Full text of Commercial and Financial Chronicle : February 3, 1944, Vol. 159, No. 4252, Section 1

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

Final

Edition

ESTABLISHED

OVER

100

In

YEARS

2

Sections-Section 1
FEB 4

9us.

1944

ommetci&l an
Reg. U.

Volume

159.

Number 4252

-

New

Discount Corp.
Of M. Y. Elects
Celebrating 25th Year
•

The

Board

Discount
York

of

Directors

Corporation'

have

elected

of

And That Freedom From Want Can

Only Be Attained Declares That New Deal Philosophy Of Government Has
Through Employment Provided By Industry Fooled People Into Surrendering Basic
Responsibilities
-,C;„Vs:

f

o

Discount

'

Corporat ion
for

14

I feel

peculiarly at home in this gathering which is representa¬
of the party of your
very able and very popular Governor,
Thomas E. Dewey.
I have the honor to represent in the Congress of
the United
<$>-

years

President

for

10

years.

Mr.

Repp, who
joined
the

States

21
"years ago, has
a

for

) seven
; and
.

district
.which he

di¬

rector

pi

::

1

*

Corporation of New
York is now celebrating its 25th
anniversary, having begun busi¬

ness

the

at

end

(Continued
>

'

'

.

•

■

■

of
on

the

last

page

ha

d

ed

talk¬

j

trict
than

■section containing information and
:

comment

pertinent

is

of

what

Owosso

to ' dealer afc-i

tained
tivities
:page

in

;

that, State

starts

on

is

F.

now

his

known

the

of

money pump

home

the

founders

at

Jan. '29.

for

of

Delaware Power

.

.

o m;
to

pect

the

its

i-

1: (Continued on page 525)' Ml

adage.

deposits is not

automatic

either

the

voluntary
or

my

the

American

people

will

intential-

not

ally

destroy

the free enter¬

reaction

directly,

by

the

become engulfed in and

shackled by a system of regimen¬

tation

of two

and

"■Remarks
nartisan

Jan.

Discussions

29.'

Club,
>:

which

bureaucracy

of Senator

Republican

repayment;
public's

can

Sen. A. W. Hawkes

un¬

be

can

by
assets—their,

bank

system,
that

they
a

to

indirectly,

forced

or

It
one

but

Hawkes

Forum

New

National

at

York

Non-

at

City,

on

V;.\

(Continued

on

page

526)

|

de¬

mand to convert into cash its bal¬
ances held at the banks.

old

the

the

war,

-\vr:

■

of

deflating

Dr. Melchior

Palyi

Bank¬

and

ers

*

of

the

in

opinion

intentionally

;■■■

procedures:

down,
the

decline

after

its previous inflation.
brought about only by

What goes up

comes

volume

A deflation of

billions.

says

stops.
There seems
inclination to ex¬

substantial

a

matter

depos¬
about,;

to

$110

general

happen if
priming of, the

bu¬

prise

the

New

of

and

reaucracy,
I
wish to state

about..'

total. vol-.

ume

same

regimenta¬

without many questions asked as
how that would be brought

'years

'the

the

will

to

bil¬
-

be

deposit

Deal—raising

Jackson,!

*

■

billions-

eleven

Repub¬

"■Remarks of Congressman. Crawford at
Non-partisan Discussions Forum at Na¬
tional Republican Club, New York City,

.

t i

a

$70

,

on

when

to

lions

the;

as

He often enter-,

Michigan in 1854, of the great Re¬
publican : Party
which
shortly

528.

page

war

credit:

f 1

in

with
problems

the

that

the

some

editor

was

lican

one

see

banks

and

$45

-leaders; of the State of
506.' •••". 2;. '2.\ Michigan, p. His grandfather was

For index

member

<5>-

approximately

L. Crawford

father

Argus.
at

the

what

i p

more

His

of

themselves

amounts

dis¬

his.

investments

bank

respected

PENNSYLVANIA SECURITIES

and

period, the

his

my

loans

the entire

Mother.

ily in

total

banks, and for

No other fam¬

In This Issue

tion

period. For all

I

fre¬

with

good

:

of

is,
spe¬

cifically

of

interest

ve

deal

side of the growing volume of U. S. bonds in bank
port¬
folios, which is mainly responsible for the $31.3 billions expansion

with

pride.

American free

enterprise

October,
1943, total deposits of member banks (not including items in process
collection) have risen by $31,563,194,000. This is, of course, the

his

;-

we

attempt to an¬
alyze
what

of

boy

quently

526)
«v''

In the 15 months from the middle of 1942 to the end of

converse

and

Before

,

or

his

a

o w e

great

war,

•

By DR. melchior palyi

a y,m a te.s

career

count

,

^

Deposits Decline?

know

who have fol-

Dudley H. Mills

Dis-

Will

in

was

of

when ::

for

years.

The

I

many

Vice-

a

eight
:

born.

years

President

question, "Are We to Foresake
System of Free Enterprise and Adopt a System of
Regimentation and Bureaucracy?"

Our Traditional

the

Congressional

; company
i b e e n

I have been asked to discuss the

tive

''

and

Sees Liberty Of

People Endangered By Unintentional
Acceptance Of System Of Regimentation And Bureau¬
Of Security And Enslavement Of People To State—
cracy Which Makes It Impossible For Free Enterprise
Maintains That Production, Not Government
Largesse, And Individual Freedom To Survive—Warns Against
Is Real Key To Buying Power And Workers' Wealth
Endowing Government With Uncontrolled Powers And

H.

Mills
been
a

Director
the

Copy

a

U. S. Senator from New Jersey

Holds That Surrender Of Individual Rights And Free¬
dom For Social Security Will Inevitably Result In Loss

of ' New

Dudley,

Cents

60

By Hon. ALBERT W. IIAWKES.+
k

-

the

*

has

•

4

V

CRAWFORD,*

Representative in Congress from Michigan

•

Mr:

Price

-

Presi¬

dent.

Office

York, N. Y., Thursday, February 3, 1944

By Hon. FRED L.

;

Mills Chairman of the Board and
Herbert

Repp

Pat.

^Are We To Foresake Our Traditional System 0i Free Enterprise
And Adopt A System Of Regimentation And
Bureaucracy V

Repp f ■J|ff

,

S.

There

are

no
major channels
two, through which the
(Continued on page 509)

but these

public

asking

are

THE

CHASE

NATIONAL BANK

&

Light .pv

Invest in

j'

Common

When

;

;

'

Bond

VICTORY

Bay War Bonds
Members New York Stock

other

Exchange
Exchanges
~

:

R. H. Johnson & Co.
PN

f

London

*

Geneva

NEW YORK 4, N.Y.

25 Broad St.
HAnover

2-OGOO

Teletype NY 1-210

Rep.

•

State 8770

"■ Teletype CG 1219

64 Wall
BOSTON

Troy

SECURITIES

or

Street, New York 5
PHILADELPHIA
Syracuse
Williamsport
Dallas

Albany

Pittsburgh

■■■■■-

.

;

■""

4

IHCOIPOR AT

JERSEY CITY

E

Actual

BOND
<:

BROKERS

SB

Trading Markets, always
of national

scope

Members New York Stock

Members New

York

Curb

I P

M4 SO. SPRING ST

LOS ANGELES

"

-

•

30 Broad St.
Tel. DIgby 4-7800

New York 4
Tele. NY

c°

INCORPORATED

Members

14 WALL ST., NEW YORK 5, N.Y.
TELEPHONE-RECTOR 2-6300




N.

Y.

Security Dealers Ass'n

45 Nassau Street
Tel. REcfcor 2-3600

Philadelphia

New York 5

Teletype N. Y. 1-676

Telephone*

Enterprise 6015

Insurance

Members New York Stock
Exchange

Broadway, New York 5, N. Y.
Telephone: REctor 2-7400
Teletype NY 1-635

England

Public Service Co.
ALL ISSUES
-

Analysis

New

Members
York Security Dealers Assn.

52 WILLIAM ST., N, Y. 5

HAnover 2-0980

Bell Teletype NY 1-395

New York

Montreal

Toronto

upon

Request

•

HART SMITH & CO.

REYNOLDS & CO.

Bell

,:

Corporation

New

Purolator

Products, Inc.

120

;

IS

Federal Machine and

Kobbe,Gearhart&Co.

.'

IRA HAUPT & CO.
Members of

111

Principal Exchanges

Broadway, N. Y. 6

REctor 2-3100

~

your customer

Member Federal Deposit

1-733

Welder Co.

MEMBERS NEW YORK STOCK EXCHANGE

•

**'"*r;.

facilities

Petrola Corp.

Over'The - Counter

»•

Exchange
Exchange

International

in

Securities

bull, holden

HArdy&Co.

from

IS EXCHANGE PLACE

-y

correspondent

FROM

DEALERS

HUGH W. LONG and COMPANY

Buffalo

■'

.

-«;vv

and Dealers

BE

-

OBTAINED
AUTHORIZED

Established 1927

INVESTMENT

CHICAGO 3, ILL.
135 So. LaSalle St.

MAY

v-v

■■

service with Chase

for Banks, Brokers
PROSPECTUS

j-

;

"

Hirscli, Lilienthal & Co.
and

..

•.

.Broaden

Service

delivered

OF THE CITY OF NEW YORK
.a.

Brokerage

Teletype NY 1-1920

COMMERCIAL & FINANCIAL

THE

498

Over-the-Counter situations.
Also
experienced trader in In¬
dustrial or Public Utility stocks.
Good salary and share in profits.
Strictly confidential.
■

KING & KING

Goodbody & Co.

BELL

Telephone

York Curb Exchange

New

BROADWAY, NEW YORK
•;
Tel. REctor 2-7815
/

120
■?

r

;!

St, New York 4, N. Y.
;
HAnover 2-0700
NY 1-1557
New Orleans, La.-Birmlngham, Ala.

York Stock Exchange

New

Exchange and Other Principal Exchanges
" \ NEW YORK 6, N. Y.
?
BArclay 7-0100
;;
;
: ;; Teletype NY 1-672

Members New York Stock Exchange

25 Broad

Y

Members

BROADWAY

115

Steiner, Rouse ICb;

MC PONNELL & CO.

Members N. Y. Stock

Dealers Ass'n
PL, N.Y. 5 HA 2-2772

York Security

40 Exchange

Walworth Pfd.

BULOLO GOLD-DREDGING

Established 1920

Apco Mossberg Co.

Warren Bros. Class "B" & "C"

PATO CONSOLIDATED GOLD

with

New

Birmingham Elec. 7%

Remington Arms

BROWN CO. Com.

Exceptional opportunity offered
experienced statistician, acquainted

Members

Birmingham Elec. 6%

Botany Pfd. & Common

NORANDA MINES

TRADER

Cyanamid PfdJ

American

PAPER

MINNESOTA & ONTARIO

STATISTICIAN

Thursday, February 3, 1944

CHRONICLE

Direct wires to our

(

branch offices

TELETYPE NY 1-423

Speers Joins
Arnolt, Baker I Co.
Wm. 0.

4th

The Glorious

who recently

William C. Speers

that
to

War Loan, so

the 4th

Back

add

can

u)e

luster

new

4th

the "Glorious

>

11
Stock Exchange

Members Baltimore
120

Broadway, N. Y. S
^

WOrth 2-4230
Bell

Teletype N. Y.

By LIONEL D.

y;.' **

; ;

broker

:

/

The

'i Dumont Laboratories

Members New York

U. S. War

Municipal Dept.
44 Wall Street,

Blair & Co., Inc.,

City,

York

New

1943, there were about
$1,800,000,000 of such credits ac¬
through the tually taken up and $2,600,060,000
of credit -additionally
so-called
V in ' lines
and

that

announces

the

7-4070

System Teletype NY

ClasS

and

A

Lionel

for

long

Edie

D.

in

banks

Industrial Office Bldg.
;

*Dealt in

of the trustees of

Trust Company

.

time, to

Indiana Limestone

serve

There

on

64

:

F, I. duPonl & Co.

Preferred

&

Common

H. G. BRUNS & CO.
20 Pine

Street, New York 5

Telephone: WHitehall
Bell

Teletype NY

3-1223

1944.

7V,

on

'

page

Chicago Mil & Gary 5s, 1948
Missouri Pacific SkVis Serials

't: V,.'

.v:.o

508). V ;/

Seaboard Air Line 5s, 193!

*,

1-1843

Francis I. duPont & Co., 1

BUCKLEY BROTHERS

Bo NYSE Barters

Wall

■

Street, New York City, members
of the New York Stock Exchange,

■

•

— Boettcher
828 Seventeenth
will become members of

COLO.

DENVER,

and

Street,

that their ser¬ the New York Stock Exchange on
institutions Feb. 10, when E. Warren Willard,
have been extended to include an a partner, acquires the Exchange
Investment
Supervisory Service, membership of John T. Berdan.

vices to investors and

Du

3V3ont Laboratories

Com. & Pfd.

Elastic Stop Nut,
Marion Steam

Shovel, Pfd,

England Public Service

New

Plain Pfds.

Peoples Light & Power,

sion of Anthony Gaubis,
President

Vice

Investment

formerly

Secretary

and

of

Counsel, Inc., Detroit.

service, which will be
conducted as a separate depart¬

The

new

ment,

Pfd.

supervi¬

which will be under the

will

be

available

on

Partners in Boettcher and Com¬
pany

Claude K. Boettcher,
Newton, E. Warren Wil¬

are:

James Q.

lard, J, Fred Brown, J. Franklin
Bickmore, and David F. Lawrence.

an

annual fee basis.

;

it

Members N.
37 Wall

Bell

Y. Security Dealers Assn.

Hanover 2-4850

St., N. Y. 5

Teletypes—NY

1-1126 & 1127

agement Company from the time

was

formed by the Irving Trust

York, Basil Harris, Presi¬
of United States Lines Com¬

dent

pany, was

,•

from 1924 to

1927.

Interesting Situation;;

have increased the

of

$6

Pfd.

Deb. 5s, 1963

All

Issues

England Public Service
AH

All

6

%

&

7%

Teletype NY

1-609

170 PINE ST., N. Y. 5 WHitehall 4-4970 I



V

J Mutilated
C. E. de Willers & Co.
Members New York

Security Dealers Assn.

120 Broadway, N.
REctor 2-7634

Y. 5, N. Y.

Teletype NY 1-2361

Eastern

•

Match

7%

PITTSBURGH

•

/

RAILWAYS COMPANY

Estimated nel earnings
for 1943 - after taxes

Corporation

Present cash

prior pfd.

Bonds

.

and equivalent
Selling

.

.

.

$4,500,000

.

.

.

13,009,000

under

Preferred

Bought—Sold—Quoted

Pfds.

G. A. Saxton & Co., Inc

BIDS
WITH

OR

of New

Portland Electric Power

FASHION PARK, Inc.

Issues

Virginia Public Service

speculative at¬
Prior Lien

Ohio Match

Issues

Northeastern Water

Troster,Currie&Summers
N.

Members

Siaons, Linbura & Co.

74

Y.

Security

Dealers

HA 2-2400

Trinity Place, N. Y. 6

Teletype NY

Ass'n

1-376-377

,

Members New York Stock Exchange

25 Broad
HAnover

St., New York 4, N. Y.

2-0600

Tele.

NY 1-210

0rivate

Wires

Detroit

-

to

Buffalo

Pittsburgh

-

-

Cleveland
Louis

St.

BERWALD& CO.
Successors

Robert

C.

Mayer

to

&

Co., Inc.

Special Letter available
late

30 Pine

St., N. Y., DIgby 4-7900

Bell
New

Teletype NY 1-1790
York

Security

Healers

Ass'n

on

New

50%

interesting

developments.

T. J. FEIBLEMAN
Members

Member

i

-.

Universal

Laboratories "A"

Common

ON BONDS

the

request.

FASHION PARK, Inc.

^

Philadelphia & Lps Angeles

WE MAKE

England Public Service Company
according to a detailed circular on
the
situation
prepared by - Ira

Allen B. Du Mont

Illinois Power
New

both

and Plain Preferred stocks

FASHION PARK, Inc.

WHitehall 3-7253

Direct Wires to

r

York 5, N. Y.

63 Wall Street, New

elected a Trustee.

Steady and substantial growth
in earnings of the ^'Utility Group"
traction

Exchange

Members New York Stock

-

:

Green Mountain Power

/'

*'fw

of New

Company in 1929, and during his
who has specialized
lash three years with that com¬ Haupt & Co., Ill Broadway, New
in studies of stock selection meth¬
York City, members of the New
pany served as vice president and
ods and stock market cycles, is a
York Stock Exchange and other
secretary.
;
graduate
of the University of
He was on the staff of The leading national exchanges. Copies
Michigan, where he majored in
economics.
Prior to joining In¬ Economist of the American Tele¬ of this interesting circular may be
vestment Counsel, Inc., in 1934, he
phone and ; Telegraph Company had from Ira Haupt & Co. upon
was
with Irving Investors Man¬
Mr. Gaubis,

SreeTiecmdCompaTiu

"Basil Harris

Company,

today

announces

1944

Baltimore & Ohio 4s,

Boettcher & Co. To

Inaugurates New Dept.

"

Mid-Winter

(Continued

| i

TRADING MARKETS

•

.

Struthers Wells

NEW YORK 5
HAnover 2-9470

i

WALL ST.

Teletype NY 1-1140

Bankers

Jan. 17,

is, however, uncertainty, about the,

1952

Co.

Exchange-

Members New York Curb

Meeting New York
Association, Federal Re-;
Bank of New York, New York City

the

State

Income ,6s,

tni New York Curb Exchange

Frank C. Masterson &

by Dr. Edie be-;

address delivered

*An

fore

a

v1-';

Common

;

,rHarris Elected Trustee
the United States

SYi% Debentures

Federal Screw

Department

If the guarantee

the

remain

come.

Income 6s,

c >

*5%' &

Common & Preferreds

is carried, over
into peace-time, private banking
every
reason will
gradually deteriorate and the
to
suppose
spirit of free. enterprise will go
that the huge
the way of all flesh.
The hand of
Government
Government will fall with parportfolios will

stock

1963 with

s,

present
be perma¬

nent? There is

Lincoln Building
514

banks themselves to decide.

war

1-1648

Byrndun Corp.
Common

,1 Whether the principle of guar¬
anteed credit is retained in peace¬
time is largely a question for the

Central States Elec. (Va.)
:

Sachs & Co. and more re¬

cently with the War
in Washington, D. C.

/-

-

tions made by

New York 5

Telephone COrtlandt
BeU

"

man,:

At a meeting

these

contribu¬

two

York Curb Exchange

31 Nassau Street

31,

available/

VT loans.

