los Angeles.
Shawrnut
Association,
Boston,
Mass.
5,500 shares of common
stock (no par) to be sold at $16 per share (subject to
change due to market conditions) by the National Shawmut Bank of Boston. Underwriter—Paine, Webber, Jack¬
son
(letter of notification)
16
& Curtis, Boston.
6
filed
being sold jby Stephen J.
Bartush, President, and 20,000 are being'^offered by the
company directly to employees./ Underwriters (for the
120,000 shares)—Blair, Rolling & Co. Inc., New York,
and Shader-Winckler Co., Detroit.
Price—To be filed
by
($10 par)
which
120,000
amendment.
shares
are
20,000 shares
Proceeds—From
added to cash balance.
to be
Business—Manufacturer of food
Expected about Feb. 27.
products.
Sinclair
Oil
vision"
device, whereby television users could pay a
special fee for costly television programs by calling the
telephone company and asking to be plugged in.
•
Tect, Inc.
of notification) 50,000 shares of 6%
profit-sharing preferred stock (par $1) and10,000 shares of common stock (par $1), to be offered
by company at par.
No underwriter.
Proceeds for
manufacture
and
sale of
products and purchase of
14
(letter
Office—556 Grand Avenue, Englewood, N'. J.
equipment.
Texas
Utilities
Co.
(3/20)
400,000 shares of common stock (no par).
Underwriter—To be determined by competitive bidding.
Feb.
filed
16
Probable bidders:
Blyth & Co., Inc. and The First Bos¬
(jointly); Lehman Brothers; Goldman, Sachs
Ripley & Co., Inc. (jointly); Union
Securities Corp.; Merrill Lynch, Pierce, Fenner & Beane
and Kidder, Peabody & Co. (jointly); First Southwest
Corp., Rauscher, Pierce & Co. and Dallas Union Trust
Co. (jointly). Bids—Expected to be received on or about
March 20.
Proceeds—To increase common stock invest¬
ton
Corp.
ments in subsidiaries.
Jan.
13
terest
officers
and
acquired. The maximum number of shares which can be
in a five-year period is 598,700, or
5% of the outstanding shares.
Proceeds—For gpneral
sold under this plan
funds.
1970; 32,000 shares of $5 class A
preferred stock (no par), with .no rights to
1956; 52,000 shares of $5 class B cum¬
preferred stock (no par), with no rights to
income debentures due
cumulative
until
dividends
ulative
Inc., San Antonio, Texas
Feb. 10 (letter of notification) $194,000 of 4% convert¬
ible income debentures, due 1957 (non-interest bearing
until March 1, 1952), and 19,400 shares of common stock
(par $10), into which the debentures will be convertible.
Underwriter-—Fridley & Hess, Houston. Proceeds—For
general corporate purposes.
South
Carolina
South
payable on debentures must first be approved by RFC,
recently loaned the company $15,100,000. Under¬
writer—None. Business—Oil production.
Upper Peninsula Power Co.
200,000 shares of common stock
Underwriters—SEC has granted exemption
from competitive bidding. An investment banking group
managed by Kidder, Peabody & Co.; Merrill Lynch,
Pierce, Fenner & Beane, and Paine, Webber, Jackson &
Curtis may be underwriters. Proceeds—Will go to sell¬
ing stockholders. Consolidated Electric & Gas Co., Mid¬
dle West Corp., Copper Range Co. and private indi¬
viduals v/ill sell
120,000 shares, 34,000 shares, 34,800
Feb.
10
(amendment)
$9).
(par
Electric
Valley Forge Golf Club
Feb.
14
(letter of notification)
cumulative
of
preferred
stock
common
shares
of
preferred and
shares
and
(no
shares
&
Gas
Co.,
Columbia,
Expected in January.
in
offered
units
of one
be
offered
Proceeds to
to
repay
employees
at
par.
loan of $10,000 and
principal of first mortgage. Office—Care of
Davis, Treasurer, Times Medical Building, Ard-
reduce
Pa.
more,
Videograph Corp., N. Y. City
(letter of notification) 300,000 shares of common
stock
(par 10c^.
Price—$1 per share. Underwriter—.
George J. Martin Co., New York.
Proceeds—For addi¬
tional
working capital.
Business—Assembles a coin
operated combination television and phonograph. Office
Feb. 2
this
New York, N. Y.
Expected end of
month.
Virginia Electric & Power Co. (2/23)
(3/8)
an unspecified number of shares of common
Jan. 31 filed
stock
and 100,000 shares of preferred stock
The company has called for conversion
(par $10)
$100).
(par
March
2
$4,000,000 of its 3 Va%
convertible debentures,
It will sell underwriters
stock equal to those
on
or before Feb.
20 in converting the de¬
Underwriters—For common stock:
Stone &
1963, at 102% and interest.
the
number
not
issued
&
$22,200,000 first and
Co.;
the
be
common
will
No underwriter.
(probably Halsey, Stuart & Co. Inc.; Kidder, Peabody &
The First Boston Corp.; Union Securities Corp.).
filed
par),
to
shares of 6%
and 3,300 shares
preferred and 1,000
1,000
(par $50)
share at $51 per unit; 2,100
will be reserved for exercise of options;
one
common
200
stock
stock
common
bentures.
22
respectively.
•
due
Carolina
stock
which
refunding mortgage
bonds.
Due 1979. Underwriter—Names by amendment.
Proceeds—To
redeem
a
like amount
of outstanding
bonds.
Due 1979.
Underwriter—Names by amendment
Nov.
1956; and 2,000 shares of common
(no par), represented by voting trust certificates; to be
issued under a plan of debt adjustment.
Any interest
—701—7th Avenue,
Slick Airways,
Dallas, Texas
$3,000,000 of 4¥2% senior cumulative in¬
debentures due
1965; $1,200,000 of 5% junior
filed
Edward
Corp.
of common stock (no par) to
employees of the company
and subsidiaries under a stock purchase plan.
These
shares are either held in the treasury or will be re¬
to
stock.
working capital and the promotion of Zenith's "Phone-
to
Jan. 27 filed 598,700 shares
offered
common
are
shares and 11,200 shares,
Foods, Inc., Detroit (2/27)
140,000 shares of common stock (par $1),
Shedd-Bartush
Feb.
No
Address—•
to be offered to holders of
common stock in Zenith Radio Corp. at rate of one share
for each five held.
Underwriter—None. Proceeds—For
Offering—These shares
Los Angeles, Calif.
(letter of notification) 65,000 shares of common
Price—Par ($1 each).
Underwriter—Dempsey
Tegeler
capital.
share.
545, Hailey, Idaho.
Teco, Inc., Chicago
Nov. 21 filed 100,000 shares
dividends until
III.
Evanston,
stock (par $1).
Price—$6.50 per share.
Sulzbacher, Granger & Co., New York,
viduals.
Proceeds—For working capital.
Dec.
Inc.
(par 10c). Price—25 cents per
Proceeds for mine development.
capital stock
Texmass Petroleum Co.,
Francisco
underwriter. Proceeds
develop and operate the Mad Ox mine, Shasta County,
Calif.
Office—139 N. Virginia Street, Reno, Nev. *and
821 Market Street, San Francisco, Calif.
•
Valley Lead-Silver Mines,
(letter of notification) 400,000 shares of unissued
Feb. 9
Va.
San
Canada
375,000 shares of common stock. Price—$1
filed
June 7
& Co. and Harriman
(letter of notification) 17,202 shares of common
($10 per share), with the company
14
Feb.
Underwriters—
Conn.
Higginson Corp., Carreau & Co. and Reich & Co.,
Lee
•
shares of common
Price—$3 per share.
UnderwritersSmith, Talbott and Sharpe, Pittsburgh.
Proceeds—For,
additional operating expenses.
Feb.
stock
(letter of notification) 21,500 shares of common
be sold at the market price of about $4.50 per
1
stock to
cumulative
Feb. 16 (letter
of
Horner & Mason, Inc., Lynchburg.
Underwriter—Scott,
Feb.
Radio
•
reserved
Under¬
writer—Kirkpatrick-Pettis Co., Omaha, who will reoffer
unexchanged and free (3,067 shares) 4%% preferred at
for
Oil
Lynchburg, Va.
Inc.,
Bakers,
(letter of notification) 1,895 shares of common
stock to be sold at $11 per share by two stockholders.
15
Box
common
of 6% stock and the payment
and
(EST) on
13.
3
Feb.
be
New
Probable
expected to be received at 11 a.m.
are
Pioneers
•
of
O
Sta-Kleen
bidding.
Feb.
hearing Feb. 17.
Feb.
nepheline
Feb. 1 filed $3,000,000
Feb.
working capital.
Feb.
Business—Mining
costs.
to
9
share
mining
syenite deposits.
mon
Newark,
Water Co.,
(letter of notification) 5,200 shares of common
stock to be offered to common stockholders at $50 per
Feb.
ceeds—For
Jan.
Detroit 6, Mich.
wood Ave.,
1,000,000 shares of capital stock (par $1
Canadian funds).
Price—40 cents per share.
Under¬
writer—F. W. Macdonald .& Co., Inc., New York . Pro¬
•
Feb.
filed
21
March
Electric Light Corp., Lowell, Mass.
Lowell
Dec.
Ltd.
Nepheline Mining Co.,
Palisades
9
Feb.