Will

Vanderhoef & Robinson
New

Get.

of private
ban k
credit

tee

Bonds

Members

On

guaranteed credit.

future of

guaran¬

1-1919

Teletype NY

Bell System

—^

Govern-^

of

C;i.

WHitehall 4-8120

65 Broadway

in banking.
' .
f
inaugurating the national

Stock Exchange
Exchange

Members New York Curb

.

World War I was significant for broadening and Donald S. MacFadden is now asso¬
developing the Federal Reserve System.
ciated with them in their munici¬
World War II will be significant for introducing huge portfolios
pal bond department.
Mr. Mac¬
of Government bonds in- bank assets and for initiating the principle
Fadden was formerly with Gold¬
ment-

England P. S. 7% PL Pfd.

New York City,
specialize in stocks
and bonds secured by New York
City real estate. ' ■
* *
''

banking system.

BUY

England P. S. 6% Pi. Pfd.

New

Broadway,

150

In

bring revolutionaryichanges
Civil War was significant for

New

active

Wheelock,

Brown,

where he will

Above In 1947.

All wars

with

Harris, Stevens, Inc., is now asso¬
ciated with Amott, Baker & Co.,

Grave Doubt That Government Is
Going To Be Willing To Pay Higher Interest Rates To
Commercial Banks On Government Securities — Says
Payment of $1,200,000,000 Interest Per Year To Banks
After War Will Serve As A Balance Wheel On Earn¬
ings—Sees 2% Bonds of 8- to 10-Year Maturity Selling

Dr. Edie Expresses

At Par Or

1-1227

EDIE*

completed 25 years as an

New England Gas & Elec.j;

;

& CO.

Orleans Stock Exchange

41 Broad Street
BOwIing Green 9-4433

New York 4
Tele. NY 1-493

Volume 159

Number 425;

THE COMMERCIAL & FINANCIAL CHRONICLE

499

The COMMERCIAL and

FINANCIAL
;

CITY OF PHILADELPHIA BONDS

CHRONICLE

Reg,. U. S.

Jan.

Patent Office

Panama

William B. Dana Company

.

.'

Publishers
25

■

BEekman

!

Coca-Cola

Spruce Street, New York 8

,;v

3-3341

We

Editor and Publisher

William

Dana

D.

Seibert,

Riggs,

every

Thursday

and

news

Offices:

stock

market

Due August

amount

Bought

Reentered

by
as

prices.

New York Phone

of

135

S.

William

STRAUSS BROS.
Members

32

Salle

La

New

York

Security

Dealers

B.

Dana

By HAROLD

CHICAGO 4

NEW YORK 4
DIgby 4-8640

Teletype NY 1-832. 834

Teletype CG 129

Petroleum

S.

Lichtenstein

&

Co.

Pennypacker 0300

Lawyers Mortgage Co.
N. Y. Title & Mortgage

Co.

Of

All local Title Companies
■

year.

Q

...v.;.■. </,

.

Consultant

Sees

CERTIFICATES

Germany

On

Hand-ToBOUGHT

Disparity
Precludes

Complete

•

SOLD

QUOTED

•

Statistical

Information

Industry As In 1944 To Be Somewhat Better Than

L.J. GOLDWATER &

CO.'

INC.
Members New York Security Dealers Assn.

39

Broadway

New York 6, N. Y.
HAnover 2-8970

Teletype NY 1-1203

In 1943

Bought—Sold—Quoted
At this time all of

Bank and Quotation Record—Mth. $20
yr.

Monthly Earnings Record—Mth...$20yr.
NOTE—On account of the fluctuations

health

Newburger, Loeb & Co

!n the rate of

Members

exchange, remittances for
foreign subscriptions and advertisements
York

TITLE COMPANY

Standing Up Indefinitely—Declares We Are A
Long Way From Running Out Of Oil In This Country
But Passing Of Era Of
Superabundance May Mean
Long-Term Price Trend Is Upward—Looks For Earnings

Issued by

Publications

in New

Industry

J. WASSON*

Nazis

CERTIFICATES

Continental Europe (except Spain), Asia,
Australia and Africa, $31.00 per

made

B.

Philadelphia Phone

2

Mouth Basis So Far As Oil Goes And Wide
In Motor Fuel Potential In Favor Of Our Side

MORTGAGE

Company

$27.50 per year; South and
America,
Spain,
Mexico
and
$29.50 per year; Great Britain,

be

STREET

Harrison 2075

Canada,

must

WALNUT

PHILADELPHIA

,

Outlook For The Oil

Ass'n

Board of Trade Bldg.

Broadway

second-class matter Feb¬

Other

1528
!

Monday

Subscriptions in United States and
Possessions, $26.00 per year; in Dominion

Cuba,

.

Buy War Bonds

REctor 2-0790

ruary 25, 1942, at the post office at New
York, N. Y., under the Act of March
e, 1879.

Central

Quoted

—

the

Yarn all & Co.

Smith.
1D43

Sold

—

on

MARSHALLS

1, 1968

current

at

issue)

St.,
Chicago 3, 111. (Telephone: State 0613),
in
charge of Fred H. Gray, Western
Representative:
1
Drapers'
Gardens,
London, E. C., England, c/o Edwards &
Copyright

March

TURNPIKE REVENUE 3%% BONDS

supply dealers with

of

(complete statistical issue—market quo¬
tation
records,
corporation,
banking,
clearings, state and, city news, etc.)
Other

1973

,

advertising

and every

August 1,

MARSHALL
those extra $ $

COMMONWEALTH OF PENNSYLVANIA

position

a

reasonable

week

a

in

are

a

Manager

Thursday, February 3, 1944

(general

Due

to

President

Business

Published twice

1, 1975/65

for the

Herbert D. Seibert,

William

1975/ 62 and Jan.

1,

DELAWARE RIVER JOINT COMMISSION
REFUNDING BRIDGE 2.70% BONDS

40 Wall

funds.

New

Teletype

the

NY

1-2033

The

war

bearing

.

In

no

are contingent on our outlook with
direction do the two outlooks
merge

they do when

as

outlooks concerning the future economic

our

industry

any

war...

closely

WHitehall 4-6330

St., N. Y. 5

Bell

Exchange

Stock

York

to

of

thinking about oil.

are

angle of oil is not

the validity of all

on

respect

^together

we

a

new

f

story, but it has such

other

our

Du Mont Laboratories

so

economic

vital

a

outlooks

at

Moxie Co.

this

particular

juncture
world

NASD Profit Limitation

that

it

Rule Would Close Capital

fact, this
phase
is
one

Markets To Small Business

b

will dwell

effect the rule will have

the

tity than
This

most

de¬
.;

side

,

1

monu¬

and

job

certain

in
Harold

the small

J.

Wasson

—

With this in mind it is necessary to again
of Oct. 25, 1943 advising the members

•decree.

Therein

reference

made

was

to

the

refer to the
of the 5%
fact

that

oil

war

so

by

quarters
to

they had taken on fifty
during the previous six
but only fifty it is well to bear

to say that the Board has com¬
pleted its study of the questionnaires (answered by only 82 %
of the membership) and discovered that
4t% of the trans¬
actions reported in the questionnaires were effected at a
or

mark-up of not

over

3%, and 71% at not

_'%,

observe that 18% of the members failed to
questionnaire but further examination reveals

the

what is not

so

apparent, namely, that in the case of 29% of
the tranactions stipulated it was found
necessary to go in
for mark-ups of more than 5%.

Despite this fact, the Oct. 25, 1943, letter informs
m'embers that District Business Conduct Committees
been instructed to determine whether a dealer has

a

at

meeting

a

tomers'
in

the

New

Brokers

Board

of

York Stock

a

transaction with

a

customer at

were

effected at

a

gross

war

doubt be

no

(Continued




on

more

whole took this to

page

War Bonds

the

all

HmioB&lo.M

Money

170 Broadway
COrtlandt 7-6190
Bell System Teletype NY 1-84

for United States

SUGAR

crease

rency

gov¬

expenditures and deficit

in

a

slower rate of in¬

bank

deposits and cur¬
in circulation. ' The extent

of these

the

down-turn in

a

changes will depend upon
of

course

Eisenhower

the

General

war.

has stated his

positive
belief that Germany will be de¬
feated

in

1944.

When

the

a

SECURITIES

government

■

(Continued

Euro-

on

page

DUNNE & CO.
Members New York Security Dealers Assn.

25

We

Tel. WHiteSall

522)

N. Y.

3-0272

524)

suggest:

While Rock Mineral

Pacific Goa&t

1st

SectVutUl

than 5 %.

mean

Broad Si., New York 4,

have

American Cable

Springs

7% Preferred

To

and Radio

yield 7.7%

Discount

(Common

listed

Warrants

dealers

to

N.

Y.

Stock

Exch.)
t

Wyeth

&

Co.

'Since 18939

that

they would be obliged to refrain from going in for
mark-ups
of more than 5% for fear of
violating the rule, some ques.

of

517)

page

war

ably be

production, there will

financing, and

always justified."

,

on

a

mark-up of not

as a

Room

better way

!>Sff Buy

held

ends, there will prob¬
substantial reduction in
expenditures and in
Treasury borrowing.
It is esti¬
mated that our war expenditures
might decline 50%- within a year
after Germany is defeated, even
though the Pacific war continues.
Continuing, the survey has the
following to say:
Treasury Borrowing — If the
pean

If the year 1944 witnesses a de¬
cline in

as

membership

1944,

no

speed Victory

Exchange.

(Continued

rOutlook for 1944

those selling below $10, a somewhat
higher
percentage may sometimes be justified. On the other hand,
5% or even a lower rate is by no means
While the

to

With respect to the outlook for the current.year, the
survey says:

This letter then added, "In the case of certain low
price se¬

curities, such

25,

Governors'

a review of 1943 and its outlook for 1944,
Government securities and the money market,

price not reason¬
ably related to the current market price of the security by
having in mind the fact that 71% of the reported transac¬
tions

Jan.

on

There's

at¬

The Bankers Trust Company of New York has issued a pamphlet

consum¬

mated

System Teletype, N. Y. 1-2480

M

ernment

It is easy to
return

to

by Mr. Was¬
petroleum consultant of this city,
of the Association of Cus¬

son,

that may not, I be¬
fully appreciated.

least

delivered

giving

The letter then goes on

spread
5%. "

Bell

military force
planes, tanks,

the

address

^

in mind.

gross

Assn.

REctor 2-5288

•

our

tendency in

a

at

measure

counting

*An

Bankers TrustCo.0n

would reflect the gross mark-ups
consecutive principal transactions

over

Dealers

Broadway, New York, N. Y.

a

questionaire1 had previously been sent to all members re¬
questing that they indicate therein certain particulars which

months—not all tranactions

and

lieve, be

there has been

tempt

helping us
prevail over

>

letter

for

Ill

Security

We commonly refer to the pres¬
conflict as a mechanical war,

great

job—a

in securities but also the

constitutes

Members

York

New

great military advan¬
...*•

yery

tage.

in¬

is 'do¬

a-

to
independent dealers
our
enemies.
tendency it will have as time goes
That, I assume, we all know.
on to close the doors of our
capital markets to small business
However, there are some aspects
and thereby stimulate monopoly right down the line.
of the close relationship between
on

a

J.F.Reilly&Co.

ent

ing

only the stifling

enemies.

ammunition,

fined,

dustry

Merchants Distilling

the

ours to expend
amounts, of oil ammu¬
nition, so to speak, against an en¬
emy who is severely limited in his
supply of this highly important

mental

not

on

our

is

oil

on

unlimited

horizon

The

expend

can

ability of

clearly

•quasi-governmental organization contrary to its by-laws and
the provisions of the Maloney Act.
\v;;.
we

and

battlefield in vastly greater quan¬

war

that to me, at

least,

get from

and

possess

segment

look

January 30th we carried an article
bearing the caption "Right Is Might" in which we stressed
the high handed manner in which the Governors of the
^National Association of Securities Dealers, Inc., foisted a
5% gross mark-up limitation rule on the members of this

In this article

of

of the oil out¬

In the "Chronicle" of

we1

vital

As

matter

Emerson Radio

itself,

that is, liquid fuel
oil, is the one
indispensable element
of combat striking power that we
that

bears

retelling.
a

Oil

in

history

HoiiRsse&Trsster
Established

NEW YORK

LOS ANGELES

74
.

Members Los Angeles Stock Exchange

Trinity Place, New York 0, N. Y.
Telephone:
Teletype:
Green 9-7400
NY 1-375

BOwling

C. E.

1914

Members N. Y. Security Dealers Assn.

Unterberg & Co.

Members New York Security Dealers Assn.

61

Broadway, New York 6, N. Y.

Telephone BOwling Green 9-3565
Teletype NY 1-1666

500

rHE COMMERCIAL & FINANCIAL CHRONICLE

/

We

interested in offerings of

are

r •

American

S. H. Kress & Co. Pfd.

High Grade

ACTUAL TRADING
Public

MARKETS

Stromberg Carlson

Trask & Co.
/

Members Neiv York Stock Exchange

Permutit Co.

<,

-

Amer.

Vertientes Camaguey Sugar
Moxie Com. & Pfd.

has submitted

Council

City

Chicago

The

"A"

Du Mont Laboratories

trading

active

maintain

We

Crowell Collier Pub.

of these two systems.

markets

H. H. Robertson

Art Metal Construction

Established

Peoples Light & Power Pfd.

Members New York Stock Exchange
and

Telephone

Explosives

.

Indnstiy Must Consider World
Needs In Post-War Period: Keller

Corp.
Pfd.

Car

Mokan

Remington Arms

Airlines

Export

American
Eastern

Cooperate With Government In Formulating PeaceTime Policies And Stresses Importance Of Approaching
Problems With Common Interests Of All In Mind* j

Corp.

Federal

Screw

American Industries

R.

Loft

Co.

&

Hoe

Aircraft

Kellett

Candy

for
"...

Airlines

Aircraft

Petroleum Heat & Power

Aircraft

plan

work Up

in

tained

Instrument

General

con¬

were

Home Appliances

Bendix

now."

These remarks

Swasey

&

Warner

Lewis

&

can

you

a

speech deliv¬
ered
by
Mr.

Haloid

Richardson

at

the

Haskelite

Keller

Doyle Machine Tool

Economic

Metal
A. E.

Thermit

&

cago,

Harvill

Tank

Oil

"War is

Pump

&

business.

All Issues

doing
K.

thing

Keller

T.

Southwest

some¬

Com.

Pub.

Serv.

Ccns.

& Power

Utility Service Pfd.
&

Gas Pfd.

Iowa Southern
Nassau

Util.

■"

The failure of the

Coin.

have thus

that

on

hard

far gives

score—we

in the midst of

now

are

Our

Queensboro Gas & Elec, Pfd.

Central

Railroad

Chicago N.

W.

of N. J. 5s

&

4s

matter of wage

at

for

Missouri

Public Utilities 5Y2s
Pacific

Gen. 4s

Associated Gas

^

arbitral body

of

page

& Elec. Issues

erhood

"As

and

the law stands

"either

ignore

Ward & Co.
Y. Security Dealers Assn.

120 Broadway, N. Y.
REctor

2-87C0

Teletype NY 1-1288

Direct

BOSTON

~

Established 1926

Wires

"It

—




PHIL A.

of

his views, Vicetook occasion

Fletcher

—

-

-

•

represents my

V. Fletcher

when sacrifice
the watchword of the nation,

body

may

provide that the decisions

well

of the

own

views and mine alone.

not.

R.

on

Preferred Stocks

Southwestern Securities

RAUSCHER, PIERCE & CO.
DALLAS,
.

Houston

•

TEXAS
San Antonio

ST. LOUIS

in-

the

LONG BELL

vestment
and

whole is

broker

fraternity

LUMBER

as

making to insure suc¬

of the Fourth War Loan.
BOUGHT

fraternity

indicate

a

—

SOLD

—

QUOTED

stock

of

determination

'eltason, Tenenbaum, Inc.
803

to

their brothers-in¬
arms
in this department of war
work, that they know best, Mr/
support

Landreth

Bldg.

ST. LOUIS 2, MO.
L. D. 240

Teletype—SL 486

Sullivan said.

"We are enlisting every mem¬
ber of the NSTA who are associ¬
ated

with

firms

in

approximately
1,100
effort to spread on
tbe record our wholehearted co¬
operation with the fighting forces.
While a continued effort through¬
by

our

lief

our

war

.drive will be maintained
membership, it is our be¬
to crystallize the work
fraternity in a final day of

devoted

100%

bonds, will,

percentagewise in
tional drive.

investment
as

£

Co.

SAINT LOUIS
?y

Bell

509 OLIVE ST.
Teletype--SL 80

System

that

effort
of

x5t/X

the

out

of

this

never

to

the

score us

this

great

sale

high
na¬

I believe the entire
group

before

to

Members St. Louis Stock Exchange

organized

are

contribute

handsomely to this work."

Norton Is V.-P. Of

mm

have prepared an attractive book¬

"What I 'shall say

to

legislative

drive

Sullivan

John

Available On Request

to state:

that in time of war,

,the

Firemen

us

with, and sup¬
plementary to,
the
general

Enginemen;- Joseph B. East¬

President

Board."

seems

Locomotive

Before outlining

the

me," he adds,
is

to

HARTFORD

gency

at

guests,

tion of American

Emer¬

the

of

and

& Terminal 6% 1951

in

;is

Pelley, President of the Associa¬
Railroads.

party

judgments

Members N.

This

Director of the Office of De¬
fense Transportation, and John J.

privileged

to

Jan. 26 attended by its

Check

connect ion

man,

now," says Mr.

is

on

of

which
other
speakers were David B.
Robertson, President of the Broth¬

Fletcher,

Wire orders collect

ad¬

of the Eco¬
New York at a

members

Club

members

ing on all the

parties."

to

dinner

be

sive and bind¬

INSURANCE STOCKS

compulsion."

nomic

conclu¬

final,

shall have the force

Dallas Ry.

All Texas Utility

Commit tee.

and

518)

Mr. Fletcher's remarks were

dressed

board

ing

should

Missouri Pacific Conv. 5y2s

Bond

and
bond men, whose profession deals
with the public year in and year
cently completed by the Army out in the marketing of securities,
which
gives some idea of the are very proud of their contribu¬
strength of our enemies and what tion of 400 members to active
it will take to beat them.
Per- military service of their country,

and General Counsel of the Association of
governed in the
disputes solely by the procedure of the Railway Laboi

judgments of
the fact-find¬

Indiana Limestone 6/52

Central

War

This

on

J.

,

Southern Union Gas Common

Ass ociation's

perimeter of Japanese de¬
fenses.
Perhaps some of you may
have seen a motion picture re¬

(Continued

Pepper

SoVestern Pub. Serv. Com. & Pfd.

the

of

man

the

outer

Quoted

—

Republic Insurance

Boston, chair¬

cess

that "if the railroads are to be

the

duration,

L.

Sold

Putnam & Co.,

a

present legislative machinery to effect satis¬

war's

F.

of

Jr.,

biggest land invasion in
world. And in
Pacific we are still on the

service

least

the

Act,

Conv. 4%s

Inland Power & Light 6s

bond

Sullivan

E.

right

Fletcher, Vice-President
American Railroads,

Feb.

sales, accord¬
ing :: to
John

preparations

the

—-

Dr.

their

as

war

dealer

for

Bought

special day for

that

victory

the

to

way

set

7

little comfort
have a long,

surely lies ahead of us.
"The United Nations

DALLAS

country,

have

porting them, are doing a mag¬
nificent job, but unless there is
internal
collapse in the enemy
countries—and the evidence we

factory results in mediation efforts in disputes between the railroads
and their workers prompts the suggestion by Judge Robert V

Suffolk Ltg. Pfd.

&

the

forces sup¬

Emergency Board Judgments In Rail Disputes
Should Be Final During War Period

7s

Transit

Elec.

financial centers of

the larger

fully

Pub. Serv. 6s

E.

American

the

and

industrial

Serv.

Pub.

E.

N.

Conn. Light

forces,

fighting

& Tel.

N.

Syracuse

it

else to¬

morrow.

Central Electric

You

win

cannot

Div. Arr. and

grim

by working at
it
today and

Chicago Tractions

Illinois Power

representing 2,200 members in 23
of

the history of the

said:

Maryland Casualty
Tokheim

in Which

further

he

Corp.

Chi¬

of

Club

Staley

Auto Ordnance

and

forces

Teletype BS 424

Capitol 4330

National Security Traders

The

Jan.

Sugar

Giddings

Building

MASS.

9,

Association and affiliated groups,

K.

on

Whelan

United Cigar
Vicana

war,"

declared

National Airlines

Rohr

Bank

BOSTON

All Out War Bond Sale

T. Keller, President of the Chrysler Corp., further
28, "I believe in preparedness for peace.
I be¬
lieve the best preparedness for peace is to concentrate on winning
the war—quickly and decisively.
If we can shorten the war by
as little as one month, it will mean more to the country than any
peace - time*^
*

Majestic Radio

Northrop

HSTA Sels Feb. 7 For

preparedness

have always believed in

declaring that "I

While

Mid-Continent Airlines
Northeast

Chrysler Corp. Also Urges Business To

President Of

Aircraft

Aeronca

Great

Pont, Homsey Co.
Shawmut

Shore Oil

Hearst
Auto

du

•

.

Pollak Manufacturing
Lanova

Stockyards Preferred

Telephone BArclay 7-0700
Bell System Teletype NY 1-1493 /

West Coasts

Worsted "A" and Pfd.

Botany

Triumph

South

United

-'v.---;"'

East and

Chicago 4, Illinois

35

Chicago

United Elastic Corporation

NEW YORK 6

to—»:
!

209 South La Salle Street

/Teletype

*

Remington Arms Co.

1920

Security Dealers Assn.

Broadway >

115

Direct Private1

Chicago Stock Exchange

Wires

Dearborn 0500

Co.

Securities

Christiana

Members New York

,

Bird & Son

Bristol & Willett

.

CRUTTENDEN & CO.

Title Guaranty & Trust

•:

to

Mallory

P. R.

y

v'-

BOSTON'

securities

the

■.

Incorporated
New York 5, N. Y.
Teletype NY 1-897

Bell

1

in

I'-'v

•'

'

'

Street

Wall

63

Cyanamid Preference

,

,

Merchants Distilling

offer

an

f

.

:rederic H. Hatch & Co.

Chicago Rapid

purchase the Chicago Surface Lines and the
Transit properties.
1
„
r

V

•

National Casket

CHICAGO TRACTION SECURITIES

Nut Com. & Pfd.

Elastic Stop

Universal Match
•V"-

Teletype NY 1-5

Telephone HAnover 2-4300

Alegre Sugar

Punta

Penn. Bankshares & Sec. Pfd.

Case Pomeroy & Co., Inc.

25 Broad Street, New York

Steeel

Lawrence Portland Cement

American District Telegraph Co.

Emerson Radio

Wickwire Spencer

Cyanamid, Pfd.

Sugar Associates, Com.

Minneapolis & St. Louis Ry.

J

PREFERRED STOCKS

Eastern

Interstate Natural Gas

Utility and Industrial

•encer
Sp

Thursday, February 3, 1944

'

this

evening,

speak

as

I do
-

the

of the industry or in any
representative capacity.
I have
organ

Schenley Distillers Corporation

Renter, Mitchell Go.

CHICAGO, ILL. —Remer, Mit¬
La
Street, announce the elec¬
cles in the series they have been tion of -Laurence H. Norton - as
running in the "Financial Chron¬ Vice-President in charge of their
icle." Copies of this booklet may Lumber
and
Timber
Securities
be had upon request by writing Division, effective as of Feb. i,
let

containing the first

ten

arti¬

chell & Reitzel, Inc., 208 South
Salle

1944.
to Mark

ley

Merit, in

Distillers

care

of Schen¬

Corporation,

350

purposely refrained from consultFifth Avenue, New York 1, N, Y.
(Continued on page 520)

Mr.

Norton

has

been

asso¬

in their
trading department for the past
ciated

ten

with the company

years.

Volume

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4252

159

is I don't know. For

Tomorrow's Markets

Says—
News uncertainties currently
reflected in market action,

Offerings

down to
bids in many cases. Further
irregularities and
dullness

any bearing
trend.

Stock

the market

on

here

and

there

certain

stocks

began eating into the
figures in a disturbing

fashion.

But

offset

to

From

than

other

the

BULOLO GOLD DREDGING
Direct

point,

such

action

as

men¬

tioned above is almost

mean¬

ingless.

Or if it has meaning
it indicates one of two
things:
First, individual stock action

Offhand it looks

ness.

the market

were

to occur;

news,

that

would

as

if

waiting for

development,!

some

some

FALCONBRIDGE

Schwa backer & Co.
14 Wall St., N. Y. 5
Private
San

Francisco

either

drive

it
or

push it through.

*

.

dent

of

the

Mr.
s o c

National

Association

work

publie

of

1 afields,

Other

Bald¬

been

has

er

National Pub¬

Relations

lic

knowledge

Advisory
Committee

dustries whose securities;
traded on the

Scout

In

for

.

New

directors

Thomas

named

Toronto

Hickey Heads

Bond Brokers Ass'n

.were:

elected

ciation's board of governors were:

were:

Sydney
P. $ Bradshaw,
Clark,
Dodge & Co.; James H.< Carson,*
Salomon Bros. & Hutzle?; Robert
public rela¬
Fry, of New York,
tions chair¬
Westinghouse Electric & Manu¬ D. Danks, Ernst & Co.; Sylvester
man
of
the
facturing Co.; K. E. Cook,i, of New P. Larkin, Pflugfelder, Bampton
National Noise
York, Standard Oil Co. of N. J.; & Rust; Howard • J. Nammack;
Abatem ent
Raymond C. Mayer
Weston
Smith,
of
New
Yofck, Struthers & Dean; Arthur M. Nel-;
Council,
;r *
Guenther Publishing Corp.,?"'and son, Cowen & Co.; Kenneth A*
Samuel D. Fuson,' Vice-Presi^
Roome, Hardy & Co.; Walter F.
Frank J, .Price, Jr., of the Pru¬
dent of Arthur Kudner, Inc., New
Seeholzer, W. S. Sagar & Co., and
dential
Life
Insurance
Co.
of John Wasserman, Asiel & Co.
York, was elected First Vice-

George

years

is

and

also

P.

Oslin, of New York,
Union
Telegraph Co.;

Western

Charles

something

page

s

many

saying in ef¬

on

of

Girl

the

are

large way this is true. For
anybody who buys or sells a

(Continued

a

member of the

re¬

officers

1-395

Montreal

Thomas J. Hickey, of Vilas &
Vice-President, Henry W.
von Morpurgo, of the W. A. BechHickey, has been elected Presi¬
tel
Co.,
San
Francisco,
Calif.; dent of the Association of Bond
Third Vice-President, Daniel
C. Brokers of the New York Stock;;
McCarthy, of the Firestone Tire Exchange. W. Stuart Bernard, of
&
Rubber
Winkler
&
Co.,
was
Co.,
Akron,
Ohio; Bernard,
Secretary, A. Schaeffer,;Jr., Amer¬ elected Vice-President, and Ro¬
ican Society for the Control of land L. deHaan, of Mabon & Co.,
Cancer, New York, and Treasurer, was elected Secretary and Treas¬
Paul Haase, Controllers Institute urer.
Elected members of the Asso¬
of America, New York City.

Wil¬

succeeds

about the business of the in¬

fect that he knows

Relations

HAnover 2-0980

Teletype NY

Second

win. Mr. May¬

share of stock is

Public

St., N. Y. 5

Bell

<s>-

r e

tions

theory on which these
support levels is based pre¬

-

WILLIAM

New York

Mayer; who is Well-known in the industrial, engineering and

ia 1

liam H.

Exchange.

52

Counsel, Inc.
This announcement was made on
Tuesday, Feb. 1 by the board of
directors, following the annual meeting held last night at the Hotel
Lexington.

;

flects all the best

HART SMITH & CO.

Raymond C. Mayer, of New York City, Has been elected Presi¬

The

What that

UPPER CANADA

Fresno

Mayer President

recognition of certain support
levels is almost a
necessity.
.

Sacramento

Oakland

VENTURES

is the former you
concerned with, then the

*

PEND OREILLE

PRESTON EAST DOME

National Public Relations ien Elect

it

-

f

NORANDA MINES

to

Santa Barbara

Monterey

T

CO. 7-4150
wires

NICKEL

KERR ADDISON

Members New York Stock Exchange

a

something

a

from present levels

away
•

dull¬

on

CONSOL. MINING & SMELT.

If the latter

contrary to the market; sec¬
ond, a continuance of irregu¬ supposes that the market

larity superimposed

private*, wires

way

surprises is one
thing that the market cannot
guard itself against. The only
insurance
against being
caught by such surprise is, so
far as it's practicable, to either
recognize stops and use them
for all they're worth, or get
out of long positions until the

are

HURIONIAN

AUNOR GOLD

Time

And

this air
has cleared.

forecasting view¬

a

10 A.M. to 5:30 P.M.

Naturally, with a war on
hands surprises are usual

danger other plan is followed there is no
stocks maintained themselves
point in talking about trends,
either at last week's levels
danger points, or anything
and in some cases improving
else having to do with the
on them.
market.
If the former, and I
Sjc
^
;,

ANGLO

'

our

assume

Canadian Mining Stocks

Open from

of

appearance

Exchange

Eastern War

around.

During the last six market
days prices have again dis¬
played an inability, or refusal,
to go through the offerings.

on

tiSan Francisco

:

rather

By WALTER WHYTE

bid

Orders executed

ing invasion1 of Europe will
play an important part in the
stock picture. As a matter of
fact, anything which has been
widely discussed seldom has

coming

looked for.

And

example,

I don't believe the forthcom¬

Walter Whyte

501

525)

N.

...

Greatest Fight Mead—That

President.

The

Newark, N. J.

Against Possible Totalitarian
*

**

'

...

.1*, * "

State In U. S.—Robertson Monetary Economist Sees Reed For Joint
Currency Action By Principal Rations
.

•

-

<

t

•

*

v

•

.

J. '

'

^

.

'

:

Brotherhood Head Would Combat Increasing Bureau¬

cracy—Sees Rationing, Draft and Governmental Inter¬
national Management of Money Leading to
Insolvency
Of American Economy—Comments On UNRRA
Declaiming against bureaucracy at Washington and the drift
a totalitarian State, David B.
Robertson, President of the Broth¬
erhood of Locomotive Firemen and
Enginemen, told members of the
•

toward

Economic Club of New York at their dinner

on

Jan. 26 that Misillu-

sioning experience of the recent past in our relation to increasing
bureaucracy at Washington has convinced me that many of us per¬
haps
should
no avail."
change th
Continuing, Mr. Rob¬
shopworn
pression

'coupon

ertson said:

ex¬

of

clip¬

est

'opportunity
clippers'
as
a p p 1 i e
appar-

11 yc o

e n

d

m a n

Go

t

in

Capital
"I

more

today

our

this

ertson,
went

-

David

B. Robertson

must

say

and

will

be

victorious

against the Axis, but possibly the
greater fight we will have ahead
is

against

lute

ica.
or

or

a

drift toward

an

abso¬

totalitarian State in Amer¬

We must break up this drift

our

requirements.

,Of

war.

However,

when

a

time-will

a

halt must be called

prodigious and unwise spending
of
taxpayers',
and
workmen's

earnings which will increase the
power
and expense of bureau¬
must cracy and destroy American
living

that "we
change the drift toward the very
thing against which we are fight¬
ing
this
horrible
war."
"Of
course," Mr. Robertson averred,
'.'we

as¬

to

who
to

in

will continue freely to

we

come

clearly
than

on

between

world

great

Mr. Rob¬

said

the

sacrifice in every possible way to
win a
complete victory in. this

before,"

ever

finance

course,

City.

see

of

ment

v-ernm

trends

cooperation

nations

sisting each of them to help itself,
I am primarily desirous of further
substantiating and increasing and
widening the American standard
of living.
We are all feeling the
impact of taxation and Govern¬

of

who

possible

the

pers' to that

some

"

"While I would favor the great¬

fighting abroad will be of




standards.
see

Otherwise, I cannot
members, at least,

where

my

will be able to take home to their

families
to

adequate

maintain

tions.
"A

dress
data

V
few
at

.

months

ago,

Cincinnati,

which

lengthy

envelopes
home condi¬

pay

proper

was

' the

research,

(Continued

in

I

on

an

result

suoDorHnf?
page

ad¬

described

527)

of
pa-

From

Association

also

elected

a

nominating committee for 1944,
consisting
of Allen A. Pierce,
Merrill Lynch, Pierce, Fenner &
Beane; Benjamin E.
Bampton,
Pflugfelder,
Bampton
&
Rust;
Samuel L. Hornstein, C. M. Loeb,
Rhoades & Co.; George K. Gar¬

study of the inter-war experience, Dr. John Parke Young,
economist now engaged in post-war economic planning vin, Garvin Bantel & Co.,' and
for the State Department, concludes that the world's currencies, Alexander R.. Piper, Jr., Paine,
particularly the major, systems, are so interdependent that without Webber, Jackson & Curtis.
coordination, or. at least intergovernmental collaboration, economic
difficulties of increasing severity appear likely in the post-war era.
Emphasizing the need for jointsRealty Issues Interesting
action fn the field of currency, action by the principal nations of
Hill, Thompson & Co., Inc., 120
Dr. Young holds the opinion that the world is. delineated by Dr,
Broadway, New York City, have
the
course
of
economic
affairs Young as the first of seven les¬ in
preparation
an
interesting
memorandum discussing the cur¬
probably would have run more sons of the inter-war period.
"The others enumerated are:
smoothly had there been in ex¬
rent situation in U. S. Realty and
istence following World War I
"(2) The need of Europe after Improvement 6s and Fuller Build¬
machinery for such collaboration. the armistice for capital for re¬ ing 6s. Copies of this memorandm
Dr. Young's views are expressed stocking,
rehabilitation and re¬ may be had from the firm upon
in a paper published on Jan. 30 construction and with the lack of
request.
•
by the Monetary Standards In¬ adequate facilities for supplying
quiry which is studying post-war necessary
funds
in
sufficient
'Hot money* movements were a
Disturbed
conditions
monetary problems under the di¬ amounts.
a

monetary

.

rection-

of

Herbert

The

advices

the'

Monetary

made

Bratter.

M.

available

by
Standards Inquiry

aggravated

were
greatly
deficiency.

constant

this

by

"(3) The lack of control of exr
change rates during transitional
"From the standpoint of condi¬ period
following the armistice.
tions in European countries, the Events during four or five years
economic disintegration and dis¬ immediately
following war re¬
tress during the post-war period: vealed
evils of
permitting ex¬
Was more severe than during the change rates to fluctuate at will.
war
itself,' Dr. Young believes, Wild gyrations of rates produced
and he expresses the hope that chaotic condition which retarded

states:

'

'

..

currency
itself;

history will

not

repeat reconstruction

in

position
similar in many respects to that
of 25 years ago, he says, but there
is an- important
difference.
In
contrast to the earlier policy of
letting events largely take their
course,
today governments are
engaged in studies designed not
only to restore, but to improve,
the world's currency structure by

tional

now

a

mony

ity

Short term capital

"(5)
ments,

systems

need

for

joint

come

currency

-

if

uncontrolled,

so

breakdown

great: as
of

to

sued

throughout

nationalistic

by

much

of

the

and

re¬

currency

stability

exchange

relationships

free

Basic to

and

mercial policies which

relatively

world

the

throughout this period.

healthy
are

com¬

permit the

movement

of

goods and service throughout the

J
•

rates.

The

"(7)

be¬

cause * a

exchange

trade

strictive commercial policies pur¬

move¬

may

and

world is unlikely.

an

of difficulties.

source

ex¬

few
and

sustained level of economic activ-f

of

ships,. it cannot be maintained
indefinitely and efforts to main¬
tain
unrepresentative rates are
the

and
in
the
healthy

currency

change
conditions
major countries, a

and is in reasonable har¬
with world price relation¬

ceipts

reasonabl stable and

satisfactory

exchange rate is
one
which reflects approximate
equilibrium between a country's
total foreign payments and re¬

in

national

relationships.

"The

"(4) Unless

of their close interna¬

coordinating

light

revival

and without

trade end production.

"The world is

the-

and

of difficulty dur¬

source

ing much of the inter-war period
and affected nearly all currencies.
"(6)
Currency and exchange
developments are closely related
to the general level of employ¬
ment, production and prosperity,

world
basis."

on

a

broad

multilateral

Thursday, February 3, 1944

COMMERCIAL & FINANCIAL CHRONICLE

THE
502

Dr. Max Winkler Discusses Controversy
Over U. S.

WE BUY

(Del.)

Northern States Power
6% & 7%

SEL

AND

f

Preferreds

FIRST
Bought

SoW — Quoted

MORTGAGE

■

1

u

CERTIFICATES

1 y

a r

& Curtis

ESTABLISHED 1879

Engineers Public

and other Title

Service

Companies

.'V*: iC\ i:;,* ■ '' ,.V >££ V."'*

•••'•**'•

renewed interest recently in Engineers Public
Service because" of that company's strategic move in planning to
acquire Virginia Public Service common stock from General
Electric (Associated Gas & Electric system) for $1,000,000 cash.
Sev¬
eral months ago General Gas,' conforming to the mandatory selling
order received from the SEC, had planned to dispose of the stock tor
a nominal amount, while the com-^
ings of Virginia Electric of nearly
pany was ordered to recapitalize
$1,900,000. This increase, carried
on the
basis of a formula appar¬

Co.