Bids
N. Y.
New York,
include Glore, Forgan & Co. and Kalman & Co., Inc.
be supplied by amendment.
Proceeds—To
retire bank loans.
Expected to be issued after March 1.
may
47
Thursday, February 23, 1950
FINANCIAL CHRONICLE
&
COMMERCIAL
THE
(840)
Webster
of
shares of
common
Inc.; Harriman
Boston Corp. and Kidder,
For preferred stock: Stone
Securities Corp. may head group.
Price—
Securities
Corp., Blyth & Co.,
Ripley & Co., Inc.; First
Peabody & Co., New York.
Webster
To be
mon
filed
stock
by amendment. Proceeds—From the com¬
will be used to redeem unconverted
sale
Volume
171
Number 4884
THE
debentures, and from the preferred stock sale, to finance
construction.
and
Volunteer
Gas
Jackson
10
each.
No underwriter.
—304 S.
i«
•
5
bonds
and
through
issuance
6
about
Louisiana
reported
company
$27,500,000
to
of
refunding
internal
new
Gas
to
sterling
bonds
debt
basis.
in
mid-
First Boston
The
Corp.
Co.
be
considering offering of
first mortgage 3%
on
stock
common
or
on
a
In
bonds, the proceeds
Natural
Gas Corp.
unexchanged new 3%% preferred
stock
(issuable in exchange for 6% preferred
stock,
share for
share, under proposal to split company into two
units) will be sold publicly.
Gas
on
Feb.
System,
24.
'
i
pany's program currently calls for the sale of
of additional common or
preferred stock and
$10,000,000
$17,000,000
of debentures to finance its
expansion program.
Under¬
writers^—May be named by competitive bidding.
Prob¬
able bidders for equities:
Blyth &
and R. W. Pressprich & Co.
Co., Inc.; Shields & Co.
(jointly); Merrill Lynch,
Lehman Brothers, Goldman,
Fenner & Beane;
Sachs & Co. and Union Securities
Corp. (jointly); Mor¬
Stanley & Co. Probable bidders for debentures: Hal¬
sey, Stuart & Co. Inc.; Salomon Bros. &
gan
Hutzler; Morgan
Stanley & Co.; Lehman Brothers; Merrill Lynch,
Pierce,
Fenner & Beane.
Ry. Co. of Chicago (2/23)
be received by the
company at Room
211,
47 West Polk
Street, Chicago 5, 111., at or before 12
o'clock noon (CST) on Feb. 23
for the purchase from it
of $2,832,000
equipment trust certificates of 1950, to
mature serially in 24
equal semi-annual instalments be¬
ginning on Oct. 1, 1950, and ending on April
1, 1962.
Probable bidders:
Halsey, Stuart & Co. Inc.; Salomon
Bros. & Hutzler; Harriman
Ripley & Co. and Lehman
Brothers (jointly); Harris, Hall & Co.
(Inc.); Lee Higginson Corp.
Boston
Edison
Carolina, Ciinchfield
reported
company
of
$3,885,000
mortgage bonds. Probable bidders: Halsey, Stuart & Co.
Inc.; First Boston Corp. and Kidder,
Peabody & Co.
(jointly); Dick & Merle-Smith; R. W. Pressprich &
Co.;
Harriman Ripley & Co. and
Drexel & Co.
(jointly).
Proceeds to pay notes due to Louisville &
Nashville RR.
month or early in March.
Expected late this
Central RR. of New
(Inc.); Salomon
Hutzler; Harriman Ripley & Co. and Lehman
Brothers (jointly). Expected March.
24
RR.
of
Pennsylvania
reported
(2/23)
company may issue
ment trust certificates to bear the
tral RR. of New Jersey.
$3,180,000 equip¬
guaranty of the Cen¬
Probable bidders include: Hal¬
Stuart & Co. Inc.; Salomon Bros. &
Hutzler; Harris,
Hall & Co. (Inc.).
sey,
Chicago & North Western Ry.
Bids for
the
purchase from the
company
the
office
of
R.
L.
(jointly); The First
Harris, Hall & Co. (Inc.).
/
Boston
Corp.;
Chicago, St. Paul, Minneapolis & Omaha
Ry.
(3/1)
Bids for the
purchase from the company of
$915,000
equipment trust certificates, series of
1950, to be dated
April 1, 1950, and to mature in either 10 or 15
equal
annual instalments
beginning on April 1, 1951, will be
received at the office of R. L.
Williams, President, in
Room 1400, Daily News
Bldg., 400 West Madison St., Chi¬
cago 6, 111., up to 11 a.m. (CST) on March
1, 1950. Prob¬
Halsey, Stuart & Co. Inc.; Harriman
Ripley
Lehman Brothers
tjointly); Salomon
Bros. & Hutzler; The First Boston
Corp.; Harris, Hall
& Co. (Inc.).
Co.,
Inc.
and
Chicago & Western Indiana RR.
Jan. 31 reported company will
probably issue in the
future some bonds to refund the
4% non-callable
solidated first mortgage bonds due
bidders:
Halsey,
Stuart
&
Co.
Kidder,
was
Delaware
development of hydro-electric
River
in
New
power on
Jersey, Pennsylvania and
approximately $47,000,000, which would be
financed through the issuance of
$28,200,000 bonds, $14,preferred stock,
$4,700,000
stock and 100,000 shares of
no
par
convertible
value
common
common
stock.
Equitable Gas Co.
Jan.
19
Standard Gas
delphia Co.
may
&
Electric
shortly file
an
Co.
announced
Phila¬
application with SEC to
sell its
Equitable Gas Co. common stock to be outstand¬
ing following its proposed reorganization (see also Wis¬
consin
Loeb
Public
Service Corp. below). Probable
Brothers and Drexel & Co.
&
Co.
Hutton &
Boston
Corp.;
Florida
bidders:
(jointly); Kuhn,
Smith, Barney & Co. (jointly); W. E.
Glore, Forgan & Co. (jointly); First
Harriman, Ripley & Co., Inc.
and
Co.
and
Power &
lowing have
groups to bid on the 191,590 shares of com¬
stock which Electric Bond & Share Co.
will receive
upon consummation
of American Power &
mon
Light Co.
plan: Blyth & Co. Inc.; Dillon, Read & Co.
Inc.; Lehman
Brothers; First Boston Corp.; Merrill
Lynch, Pierce,
Beane; Glore, Forgan & Co.; Union Securities
Power Co.
(4/4)
Inc.;
Blyth & Co., Inc. and Kidder, Peabody & Co.
(jointly);
The First
Boston
Corp.; Union Securites Corp. and
Equitable Securities Corp.
(jointly); Shields &
& Co.
•
&
Co.;
Co.; Morgan Stanley & Co.; Harriman
Ripley
Proceeds—To finance construction
program.
Gulf States
Utilities Co.
Feb. 16 reported
company may offer $7,500,000 preferred
stock and $13,000,000 "new
money" bonds later in April
or
May, this year. Probable bidders for bonds:
Halsey,
Stuart & Co. Inc.; Blair, Rollins &
Co., Inc. and Carl M.
Loeb, Rhoades & Co. (jointly); The First Boston
Corp.;
Equitable Securities Corp. and Union Securities
Corp.
(jointly); Glore, Forgan & Co.; Kidder,
Peabody & Co.
•
near
con¬
possibility.
Inc.; Morgan
& Co.
(Inc.).
Laclede Gas
20
vote
on
announced
that
on
April
20
will
proposal to authorize the directors to incur
to $3,500,000 of indebtedness on
a
long-term basis, so
to place the
company in a position to do such
up
as
financing
voted
to
authorize
a
nevif
& Beane and Reinholdt &
Gardner
ner
man
(jointly); Harri¬
Ripley & Co.; White, Weld & Co. Proceeds—To be
$20,000,000 construction program
used to finance part of
planned
the 1950-1953 period.
over
Louisiana Power & Light Co.
Feb. 6 reported
company may sell between $4,000,000 ami
$6,000,000 of bonds, and refund the
outstanding $6 pre¬
ferred stock.
Probable bidders: W. C.
Langley & Co.
and First Boston
Corp. (jointly); Halsey, Stuart & Co.
Inc.; Merrill Lynch, Pierce, Fenner & Beane and
Kidder,
Peabody & Co. (jointly); Kuhn, Loeb & Co., and Leh¬
man
Brothers
(jointly); Shields & Co. and White, Weld
(jointly); Salomon Bros. & Hutzler; Blyth &
Co.,
Inc.; Harriman Ripley & Co., Inc.
& Co.
.
Metropolitan
Edison
Co.
Feb. 9 company informed SEC it
intends (in addition to
current financing) to sell in
September, 1950, $4,000,000
bonds and $2,000,000 preferred stock.
Probable bidders
on bonds:
Halsey, Stuart & Co. Inc.; Kidder,
Peabody &
Co.; White, Weld & Co.; Drexel & Co.; Harriman
Ripley
& Co. Inc. and Union
Securities Corp. (jointly); Carl M.
Loeb, Rhoades & Co.; Lehman Brothers. On
preferred
stock:
Smith, Barney & Co. and Goldman, Sachs & Co.
(jointly); Drexel & Co.; Glore, Forgan & Co. and W.
C,
Langley & Co. (jointly); Kidder,
Peabody & Co.; Carl
M. Loeb, Rhoades & Co.
Missouri
Pacific
RR.
(3/6)
invitations for bids March 6 on
$3,000,000 equipment trust certificates, due
serially 19511965. Probable bidders:
Halsey, Stuart & Co. Inc.; Salo¬
mon
Bros. & Hutzler, Drexel &
Co., Union Securities
Corp. and Stroud & Co., Inc. (jointly); Lehman
Brothers,
Bear, Stearns & Co. and Paine, Webber, Jackson & Cur¬
tis (jointly); Harris, Hall & Co.
(Inc.).
15
trustee
issued
•
Monongahefa Power Co. (3/28)
Feb. 20 reported
company filed an application with the
SEC covering
60,000 shares of cumulative preferred
stock, series C (par $100), to be sold through competitive
bidding.
Bids are expected to be received around
March
28.
It
also
sought authority to issue 230,770
stock (par $6.50) to West Penn Elec¬
the parent.
Probable bidders for preferred
stock: Blyth & Co., Inc.; Drexel &
Co.; Harriman Ripley
& Co., Inc. and Union Securities
Corp. (jointly); Carl M.
Loeb, Rhoades & Co.; Kidder, Peabody &
Co.; Smith,
Barney & Co., and Goldman, Sachs & Co.
(jointly);
Glore, Forgan & Co. and W. C. Langley & Co.
shares of
tric
common
Co.,
Proceeds will be used for construction
expenditures.
New York Central RR.
Feb.
7
reported
that
offering of $9,000,000
equipment
trust
certificates is expected early in
April. Probable
bidders: Halsey, Stuart & Co.
Inc.; Salomon Bros. & Hutz¬
ler; Harriman Ripley & Co., Inc. and Lehman Brothers
(jointly). Expected in April.
New York State Electric &
14
Gas
announced
Corp.
Future equity capital will be
necessary in connection
with the construction
program.
Traditional underwriter:
First Boston
Corp.
Other probable bidders for
The
preferred issue: Kuhn, Loeb & Co.; W. C.
Langley & Co.;
Lehman Brothers and
Glore, Forgan & Co. (jointly )j
Harriman, Ripley & Co., Inc.; Salomon Bros. &
Hutzler;
Kidder, Peabody & Co. and Merrill Lynch,
Pierce, Fen¬
ner
& Beane
(jointly).
Northern Indiana Public Service Co.
Feb. 8 reported company is
Hytron Radio & Electronics Corp.
Fe]a. 10 reported company plans issuance Of about
200,000 shares of convertible
preferred stock at around $8
per share and about
400,000 shares of common stock at
Traditional underwriter:
(3/28)
j<
planning sale of approxin
mately $12,000,000 new first mortgage bonds. Probably
bidders:
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.;
Central Republic Co., and Merrill
Lynch, Pierce, Fenner
& Beane; Union Securities
Corp.; First Boston Corp.;
Harriman
Bear,
Ripley
Stearns
&
&
Co.,
Inc.; Lehman
(jointly); White,
Co.
Equitable Securities Corp.
for construction costs.
23
with
Brothers
and
Weld
Co.;
&
Proceeds to be used to pay
Registration expected about Feb.'
offering about March 28.
Natural
Gas
Co.,
Omaha,
Neb.
Jan. 20 announced that the company
proposes to
and
sell
issue
at
competitive bidding $40,000,000 of 2%%
20-year debentures and to sell 304,500 shares of common
stock
on
the
basis
outstanding,
share.
Light Co.
stockholders
ders; The First Boston Corp. and Blyth & Co., Inc.
(joint¬
ly); Smith, Barney & Co. and Goldman, Sachs & Co,
(jointly); Lehman Brothers, Merrill Lynch, Pierce, Fen¬
Northern
stockholders
a
between $4 and $5 per
Barrett Herrick & Co.
14
of
480,000 shares of preferred stock (par
$25),
of which 160,000
may be presently issued, and to
change
the name of
company to Laclede Gas Co. Probable bid¬
Hamilton Watch Co.
Feb.
Feb.
stockholders will vote in March on
increasing the authorized preferred and common stocks.
Jan. 17 reported company
expects to file a registration
statement with the SEC on March 3
covering $15,000,000
of debt securities. Bids are
scheduled to be received on
April 4. Probable bidders: Halsey, Stuart & Co.
Drexel
on
Probable bidders:
Feb.
Georgia
7
serially 1951Halsey, Stuart & Co. Inc.; R. W.
Pressprich & Co.; Salomon Bros. & Hutzler; Harris, Hall
1965.
(jointly).
Light Co.
Jan. 12 McGregor
Smith, President, said company plans
to spend
$18,000,000 in 1950 for construction. The fol¬
Fenner &
Blyth & Co., Inc.;
RR.
(3/7)
15, trustee issued invitations for bids March
$900,000 equipment trust certificates, due
Feb.
announced that the estimated over-all cost
New York is
underwriters:
International-Great Northern
®
Development Corp;. Jersey
when deemed
necessary.
July 1, 1952. Re¬
funding of the first and refunding
mortgage 4(4% bonds,
series A, due Sept.
1, 1962, is also said to be a
Probable
River
of the proposed
able bidders:
<&
Delaware
the
of
Williams, Persident, in Room
1400, Daily News Building, 400 West Madison
Street,
Chicago 6, 111., up to 12 o'clock noon
(CST) on March
1, 1950. Probable bidders: Halsey, Stuart & Co.
Inc.;
Salomon Bros. &
Hutzler; Harriman Ripley & Co., Inc.;
and Lehman Brothers
conversion of 3.6% stock will be
Traditional underwriters:
Corp.
(3/1)
$7,065,000
equipment trust cetrificates, series of
1950, to be dated
April 1,1950, and to mature in either 10 or 15
equal annual
instalments beginning on April 1,
1951, will be received
at
underwriters.
Feb. 10 it
&
Central
Jan.
to
Lehman
Jersey
Jan. 30 reported
planning sale of $3,700,000 l-to-15-year
equipment trust certificates. Probable bidders:
Halsey,
Stuart & Co. Inc.;
Harris, Hall & Co.
Bros.
sold
up on
Peabody & Co.; The First Boston Corp.
100,000
sale
in conversion of 3.6% stock will be
1% shares of common stock. The common
City, N. J.
& Ohio RR.
planning
not taken up
stock not taken
®
$18,000,000
1980, probably about
the middle of April. Probable
bidders: Halsey, Stuart &
Co. Inc.; Lehman
Brothers; First Boston Corp.; Harri¬
man, Ripley & Co. Inc.; White Weld & Co.
4
stock
Co.
Jan. 26 reported
company is planning to issue
of first
mortgage 30-year bonds due
Feb.
Feb. 8 company reported to be
planning issuance of $2t>,000,060 of new cumulative non-convertible preferred
stock (par $100)
following redemption of a like amount
of outstanding
3.6% cumulative convertible preferred
vertible into
•
•
Commercial Credit Co.
will
Traditional
Feb.
issue
Belt
Bids
Roach, President, said company plans to sell
4%
preferred stock later this year to raise
$4,000,000 to finance, in part, its 1950 construction
up to
On
Inc.
17 company
Pierce,
additional
The proceeds will
or not part of such
requirements should be obtained from
the sale of preferred stock. Such determination will be
made when the
financing "is closer at hand." The com¬
bidders: Halsey,
Stuayt & Co. Inc.; First Boston Corp. and Lazard Freres
Co. (jointly); Union Securities
Corp.; Smith, Barney
& Co.; Equitable Securities
Corp.
announced
Columbia
SEC
applied to the SEC for authority to re¬
classify and change 1,000,000 shares of its unissued com¬
mon stock (no
par) into 1,000,000 shares of unissued pre¬
ferred stock (par $50). While it is
anticipated that addi¬
tional equity financing of the construction
program, will
be required in 1950, it has not been determined
whether
&
6
April 7 for 498,666 shares of
subscribe
to
49
Idaho Power Co.
Feb. 7 T. E.
program.
stockholders of record
right
used to finance construction
program.
Feb.
repay $21,125,000 bank loans and to pro¬
vide additional
working capital. The sale of these bonds
is contingent upon
approval by SEC and favorable Court
action on Arkansas Natural
Gas Corp.'s plan to split
itself into two new
companies. Probable
Arkansas
the
be filed with the
•
dollar
be used to
Feb.
common
to
callable
and
$60,000,000
Probable underwriters:
Arkansas
Feb.
its
of
that
given
(841)
Wegener & Daly Cor^)., Boise, Idaho.
Electric Co.
be
considering
payment
be
&
Webber,
addition, employees and officers
may subscribe for 58,000 shares, and any shares not taken
by the stockholders. A registration statement is expected
(Province of)
reported
March.
will
one-for-five
Alberta
Gas
announced
15
before
•
&
20
March
-
Prospective Offerings
Feb.
CHRONICLE
Brothers; Paine,
Curtis; Kidder, Peabody & Co.
Cincinnati
Feb.
Proceeds to drill test well. Office
Gay St., Knoxville, Tenn.
FINANCIAL
Bros. & Hutzler (jointly);
Harriman, Ripley & Co., Inc.;
First Boston Corp.; Lehman
& Oil Corp.