•

:'?i ■':d

■

Offerings

sent

thirties,"

ently unsatisfactory to Associated
Gas
interests.
The last minute

into the

The system is currently
past quibbling by pated.
the question of size, (before merger adjustments) pay¬
proposal enjoyed unusually ing out excess profits taxes of
of

some

the SEC over

the

32 BROADWAY

loans

sailing.

Dr.

Max

Says Francis Of CP

has¬

America

was no one

aid

were

who

came

of

banking houses
condemned by a Sen¬

Committee

for

the

very

governments, po¬
and

subdivisions

^

Winkler

corpora¬

Soviet Paper

the subject of a
very comprehensive investigation
by a Senate Committee on Bank¬
ing and Currency." "The investi¬
gators succeeded in selecting such
loans as were characterized by a
certain degree of irregularity and
abuse,1' said Mr. Winkler, who

In Post-War Planning

Latin

to

is presently accused."

of

tions, was made

Business Must Lead

aid

things of which the Government

be¬

on

litical

Telephone: DIgby 4-6886

Charges
Pope A Pro-Fascist
Press

advices,

Feb.

on

1

Izvestia,
ment

the

the

Moscow

asserting that
the
Vatican

newspaper,

servility

of

toward Fascism has not been
fined to

thereby
providing
the
of the nation with sensa¬
material for a long time.

length,
tional

significant that out of a total
$15 billion of foreign
loans
floated publicly and pri¬
It is

of

about

the course of the '20s,
the investigating committee suc¬
ceeded in discovering irregularly
.underwritten issues to the extent
of substantially less than 1% of
vately in

f

radio

quoted an article from
official Soviet Govern¬

"They then proceeded to delve
into these irregularities at great
press

;

According to London Associated

went on to say:

Industry's greatest challenge in
the post-war
period is to help
fashion an economy which will

The pro forma $10,266,745, equivalent to $5.38 a
income
statement
for
the
12 share on the common stock. The¬ get into the hands of customers
months ended Nov. 30, 1943, giv¬ oretically about half of this might the largest
possible amount of
be saved in the post-war period if
goods and services, and thus as¬
ing estimated effect to the merger
the excess profits tax were re¬ sure the highest possible employ¬
plan and refinancing, compares as
Actually, however, such ment, Clarence Francis, Chair¬
follows with the actual report of pealed.
a
gain would probably be offset man of General Foods Corp., told
Virginia Electric & Power:
Virginia
Merged Co. by the loss of prespnt boom busi¬ the St. Louis Chamber of Com¬
Electric
Pro Forma ness attributable to the war indus¬
merce
last week,
Operating revenues $33,243,061 $48,069,569 tries in the areas served, particu¬
v
"We in the business world have
Operating expenses
12,187,233 17,853,937
3,253,514 larly Virginia.
2,394,189
special responsibilities for taking
^Maintenance
3,937,658
2,819,068
in. long-range plan¬
The system's status„with respect leadership
^Depreciation
1,054,808
JClant amort.—
he said.
"For example,
8,677,019 to dissolution remains somewhat ning,"
6,813,043
'Ved. income taxes3,819,844 unsettled, as the management and American
industry,
which
has
2,657,287
Other taxes.,——
smooth

ate

half of foreign

0:

New York 4, N. Y.

which

g

which

writing

the

to

under¬

the

LANICE & CO.

spokes¬

the Administration

hand, there

active in

were

of

case

has been beneficial.' On the other

con-

i n

k

an

houses

consolidated system
earnings of Engineers Public Ser¬

over

vice, would mean about $1 addi¬
proposal for merger with the
tional for. that company's common
iieighboring
company,
Virginia stock.
'
• ■:,
Electric & Power in the Engineers
In the 12 months ended Novem¬
system, appeared to be a happy
ber 30th, Engineers reported $1.67,
solution for all concerned.
Merger of the two companies is which would increase to $2.67 if
a logical development,
though in the merger works out as antici¬
view

b

not

■

in the
report,

sure,

Butler's

American

tiued, "the activities of

Gas &

for

is

purposes

tened to stress the extent to which

Dr.

Winkler

be

for

men

"In the early

request

on

"To

Senator

own

expended

are

at this moment,

known

medicine."

been

There has

its

of

The precise extent to

funds

non-productive

is
giving Wash¬
ington a dose

republics,

Lawyers Mortgage Co.

N. Y. Title & Mortgage

which

Southern

the

effort.

war

in

expended

Title Guarantee & Trust Co.

Securities

publics south of the Rio Grande
are
highly constructive in char¬
acter and of marked aid to the

in

Amer¬

ican funds are

ISSUED BY

Lawyers Title & Guaranty Co.

Public Utility

the

manner

which

Paine. Webber, Jaekson

Spending In Latin America

Speaking before the New York Society of Security Analysts at
a luncheon Monday, Jan. 31, Dr. Max Winkler, partner of Bernard,
Winkler & Co., and special lecturer at the Latin American Institute,
contended that "the controversy between Senator Hugh A. Butler
from Nebraska and the Administration resulting from the former's
criticism of America's policy with respect to Latin America, partic-

con¬

Italy, but that the Vatican

has

approved of many Fascist
of aggression.
Continuing,
the London account, as given in

acts

the New York

"The

"Sun," stated:

•,

j

inglorious part played by

solini's

Hitler's and Mus¬

in

the Vatican

is

ventures

while

knowledge,

common

the

Vatican
Italy at¬
in v June,
1940,".

maintained silence when

France

tacked
Moscow

corded

said

in

a

broadcast

re¬

Soviet

monitor

support

of Fas¬

the

by

great here.
"The
Vatican
has
now
emphasis was laid upon loans of
changed its course and preaches
this category, and since informa¬
impartial love to all people, but
tion was conveyed to the public
the fact remains that in the great
beaten all records in its efficiency
through glaring headlines about historic battle of freedom-loving
in
converting
raw
materials
irregularities, actual or alleged,
into
finished
goods,
must
people against the enemy of man¬
without in any way intimating the
step up its technology much fur¬ amount of bonds involved in rela¬ kind, the Vatican adopted an at¬
total.

ithe

However,

since

,

oper.

revs.__

$6,372,241

$9,472,789

net-

49,350

64,610

$6,421,591
1,901,450

Net

$9,537,399

Other income,

the SEC have not

yet agreed on a

plan and the company is appar¬
ently still pushing its court appeal

the
Act.
The company won a legal
$6,769,384 round
$4,520,141
Balance
against the SEC recently
Preferred
dividend
when a Federal Court decided that
1,525:960
1,171,602
requirements
it had had insufficient time to
$5,243,424 choose which property it would
$3,348,539
1,200,000
670,000
Surplus frozen
retain under the Utility Act (pre¬
sumably a choice between Vir¬
Balance for com¬
dividends " $2,678,539
$4,043,424 ginia
Electric and Gulf States
Utilities).
The company already
Non-recurring
operating
ex¬
has some cash on hand from the
penses
and tax- savings derived
sale of properties but thus far has
from non-recurring deductions in¬
2,768,015

over

the

constitutionality of

___

mon

plan are not

cident to the merger

reflected

in

the above pro forma

income statement.
faxes

of

Virginia

Federal income

been unable to
ful plan

ing preferred

Electric would
balance for
increased by

develop a

for reducing its

stock.

V

,,

ther

to

reduce

costs

the

public to
and thus create jobs.
enable

thereby

and

buy

more,

tion

to

the

total, the impression

created that

was

'abuse

irregularities and

which characterized an in¬

"Through' larger volume of low- finitesimal
part of the total of for¬
priced goods and services, busi¬ eign loans, applied to all foreign
ness
and its 15,000,000 investors
issues. The stigma which attached
must
seek
adequate return
on to
banking houses in general and
capital—not by making a large those prominently identified with
profit on each item, and selling
;the sale of foreign bonds in par¬
only a few,.but on making a small ticular has not yet been com¬
profit on each item and selling a pletely removed, although the in¬
Under this prin¬
success¬ vast quantity.
justice was obvious to all those

outstand¬
.

ciple everyone benefits—the con¬
sumer, the worker, the investor,
and

enterpriser."

v

who
in

took

the

detail

trouble to examine
without

and

ceived bias the

precon¬

general character

direct

of

titude

cism."
From

were

Feb.

Moscow,

advices

Press

ated

1, Associ¬
follows

as

reported in the "Sun":

in the official Soviet
Izvestia, Dmitri Petrov
today called Pope Pius XII proFascist
and said: V, "No wonder
hate of Hitler and Mussolini now
also includes the Vatican.
Writing

newspaper

England,

"Catholics who live in

America, Spain, Poland and
countries

as

becoming

are

other

the Italians
convinced of the

well

as

steps which of foreign loans.
pro-Fascist character of the Vati¬
essential in | ; "Although the complete report
can's policy.
The Vatican has as¬
post-war planning are advances ^submitted to Congress by Senator sumed the position of direct ac¬
Cgo.-Ipls. Rail
;
approximately $468,000 irrespec¬
in scientific research, better hu¬ Butler has not been available, it
tive of the merger, giving effect
Shaskan &
Co., 40 Exchange
complice of Fascism."
is apparent that the Senator may
man relations, the encouragement
to the additional consolidated tax
Place, New York City, member
In a long article reviewihg the
of small business enterprises, and have emulated the ekample set
benefit to Vepco arising princi¬ New York Stock Exchange, has
American Foreign Policy Associa¬
nation-wide as well as localized by his colleagues who were sit¬
pally from the sale by Engineers distributed privately a block of
tion's observations on the Vatican,
preparations to absorb 10,000,000 ting in judgment over American
of its investment in common stock
"The Pope's
$700,000
Chicago,
Indianapolis returned service men and women bankers about a decade ago, and Petrov continued:
of Puget Sound Power & Light and Louisville RR., first and gen¬
declaration of equal love for all
submitted a report criticizing cer¬
in gainful employment.
Company, not yet completed. The eral 5s and 6s due 1966.
tain of American activities which people on the fourth anniversary
According to Mr. Francis, each
pro forma figures give effect to
of the war, and on Christmas Day,
are
deserving of criticism, but
business
man
needs to plan to
this saving and also to the tax sav¬
failing to state that many, or per¬ 1943, does not conform with the
Lehmann & Verace Admit
reduced

be

common

the

and

Shaskan & Co. Places

dividends

Among

Mr.

from

amortization of war
pro

facilities. The

forma balance after

dividends,
an

accelerated

$5,243,424,

increase over

preferred
represents

the present earn¬

sees

as

Bonds

have

resulting

ing

post-war

Francis

Nichols has
admitted to partnership in
mann & Verace,
1 Wall St.,
York City, members of the
Benjamin R.

York Curb Exchange.

work

useful

former

for

Vatican's practical policy which
haps most, of the American activ¬
been workers who left to fight for his ities in and on behalf of the re- not only has maintained diplo¬
Leh¬ country, and for present em¬
matic relations with Htler, but
New ployees who wish to continue at
helped Hitler strangle Catholic
work.
Each community must see able," he said, "that the bottom
New
groups
opposed to Fascism in
what it can do collectively.
Job- should be allowed to drop out
Germany as well as in Italy."
creating programs' can be carried suddenly from under the 'prices
Petrov declared that there was
out by business associations/ and for millions of farmers, or that
at the same

time there should be

thousands of workers should find

government plans to take up the

4th WAR

LOAN!

themselves

slack.

of vast Government contract can¬

Mr.

&

Co.

Members.New York Stock Exchange

national policies
ment-business




because

cellations."
■Mr.

estimated

CHICAGO

emphasized the problem of

post-war shortages and
of raw materials.
"It is

surpluses
unthink-

war

Vatican is

to maintain Amer¬

stimu¬
and pur¬

ica's world leadership and

late, jobs, investments,
chasing power.

own

Vati¬

,

"The
of

harvesting the fruits

policy."

that

He
declared
affecting govern¬ ously employed.
under that the profit motive would help
after the

growing opposition to the
in Italy, and added:

can

its

Francis

relations,

congressional legislation."
He

NEW YORK

street

disposition of the war industries, 2,170,000 new jobs would be cre¬
there is need for "a tax program ated after the war if the nation's
business
establishments
which will stimulate rather than small
stifle, business, and the adoption, found a way to employ only one
before
the war ends, of sound more worker than each had previ¬

Buy Bonds

Bear, Stearns

that, in ad¬
Government's sound

Francis added

dition to the

the

on

Bayway
The

Interesting

current" situation

in Bay-

Terminal has interesting pos¬
sibilities according to Kennedy
way

and

Title, Building,
Information on
situation may be had from
Co.,

Land

Philadelphia, Pa.
this

Kennedy and

Co. upon

request.

Volume

Number 4252

159

THE COMMERCIAL & FINANCIAL CHRONICLE

503

Western

ValuesIn Reorganization Railroad Bonds
A

comprehensive

of nine

survey

Chicago, Mil., St. Paul & Pacific
v

Extra

Missouri Pacific
New York, New Haven & Hartford

Denver & Rio Grande Western

Seaboard Air Line

pflugfelder, bampton & rust

r.

Members New York

'

•

1

;

Western Pacific

1

new

Broadway

Values of

2

Cash available for debt reduction after

3

Postwar earnings prospects.

;

s,

'

.•

.

-

'

.

'

.

.

Railway

new

and old securities.

reorganization.

•

-

With

which

few

retroactive

final

&

a

awards

Company

the

awarded employees had
instances sizable deductions

deduction.

deferred

Y.

maintenance.

The

as

a

retroactive

increases naturally had the
on those roads in

wage

NEW YORK 5, N.

greatest impact
the

most

Cowen & Co., 54 Pine St., New
York

City, members of the New
York Stock Exchange, have issued
comprehensive

of

survey

nine

pending railroad reorganizations:
Chicago, Milwaukee, St. Paul &
Pacific; Chicago & North West-

Chicago, Rock Island & Pa¬
Denver
&
Rio
Grande
Western ^Missouri
Pacific; New
York, New Haven & Hartford; St.
Louis-San
Francisco;* Seaboard
Air Line,
and Western Pacific.
era;

cific;

favored

Included

in

tinent data
values of
cash

Iack the

the

survey

are

new

capitalizations,
new \ and
old
charges, allocation of new securi¬
ties, 1940-43 earnings, other per¬
and

new

available

estimates of

also

and

for

old

securities,

debt reduction

after reorganization, and post-war

vey

may

be had fronv

sur¬

CowenJ &

Co. upon written request.

attack...

tax

position

cash

We Tra.de

B uy more

Old Colony

•

RR

large

k

roads

which

a

earlier

year

had

reported

fairly substantial earn¬
completely wiping out cu¬

ings,

mulative

year-to-year
earnings
gains of the preceding 11 months.
A

few

of

the

adjustments

All Issues

•• -

•

•

Members New Yor\ StocJ(

Exchange

Broadway, New York

in

had

roads

the

the

the

final

tax

month

Western

Pacific,
adjustment

December

necessitated

upward revision
of the company's earnings for the
year in contrast with the down¬
an

revision

of

roads.

most

Decembey took
$6,759,886.
The
management dedided
that the company had no liability
for income taxes or excess profits
taxes last year even though they
income

made

New

'

Telephone REctor 2'7 340 :

Ill

York

Security

Dealers

REctor 2-52SH

i

Bell

System

Teletype.

NY

'

}

substantial
months.

accruals

The

in

reasons

sudden

change in opinion
as
to
the company's tax
status
were
not given but presumably
they are tied up with elimination
in reorganization of the preferred
stocks

common

operating

of

the

rail¬

which
entirely owned by the holding
company,
Western Pacific Rail¬
company,

are

Corporation.

As

Assn.

Broadway, New York, N. Y.

credit' of

tax

earlier

for the

road

Members

credit

tax

of

417;

--''v.':/
the

of

net

Western

December

operating

Pacific

for

income
the

full

compared

4942

and

in 1941.
On
reorganization

$695,148

basis

of

the

capitalization the 1943 earnings
would be equivalent to approxi¬
mately
year's

per

selves,

:,;jvA':;';:

Members New York Stock Exchange

49. Wall Street

:

>

Teletype:

to

which

New York 5, N. Y.

Telephone: IIAnover 2-7900

a

A

.>

.

NY 1-911

a

with

due

/

St., Chicago 4, 111.

$20,380,160

the

Government

for

Buy U. S. Treasury

transporta¬

current

assets

010,574.

The

included

United

aggregated

4th War Loan

$22,-

liabilities

current
States

tax

ac¬

Bonds

cruals

$28,770,460.
and

For

income

new

interest

preferred stock dividend

cruals

from

the

effective

share

date

will

condition

presumably

be

non¬

New York 5, N. Y.
Bell Teletype NY 1-897

of

pany

will

need

204,000.
By the

,df

the

tificates

$10,-

the."trustees''"'cer¬
be

reduced

These

allocated

are

Chic. & Eastern 111

consummation

$9,000,000.

mortgage
the

of

will

around

of

J
time

plan

tificates

cash

bonds

new

for

par

Class A Slock

to

./cer¬

Selling

around $14 to yield
14%—-1943
earnings about

first

par

in

contemplated

with

the

Analysis

are,

on

request

ex¬

ception of equipments. The com¬
pany will obviously be fully able
to pay off this new first mortgage

immediately on consummation of
the plan.
Fixed charges will thus
be
reduced
below
$100,000 per
annum.

In

quirements

adittion

the

to

these

company

could

be

new

for

distribution.

This

applied to purchase of
income bonds (only

$21,219,000 to be outstanding) or for
very substantial distribution on

a

common

'stock.

There

CAP.

0425

:

:

Teletype BS '250

N. Y. Televhone HAnover 2-7914

W. J.

the

available

the

i.

re¬

by the
reorganization is com¬
pleted should have at least an
additional $5,000,000 of free funds

the

148 State St., Boston, Mass.
Tel.

are

Interesting Textile

Warren

Hoysradt Dead
J.

with F. S.

Hoysradt, associated

Moseley & Co., 14 Wall

St., New York.City, for

a

of

Lawrence

died

years,

at

the

number

Hospital, Bronxvifle, N. Y., after
an

extended

sradt

in

the

illness.

past

Mr.

was

President of the First of

Corp.

and

was

Municipal
York.

-y-C/

v-:/

a

Club

Hoy¬
Vice-

Michigan

President

Bond

of

of

the

New

V.v.

'

Arlington Mills offers an inter¬
esting situation ■ according to a
memorandum
issued
Hornby

recurring, do not alter the funda¬
mental
position of any of the blower & Weeks, 40 Wall St., New
York City, members of the ,New
road's new securities.
The finan¬
York Stock Exchange and other
cial implications of the freedom
leading^ exchanges. Copies of this
from any tax liability out of 1943
'memorandum may be had from

earnings

dividend.

times

3

reorganization, the only fixed

debt

on

tax

Incorporated
63 Wall Street

ac¬

the plan to Jan. 1, 1944, the com¬

large distortion

the

favorable

Frederic H. Hatch & Co.

the

on

bonds, sinking funds,

only 319,441 shares of the latter
the new to be outstanding.
>
Obviously,
the
one
share earnings in them¬

$50

common.

Vilas <Sl Hickey

LaSalle

miscellaneous

tion services and may be consid¬
ered the equivalent of cash.
Net

time

amounted to $18,431,with $9,108,052 in

1943

year

the

result

a

1-2480

Bond Brokers

of

of

v

was

road

J.F.Reilly&Co.

items

$11,430,000

So.

sheet

of $8,321,791.
Eliminating
1943, which also had the effect the income tax credit of $6,759,886
of distorting
earnings estimates reduces the company's 1944 cash
made on the basis of 11 months'
requirements by that amount and
results.
Notable
among
this increases net working capital to

and

SutroBros.&Co.

balance

30

Broadway, New York 5, N. Y.

231

of

had

Seaboard Airline

re¬

increased

adjustments resulted in accounts-receivable. Most of the
net operating deficits for latter represents funds due from

the

War Bonds

York Stock Exchange and other
leading Security and Commodity Exchs.

December

an

'

MEMBERS

120

for

or

and

the

previously

dividend disbursements.
showed

instances

many

Western Pacific in
■

is

either reduction of debt after

organization

carriers.

ward

\V%

in

item

New

Nov.

where

Copies of this interesting

made

this

funds

The

The

group

earnings. prospects.

While

in general,
included
a
larger proportion of the bankrupt
In

Quoted

—

important

an

were

set aside to meet the tax may now
be
diverted
to
other
purposes,

which,

Survey Of Nine Pending
Railroad Reorganizations

Sold

—

\

ICC

ruling be-^
present scarcity of portant.

the

Bought

earnings reports
unexpectedly wide
Final wage adjustments to reflect the

recently
some

for

materials, it is not allowed
tax

December, railroad

earlier.

year

under

of

cause

Members New York Stock Exchange

54 PINE STREET

1st Cons. 4s, 1960

last week have shown

appear

month

allowed

Cowen

to

influence, and in
the

!

exceptions

started

declines from

_

COPY ONLY ON WRITTEN REQUEST

120

J

.

of

-v-A

a

.

'New York 6

!fl§|f Railroad I Securities |ii

1

.!

Peoria & Eastern

Exchange

,

securities, 1940-43 earnings, other pertinent data;also

estimates of:

-

Stock

.

61

New capitalizations, new and old charges, allocation

Securities

(When Issued)

>

St. Louis-San Francisco

:

New

WAR

BONDS

Chicago, Rock Island & Pacific

^

Railway Co.

BUY

pending railroad reorganizations
.Chicago & North Western

Pacific

BUY

however, highly im-' the firm upon request.

WAR
Our Recommendation until

Victory

BONDS

-•

May

Bay WAR BONDS

we

Mclaughlin, baird & reuss
Members New York, Stock Exchange

ONE
TEL.

WALL

STREET

HANOVER 2-1355




NEW

suggest one

KNOW will
4TH

security which

show appreciation?

WAR

LOAN

Adams & Peck

YORK

TELETYPE NY

we

5

1-1310

63 Wall

Street, New York 5

BOwling Green 9-8120
Boston

Philadelphia

Tele. NY 1-724

Hartford

A

Thursday, February 3, 1944

FINANCIAL CHRONICLE

THE COMMERCIAL &

504

Fourth War Loan Drive

Suggested Solution 01 The

SPECIALISTS

World Trade Problem

m

For $14 Billions

'

Since

Members

On Securities

Corporation To Benefit

country mention plans
projects, public buildings, office
When one thinks back over a
period of years, you come to the realization that theie has been
practically no new construction compared with normal years since

and

(and of all recipro¬

J

mi.

J

f

_

the full goods from Britain (textiles, tinmanufactures,
etc.)
duties, such pi a t e,
credits of course to be in the cur¬ amounted to say X million dollars,
that amount would be placed by
rencies in which the duties are
levied.
Thus'not only would each the U. S. Government to the credit
;

of the British Government. Every

accounting
in

be

eral Mortgage

Income 6s due 1952,:
of First

which assumed the status

Fixed Interest 6s due
of Nov. 1, 1943, when the

Mortgage
1952

as

;

TRADING

•

REAL ESTATE

bonds, the first fixed in¬
terest payment becomes due on
these bonds May 1, 1944, and the
indications are that earnings from
war contracts should be sufficient

SHASKAN & CO.

.country that be¬
came
party to ; the reciprocating
agreement. Thus the smaller and
poorer countries would constantly

Members New York Curb Exchange
40 EXCHANGE

PL., N .Y.

Bell Teletype

»

every

think the market is in an intermediate
readjustment phase similar to that of 1923-24 and 1934.
Technical
probabilities favor something approximating a 10% decline in, the
industrial average during the first half of the year.
If Germany
should collapse within the /next few months and Mr. Roosevelt
should decide against seeking a fourth term, the market would
probably initiate the second step^—
of its major recovery before the right on with the interrupted bull
holds

Germany

and
again,
expect the market to

through

on

if

the

year

Mr. Roosevelt decides to run

I

"would

not

get out of a range represented by j
120-150 in the industrial average I
until
is

months after Germany

some

and

defeated

begin

to

counting
ment

The

of

think
the,

the

in

market

terms

post-war

consumer

can

of dis¬
replace¬

durable goods.

beginning of the second step

of the

major recovery could thus
until the spring of

deferred

be

1945.
I
too

find

a

number

important

tracted

to

of people are

accept

a

pro¬

intermediate phase of re-

adjustment.

They

want




to

1,600,000

individuals

in

total of $242,000,This is 26.6%,
through Friday (Jan. 28), of the
State quota of $911,000,000. Treas¬
all

a

series.

officials said they were well
satisfied, since in this drive, as in
previous ones, the * first efforts
ury

the

toward

were

to small

of

sales

bonds

investors, with the 'heavy

money' sales coming
closing weeks.
"With

sales

during

Series

of

the

bonds

E

jumping to $8,000,000 on Friday—
a record for a single day—as a re¬
sult of the disclosure of the mass
of

murder

American

prison¬

war

officials

of the

import duties oh their (the poorer
countries');" goods,'and vice versa*.
They would of course also be
receiving ; credits in their, fellow
poorer countries' currencies,'.and
-

by the Japanese, War Savings

predicted last night that
eight-million-dollar days in Series
would

E sales

time.'/'

Tor

continue

Although only reports
Feb.

to

up

ceiving;. fcredits firri^ thei^;' lelipw

some

>H

vidual' sales will

the richer countries would be re¬

indi¬

on

publib

made

be

subscriptions from

1,

other

non-banking investors will
also be accepted during this pe-f
riod.
The drive is expected to be

richer-Countries' currencies. Every

charging 'import "'-duties
wouldr in: fact; be holding - per¬
petually accruing credits in favour

credits,- would -far outweigh .the
initial drawback which each na¬

statement urging support of
the / drive, / President
Roosevelt
ported goods'Jt charged customs
said:-vv.':, ->:/
*
1 •:
duties. - * —'

country

circulation of buying power by
the
all-round
shuttling
of the

countries

the

of

whose

on

concluded

/ in

im¬

// |

tion would have to face in filling

Feb.

on

/'

15.

a

1

understood, of course, that : i "The Fourth War Loan Drive is
undertaking wpuld be. to re¬ an opportunity to demonstrate the
import duties in- its own Budget.
Each: i country.;would, '.of. .course, ciprocate with any 'country, wish¬ power of democracy in. action. ■ Ii
is the personal busi ness of/every
have the recurring: credits^on :its ing to reciprocate; there would be
American toy see that: this dri v^ •:
taxed imports, into .foreign coun-^ no Question .of selAriibn,. thevpur-,
!' vM
tries, and they would in due time pose being first a surety of trad¬ succeeds.-V,.v-//*• '•"/'
!<iOuf most difficult military op¬
become' converted;;into its:, pwn ing, goodwill -secondly a round-'
money currency ; by way
of im¬ the/world vctfeation,v of interna^ erations are ahead of us--not be¬
tional trade, and-thirdly,- if this hind us.
Until we have actually
ports and exchanges.
So that the benefits of the re¬ can also be agreed, the provision occupied
Berlin and Toyko we
versed credits from, import duties of funds for set plans of Social cannot indulge for a moment in
may - become ; of
even,
greater Security through the application the pleasant day dream that the
:

the, absence of

the void created by

It is

the

by each country of the equivalent

self

be that no country

subsidise

its

shall it¬
either

exports

value

t

credits

advantage of the reversed
received from the coun¬

importing
its
goods
and
would nullify their real purpose.
It would be a fine thing if each

tries

If

credits

the

of

■

its

in

-

,

Britain

agreed to the scheme as between
themselves and any

wishing

other country

reciprocate,

to

none

aloof.
little

Those

which might

find a

temporary difficulty in im¬

market.
war

They

boom

want

while

continuing.

I

can

the

their

war

is

still

understand and

of $8,000,000,000 a

would in all

month,

probability produce a

major bear market after the war.
Major bear markets wreck the
long-range confidence

needed for

genuine New Era price struc¬
ture.. To have another 1921-1929
or even another 1932-1937 the de¬
a

lusion must be
bear

markets

get nated because

there

would

automatic lever

on

then

be

an

the standards

the poorer countries.
briefly outlined is a sug¬

of living of

post¬

be tolerant of their impatience,
but from a longer-range New Era
viewpoint I think they are wrong,
A big bull market during the war,
subsidized by Government expenditures

by

beneficial effects of the revolution

Thus

gested world-wide departure from
an existing bad custom by so-to-

other

could

of

forms

tax

revenue

The

easily be helped out.
of

effects

trade

availability

the

credits,

expansion,

foreign

of

general

the

currency

goodwill

of Social
ternal

as

Security benefits on in¬
well

as

external

improvement

through

standards, would go

a

of

trade

living

long way

towards the attainment of the twin

We

pressions and got 1929 to 1933.
We
planned the Securites and
Exchange

Commission

nate another

is

1929.

to

elimi¬

If the market

patient and plays along slowly

with fiscal control of the business

must ,have,

superiority

over¬

in

every

of
weapon
and
fighting
equipment—in the air, on the sea,
under the sea, and on land.
That
is the quickest way to achieve
victory—and the least costly in
human life and

*

sorrow.

-

"During the Fourth War Loan
Drive

the abolition of

war.

invites

"Chronicle"

The

conditional

Mr.
on

on

the views

Whitehead

any

in

this

related phases of the sub¬

an

op¬

future

of

the

addition to

an

en¬

invested

dollar

offensive power, a
our

in
our

contribution to

happiness and secur¬

Let's all back the attack!"

ity.

A. L. M. Wiggins,

Jan.' 15,

On

President of the American Bank¬
ers

Association

the

of

Bank

and

President

Hartsville,

S.

of

C.,

in a radio address that
surplus dollar of income be
invested in war bonds for post¬
war economic security and as the
"best check on inflation.". - Mr.
urged

every

Wiggins

was

introduced

to

the

Daniel W. Bell,
Secretary of the Treasury,

radio audience by

com¬

article, or

will have

surrender

is

bonds

war

Under

expressed by

us

Every

emy.

who paid
ments

of

all

portunity to do our share in short¬
ening the war and causing the un¬

.

abroad, and, not least, the effects

planned the Federal aims of so many present-day plan¬
Reserve
System
to
eliminate ners—the abolition of want and
money panics
and business de¬
way...

over.

troops

would find it worth while to stand

mediately replacing import duties

because

is almost

"Our

kind

alone

America

and

country

undertook to apply the
value of all reversed
import duty credits to an interna¬
tionally agreed scheme of Social
Security for its peoples, for that
would
enormously enhance the

war

owh

powering

currency.

directly or indirectly through its
manufacturers, producers or trad¬
ers: for that would be taking an

NY 1-953

1, 1944,

the outlook for 1944, I

But

in

ers

exchange

1944.

State, for

000

tries' moneys to the extent

ternational trade and the econom¬

must

Dlgby 4-4950

Outlook For The Stock Market
For 1944

of

to

ic

unfair

end

showed

bonds

of

receive credits in the richer coun¬

dicated, there should be conditions
attached.
; One
such
condition

Members New York Stock Exchange

in comparison to
liabilities' of $153,000, the

.

drive

sales
this

.

and as the balance sheet
of Nov. 30, 1943, showed actual

.

that al¬

even

current

between the Govern¬

as

of

ment

world wide value than already in¬

cash of $450,000

.

theNew

.

SECURITIES

to cover,

payment of interest May

in

"Times" of Jan. 31

.

these

total

MARKETS IN

disclosed

was

though the current campaign (in
the State) is running 12% ahead

•

obligation under $2,000,000 Prior
Lien 6s became fully discharged.
"Under
the
indenture
securing

as

collected

imports from the other would
treated, similarly. ; And so it

would be

,

.

whatever
by duties

period,

amounts each

.

depletion and depreciation.:-Since
funded debt.-•*
1930, due to lack of construction,
These securities, in our opin¬
this company has operated at a
deficit until 1943, when earnings
ion, 'have a: very /ctefinite^ post¬
due
to
war
contracts
showed
war
speculative appeal /and are
$182,000 available for interest on
outstanding funded debt, .•?./, ■ ■, ..f worthy of consideration1.
The funded debt of the corpo¬
ration consists of $6,489,500 Gen¬

Government

similarly if in the same period
States import
duties on

with

countries)

cating

1

___

•

It
York

in total sales of all series of bonds

amount of all import

participating country know that
well-known fact that occupancy ratios today
it would be obtaining the full
are
higher than they have been<§>
~ ~
' value for the products of its peo¬
in many years. The natural con- is not beyond the realm of posples' labour and machinery, with
clusion is that as soon as new sibility.
' . .
consequent great accession of allbuilding is again permitted, there
Whether or not this interest is round goodwill, but, also, and not
will be a great deal of activity in paid does not to us i seem impor.t'n
nL
tant.
The important facts which less important from the economic
the construction field.
point of view,; every country re¬
we consider are first, net current
Many 'corporations whose main
assets
of
about
$1,116,000 are ciprocating would be obtaining
business has come from the build¬
equal to about $170 per $1,000 extra credits in the moneys of
ing industry will profit and the
other
countries.; '/In ; that there
outstanding
securities of
such bond outstanding in comparison would be the
promise of increase
to
the present market level of
corporations will enjoy the effect
about $230 per $i,000 bond, while in the volume of -foreign money
of increased earnings. A corpo¬
fixed assets at depreciated book exchange and concomitantly in the
ration which we believe will ma¬
value of about $7,100,000 further volume, value and velocity of in¬
terially
benefit is the Indiana
ternational trade. ' v- i ~ - i, >** - /
Limestone Corp. which in
1930 secure the bonds and, second, the
Broadly * it is evident that the
return
to
normal net sales of
had net sales of over $10,300,000
of tremendously in¬
around $10,000,000 producing $1,- advantages
and showed an operating profit
creased
goodwill • ; between
the
in that year of $1,289,000
after 289,000 income would insure 3 %
times
interest
coverage
of the trading nations,; the uplift of in¬
-

fixed at

of both-the second and third loans

United

It is also a

u

quota has been

$911,000,000, of which New York
City's quota is $698,500,000.

import

of the United States

that

credit the Governments

of each other

post-war construction of housing
buildings, hotels and apartments.

_

sales

al

its record is

agreeing

Dominions

they will

for

about 1931.

Treasury Department has set.

national quota of $5,500,000,000.
For New York State the individu¬
a

better in sales of
altering motor cars, etc.—amounted to say
Series E bonds, the type favored
the protective effect of such du¬ X million pounds, such X million
The paper
ties, by the Governments of, the pounds would be placed by the by -small investors."
United
States, Britain, and the British Government to the credit quoted-also said: "A review of the

in all parts of the

Lately the newspapers

United

on

by individual investors, for which
the

States,goods—

Britain's

example, if

duties

done, without in any way

British

Indiana Limestone

for

goods pertaining in the country
that imports them.
This could be

And Building Industry

Favorable Effect Of Building

considered to do

Let them remain to protect if they are

particular industries, and particular interests of the countries that
impose
them, ; but, as between^
country and country reverse their speak simply switching over from
credit effect.
In other words, let the debit to the credit side the im¬
the
country which exports the port duties in the ledger as be¬
goods have the full value of these tween country and country.-Thus

Real Estate Securities
Post-War Real Estate

000,000, is emphasizing purchases

import duties, customs tariffs, taxes on foreign

so,

HAnover 2-2100

V :<

As

/

such duties.

1
Dealers Association

York 4

Broad Street, New

41

York Security

New

throughout the nation on Jan. 18
with a over-all goal of $14,000,-

trade, protec¬
tive duties, or whatever they may be called, are the main bar to fair
trade, let the nations of the world—under the leadership of the
richest—agree to remove the principal unfair characteristic of all

& Co.

Seligman, Incorporated
Lubetkin
'

opened

/;///■'' By II. R. Whitehead, London, England

192$

:

\

drive

Loan

formally

was

Import Duties Reimbursed /

Securities

Real Estate
■

War

Fourth

The

which

their

tribute to the banks and
for the /indis¬

employees

pensable

services

given

to

the

Treasury."

sold con¬
G savings
bonds;
Series C savings notes;
fostered that major Hughes,
Smith, Barney & Co., "Commercial and Financial Chron- 21/2%
bonds
of 1965-70; 2V4%
bonds of 1956-59, and %% certifi¬
have been elimi- before the Jan. 19 meeting of the icle," 25 Spruce Street, New York
we

cycle, who can tell whgt we can ject under discussion. Comments
ultimately

get?

—

James

F.

planned it that American Statistical Association.

should

8, N. Y.

be

addressed

to

Editor,

The

securities

being

sist of Series E, F and

cates of indebtedness.

r

Volume

159

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4252

,

57.4% of asset value.

was

the Platinum Metals

I

On the

date, Old Colony shares

same

the over-the-counter market

rYear Saw Increased Use of Platinum,:Palladium and

43%.

On

mut's

shares

J Ruthenium, Says Charles Engelhard—Future of... Platone

shares

Inc., states in his

annual review

of the

platinum metals.