(letter of notification) 1,500 shares of class A
common stock (no
par) and 1,000 shares of class B com¬
mon stock
(no par) with the class A to be sold at $100
Feb.
&
Stanley & Co.; Lee Higginson Corp.; Harris, Hall & Co.
(Inc.); Drexel & Co.; Kuhn, Loeb & Co. and Salomon
Common stock offering expected Feb. 23
on March 8.
preferred stock
•
COMMERCIAL
the
of
one
latter
to
share
for
eight
shares
now
supply
from $9,060,000 to
The net proceeds, together
with other funds, will be used to finance
the company's
$10,657,500 of
new
capital.
construction program. Probable bidders-for
tures: Halsey, Stuart & Co.
First Boston
the deben¬
Inc.; Blyth & Co., Inc.; The
Corp.; Kidder, Peabody & Co.
Continued
on
page
50
50
(842)
THE
COMMERCIAL
Continued from page 49
•
Public
Feb.
Otter Tail
Power
Electric Co.
Feb. 8 company announced its plans to issue and sell
1,656,156 shares of common stock to common stockholders
about March 20, 1950, at the rate of one new share for
each five shares owned.
•
The subscription
period is ex¬
pected to close April 5, 1950. The offering will be under¬
written by a nationwide group of underwriters probably
headed by Blyth & Co., Inc.
The proceeds are to be used
for expansion.
•
Pacific
Feb. 18 it
Gas
&
Electric
Co.
ceeds for
Pennsylvania
Power
&
Blyth
Co.,
Inc.
be
Light Co.
Halsey,
Stuart
&
Co.
bidders
Feb.
16
first
mortgage bonds
now
debentures.
or
Light Co.
announced that company
proposes during
and sell common stock on the minimum
was
share of
one
now
used to repay
White
Seaboard Air
Line
15 it was said the
RR.
(3/23)
loans and for construction.
Harriman
Ripley
&
company
Co.,
Inc.
Lehman
and
of
Southern
Dec.
19
Jan.
ac¬
Service
Standard
Corp.
Gas
&
Electric
Co. would
application with the SEC to sell all the
an
stock
of the
Wisconsin subsidiary, and the
Philadelphia Co., its principal subsidiary, will ask the
able
issue and sell approxi¬
Gas
Co.
to
be
able
System to sell only
Co.; Merrill Lynch, Pierce, Fenner & Beane; the First
It is the intention
of these holdings. Prob¬
one
Ipidders for Wisconsin stock: First Boston
Robert
and
Boston Corp.: Shields & Co.: Kidder. Peabody & Co.
stock of Equit¬
common
outstanding following its proposed
reorganization (see Equitable above).
of the
Probable
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.;
reported to be forming.
i
Public
announced
common
Brothers; Harris Hall & Co. (Inc.); White, Weld
&
450,000
SEC for permission to sell the
Lehman
$7,500,000 of
19
on in¬
capital stock (par $20) from
shares, through issuance of 150,000
shares.
shortly file
Brothers
Bidding expected about March 23.
may
to
Dental Mfg. Co.
authorized
Wisconsin
California Gas Co.
reported company
(S. S.)
the
additional
plans to sell $7,050,000
l-to-15 year equipment trust certificates.
Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Salomon Bros. &
Hutzler;
(Inc.); First
Underwriting
manufacturing of coke in Utah
new stock for each
eight shares of
outstanding, and to issue and sell $10,000,000 of first mortgage bonds. Probable
bidders for bonds:
Halsey, Stuart & Co. Inc.; Drexel & Co.; Harriman Rip¬
ley & Co., Inc. and Union Securities Corp.
(jointly); Kid¬
der, Peabody & Co.; White, Weld & Co.; Lehman Bro¬
thers; Car! M. Loeb, Rhoades & Co. Proceeds—To be
Corp.
bidders:
sell
Power &
issue
300,000
•
Colorado
expects to
company
to
common
include
mately $20,000,000 of bonds, probably in May.
of
and
creasing
Securities
Corp. (jointly).
Co.
(4/10)
offer
Feb. 2 announced stockholders will vote
April 4
Feb.
Inc.; Salomon
care
Co.
will
Colorado
Utah
1950
and
Probable
Price—
set at 100.
Union
financing through issuance of series
Service
are
arranged.
March V.
on
Halsey,
Stuart & Co. Inc.; Kuhn, Loeb & Co.; Lehman Brothers;
First Boston Corp. and Harriman Ripley & Co. (jointly);
Z certificates.
reported
•
(jointly); Harris, Hall & Co. (Inc.) and Lee Higginson
additional equipment
counts
basis of
be
noon
price, with the minimum
and sale of said products.
Feb. 17 it
could
Ripley & Co. Inc. and Leh¬
Jan. 9 also reported company is expected to take
Fuel
referee
Utah and
Corp.
opened at
the
at public auction at 11 a.m. on
April 10 all of the 100,000 outstanding shares of stock of
this corporation at the Guaranty Trust Co. of
New York,
140 Broadway, New York.
Business—Mining of coal in
appointed a committee to proceed with
refunding of the approximately $31,800,000 outstand¬
ing first mortgage bonds, provided satisfactory terms
Pennsylvania RR.
Public
Utah
The
common
Securities
be
name
on
Seaboard Air Line RR.
Boston Corporation.
•
7
the
Brothers (jointly); Harris, Hall & Co.
man
March
Feb. 7 directors
(3/1)
Bros. & Hutzler; Harriman,
Bids to
Bidders to
Ladenburg, Thalmann &
Co. (jointly); Merrill Lynch, Pierce, Fenner & Beane;
Kidder, Peabody & Co.; F. Eberstadt & Co.; Allen & Co.
received
bidders:
bids
Co.
&
(3/7)
to offer at competitive bidding 440,000 shares
stock (total issue outstanding) late in March
early in April. Registration with the SEC expected
shortly. Probable bidders: A. G. Becker & Co. (Inc.),
by the company at Room 1811,
Broad Street Station Bldg.,
Philadelphia 4, Pa., at or
before 12 o'clock noon (EST) on March 1 for the sale
by
it of $10,200,000 equipment trust
certificates, series Y,
to be dated Jan. 1, 1950, and to mature in 15 annual in¬
stalments of $680,000 from Jan. 1, 1951 to Jan.
1, 1965.
Probable
for
(3/9)
Underwriters—Names to be determined
by competitive
bidding. Probable bidders: Halsey, Stuart & Co.- Inc.;
Morgan Stanley & Co.; Blyth & Co. Inc.; White, Weld
or
writers: First Boston Corp.; Drexel & Co.
will
invitations
Co.
approval, the
10, 1950 of the
privilege to subscribe, at par, on or before March 31,
1950, for $37,727,600 of convertible debentures, due April
1, 1960, convertible into common stock at $55 per share.
paring
of
Pro¬
ities (probably preferred and common
stock) to finance
balance of 1950 construction program. Traditional under¬
Bids
trustee issued
Pacific
16 directors approved, subject to ICC
offer to stockholders of record March
Union
&
Jan. 26 company announced that it may be
necessary to
issue sometime this year about $18,000,000 of new secur¬
Pennsylvania RR.
15
Southern
Feb.
Jan. 26 announced the Alien Property Custodian is pre¬
construction.
new
Louis, Brownsville & Mexico Ry.
Thursday, February 23, 1950
•
(5/2)
Schering Corp.
reported company may offer this Summer
early Fall an issue of $75,000,000 of bonds. Inquiry
brought official word that no new financing was immi¬
underwriter:
Electric & Gas Co.
company
$750,000 equipment trust certificates, due serially 19511965. Probable bidders: Halsey, Stuart & Co.
Inc.; R. W.
Pressprich & Co.; Salomon Bros. & Hutzler; Harris, Hall
& Co. (Inc.).
was
Traditional
St.
Feb.
or
nent.
Service
announced
CHRONICLE
plans to offer $26,000,000
refunding mortgage 30-year bonds. Underwriters—Names
to be determined by competitive bidding. Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.
and Drexel & Co. (jointly); Kuhn, Loeb & Co. and Leh¬
man Brothers
(jointly); First Boston Corp.; Union Secur¬
ities Corp. and White, Weld & Co. (jointly).
Proceeds
—To refund 3V4% bonds due 1966. Expected about May 2.
Co.
Feb. 15 said 25,000 shares of cumulative
preferred stock
may be offered publicly or placed privately.
Probable
bidders: Glore, Forgan & Co.; Kalman & Co.
Pacific Gas &
7
FINANCIAL
&
W.
Baird
&
Corp. and
(jointly); W. E. Hutton & Co.
Co.
Glore, Forgan
&
Co.
(jointly); Harriman, Ripley
& Co.
Continued from page 16
land, it cannot get to first base. lesson from this and adopt a policy
Where it is partially weakened, of astuteness rather than a policy
as
in Italy
and France, it can of irritation. Belonging to the un¬
Why Not Use Diplomacy?
resemblance
to
diplomacy,
dead
accidental.
raise temporary havoc, but
not
call cautious reconciliation.
If the
conquer.