Platinum

•r

on

the

on

over-the-counter

30, .1943, Shawmut's
the exchange were 61%
value, while Old Colony's

on

57%

were

the over-the-counter

on

markets.

figures

show

that

the

applicant's

Palladium

;

Ruthenium

«Palladium
has
c-t i

a

v

mand

"

very

metals

during the past year.
It
previously been overshad-|
owed by iridium as a hardener!

had

during

of

principally
jewelry,

for

dental

alloys

electrical

\

platinum's
in

use

Knudsen said.
1

the

by

jewel-

the

ry,'

1 i

trade

the

"The

pub-

metals

revived

c

;interest

i

modern

?

Engelhard

it

declined

do

to

in

the

4:

,

J Palladium

jewelry.

ladium

the

has

demand

been

the less there has been
tion in

jewelry's

for

unsual,
use

a

pal¬

never-

restric¬

of the metal

well

as gold because of the
Government's desire to conserve

;as

and. employ

manpower

precision

'machinery for war production,"
Mr. Engelhard continues.
"As a

;

•result of this curtailment it is

ported

the

re-

supply of wedding
rings may be in¬

and engagement

sufficient.

In

opinion, the
Government will make adequate
provision

my

for

should such

a

additional

metal

all

encouraging

platinum
as

a

con¬

of the great interest in

had neither precedent nor a spe¬
for the imposition of a

cific rule

term

the

post-war

is

for

era,

and

processes

new

improved

products.

interesting

that

to note
production of

panded

It

said.

fiberglas,

and electronics, three mod¬
developments of science, was

"The record will disclose—

view this makes it imperative that
their approval or disapproval on

bright, particularly in jewelry to
the question; of delisting be
supplant white gold, in dentistry

tion.

purposes."

*>•*'

Tells

'£.■*>'V

SEC

of

*.V.f r*.

•••♦.'

Threat

to

"We believe that the Commis¬

registration

The

issuers, and its ultimate effect

on

request

on

was

made by

that the SEC take

like to suggest

situation

this

than

consideration

said.

into

those

ers' vote.

sharehold¬

a

If the applicant is ag¬

decision it has

a

opportunity and

seek judicial; revue
the Commission."

the right to
of the act of

regional
curities

Mr.

the

be at hand when there may

be no

exchanges and the se¬
turned largely

industry

to the over-the-counter mar¬

ket, in which event even the Big
may feel the pinch."

of

a

Brandon-

and

Mr.

trading

counter

inthe

market

the value

over-the-

would*

enhance

argument was on the re¬
port of Trial Examiner Richard
Townsend,who ' recommended
that the Commisison find that the
question of withdrawal from list¬
ing should be submitted to Shaw¬
mut's stockholders for approval,

in¬

ever

withdrawal

record

shows

that

efficient and

buyers

change

and

sellers

market,"

more

the

ex¬

closed-

that

sion's

a

copy

findings




factories

to

Please

sion

have

regulations,

Act and

placed

the

pro¬

Commis¬

exchange
tradings will have been in vain if
upon

the exchanges are to dwindle into
nothingness through the process of

delisting of their registrants," he

saicf.«"It

is apparent that govern¬

mental control and

supervision of

as a

can¬

practical matter be nearly

effective "as control and super¬

as

vision of the exchanges.
"The Boston Stock
well

aware

that

in
is

in

sq

in

location of la¬

sitting in

symphony hall. There in

front of you

should
be

long

more

conversion

and

in

—

in

the

the

will

harp and

a

perhaps

virtuoso

a

Floyd B,

war

on

Odium

has

the

of

the

Exchange is
advancing

going

some¬

calling

to

a

the

Commission

situation which it submits is not

a

one.

own

the podium, and he
score

Or, perhaps, )he needs

Europe,

cushioning the shock.

to the music—the

*

people
of
this
country
when peace arrives will be great¬
ly
understocked
with
civilian

goods

will

and

amount

of

have

spend in stocking

demand

from

great

a

accumulated

savings
Also the

up.

abroad

for

our

harmony—that

All this would

to indicate

seem

period of business activity.

out of those instruments!

comes

Forgive
man

He

on

the podium is a "blender."

"ingredients"

characteristics
who

them

!

won't you, but this

me,

takes

men

products will be considerable.

no

he knows that symphony by
heart. He raps for attention. Listen
score;

The

of

play

together

whole —in

—

different

instruments

them—and
into

harmonious

a

proper

and

blends

and

sequence

"Values" intended by the composer

Home

Financing Up Eei

—and you
arouses

Ill.-Wis. District

have

an

end-product that

enthusiasm.

your

And, hearing is only

; *

of

one

j

our

The money borrowed to finance
in Illinois and Wisconsin
for the full
year
1943 will be

senses;

Home

doesn't knowthe taste of the best eggs/

homes

tasting is another. We have

the most educated taste buds of any

people on earth, because our standard
probably greater than in 1942, it
of living is higher. Who, in America,
was
pointed out by the Federal
Loan

Dec. 28. In

Bank

of

reporting

Chicago'

on

the, home

on

mortgages recorded by all
lenders ; through
the

types

the best milk, the best
best cuts of meat?

' third
quarter of the year, the bank said
a total of
29,144 home loans,
amounting to $102,460,000 were

that

made,
the

increase

an

same

quarter

of

smaller

than

of

8.2%

last

over

year.

The

however,

loans,

was

last

demon¬

year,

strating the increasing size of the
obligations being assumed

new

home

with

ownership.

June

this

of

A.

R.

the

Bank

new

home

leaped

total amount lent each
quarter of
the current
year.
In the third

quarter

they

accounted

dollar

the

volume,

for

38%

compared

with 36.7% the second, and
32.7%
the first quarter. Dependence on

these
ey

community

of

sources

conspicuously

was

our

Well, I
ductor,

cookery. Most

viands

au,

mon¬

greater

of

us

nature!..

off the track. What's

am

all this got to

do with a symphony con¬

blender? I wanted to make

or

analogy in spite of the know¬

an

times dangerous.

are

some¬

A skillful blender of

whiskies also seeks the "harmony" of

ingredients. His ingredients are

many

varied types of whiskies of different

and dominant characteristics.

ages

He

•

"Savings,
building
and
loan
associations, providing the largest
single block of this financing, in¬
creased their
percentage of the

of

national

our

prefer

Beginning ledge that comparisons

year,

Gardner, President of
said, total volume of
district

high seasoning

and condiments and fancy sauces in

.

for

to the lack of

answer

butter and the

Perhaps that's the

of

when their percent¬
age was 33% the first three quar¬
ters.

■

•

"During the third quarter this
the loans made in metropol¬

year

itan

areas

of

to

rose

total

a

new

dollar

with

high of
volume, as

55%

the

them in the Distiller's

finds

"Library" of Whiskies. Perhaps many
of these whiskies

quite palatable

are

themselves, but the blender by

by

deft, sequential "arrangement"
take

a

kies and blend them to create

which

product

may

superior in taste and
ness

can

number of fine individual whis¬
an

end-

infinitely!

be

aroma,

mellow-!

and mildness, to any single "in¬

gredient" he employs.

Rarely does the master blender
actually know what

a

Burch

on

a

It is in effect mak¬

plea for its owA survival and

N. Y.

know that he is pleasing your

does

palate when

same

continue to buy,1

you

time and time

Banking Bd.

FREE—X

again—by name—the

sent

you

on

request,

to me care of

ing Board has been

announced by

Dewey.

reprints

Fifth

Send

post-card

a

Schenley Distillers Corp.,

Avenue, New

1,

York

MARK

Mr.

Burch,, who is President of the
Cooperative Savings
and

containing

of earlier articles in this series will be

350

E.

•

•

booklet

ber of the New York State Bank¬

Thomas

for your ;

■

appointment of Arthur J.
Burch, of Troy, N. Y., as a mem¬

Gov.

you pay

whiskey. He works objectively. But he

blend he created.

period last year."

The

healthy

in his

"formula" before him—a

a

of music.

in

war

temper the effects of re¬
adjustment to peace by spreading

a

piano.

the conductor! He

comes

takes his stand

should

to

a

Pacific

outlast

and

brasses, and strings, drums, and

Now here

probabili ty
that

or

right, because this is a great orchestra.

plus the

way,

orchestra of 100

an

Each instrument is played by an artist

minor

a

is

two. You're

or

pieces. There are the wood winds

timpani; and

of

industry
has
already
been
started,
even
if

a

«

attention

run

bor

moment

than in 1942

doing it is serving

purpose

imagination

your

a

stated:

various

let

rampant for

tion and real¬

hibitions, controls and safeguards
the

Harmony!

produc¬

peace

which

that of the other exchanges, all
of the Commis¬ end company as an illustration,
of
which
are
experiencing the
and opinion, set¬ he told the Commisison that Old
same problem.
It is not seeking
ting forth the facts developed at Colony Trust Associates, securi¬
the hearing, - be furnished
each ties of which are all traded in the to take anything away from the
stockholder at or before the so¬ over-the-counter market, shows a over-the-counter
market,
but
different picture.
licitation of such consent.
rather to retain some kind of bal¬
Robert E. Dodge, Jr., counsel
Taking .conditions as of Dec, 31,
ance
between the two types of
for
Shawmut, argued that the 1941, Mr. Knudsen said that the
value
of
trust's whole desire in requesting market
Shawmut's trading and keep itself alive as a
delisting was to* increase the mar¬ shares on the Boston Exchange competitive entity."
and

In

ahead of last
year, month by month.
In
its advices the bank
also

"The

\

CORP.,

JfORK

of

useful

Knudsen

comparative

con¬

with

sin

ing
a

in

nection

the

said.

Taking

have

DISTILLERS

NEW

*

stock

exchanges.

SCIIENLEY

we

the

costly to

than

Mr.

in-

as

compared

is. considerably

less

and

that

market

for

labor

dustry

66%

applicant's

stock

country as a consequence
Such
dislocation
of

will be of interest to our fellow Americans.
This is number seventeen of a series.

peace.

involved in this case, but it feels

over-the-counter

be

mortgages in the Illinois-Wiscon¬

what afield from the precise issues

"The

will

from registration to be the result
control and regulation of the

of

stock, terming it these contentions it
"sheer conjecture."
Calls Over-Counter Costlier

The

wholesale

a

of its

Board

Shawmut Stand Challenged

tended

the Commission

he the over-the-counter market

corporation,

took sharp issue with
Shawmut management's statement

that

gress nor

there

prolonged depression

number

-

Mr. Brandon argued that it was
clear from- the historical
back¬

not

Both
issues here.
Otherwise, the time may shortly Knudsen

determining

over

in favor of

Act of 1934 that neither the Con¬

the Boston Stock Exchange.

Ed-^
mund Brandon,
counsel for the ket value;' of its stock through
Boston
Exchange,
who
joined over-the-counter trading sponsor¬
with Orrin C. Knudsen, counsel ship.
He pointed out that trading
for the
SEC's trading and ex¬ on the exchange was at $11.75 a
change division, in asking the share, compared with an asset
Commission
to
impose
certain value of $19.65 a share.
In discussing Shawmut's struc¬
conditions in granting Shawmut's
application.
ture, Mr. Dodge pointed out that
Pointing out that there is "a it is not a corporation/ that its
definite trend" toward delistings shareholders are merely benefici¬
by issuers, particularly in the last aries of a trust and have no vot¬
twelve months, Mr. Brandon said: ing rights
except upon amend¬
"In 1943, alone, 50% of all de¬ ments. V Under the
circumstances,
listings filed since 1936 came be¬ the trust's shareholders are "less
fore the Commission.
I should entitled" to a vote upon delisting

on

be any doubt the doubt should be
resolved

exchanges, jiuring oral argument on the application of ShawAssociation, of Boston, to remove its common stock from listing ground to the Securities Exchange

mut
and

ample authority to im¬
pose such a term and that if there

the

The Securities and Exchange Commisison was asked Jan. 13 to
"give consideration" to the growing trend for delisting of securities
such

has

grieved by such

Regional Exchanges

by their

ascer¬

tained after they have been fully
replace gold, and in the chem¬
informed of all the facts and cir¬
ical
industry for catalytic pur¬
cumstances surrounding the ques¬
poses.
Current
stocks
of
this
metal assure ample supplies for tion of withdrawal fi;om registra¬
to

:

regional exchanges

he

future of palladium is extremely

..V-.,

on

term,"

voice in the management and con¬
trol of the trust's affairs.
In our

V

Counsel

for the

one

made possible by platinum.''
s.
Mr. Engelhard feels that "the

Delisting Trend Emphasized In Shawmut Case
Exchange

an

and indeed the applicant concedes
—that the applicant is a trust in
which the shareholders have no

i*

-

stockholders'

a

appropriate
imposition of such a

ex¬

rayon
ern

is

case

sion

Boston

requiring

by

all these

contingency arise.

of

vote on a question of withdrawal
science > and
industry
from listing, it would not impose
during the present war.. Knowl¬
such a term. ^
'
edge of these metals indicates
"Despite this language we are
their greater
usefulness
in the
of the opinion that the instant
chemical and allied industries of

them

has benefited from this
trend, he
adds.

"While

is

sequence
Charles

n

white* if metal
for

future

this

believe

or

The fact that

*

•and

in

not

deep

not

Fuller Case Recalled

which

do

sustained.

,

the restriction
on

Mr.

industry and this
Fuller Manufacturing Co. decision
metal now fills an important po¬
last month.
-1 „■ ■
• •'
.
sition
in, the field
of
precious
In that case the
Commission, in
metal hardeners.
granting the delisting application,
took the position that because it
Outlook for Platinum Metals

Following

<

sustained,"

other

gated

; contacts.
'

be

cannot

Mr. Brandon said that in
asking
platinum metals.
With
for the imposition of terms he was
the shortage which developed in
aware
that he was
asking the
the supply of iridium, the prop-i
Commission' • to
do § something
erties of ruthenium were investi-i

year,

and

•

_

a

ev, der

the

claim
that
there
is
much too great a
discrepancy be¬
tween the asset value and market

V "Ruthenium was one " of the
value
most interesting of the
platinum1

expe-

rtienced

/*;:;•

I
any

conversion

"These

T

NOTE— From, time to time, in this space,
there will appear an article which we
hope

By FLOYD B. ODLUM

of

On- June

;

shares

of asset

With platinum being used almost
exclusively in the; war effort, a
review of its uses is inadvisahlp at. this time.iew
uses is inadvisable at this time.

1943, Shaw¬
the
exchange

market.

of increasing use of platinum, palla¬

dium and ruthenium, Charles Engelhard, President of Baker & Co.,

'

Looking Ahead

were

31,

59.9% of asset value, com¬
pared with 46.8% for Old Colony's

Encouraging.

The year 1943 has been

;

ADVERTISEMENT

on

were

i inum Metals

Dec.

505

of Schenley Distillers

N.

Y)

MERIT

Corp.

Troy

Loan
the

Association,

unexpired

Arthur P.

was named for

term

of

the

late

Bartholomew, who

rep¬

resented the

savings and loan in¬
the Banking Board. Mr.

dustry

on

Burch

has

operative

headed

for

the

the

past

Troy Co¬
25

years

and

prior to that time

ciated

with

Loan and

the

was

Savings Association. Mr.

Bartholomew's death

was

ed in these columns Oct.

page

asso¬

Pioneer Building

1628.

report¬
21, 1943,

Thursday;* February 3, 1944

FINANCIAL CHRONICLE

THE COMMERCIAL &

506

PHILADELPHIA

'

markets in:

We maintain

and .Security Dealers an experi¬
department for handling the clearance of security

enced

transactions.

Muskogee Company
Memo

Our facilities are

Insurances

BUCKLEY BROTHERS

Bell Teletype

PH 265

—

Ins.

Co.

Street, Philadelphia 2 '
New York Phone
HAnover 2-2280

1477

with points in I wage awards brought about the
has laid aside iower net income figure.
The
Pennsylvania, which has
enough to provide a sumptuous
turned in an outstanding perform¬
table.
The "soda bar" presented
ance in handling wartime traffic,
something more of a problem.
both passsenger and freight, re¬
Spirits have been strictly rationed
in Pennsylvania since November. ports 41,101 employes in the armed
Allowable per capita purchases, services, 92 of whom are golddaily trading,

,

>V:-'

Teletype PH 257

at

a

over

Delaware Pr. & Lt. Common

Lehigh Valley Transit 5s 1960
South West Pub. Serv. CornYork Corp. Common

York

strangely enough, regarded as
niggardly. Members of the Asso¬
ciation, like good little squirrels,
have hoarded sufficient gallonage

4

plethora of pulchri¬

a

the 43 members of the

Inc.

now

16

v

Association

serving in the armed forces.

Major Herbert H. Blizzard, Her¬
Co., stationed at

Phone

:v

Pennypacker 8328

bert H. Blizzard &

South Caro¬
lina,- keeps in touch ' with his
broker friends by occasional is¬
Shaw Field, Sumter,

sues

Northern Ohio Ry.

"Blitz Bulletin."

of his

"Sherbert

Akron, Can ton & Youngslown
5^2 5 & 6s and When Issued

from Herbert,"

his

mimeographed

calls

as

The
he

news

letter, is couched in Herb's
known trenchant style.

&

vise trading

Philadelphia 7, Pa.
System Tel.

Bell
*

PHLA. 591

WHitehall 4-2300

nervous

—

On the

Caiighlin and Randolph
Fernon. Safely over the hill is col¬
laborator Almon L. ("Old Hutch")

history

AND

Established

Members Philadelphia

Title

CO.

1923

Stock Exchange

Building

PHILADELPHIA

Telephone

of

with
Henry B. Warner, of trading de¬
partment of E. II. Rollins &

lingford

co-manager,

as

too

as

of De¬

year, were

Mutual

Life ^Insurance

in his annual report
(Continued

Davis, vice-president
of the trading de¬

to

the

Kerner,

has

signed

up

for

much

'pep',"

says

observers

Eddie.

believe

on

page

507)

the

Garter Elected Pres.

and

see

tain Party.

■

' ■■

is

■

PHILADELPHIA, : PA:—Harold
F.

,

look at the record

higher quality

19402

,

the third

largest

cities, is an

impor¬

Philadelphia,

of American

and distributing cen¬

tant seaport

Under the

1941

operation there

refunding plan

$131,064,000
refunding ; authorization.
$83,389,200, or 63.6%, had been ex¬
changed at the termination of the
refunding agreement on June 15,
1942.
The approximate saving to
the city byf the 1941 refunding
plan
is estimated to be
$18,was a

,

,

be very helpful

fact alone should

of

period

the

->*

salesmen.

Other officers

elected:

V ber," Jackson'& Curtis, vice presi¬

Commission closed

.

1943

transition

city

393,100

water

owns

piers

airport.-

and

certain

debt

It> also

street railways

and

works which are operated
under lease agreements.
For many years the city was
forced to operate under an un¬
balanced budget.
To rectify this
condition it was necessary to take

year

of

which included $134,-v
in
investments
and

$4,523,011 in cash.
year, of
1943 the

posal plant, public markets, ship¬

the

|with assets totaling $140,-

970,697,

"

and operates its
works system, sewage dis¬

The

reduced

was

(Continued

During the
city's gross
$10,480,700,

on page

507)

its gas

In

;

4441
1939, the rentals of;

economic

drastic

May,

city's

measures.

works

gas

for

an

city to a trust

funds enabled
the budget

city to balance

for the first time in many years.

this budget balanced it
to find additional
annual revenues.
The angel this
To keep

...

•• •

•

'

•

.V

Phila. Traders Ass'n
To Hold Winter Dinner
:

PHILADELPHIA, PA.—The In¬
Traders Association of

vestment

Philadelphia will hold its annual
Mid-Winter
dinner
on
Friday,

members of the Association

(wage)

tax. '<

of

a gross

man

specifically

earned-income, exempting in-

from investments.
The tax
at the source and

collectible

1943..-,„.-„

.

forces.

of the

////

dinner//

reservations indicate
attendance of approximately

Advance

an

.

four hundred.

On Jan. 1,

1940, a llk% tax on wages, sal¬
and
commissions
became

aries

The levy is

in the

Alfred Tryder of
H. T. Greenwood "& Co. is chair¬
armed

necessary

time came in the form

is

:

February 11th at the Benjamin
The dinner will
gas / Franklin Hotel.
trust certificates were
be dedicated
to the forty-three
These

issued.

co;me

.lb.

$41,000,000

this

revenue

on

..

initial period of 18 years.

Against

the

were

Phila. Cashiers MamO
New Officers For '44

v

The
required to make Cashiers Association of Philadel¬

Carter, Hornblower & Weeks, employers are
president of the payments monthly.
The tax
Philadelphia ; Securities Associa¬ netted city as follows:
tion, composed mostly of retail

has been elected

William V. McKenzie; Paine, "Web¬

Corporation Notes

a

why this

effective.

a

In¬

he

Co., president
Philadelphia,

the appointment of

take

us

was

Of Securities Ass'n

running high pressure over a Cer¬

PA.—Robert

has

PHILADELPHIA,

PA.

—

phia announces the election of the
following officers: V- /
\ • ■
President: Norman W. Godshall,

$16,283,820
18,377,900 J. W. Sparks & Co.

4

-

*

Vice-President: J, J. Trueman,
"24,762,041
20,761,883 Jr., Harriman, Ripley & Co.

Although
gross
revenues
of dent; George K. Dorsey, Reynolds
Treasurer:
Howard
Umsteadj
This
wage
tax in' 1942 was Stroud & «Co.
Pennsylvania .Railroad for, 1943 & Co., treasurer,and Henry R.
established a new record of $979,- Hallowell, Eastman, Dillon & Co., 27.76% of total current receipts.
Secretary: George Purvis, Jr.,
Matthews, Kidder, Peabody & Co,
773,155,
against $838,474,623 An secretary. Elected to the board of In December, 1942, City Council Drexel & Co.
Arrangements Committee:
Herbert
F.
Gretz, realized that it was not necessary
1942 and $614,041,163 in 1941, net governors:
Executive
Committee:
Harry
George L. Morris, Hornblower &
rate and so it
income for the year was some Fidelity-Philadelphia
Trust
Co., to have a
Weeks.
William B. Ingersoll, Stroud & was reduced to 1%, effective Jan. Eisenhaqs, Biddle, Whelen & Co.;
$16,000,000 less than in 1942. Com¬
Publicity Committee: John M. mon stock earned
$6.49 per share Co., Harry B. Snyder, Yarnall & 1, 1943. The wage tax in 1943 was Thomas Brennan, C. C. Codings
Flynn, II, E. W. Clark & Co.
in 1943 against $7.07 in the pre¬ Co., Harold J. Williams, Boenning 24.23% of total current receipts
& Co."; and Allen Hunter, Hopper,
Attendance Committee: Norbert ceding year. Increased tax liability &
Co.,
and
H.
Clifton
Neff, even after the 33Y3%- reduction in
j
Soliday & Co.
rate.
* ■*
" 1 •
and an accrual of $20,000,000 for Schmidt, Poole & Co. .*
W. Markus, Smith, Barney & Co.
• -

following committee chairmen:
.

$896,963,356

manager

formed

4Let

the

board of trustees.

series of blood donations. "I've got

Committee. Chairmen

credit rating.:

income

Edmund J.
and

&

announces

reports

Sons.

Bond Oluh Of Phila.

of the Bond Club of

the

31, highest in company's
and an increase of $48,-

Penn

Co.,

partment of Rambo, Keen, Close

G. Rowe, Stroud &

that

10, PA.

Teletype PH 380

PHILADELPHIA,

Steel

reported
by John A. Stevenson, President

appointment of Charles L. Wal-

Rittenhouse 3940

Bell System

advised

-

-

270,665 for the

Effective the first of the year:

KENNEDY

Lukens

profit

Assets of

request.

on

services

to

funding plans of 1941 and 1942.

investment

due

owns

cember

'

■

investment

the

therein

assigned by the

of

day last week.
Information

of

been

1942.,

Buckley Brothers,
who celebrated an advanced natal

Quoted

from

restricted

were

during

of $681,936 for. 1943,
after deducting $201,248 for ad¬
justment of securities values. This
compares with profit of $223,679;
after
deductions of $352,331,
in

seat in the same office are

Hutchinson

Sold

1

Bankers Securities Corp.

Edward J.

Bayway Terminal

few weeks'ago when Moody's

a

changed the rating from Baa to A.<s>The next outstanding economic
With this higher rating the bonds
of the city of Philadelphia will measure taken was the large re¬
duction in future debt service re¬
no doubt find their way into new
accounts.
It definitely opens the quirements.
This was made pos¬
door
to
the
.portfolios
which sible by the unique voluntary re¬

ping

net

May, it was a

in

birthday,

.

This took place

be raised.

should

23, to allow more time for the
preparation of the annual report.

& Mattison,
Ambler, Pa., manufacturers of as¬
bestos pipe, from 3
to 11 p.m.
daily. Ben lost a debate with his
local draft board lately. Until his
next

the financial condition of the city of Phila¬
has shown an; outstanding- improvement.7 Because 'of the
astute.financial management of the city and the definitely improved
financial structure which now exists, one of the outstanding invest¬
ment services recently realized that the investment quality rating

delphia

8, has been postponed until Feb,

Keasby

question of G.I. or else.

—

have

Co.

activities in the fore¬
rolling
with
the

at

In the past few years

after the war.

while

noons

CERSTLEY, SUNSTEIN & CO.
J

unlisted

Co., continues to guide and super¬ annual meeting, scheduled for Feb,

6s

York Phone

.

Stockholders

punches

213 So. Broad St.

the

in

trader

since 1940. It is tax free in Penn¬

5/45

Philadelphia Reading Coal & Iron
a5s

popular favorite and a

well- sylvania.

Benjamin Brooks, W. H. Bell &

Land

BOwling Green 9-8184

ter/being located on the highly
navigable Delaware River.
The 100,000.
made its debut on the New York
city is one of the world's greatest
Under the 1942 refunding plan
Stock
Exchange
January
31.
workshops. It contains over 4,500 operation there was a $162,296,000
Opening at 11%, it was up M
separate
manufacturing
places, refunding
authorization.
$99,from the last over-the-counter
employing
hundreds
of
thou¬ 991,400, or 61.5%, had been ex¬
transaction.
sands.
Manufacturing is the chief
changed at the termination of the
industry
and
includes
textiles, refunding agreement on Oct. 31,
Earnings of Muskogee Company, metals, electrical supplies, chem¬
1943.
The approximate saving to
Philadelphai - managed railroad icals, locomotives, airplanes, ship¬
the city by the 1942 refunding
holding company, are expected to building and various other indus¬
plan was estimated to be $27,710,approximate $1.50 per share on tries.
Because
her
industries 000.
44
;
,
the 202,182 common shares out¬
cover a range of several hundred
These two successful refunding
standing. This will compare with lines of employment, the city's
operations should effect a saving
the' $0.96 reported in 1942. Com¬
prosperity does not depend upon
to
the
city
of approximately
mon
stock
has
paid dividends massproduction
of
a
limited
"
without
interruption since 1928 number of products, as in most $45,800,000. :
and at the present rate of $0.75
Philadelphia's Sinking Fund
great manufacturing centers. This

lenge the collective thirst of all in
attendance.
Entertainment, head¬
lined with

common

market for the last eight months,

Philadelphia 2

1500 Walnut St.,

.

New York

PH 70

.

Corporation

a

heavy

and chal¬

premises

the

stock

to

stock,

tude, will be customarily lavish.
The dinner will be dedicated to

Bought

Teletype

rating is justified.

are,

Autocar Com.

4

starred.

to one
five-week period,

amounting

present

"fifth"

Amer. Insulator

W. H. Bell & Co.,

the retroactive

ccasion, does tricks

£is

H. N. NASII & CO.

New

.

INVESTMENT RATING RAISED

'V/'';!

attendance of approximately 400. Chairman
Alfred W. Tryder,^
H. T. Greenwood & Co., who, on back
pay under

Common

*3-6s' 2039, Pfd. &

PH

^

,

PHILADELPHIA

:

City Of Philadelphia Bonds

indicate an

Provident Trust Co.

Teletype

Municipal Bonds

Philadelphia

Corp.

the victual and liquid refresh¬
Investment Traders Association
loudly proclaims there is no rationing of good fellowship.
The
Association's annual Midwinter Dinner will be held Friday,- Febru¬
ary 11, at the Benjamin Franklin Hotel and advance reservations

Lives etc.

on

Phila. Transportation

I

Federal. Deposit Insurance

Despite wartime restrictions in
departments, the Philadelphia

Philadelphia National Bank

•

,

Rittenhouse 2580

'•

•

■

—

yield 2.10%

1421 CHESTNUT STREET

ment

Girard Trust Co.
Penna. Co. for

Phone

Member

,

,

Philadelphia ^Traders Party

Nat. Bk. & TV. Co.
Fidelity-Phila. Trust Co.

•

(

Streets

" ' \

,

A. Webster Dougherty & Co.

Pennsylvania Brevities

Corn Exchange

1421 Chestnut

Price io

.

1975/65

1,

January

-

Central-Penn National Bank

Locust

COMPANY

Member

Federal Reserve System

Philadelphia Bank Stocks

Phila.

Due

N. Y. WH 3-7253

Phila. RIT 4488

-•

3 xk%\ Bonds

moderate.

^

/

OF PHILADELPHIA

.

.

•

PHILADELPHIA

Philadelphia 2, Pa.

Walnut St.,

/

-.

Lives and Granting Annuities

on

15th and Chestnut

Stock Exchange
New York Stock Exchange.

Members Philadelphia
Members

•:••

of the best and the cost is very

THE PENNSYLVANIA
For

1529

y-;v\v

•

;

Inquiries Invited

request

on

'•

■' *:

Common

&

.Preferred

////CITY

Brokers

to

offer

We

$150,000

FACILITIES

CLEARANCE

Elective

Committee:




Orus

^

J.

Volume 159

THE COMMERCIAL 8c FINANCIAL CHRONICLE

Number 4252

507,

JUST OFF THE PRESS
Adive Markets in:

an

Illustrated Review

DIRECT PRIVATE WIRE

.

NEW YORK CITY

Commonwealth of Penna. Turnpike Rev. 3%sr 1968
Delaware River loint Com. 2.70% 1973

NEW

PHILADELPHIA

AND

CITY

YORK

<>

City, County and State Bonds in Pennsylvania

REAL ESTATE BONDS

Reed, Lear
Members

C-l

Write for Booklet

Rambo, Keen, Close

Members

of

Philadelphia Stock Exchange

1518 Locust

''

'■

Street, Philadelphia

City Of Philadelphia Bonds
total

of

as

S476,514.800.

Dec.

31

being

(Continued from

slightly

than

more

outstanding

city

26%

It

also

funded debt outstanding
12-31-1939

outstanding

the

on

debt

city

'

•

1

12-31-1943

<

Unclaimed matured

"

loans overdue

18,700

7,700

4,900

4,900

12,400

.

147,784,200

141,879,500

134,210,800

136,428,200

mills,

quired

to

debt—— $385,685,100 $375,597,800

funded

Cash

12-31-1942

12-31-1943

$1,196,918.31

—

Net

debt

$4,523,011.14

351,587,781.69 346,172,888.88

Government

held.

bonds

Collections
;

for

1943

ceipts

of

were

mate.

The

re¬

$85,690,392,

principal

28,

1944,

Randolph, President
Philadelphia National Bank,

city

of

Philadelphia celebrated its 259th
statistics

of

the

U. G.

quoted 1%

to 2.

in

for U. G. I.

common

the

bank's

history, amounting
$5,870,116 against $4,548,608 in

1942.

interest

the

demand and strengthened in
price with the publication of the

ex¬

Colorado

10

shares

of

new

for

common

1933
T

1928

1918

1923

241,896

167,500

139,049

141,919''

127,796

101,482

56,940

33,781

"$88,499 "$132,823

"$85,100

3,070,557 3,456,332 4,162,012 4,454,559 3,044,231 2,490,409

1,935

/ 1,925

1,945

K 1,769

1,862

'

$15,000,006 of five-year 3

cent
portfolios of a
group of insurance companies.
•
held

in

,

distribution

Power

&

Light

stockholders

Improvement

of

Delaware

common

of

Co.,

stock to

United

Port Authority Vs. Treasury

find

litigation between the
Authority and
the United States Treasury, grow¬
ing out of the efforts of the latter
to have interest on the Authority's

U.

G.

I.,

approved

was

Dec.

df

1

by

the

28, 1943.

the distribution.

on

Holders of 22-year 6% external
loan sinking fund gold bonds due

Treasury.

55

on

are

able

from

just

discussion, the
vigorous

sporadic

promise

of

fairly

a

in the

activity

period of

judging

visualize,

to

they

now

cor¬

porate issue market.
Just

now

fords, there is considerable discus¬
undertakings which
looked

terialize

upon as

soon

likely to ma¬

after

the

Treasury

withdraws from the money mar¬
ket.

Largest of such issues imme¬

diately
vast

in

sight,

Niagara

sion,

the

sixteen-judge

split 10 to 5 with

participating,
more

now

that

Hudson

the

important, the court gin¬

',;>v

The ruling in favor of the Au¬

thority

was

based

clause in

a

ity opinion holding "We take the

enue

Acts."

it

Consequently,

to

in bond

the

is

the

con¬

circles that

now carry

Supreme

Court

the

its

case

in

due

course.

Big Industrial Issue

Much of the preliminary work
looking toward the accomplish¬

pective

ment of this big job was carried

the

through

with

company

absorbed

subsidiary, Armour
Delaware..'

its
&

the

in

the

list

of

was

added to

per cent
two series

announcement

by

the

Phillips Petroleum Co. of its in¬
tention to file necessary registra¬
tion for $40,000,000 of new securi¬

sinking




ties.

PH 30

Phone

to

COrtlandt

N. Y.

C.

7-1202

Corp.

held

-Pennsylvania

purchased and retired

company

$2,000,000

first

in

and New

mortgage

the

treasury.

Jersey

Municipal Bonds

office

of

the

Street.

ture

1964

and

time

company

proposes

to is¬

sue

and Sell $40,000,000 of new

it had

2%

per

cent debentures to

ma-

Separate Units

More than three-fourths
of

the

of

the

ing bank loans to
working capital.

registration

replenish

its

separate agencies and
of

the National
Advices

serve

not

the

,/•

in

lieve

that

the

FHA

arate agency

as

should

it

be

same

way

a

per

or¬

cent

about

first mort¬
gage bonds promises to bring out
lively competition when the bids
are opened on February 21.
new

schedule
it now
appears that this company's re¬
financing will be among the
first, if not the first, to reach
Unless the proposed

is upset in the meantime,

market in the wake of the Treas-

sury's operation.

banking

Dissenting* opinions
general

v-/

the

San

their

-

Los

Chicago
Angeles

view

that

reflect .-the
centralization

We maintain primary markets in
the

housing, housing financing, and
of
housing loans is
preferable.
Members
favoring

Insurance stocks, and also in spe¬

separation

cial Public

say

that both agencies

surpris¬

ing to find the field much larger
the time comes for bankers to

leading New York Bank and

have specific functions to
in
the
housing and

perform
financing

Utility arid Industrial
situations.

field

and can best perform them
independent units and not as
part of NHA, according to Charles
A.
Mullenix, Cleveland, Chair¬
as

of

ington

the

Association's

HENDRICKS & EASTWOOD
incorporated
Established

Wash¬
PACKARD

Committee.

Rittenhouse
Race

Wool Associates Elect

readily

handled it would not be

breast the tape.

Boston

Francisco

insurance

man

be

as

Walnut St., Philadelphia

New York

bids, and since the issue is of di¬
can

Incorporated

-

Pennypacker 0100

1528

of

groups

known to be working up

which

v

Federal Home Loan Bank System.

Sale of Florida Power Corpora¬

mensions

Stock

issued)

E. H. Rollins & Sons

sep¬

when

was

(when

.

findings, be¬

Seventy-eight

the

Common

Association

"The study shows that 80% of
the MBA members in 100 cities in
40
States, whose opinions are

represented

Light Co.

part

a

Housing Agency.

from

ganized.

Power CorpL

2-9369

purposes

think

are

York—HAnover

System Teletype—PH 299

which Congress in¬
tended they should if they were

up as an

separate

New
Bell

Housing Administra¬

added:

Four

Telephones:
Philadelphia—Pennypacker 4646

Mortgage Bank¬

tion and the Federal Home Loan
the

early market
operation to follow the current
War Loan Drive, this undertakingwill
provide the company with
funds for repayment of outstand¬
Looming

PHILADELPHIA 9

of the

America, par¬
ticipating in a fact-finding poll
just completed, believe that both

week.

this

Dolphin & Co.
Fidelity Philadelphia Trust Building

Aflade

Frank
the

The

in

due

1955 and 1957. In addition

head

is scheduled to go through some

underwriters

of

The latter firm had outstanding
bonds

futures

business

major
Co.

$62,268,000 of 4
fund

Another sizeable piece of pros¬
new

Castings

Bank of New York, Bank System would better

tion's $16,500,000

around

when

Wall

thte

falls within the express exemption
contained in the applicable Rev¬

$75,000,000.