Balkans
Where,
as
it can¬
in the
popular school of "rugged indi¬
vidualism," I have written and
spoken against Communism and
its twin, Socialism, for 30 years,
China, the system has
alive, was purely
Administration, under the seeth¬ been frightfully weakened through
By contrast, General MacArthur's ing impact of public opinion and preceding exploitation, it enters all of which is in cold evidence,
astute
handling
of
the
Com¬ Mr. Churchill's return to his
The and I cannot therefore get en¬
origi¬ completely and takes over.
munists recognizes this ingredient nal 1945
position, will modify its arch enemy of Communism is thusiastic about the last minute
of the oriental mind.
policy remains to be seen.. The normalcy and recovery.
The en¬ bandwagon jumpers whose noise
Hickerson retreat statement would tire concept of converting a Com¬ is as harmful as their pretensions
Must Redesign Baruch Plan
indicate that its
munist into a good democrat by are opportunistic.
policy of "now
The danger of
We are now once more con¬ you see
it, now you don't" con¬ shooting him in the head is a all of us being blown to pieces
fronted with this situation, for tinues.
But -we can say that to fallacious product of "Chenaultthrough the advent of an Asiatic
Russia, once having declined the the extent that it moves
or European
Sarajevo is too seri¬
away ism," the by-product of which was
Baruch Plan, cannot without face from its own
concept and toward the $5 billion Chinese "opera¬ ous to ignore the necessity for
losing
jump
belatedly
on
the the Churchill concept, the danger tion rathole." Today we have the calm,
non-hysterical
considera¬
bandwagon.
We will have to re¬ of war will be lessened to just spectacle of brave little Finland tions with constant
attempts at
design the Baruch Plan, sugarcoat that extent. The get-tough-with- electing an anti-Communist head
reconciliation, negotiation and the
it and ask for the same thing,
Russia
policy has now become of state in a free election with creation of an atmosphere which
substantially, in a different name. highly dangerous as, with the the vast Russian army poised at might bridge over to a condition
This
is
atom and hydrogen
precisely what Senator
It is in realization of where the return of
bomb, both its door.
or
McMahon did
in
his highly mer¬
parties
play at the
can
same
game,
one
of
ator
bad
temper; not to speak of the
On
Jan.
"Herald"
before
21, 1948,
published
the
Federation
which
I
between
and Marshal
ond, "if
an
we
Miami
address
my
Beach
Womens
advocated
meeting
man
Palm
of
the
County
Clubs
first
direct
a
President
Stalin, and
could find
in
that
Tru¬
fail and end up in another Godes-
berg,
speed
of
should
we
create
with
then
top
protective system
quasi-alliances
among
the
a
democratic powers."
The first suggestion
was
tor¬
pedoed then, and again later, and
now known
the second alternative
as
the
Atlantic
Pact
took
which
almost
in
our
notoriously
own
follow
our
Communism
beaten
best
can
be
the
a
standpoint
strictly
for
merit.
This
does
not
uni¬
mean
cer¬
shown
was
would
the
where
put
weapons
on
those
are strongest
give the great¬
we
which would
and
est
accent
promise to succeed.
thing in his February 8th
statement.
Here is a
sharp di¬
vergence
of major policy, with
Truman, Clayton and Attlee in one
corner,
and
and
Tydings
former
Churchill,
in
the
McMahon
other.
The
embracing the gettough policy, with variations to
the theme; the latter are working
are
in the direction of what
one
might
prior
a
of
are
frame
taking
of
life.
few
a
When
I
at the
courses
University of Berlin in 1913, the
fateful year preceding World War
I, it was like sitting in a labora¬
and
watching
a
being
war
feating Communism. After World
War I, the various Communistic
all chance to establish Titoism
voices who spoke of areas of pos¬
sible agreement between the Ger¬
and
other
mans
fell
within
China; (b)
Nehru
we
and
Communist
in
would have thrown
Khan
into
the
Ali
camp;
(c)
would
we
have
delayed economic recovery
China, for a continuous battle¬
cannot
munist
look
and
army
for
produce
(d)
a
would
large
Com¬
have had
militaristic
Bela
and
today way behind our
on
the problem of de¬
radical
the
Kun,
first
Eisner,
Ramsay
governments
few
McDonald
many cases succeeded by
conservative
years.
Scheidemann
in
outright
simply
were
governments
to
adventures
people all of the time."
The
one
born. As today here in the United
States;,
were
in
Communism Preys on Weakened
Bodies
Communism is like
the
a
a
germ
weakened body.
body
is
strong,
as
that
Where
in
the
United States, Sweden or Switzer¬
then
French,
warning
but
they
howled down by the "prac¬
men."
The
final
for
a
and
hearts; of
to
foresee
can
better
this year, the Holy
Year, mark the point of departure
see
orientation
new
wildered
to
of
exact
conception
of the true foundations of
in the social
assured
in
international
There
spirits
return of the be¬
a
an
a
peace
domain
and
relations.
awakens
in
the
most
healthy part of all the peoples and
all nations the
hope for a recon¬
ciliation."
And thus let
that
have
we
me close by
saying
today the choice of
following the teachings of Christ,
or
the teachings of Machievelli.
Five
thousand
and
its
should
road
of
years
failures
and
history
fallacies
certainly teach
which '
us
to follow.
With
that that 19 billion marks de¬
the fantastic level
of
a
cent
and) the
in
to
propped up the shaking
body of Russian Communism, as
called
of
one
American
returning
heroes, what
is to be found in the Redbaiting
speeches of Hitler and Rosenberg
was
quarter
currency;
conquering
left of them, had
Lincoln
Communists
this
point.
as
a
were
Otherwise,
could have
able
nationalistic
We
use
rallying
Communism
collapsed
from within.
to
very
should
neatly
learn
a
fish rats
Heaven
the
out
save
us
"practical
of
garbage
from
cans.
those
men.".
I
so-
time in preference.
on
KANSAS
CITY,
His
Holiness
with
Chronicle)
MO.
become
-
associated
McDonald, Evans & Co., 1009
Baltimore
Avenue.
He
was
for¬
merly with A. H. Bennett &
and
•
Alton
—
Co.
George K. Baum & Co.
Merrill, Turben Adds
(Special
to The Financial Chronicle)
CLEVELAND, OHIO—John
Mitchell
has
staff
Merrill,
of
been
added
Turben
W.
the
to
&
Co.,
Union Commerce Building, mem¬
bers of the Midwest Stock Ex¬
change.
-
Pope
Spaulding Joins Thorsen
(Special to The Financial Chronicle)
MILWAUKEE, WIS.—James H.
Spalding has become associated
with
Adolph
North
Water Street.
G.
Thorsen,
Pie
was
735
for¬
merly with the Marshall Co. and
Loewi & Co.
1
»
take
high idealism of a Jefferson,
or Benjamin Franklin
any
Said
McDonald, Evans
(Special to The Financial
outcome
posited by the German people in
their savings banks
dropped to
the
Asia.
were
the
and
tical
was
there
which
elsewhere
enters
us
Gumbiner has
opinions
time table
are
glaring exception was Russia it¬
self, and the explanation for this
sort of
have
vice, the following would have
happened: (a) we would have lost
We
munism;
very
we
good judgment.
Had we
followed Senator Knowland's ad¬
slammed
this
should
we
own
tory
because "you can't fool all of the
on
out
But
necessity
colored by the experiences within
our
recovery,
and only recovery can beat Com¬
door
Our
lateral
disarmament, which would
folly; it just means that we
if
occur
be
Republicans with their "oc¬
cupy Formosa" policy have
hardly
field
the
drown
explosion.
on
meeting
after Secretary Acheson has just
n
will
world
largely have to
forces, let alone
tain
three-cornered
S t al i
the
over
the forces of radicalism.
Mahon's proposal of enlarging the
economic weapons has
great
economic system.
non-partisan
logic of this concept, namely
divisions
All of this is said from
in
"You
others, what joy it would be
for
cannot expect this phenomenon to
dollar which would
the wake -of
such
a
in
on
the
that
ideological and
economic front, that Senator Mc-
Russian
would
we
a
the five-cent
two years to go into effect. Now
Mr. Churchill suggesting a
comes
is
500
beat with
sec¬
such
attempt at reconciliation would
which
potential
strain
than
normalcy all
itorious proposal, and so did Sen¬
Tydings in his.
or
Vatican:
Pius
New Year's day in his address
before the diplomatic corps at
the
E. E. Mathews Co. Adds
(Special to The Financial
BOSTON,
Chronicle)
MASS. —Samuel
S.
Magid is with Edward E. Mathews
Co., 53 State Street.
•
Volume
Number 4884
171
THE
whole industry
COMMERCIAL
would be better
off.
Our
tional
outlet is
helping to clear
in
case
For
get
in
got
Corp.,
around
Pacific
the
with
taking
view
a
to
substantial
a
company
and
As
that
all
water, consider¬
business.
new
immediately
at
the
issue
reported
r ime
4he
business.
big
Coast
official word
had
utility
brought
As
derwriting
of
erne
petitive
GEORGE
FULLER
A.
Beard
of
March
firms, and
that made the
motion"
lost
If
half
sumed
is
the
was
un¬
put
it, this is
sides of com¬
His
persona!
that "too much
was
Board
under
involved.
17,
February
of
of record at
Stocks, Inc.
NOTICE
Directors,
the close
books
of
The
RICHARD
payable
record
a quarterly
share
on
the
March
the
at
31,
close
to
1950
S.
of
business
will
C.
20,
of
SOUTHERN
Secretary.
LOCKWOOD,
ENAMEL
CORPORATION
CLEVELAND,
Board
of
Directors
Five
closed
remain
J.
New
York,
open.
ry
21,
f
.vidend
1950, declared a
of eighty-seven
quarterly
and
v ilf cents
(87 V2O per share
outstanding
shares
of
the
iny's 3J/a#
»,•
Cumulative
one-
the
on
of
York.
record
the
at
close
of
business
DIVIDEND
can
BAY
&
Cyanamid Company
on
Febru-
21, 1950, declared a quarterly
dividend of sixty-two and one-half
routs
(62y2e) per share on the outsMinding shares of the
Common
Stuck
of
the
has
30.
fixed
and
declared
COMPANY
1950, to shareholders
March 8, 1950.
f
Company,
1950
Company
usiness March 7, 1950.
R. S.
close of business March 3,
share
on
314%
15,
1950
to
W.
DUBUQUE,
share
B.
Du
Mont
declared
dend
of
the
on
the Preferred
per
Stock of
value of $62.50 per share,
has been declared payable March
20,
par
1950,
record
at
stockholders
to
the close of business
of
on
March 7, 1950.
Checks will be mailed.
Bruce H.
New York,
Wallace, Treasurer
February 15, 1950.
Solberg,
Treasurer
St
5%
of
to
1950
of
14,
pay
of
its
on
KENNECOTT
record
March
the
at
CORPORATION
Stock¬
close
120
of
February 17, 1950
RAIBOURN,
1950
cents
in all
LIMITED
to
be
in
in
on
to
pay
CANADIAN
ment
in
transfers
re¬
February
of divi¬
April 29, 1950
(less
Stock.
London
will
1950
of
dividends
Stockholders
virtue
of
be
on
All
trans¬
or
betore
on
in
tax)
time
for
Taxation
under
States
the
New
to
York
particulars
Income
be
XIII(l)
of
of
Tax
mentioned
between
United
Section
Internal
application
of
may
Treaty
and
credit
SOUTHERN CALIFORNIA
(
COMPANY
EDISON
Guaranty
rates
the
United
the
Code
Trust
appropriate
United
to
all
a
tax
United
ORIGINAL PREFERRED
meeting
a
Railway
final
of
of
the
Board
Canadian
Company
dividend
of
held
NIAGARA MOHAWK
CUMULATIVE PREFERRED
Pacific
today
three
of
per
a
POWER CORPORATION
cent
year
1949
was
declared
able in Canadian funds
on
pay¬
March
31, 1950, to Shareholders of record
at 3 p.m. on February
24, 1950.
The
Directors
point
out
that
while there has been
a slight in¬
in net earnings from rail
operations for the year 1949 these
earnings are still insufficient for
crease
Syracuse 2,
The Board of Directors
authorized the payment
The
above
BRITISH-AMERICAN
of Directors has this day
the
following
initial
quar¬
other
50 cents per
3.40% Series Preferred Stock
85(1 per share
inal Preferred
of record
3.90% Series Preferred Stock
97Per share
per
Common
35(J
per
Series, payable
Stock
share
FREDERICK
BRAMLEY,
Secretary.
Montreal, February 13, 1950.
14, 1950.
Charles A.
Orig¬
stockholders
share
on
Cum¬
Stock, 4.32%
on
March 31,
1950, to stockholders of record
payable March 31, 1950, to stock¬
March
on
March 5, 1950.
ulative Preferred
share
holders of record at the close of busi¬
ness
on
27 cents per
Class A Stock
30(1
share
Stock, payable
March 31,1950, to
3.60% Series, Preferred Stock
90(i per share
all
sources.
has
of the
following quarterly dividends:
terly dividends:
ly to the Company's income from
By order of the Board.
TOBACCO COMPANY, Limited
Board
declared
the payment of any dividend. The
the
New York
•DIVIDEND NOTICE
dividend paid is attributable sole¬
Kingdom
STOCK 4.32% SERIES
DIVIDEND NO. 12
300 Erie Boulevard West
(seventy-five cents per share) on
the Ordinary Capital Stock in re¬
spect of, and out of earnings for
by
giving
STOCK
DIVIDEND NO. 163
At
dividends.
February 14, 1950.
preferred dividends
Company
can
certificates
of
by
Double
the
of
Revenue
obtain
entitled
Kingdom, to
131
PACIFIC
pay¬
transferees.
to
who
Article
States
March 31,1950
March 1, 1950.
RAILWAY COMPANY
uie
payment
on
Preference
received
4,
on
A. S. CHEROUNY, Secretary
Directors
on
before
or
for
time
decided
6%
on
stockholders of record at the close
of business
the
Also
fers
poration, payable
phases of television
to
tax)
transferees.
to
share has today been
day
same
dividend
All
Stock.
London
be
for
used
Preference
will
a
Dividend Notice
the
on
pay
(less
Preference Stock.
5%
must
ceived
(75c)
dividend
seventy-five
declared by Kennecott Copper Cor¬
Coupon No. 206 must
used for divi¬
dend on the Ordinary Stock and
Coupon
dends
of
distribution
One
decided
No, 93
cash
A
Treasurer
1G,
consecutive
Broadway, New York 5, N.Y.
1950.
15,
COPPER
out¬
Cumulative
Preferred
PAUL
Kingdom Income Tax.
issued
41 year of
Allen
Inc., has
quarterly divi¬
share
per
shares
1,
business
*
per
outstanding Com¬
Stock, payable March 20,
Laboratories,
$.25
standing
Directors
regular
a
of
of
meeting of Directors held Febru¬
1950 in London it was decided
on
March 31, 1950 first Interim
a
April
America's N$f ciqar
15i
the
February 15, 1950
BRITISH-AMERICAN
issued
PHILLIES
of
IOWA
"t>v*
Board
February
1950. Checks will be mailed.
1
quarterly dividend of $1.00
DIVIDEND
The
Secretary and Treasurer.
holders of record Feb. 28,
Philadelphia, Pa.
Feb. 17, 1950
dividend
a
on
Oscar
HAWKINSON,
E.
half-yearly dividend of 3%
~
A
March 10, 1950. The trans¬
fer books will not be closed.
Laboratories, Inc.
February 9, 1950.
stock¬
THEASUHER
ELEVATOR
J. EGER, Secretary
COMPANY
PREFERRED
holders
28th
March
OTIS
March 15, 1950.
preferred dividend No. 2
Convertible Freferred Stock, payable
5%
payable
on
INTERSTATE
clared
April
on
Corpora¬
Secretary,
per
share
Transfer books will not be closed.
Also
declared
E. DODGE,
1950, to stockholders of record
1950.
half-yearly dividend of 2V2%
was
Deposit
on
Allen B. DuMont
has been declared, payable March 5,
United
Slock of this
American
payable April
Notice of Common Dividend
Shilling for each One
Pound
of Ordinary
Stock for the year
ending September 30, 1950 on the issued
Ordinary Stock of the Company, free of
tion
stock
POWER
Checks will be mailed.
to
mon
common
mon
1950, to stockholders of record at the close
of business February 20, 1950.
Dividend
the Com¬
the
The Board of Directors has de¬
dividend of eighty-one and
cents
(8191 ) per share on
Cumulative Convertible Pre¬
one-quarter
KYLE, Secretary
on
March 10,
February 16, 1950.
15, 1950, to stockholders of record at the
South Bend, Indiana
quarterly
ary
share
1950 of
27,
PREFERRED DIVIDEND NO. 14
A
At
per
February
divi-1
quarterly
thirty-five cents (35c)
Drewrys Limited U.S.A., Inc.
quarterly dividend of fifty cents (50^)
share on the issued and outstanding
common stock, without par value, of this
Company
has
been
declared,
payable
March 31, 1950, to stockholders of record
TOBACCO COMPANY,
I
7
(20c)
on
record at the close of
holders of
H.
twenty-five (25) cents per
share for the first quarter of 1950 nas
been declared on the capital stock of
this company payable March
10, 1950
to stockholders of record at the close of
business February 24, 1950.
,
a dividend of twenty cents
have declared
dend No. 139 of
Dividend # 9
G- W» WALLACE, Treasurer
payable
1, 1950, to the holders of
><',h stock of record at the close of
the
New York, N. Y„
of
per
at the
the distribution of
amount of said dividend on
to
The Directors of International Harvester
DREWRYS
Aj ril
f
and one-half percent
net
HARVESTER
WESTERN
COMPANY
Directors
January
MFG. CO.
pany
aiv
seven
COMPANY
ferred Stock, $100 par value, of this Com¬
COMMON
non-resident shareholders tax in the amount of
payable in United States funds will be publicly
announced and posted by the New York Curb
Exchange when ascertained.
By order of the Board of Directors.
A dividend of
the
The Board of Directors of Ameri¬
Ordinary Shares of record at
1950 subject
South Africa
Shares issued under the terms of the
the Ferro
25,
on
February 13, 1950
Preferred
Varch 7, 1950.
16,
the holders of
the close of business February 27,
to the withholding of the Union of
Agreement dated June 24, 1946. The net amount
GERARD
Com-
ock, Series A, payable April 1,
1>50. to the holders of such stock
February
to
INTERNATIONAL
per
f
o<
Y„
Treasurer.
1950.
SIMPSON,
SCHEUERMANN, Treasurer.
A
Febru-
N.
A.
dividend.
this
13
No.
The Board of Directors today declared a divi¬
dend of two shillings per share on the Ordinary
Shares of the Company payable March 10, 1950
1950
COMMON DIVIDEND NO. 103
on
Dividend
The directors authorized
T.E.JEANNERET, Secretary and Treasurer
Cyanamid Company
O'oliiep Copper Company
the
Company
The Board of Directors of Ameri-
of
payment
close of business
Corporation has this day de¬
clared a Dividend of thirty-five cents
($.35) per share on the outstanding
common stock of the
Company, payable
American Cyanamid
tn
the
for
1, 1950.
Checks will
OHIO
of
Treasurer.
Limited
March
cent the amount payable on Class "A"
(Payment No. 54), and a dividend
cent (5%)
to be payable on the
capital stock out of the net earnings for the
year
1949, payable at Room No. 3400, No. 20
Exchange Place, New York 5, New York, on
and after February 28, 1950.
The dividend on
the stock will be paid to stockholders of record
at
the
close of ;busirn*s F°tr>ierv
10,
1950,
w. w
cox> secretary
New
J. B. McGEE
Broadway
129
QUARTERLY DIVIDEND of
One
Dollar
Twenty-five Cents ($1.25) per share on the
Common Stock of
this Company has been de¬
clared payable at
the Treasurer's Office, No.
165 Broadway, New York 6, N. Y. on Monday,
March 20,
1950, to stockholders of record at
three o'clock P. M. on Monday, February 27,
1950.
The
stock
transfer
books
will
not
be
per
MJLIS-CH AIMERS
v
COMPANY
NO.
Debentures
DIVIDEND NOTICES
DIVIDEND
61
New York 6, N. Y.
T. FLEMING,
PACIFIC
DIVIDEND
on
business
RAILROAD
Board
Five
the close of busi¬
Secretary
1950.
GREEN
The
of
at
March 2, 1950.
Enamel
record
PREFERRED
February 27, 1950.
COMPANY
per
1950.
0
con¬
moting actual sales, he feels the
cents
FERRO
directed toward pro¬
so
ness
pany's capital stock, payable March 15,
1950, to stockholders of record at the close
of business
mailed.
G.
1950.
17,
March
energy
holders of record
com-
the date below,
declared a dividend of $.25 per share on the
capital stock without par value of this corpo¬
ration, payable March 10, 1950 to stockholders
declared
Directors
fifteen
stockholders
larger
bidding.
o! Servation
The
February
Stock,
bitter
around, that is
DIVIDEND
DIVIDEND NOTICE
Common
field
the
a divi¬
dend of 75 cents per share and an additional
dividend of 50 cents per share on the Com¬
business
of
banker, active in the
a
offered
Tobacco and Allied
be
The
of the other houses.
some
be
DIVIDEND NOTICES
Transfer
inquiry, brushed off suggestions to
form a group, much to the chagrin
of
The Board of Directors has declared
and
-
dividend
one
will
Bonus Bonds
bonds
are
Company
presumably the
thirty five (35£)
share has been declared,
payable March 27, 1950, to stock¬
cents per
TEXAS GULF SULPHUR COMPANY
Co.
cover
issue
A dividend of
Inquiry to
that the
the
price.
of the word.
sense
There
H.
of
company,
has filed registration
$25,000,000 of new first
mortgage bonds, due 1980.
This
to
balance,
complete "sell-out" in the
a
smci
diate consideration.
One
its
reports
financing in imme¬
new
no
not
then
But
the awakening.
the
of
Power
quickly
000,000 bonus bond issue got a re¬
markably good reception, it was
to bid for the
groups
the
by
February 15, 1950.
DIVIDEND NOTICES
Elec¬
expected to
for
$4,000,000 of
3y8% debentures, due 1967.
Meanwhile Appalachian Electric
was
clean
call
conversion,
recent
indicate that
while' Pennsylvania's
big $375,-
started
with the customary formality of
organizing
to
buyers
Virginia
was
lENNESSKE
Corporation
ItNHUSH CORPORATION i
new
today, througn a
underwriting.
financing groups out of the
The
which it is estimated will re- j
quire $59,700,000 in the next two!
A
'Reports put the prospective is¬
around $75,000,000 which, in
itself, was enough to make the
ing the dearth of
in¬
sub¬
a
of
Co.,
DIVIDEND NOTICES
pany
290,000
of
market
of
sue
They
needed
was
Penna.
mouths
up
of
negotiated
into the
came
picked
Other
Current
bankers'
large
a
frequently happens this
financing.
new
week
moved in and took up the
under¬
piece
last
reach
the issue lagged,
surance
slate.
the
over
late
offering
stock
be
51
construction planned
Power
&
thereabouts
or
tric & Power
stantial block.
all
Electric
&
looking
was
market
suggesting
Gas
were
to yield 2.90%.
while
a
Public
is
ago,
These bonds
point.
market
issue may
making.
That
was
again early this week.
Talk
that
but
they
once
new
a
been
the
proved
-
have
yield easily
idea that
an
be
to
away un¬
bidding,
and
proceeds
applied toward financing
by the com¬
petitive
will
(843)
years.
Virginia Electric
shares
off at 99 V2
known
profitable
seeking
common
'
never
hands, although they
pressing the market, as
long maturities com¬
manding premiums of three-quar¬
ters to a full point.
not
brought out several weeks
a
CHRONICLE
dealers'
sold portions of recent issues.
Rock Island's $45,000,000 of 2%s,
Report
Underwriters
institu¬
of
pressure
funds
FINANCIAL
witness the
Island's Clean Up
Rock
Relentless
Reporter's
in
are
•oil.
&
on
March 5, 1950.
T. J. GAMBLE, Secretary
Tattersall
'
Secretary
February 21, 1950
February 17, 1950
£
52
(844)
COMMERCIAL
THE
&
CHRONICLE
FINANCIAL
Thursday, February 23, 1950
crals". who
BUSINESS BUZZ
Nevertheless,
Gov.
polite and oblique as
on
•
•
language, gave
from the Nation's Capital
-
presentation
all
little
signs
that
the
appearing
Federal
to
Trade
into
a
of
source
sweetness
long time
a
"at
the
judicial
Its
ladder"
of
commissioners
some
old,
cases
other
has
of the
government.
have
been
inactive
or
in its
on
FTC
rung
name
in
Too many
have
felt
vocal
with
endowed
That mission
mission.
a
the
business
the
conduct
Siberia
likewise
as
be written
to
are
Commission
siahs
itself.
The
mes-
vately with the Commissioners,
but it is going to be the Com¬
is
Of
it
course
has
evitable that
and
formerly prevailing. When mem¬
bers are too old and too tired or
temporarily
incapacitated
from
functioning, somebody has to take
over. The lawyers were the boys
around to take up the reins.
Not
if
even
innovation
Another
into
one
crept
what
was
them,
as
going
in
front
Now
all
on
rule.
a
Commissioners
are
not only
questions, not only at the lawyers
respondents, but at some of
the ambitious boys of the FTC.
for
One of the evolutions now go¬
within the Commission
is to. force the lawbook boys to
on
prove
what they allege are mal¬
practices
in
demand
and
more.
business before
the businessmen
by
call
they
they
that
sin
evolution
Another
is
no
to
get simply at the heart
of controversies between busi¬
ness and the FTC so that there
try
to
and an end
wordiness which has
come to get the FTC identified
in the past as a sort of WPA
can
to
be agreements,
legal
for lawyers.
enough,
Oddly
develop¬
these
ments have occurred since the ac¬
cession
the
to
Commission of its
two new members, both formerly,
at
Lowell
ers.
tive,
to
identified
least,
was
work
as
Mason,
left-wing¬
conserva¬
a
unable previously alone
these improvements in
the FTC.
One
former
New
of
new
a
is
Mead
of
James
Senator
York,
members
life-long Democrat
who voted for left-wing
Mead, however,
proposals.
is personally
agreeable fellow
has no profound
behalf of the Left.
an
who probably
convictions on
Jim got into
selling the Democratic line of po¬
behalf of Co-op
on
Housing,
will get it
you
just
as
well.
their
ing
First
off, this report is interest¬
it elaborates all the
arguments on behalf of the co¬
ing
books
have
the
would be borrowed
money
2% or less and re-loaned at
probably 2l/i%\ whereas under
FHA it is 414%. Under co-op
housing amortization could be
adjusted
bill, and if
op
read it you can
you
their sales line.
plus
the
3-year
a
yearly
would be
rap
period,
grace
obviously lower than
But,
years.
according to this
report, the co-opera¬
brilliant
tive
housing
bill
would
get
cheaper housing because "based
actual
experience"
the
which
pressure
reflect
FHA system.
It
would
loans
appear
were
some
that the "608"
sort of
a
vicious
profits for
on the
government guarantee.
must forget the hasty
device to wring unjust
irresponsible
basis
of
Thus
a
you
contractors,
which
names
special
Mr.
message
in
Truman
a
to Congress called
who had the
conservatives
those
temerity to try to hold down on
608
in
1948
servatives
end
of
because
thought
the
war
these
of
con¬
that with the
the
emergency,
continuance of these high
cost
projects was not justified.
Although Mr. Truman was all for
608 then to help the deserving
large
the deserving veterans, anc
deserving Democrats, it nov
develops that instead this was jus.
all a plot of the selfish construc¬
#
on
double
a
called
the
to
an
old story.
before
A
left-
the
was
on
II
money,
unless
they
no
get
more
co-op
housing.
without
money,
dustry
and
some
for
the
President
have
the
co-opera¬
House,
anxious
to
bill, drafted by his
housing
own
lieutenants.
Cabe
opined that the co-op bill
inflationary,
distasteful as
opinion would
be to
the
this
On
more
President.
1949
the
of
in
plea
for
reserve
other
the
of
bank¬
hand,
the
tion.
The
been
South
this
is
In
holding
to
force
recognition
of
of
you
total.
the
name
S.
U.
at
and
influence
to
loan
a
By
call it, this
or gift
to
Under
foreseeable
110
cir¬
cumstances, will the U. S. stick
its
neck
out
this
in
Congres¬
further loan
Board
Reserve
late
little
a
notice
in
Board
President
effect,
did
was
in
may
as
the Re¬
that the
in the Board's opin¬
then,
the
was
also
011
"liberals" of
"liberals," almost alone
Hill,
viewpoint
and
any
not
settlement
before
Spring,
1951 is
expected.
(This column is intended to re¬
flect the "behind the scene" inter¬
pretation from the nation's Capital
and may or may not coincide with
the "Chronicle's" own views.)
Cement Stocks:
Riverside Cement
Spokane Portland Cement
Oregon Portland Cement
*
Coplay Cement Mfg.
a
the
Banking Committee. It is these
itol
will start this
problem
Giant Portland Cement
McCabe
with
while the go-around on this
deter¬
ion wrong.
Mr.
gift to Britain, beyond ECA.
So
legisla¬
mining that the inflationary boom
had passed, in the eyes of many
spot
tragic blun¬
a
debtors,
time
his
renewed
"anti-inflation"
have
serve
f-'r.nla
nnnlp
to
its
after
shortly
had
Mc¬
Reserve
reduced
only
President
serve
back cotton from England in an
effort
the
Likewise
FHA Title II
industry and the
/-.VX7-
reminiscent
der
However,
Board
that
etc., the construction in¬
will wither on the vine
.m
ers
believe
S.
of
sional year for any
the
bankers, but it took some doing to
"liberals"
The
as
the
with
spot
a
requirements,
Title
U.
the
or
He
the
I,
effect of
inflationary
or
was
his opinion
co-operative housing bill.
an extension of
expiring FHA titles, only to back
down.
This time they say that,
as
of March 1, there will be no
more
he
on
Britain.
before the Senate Banking
wingers thought they could trade
Title
when
spot
was
deposit
"investment"
these
to
same
McCabe
B.
dollar
the
standstill
a
wants
some
funds
the
$
Committee to give
was
times
Britain
offer
means
that
This is
lose
of
demand
a
scale-down
Thomas
Chairman
can
public housing for
putting against the
are
the resurging
is
position that unless they
of
would
of the Federal Reserve Board
tive
couple
probably
Mr.
of
equivalent
out
term, but practically withdrawn
only after negotiation.
col¬
boom,
the
without
whatever
White
One facet of this "liberal" drive
"lib¬
to
Congress in November.
*
is
off FHA.
particularly those who
strong
CIO
and AFL
backing,
ac¬
war
Britain's debts theoretically
Britain
the
able
building
the
Truman
the
be
should
*
*
the
"lib¬
the
lapse
co¬
operative form is just cheaper.
IF
Confederacy.
erals"
get what they want they will kill
Second, the report is interest¬
erals,"
the
so
for amortization
under FHA where it is 20 to 25
against FHA
,
ing because it reveals the terrific
£3,362
costs. At
sterling debt
pay
and
represent
covers!"
blue
cutest
maturities
60-year
to
because
see
'
bank
at
on
who
on
Cap¬
on
the Reserve
credit regulation,
see
it is these very
LERNER & CO.
Investment
10 Post Office
Securities
Square, Boston 9, Mass.
Teletype BS 69
Telephone HUbbard 2-1990
"lib-
same
poor,
the
tion
HAuover
Teletype—NY 1-971
2-0050
Firm Trading Markets
As for FHA. that's no more so¬
cialistic
people
co-op housing
look
what
nice
in the FHA lodge'
tjian the
and
now are
FOREIGN SECURITIES
Executive &
>
All Issues
70
study
mental
like to
illness and can't
you
case
insane
somebody
perpetual
hospital
explain
to
motion
is
and
FOREIGN SECURITIES
how7
possible.
For instance: Under co-op hous-
Underwriting Offices
WALL
STREET
4-4540
Trading Department
SPECIALISTS
have
you
5
r.arl marks & r-o. rnc.
take the time to go to the near¬
by
YORK
Tel. WHitehall
This Sparkman leaflet is also
interesting in
Hill, Thompson & Co., Inc.
NEW
industry.
subsidy,
the
the Sparkman
subcommittee
of
ing an active part, but are partici¬
pating in the proceedings in other
than a perfunctory way. and are
shooting some knowledgable
ing
booklet put out by
the
tak¬
light and simple
a
request for the special propaganda
In the past only
Commissioners knew
two
Senator
your
Other Pur¬
for
and
Maybe if you just send to
poses."
FTC.
the
or
has
S.
to
Amended
as
of the more aggres¬
some
are.
Amendments!, In¬
Proposed by Mr.
be
to
the
owe
colonies
Britain's
million
pool.
"I'd rather open an account in the bank across the street-
Hous¬
on
2246: A Bill to
Amend the National Housing Act
left-wingers,
all FTC lawyers are
sive
tended
Maybank
to
level
sterling
*
,
the
with
has been reduced £ 164 million in
*
>;:
are
company
circumstances
the
this
and Rents of the Committee
Banking and Currency to Ac¬
on
the
approach
Government
and
cumulated
£45.5
ing
23)
(Feb.
million, representing balances
interested in any
phase of the home building or
financing business a "must" to
read is the "Supplemental Report
you
will
States
Dominions
intolerance
hauteur
after today's
long
Currently the British
He
per¬
professional radicals here
those who aren't in the
If
staff lawyers would
under
the
left-wing lodge.
get to becoming in fact the Com¬
mission
of
none
toward
in the past in¬
was
personally
reasonable.
and
from the Subcommittee
which decides.
mission
!):
proposals for assistance in set¬
tling the sterling war debt task.
the
advise and argue pri¬
can
#
Conservative,
deci¬
by
to
put it in your hat that
can
United
colleague Mead,
new
»;:
sions
Si
commissar,
a
of the
they
These
scheduled
instead.)
You
opportunist,
no
sonal
cisions and orders of the Federal
Commission.
week
(Mc¬
Feb. 23, was called last
Unlike
Carson
agreeable
NOT going to write the de¬
Trade
originally
Cabe,
appear
revolution.
Like his
no¬
henceforth
that
lawyers
not
did
inflation.
radical,
a
than
the
John
change is beginning to
tice has been given to the staff
are
which
world
not
come
their self-anointed purposes.
informal
Ad¬
British eliction whatever govern¬
ment
is
elected.
Socialist
or
under which FTC operates to suit
An
banking
and is more likely to end up in
lawyers tried to twist the statutes
place.
was
an
of
ists around this town, however,
of course, who chose the socially
desirable objectives.
And these
take
given
it
he appears to be
able objectives. It was the lawyers,
a
has
that
tolerant
ment-dictated
of the mine revolution¬
run
sincere
Board
want to compensate for govern¬
Couz-
conviction.
the
influence, but intolerant of the
secretary to
is
commer¬
ministration which it could not
of Michigan. Carson, unlike
by
the
impression
pleasantly
way
James
rift
often
the
a
radical
along lines
designed to achieve socially desir¬
Now
been
has
may
with
Too
other
from
was
Senator
the
Meade,
to re-direct the pattern of Ameri¬
can
when he
late
ens
was
John
left-winger
-
back
of these FTC lawyers
is
here,
member.
new
by anony¬
themselves
lobby
co-op
presentation
toward healing the
Board's
John Carson, who headed the
for
staff lawyers.
mous
at
cial banking world it regulates.
—by delivering the kind of goods
the new job requires—a judicial
temperament and approach.
Its work has been
reasons.
carried
the
bottom
aimed
go some way
—and in fact already has done so
For
Administration
McCabe's
he will react to the new situation
and
light.
been
a
of
of inflation.
cost
agreeably and effectively. His
job as an FTC Commissioner
is non-political. Many expect that
new
relatively
develop
may
farther.
rather
indictment
polite
as
sion/a generation-old irritant to
business,
the
programs
sold Republican merchandise just
suggest
if
even
was
postwar
promoting
housing at all costs, including the
litical merchandise, and had acci¬
dent been otherwise, might have
Commis¬
his
was
devastating in-*
a
Gov. McCabe went
complete
WASHINGTON, D. C, — Keep
fingers crossed, but there are
McCabe*
pending housing legislation.
JL CIII/
His
your
the
dictment of the co-op housing bill
and other inflationary features of
A
JM
jLM.il/tAy
Behind-the'Scene Interpretations
for
ardent
are
housing bill.
co-op
50 Broad Street
120
New York 4, N. Y.
AFFILIATE: CARL MARKS & CO. Inc. CHICAGO
Tel.
-
BROADWAY
REctor
2-2020
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