Fall

1, 1944 at par and accrued
Redemption
will
be

at

Florida

Treasury will

last

March

view that the interest in the ques¬
tion is free from tax because it

setback, is the prospective re¬
financing by Armour & Co.,
up

on

the Revenue Act with the major¬

sensus

running'

was

sidestepped the element
of constitutionality of the Treas¬

Power

which is expected to entail new

what

gerly

Corp. refinancing has received a

securities

court

Judge not

one

and,

ury's claim.

when the occasion af¬

sion of several
are

subject to federal taxa¬

Bui in handing down its deci¬

encountering- too

Steel

Federal

they

time

Private

and

ways

St., Philadelphia 3

Pennypacker 8200

has announced that, in 1943, the

the

National City

not

General

?

Association

States Tax Court ruled against the

free

of

BOENNING & CO.
1606 Walnut

.

ers

principal amount of

these bonds will be redeemed

middle of the current month when

While

Stock

pur¬
.-"■'v
■

that $380,000

interest.

much

Light
Common

accomplishing this

pose.

members

made

again to

of

means

September 1, 1945 of the Repub¬
lic of Finland are being notified

down last week when the United

once

2-0040

Puget Sound Power

Finland Redeems Bonds Want FHA And FHLBS

tion, moved nearer to final show¬

be free

discussion

a

are

bonds held

their regular business.

Philadelphia

5^s,
leaving a total of $12,280,000
outstanding, of which $3,323,000

the Fourth War Loan Drive these

will

the

Directors
of U. G. I. have called a special
meeting of the stockholders for
on

days, are inclined to look with
hopeful
anticipation past v the

pursue

REctor

Gas

in; ratio

share Delaware for each 20 shares

SEC

from

Company, parent of the Railways,
indicating a willingness to proceed

per

Port of New York

Underwriting people, when they
time
out
for
pushing the

N. Y. Phone

375

the

The long

REPORT

reply

a

Feb. 29 to act

authorized, but not Issued.

notes

bonds and $1,200,000
will provide savings in

notes

the

$ 472,559

REPORTER'S

PH

Chronicle, January 6)

The next step to be expected is

31/2%

The

(000 omitted)

V

000

with

568,800

OUR

BIdg., Philadelphia 2

Teletype

ings. originated in 1938,

through the issuance of $5,500,-

philadelphia

of

1938

1.987

Philadelphia Stock Exchange

Packard

Associated Press dispatch January
27 (see page 62, The Commercial

preferred stock in the ratio of

1

better.

even

537,097

debt

through

Southern

annually.

in the future will be

480,825

"Transit

in

of

fixed charges of about $250,000

outstanding—
per.)

be

of Pittsburgh Rail¬
Co. system have broadened

ways

available

Members

| Securities

Power Co., which will presently

change

Samuel K. Phillips & Co.

common

Colorado

6s

debt

&

developed

Southern

mortgage

Funded

(real

of

1st

$22,343

\

Cambridge BIdg. 4s, 1943

time. A present indicated market
would be 23 bid, 25 asked.
'

$6,763,400

,

valua.

stock

has

issued"

.

that creditors had proposed termi¬
nation of the bankruptcy proceed¬

;

.Assessed

"when

shares, based
on the proposed 1 for 10 reverse
split-up, may be expected at any

of

$4,989

Population

the

A third market

December,

$15,989

—

in

I., "ex-Delaware," is already

last

unissued.—

sinking fund

basis, and when issued market for

for 1943 the largest net
earnings from current operations

refunding,

debt

in

re¬

.

share of the U. G. I. On this

per

each share of old preferred. The

is

Funded

Field

Common

Pittsburgh Hotels Issues

distri¬

& Financial

city

1943 V

September 30—

of

their work

estate

the

8,574,200.00

——

indicated value of the

Common

Northern Liberties Gas

With Delaware actively traded on
a when issued
basis around 14 V2
the

given by all the city officials.
more
than likely the city
will go forward as the City Plan¬
ning Commission of Philadelphia
is composed of the most compe¬
tent men of the city.
They have
already performed admirably and

adelphia Transportation Co.
Jan.

re¬

4-mill

It

taxes, wage taxes and the Phil¬

On

the

Pfd. <fi

It is expected that physical deliv¬
eries will be made about May 22.

was

or

increases

real

current

•

[ birthday as a municipal govern| ment.
A
"go forward pledge"

revenue

good,

the budget esti¬

over

we rein

city

very

being

$4,125,996

:

residents

only

125,818,900

$370,244,800 $352,784,700 $350,695,900

<

with

pay

from

Pfd. & Common

Strawbridge & Clothier

506)

page

PITTSBURGH

John B. Stetson
C.

bution would be about 70-75 cents

Local
Net

reduced

county tax.

to
$533,469,300 $517,477,300 $506,673,000 $486,995,500 $476,514,800

City loans held by
sinking funds

4

to

been

ports

/

$533,450,600 $517,469,600 $506,660,600 $486,990,600 $476,509,900

___

8

has

tax

Evan

'
12-31-1942>

12-31-1941

12-31-1940

'

not

due

yet

paid

during 1943 amounted to $19,987,294,. a reduction of $704,528
from the preceding year.

of the

debt.

^£is
Total

Interest

owns
$125,818,900
Philadelphia bonds or

of

erty

securities.

ernment

Commission

city

The Pennsylvania personal prop¬

$8,574,200 in Federal Gov¬

owns

The Sinking Fund

•

revities

(Continued from page 506)
the

Co

Exchange

Kerner, Inc.

&

Private telephone wires to New York and Baltimore

2, PA.

PHILADELPHIA

&

Stock

Investment Securities

;lilley & co.
PACKARD BLDG.

Pittsburgh

J.

Wool

York

Knell,

Associates

Cotton

nounces

Gorham

President- of
of

the

1921

PHILADELPHIA
New

1332

178S

York

BArclay 7-3539

private wire to Laird, Bissell
& Meeds, N. Y. C.

,

New

Exchange, Inc.,

an¬
the election of Arthur N.
to

Direct

BLDG.,

membership in Wool

Associates.
urer

of

Mr. Gorham is Treas¬

the

firm

of

Gorham, Inc., Boston.

Greene

&

508
in

Thoughts On Posl-War Banking

Some

(Continued fr

3m

there

meeting the post-war challenge

ahead.

000 in addition to the amount now

Lt.-Gen.

rural commun¬
ity is sure to be a center of un¬
precedented activity in durable
consumer goods.
There will be a
period in which new automobiles
will be produced at the rate of
about
6,500,000
cars
per
year.
Electrical appliances of all kinds

v

,

Moreover,

498) ;

page

dynamic / possibilities

are

by supplying loans of $5,000,000,-

every

Vandegrift
Rally

At HYSE Bond

outstanding, which means bring¬
positive in thinking about ing them to a level of 70% above
Lieutenant
General Alexander
portfolio.
By nega¬ the pre-war level of 1939., This is
A.
Vandegrift, Commandant of
the job expected of banks.
tive, I mean the currently popular
the United States Marine Corps,
cracy will flourish.
More than a third of the in¬
notion that Government portfolio
Guaranteed credits will mean in
recently returned from the South¬
is to be looked on as a fire hazard, crease will take the form of con¬
west
Pacific
where he
led
the
effect a guarantee of suicide for
sumer
a grave risk because of a possible
credits, either as direct
Marines in the Bougainville in¬
private banking.
This seductive
tightening of interest rates.
By loans to customers or .as loans to will be turned out on a similar vasion, was the guest of honor
device for taking the risk out of
scale.
Local dealer organizations
credit companies.
at a Fourth War Loan rally on
loans leads automatically to tak¬ positive, I mean a philosophy of
Demobil¬
In the popular thought of the will have to be rebuilt.
putting to constructive use this
the floor of the New York Stock
ing away the justification for the
new tool of banking.
day on this subject there are two ized soldiers will want to reopen
existence of the banker.
Exchange on Tuesday, Feb. 1, at
Government portfolio looming extreme schools of thought.
The their little shops and small busi¬ 3 o'clock.
Guaranteed
credits in peace¬
Arrangements for the
or another.
first stresses the sharp increase in nesses of one kind
time point the way to socialized up as a major part of total assets
rally were made in cooperation
is a new product due to the war. cash balances of corporations, the All of this spells potential bank
with the War Finance Committee
banking.
The • situation
Its very newness causes tension report that corporations own 70% accommodation.
-

alyzing effect on the freedom and
initiative of banking and bureau¬

Investments

Total Loans And

in¬
which will increase its vol¬
one-half times dur¬

two and

ume

Government

But as time goes

and nervousness.

..Banking is the only major
dustry

tive to

hold all of the
gain in volume after the war.

ing the war and

on

the pilot becomes

to

his

home
be

accustomed

and feels at
at the controls.
So must it
the banker becomes habitu¬

as

new

power

He
of
and investments.
For the system this new instrument? And he will
answer: It is a great stabilizer of
as a whole (that is, excluding sav¬
ings
banks)
commercial bank earning power.
There are widespread groups of
loans and investments are esti¬
financial
authorities who spend
mated as follows:
measured

is

Volume

loans

by

Today 1943:

of

76,-334,000,000
87,000,000,000

30__

(est.)

Dec. 31

Post-war 1947:

;

v

not here to pre¬
I do not know

am

predict

them, but I gravely doubt whether
the Government is going to be

Upstate banks, that is, all New
York State commercial banks out¬
and

I

anybody who can truly

:

side

portfolio.

dict interest rates;

——105,000,000,000

(Est.)

worrying about

higher interest rates and worrying
about the effect on market value

30_____$39,274,000,000

June

portfolio.

to pay the commercial
banking System more than about
willing

had loans a $1,000,000,000 a year for banking
investments pre-war, June 30, services in connection with the
York

New

City,

$2,731,000,000; (Dec. 31,
1943 is estimated at $4,000,000,000)
and will have post-war of about
$5,500,000,000. During the war,
!up-State New York banks have
increased loans and investments
only about 50%, as against more
than twice that percentage for all
1939,

of

They have

of the nation.

banks

debt.
the

like?

1947.
In

side

world,

what

the question let
particular year, say

To sharpen

pick

us

post-war

Government portfolio look

a

a

-

typical well-run bank, out¬
cities, the

a

a

few of the largest

of maturities
will be
in the increase, but slightly longer than now and will
by the same token they will prob¬ be in the neighborhood of a little
ably make up for this in the post¬ over five years.
The proportion
war period when the return flow
in longer maturities will have in¬
of population occurs.
creased slightly.
In
1939, up-State New York
The average rate of return oil
banks had 7% of loans and invest¬ total
investment will
be about
ments of all banks.
Today they 1.75%.
If the actual yield on a
average

shared poorly

looks far

more

dead today than it

The

second

of

school

thought

periods have found

most post-war

bank credit used to finance specu¬

It
lation.
The
coming
post-war
uses the working capital shortages
of war businesses, such as avia¬ period will be judged by the de¬
tion and shipbuilding companies. gree to which bank credit is used
to finance employment.
It points to the problems of ter¬
to the opposite extreme.

goes

of

mination

that

and

contracts

to

the

World

After

I substantial

War

amounts of bank credit were used

some

mendous
and

demands

the

on

banks

worryingly asks: Where is the
going to come from? Sug¬
needs run into fantastic

money

gested

If

this

repeats itself there
temptation after

history

will

be
war

strong

to extend bank credit in

It

late
to
all banks,
excluding
and function
mutual savings.
portfolio in the
Thus the post-war level of com¬
years ahead will be to act as a
great stabilizer of bank earnings. mercial loans is expected to be
After the war, the Government about
70%
above pre-war and
will
be
paying the commercial about 40% above the present level.
banks as a whole about $1,200,- This
target should be reached
The

true

purpose

Government

of

000,000

per

annum

governments

held

in

by

Continuation of that
come

is

a

interest

the banks.

source

balance wheel

of in¬

on

earnings.
It assures bread
earnings year in and

butter
out
;

and

eliminates

on

the

bank

and
year

violent

fluctuations of the past.
Once
becomes

this

point. is

grasped,

it

possible to go from nega-




within
war

with

is

one

over

to two

years

-

flooded with
post-war planning.
Everyhody is
telling industry what it must do
in order to provide full employ¬
ment after the war.
I am merely
saying that the bankers of the
country will have done their part
The

country

is

I

are
preliminary to the
operation; the actual con¬
verging is far from being in full
swing."
—

main

Emil Schram, President of the
Exchange, reported that in the
eight business hours up to 5 p. m.,

aside

New

as

York

change War Loan
occasion of

Stock

Ex¬

On

Day.

the

similar rally in the

a

War

my

services

armed
Of

what

value are
such calculations to an individual
bank?
I realize the difficulties in
trying

to

practical

answer

this

question.

Greatest of these is the differences
between individual banks.

Obvi¬

have

for

the

turning from
banks

cannot

for

and

war

the

cause

their

Directly

contribute

number

of

re¬

men

plants.

deal to reemployment

a

great

of labor be¬
persons

on

payrolls will be limited.
the
banks can con¬
great deal to employ¬

own

Indirectly

Ins. Stocks Interesting

.first

time

seen

off

their

obliga¬

The

bore a
much better rate of interest than

Index

chance
tions.

can

pay

a

loans paid off

be obtained from Government

bonds.
of

to

The

In many cases

competition

Government-subsidized

agencies have been serious.
after the why enumerate further?

with Japan as well as

Germany.,

ment

1

,

is

__

The figures re¬

told those
that "We
are moving into position to
con¬
verge on Japan from all direc¬
tions; the actions we have taken
—and are taking at this very mo¬
the rally

Loan, the Stock Ex¬
directions which feed speculative
"
change community turned in sales
appetites. The lines of specula¬
belief that neither of
of ,$55,338,870; for that drive its
tion may be different from those
these extreme schools of thought
sales
aggregated
$1,040,037,518.
in previous post-war periods. The
is on the right track. They single
Also
participating in the rally
temptation should be resisted at
out one feature of the whole prob¬
were
Joseph A. Bower, Director
all costs.
lem and push it too far. The truth
of the Banking and Investment
In
the
coming peace banking
is somewhere in between such ex¬
will be judged by the extent to Division, War Finance Committee
tremes, and therefore I trust that
of
New
York
State, and Wm.
which it aids in the Creation of
the calculations herein submitted
Randolph Burgess, Chairman, War
jobs for men returning from the
are down-to-earth and realistic.

figures.

,

"other" loans.

Vandegrift

attended

Third

.

Portfolio

General

who

have working
two or three

ously the small country bank up- tribute a
State is in a position very unlike
ment throughout all industry by
After the war five-year obligation is 1.5%, the that of a
big New York City in¬
making credit available where it
they are likely
to rebound to return on a portfolio averaging stitution.
Banks in some of these
is most needed for an employment
about 5.5%, perhaps a little higher,
five-year maturities will be not highly stimulated war centers face
purpose.
but not to the full 7%.
1.5 but about 1.75%.This auto¬
problems
different from
those
The acid test of post-war loans
War with all its horrors is a matically has to be true for a bank
confronting banks in towns and will be whether
they help to avert
blessing in disguise in one sense, which adheres to revolving ma¬ cities which have -actually lost
the threat of a great wave of un¬
namely, that it creates a volume— turities in the present pattern of population during the war.
In employment.
The banks should
In other words, the
loans
and
investments — under interest rates.
main, New York State has in advertise to the
public that they
which
private
banking
has a with interest rates standing still, thi£ respect a far less serious
are
doing everything in- their
chance to earn enough to survive rate of return on portfolio will in¬
problem
than
has
California. power to meet this test.; The
crease
with cheap money.
considerably in a spaced
'
/;•;
Also, there are sharp differences emphasis
in
public
relations
For banks, the war makes two maturity program.
between individual banks in in¬
should be that loans help to create
Will presently outstanding 2%.
or
three
blades of
itiative in going after loans.
grass
grow
jobs. If this idea is properly pre¬
bonds of 8- to 10-year maturity be
where one grew before.
The in-Nevertheless, I suggest an ap¬ sented to the public- there will be
above or below par in 1947?
I
crease
is thrust upon you.
You
proach: Set up a target to shoot a strong public opinion in support
think they will be at par or above,
did not create it; war was the cre¬
at—loans to, commerce, industry, of private banking.
because
five-year money would
ator.
Nothing can take it away
There is some danger that such
agriculture, and consumers in the
have to tighten to above 2% as
from you except politics, and to¬
second post-war year 70% above a
program
may
result in the
day the political trend is strongly against 1.5% now in order, to put December, 1939.
Regard this as financing, not of true employment
them below par. That much tight¬
to the right, which means not only
the bogey, the objective.
Then but of inflated wage rates and in¬
that the war saved the banks from ening is unlikely.
adapt and modify this . general flated labor costs.
If that were
the New Deal but also that free
target by study of local conditions. to
be
the
Commercial Loan Demand
result,
bank
credit
enterprise and private manage¬
In
making such a study don't would again be serving the pur¬
Seven billion dollars is the in¬
ment are the correct assumptions
exaggerate your individual de¬ pose of financing speculation, this
crease in commercial loans above
to make for the coming peace.
parture from the average.
There time speculation in high wage
pre-war needed to finance post¬
I am
is a temotation to make excuses rates rather than high commodity
talking volume, volume war
recovery and re-employment
for an individual's failure to come prices
showered upon you by war, vol¬
or
high
common
stock
of labor.
>
ume not at all of your asking, vol¬
up to the average, to develop an prices.
The
protection against
The
comparisons
with
other
alibi for not being able to set up this danger in the coming post¬
ume that you really did not want,
years are as follows:*
an objective as high as the other
but now that it is yours anyway,
war period would seem to be care¬
fellow's.
"
it is here for keeps and the only
Total Outstanding
ful discrimination by banks be¬
This
temptation is especially tween high-cost and low-cost bor¬
question is: Can you use it to help 1939
_$10,400,000,000
create jobs throughout your local 1943
Loan
accommodation
12,300,000,000 easy to accept if you are a country rowers.
bank.
A
great many
country should favor producers and mer¬
communities for the
men,
now Post-War
(1947?)— 17,000,000,000
banks have had loans paid off chants who are trying to lower
fighting and dying on the battle*As used here, commercial loans
fronts of the world, when they
during
the war.
People have the cost of living.
include all loans except those
tried to get out of debt.
5 come home?
With
classed as security loans and
farm prices high, many borrowers
Government

of the State of New York,

companies will
$104,000,000 of Fourth War Loan
to
finance speculation in
com*
capital equal to onlv
bonds had been sold by the Stock
weeks' payroll.
It modifies, in farm lands, and in
foreign loans.
In later stages of Exchange community. Total sales
sees all of the marginal and subthat post-war period bank credit by the community for the drive
marginal situations in industry. As
to date, he added, exceeded $500,was used to finance speculation in
a result, this school envisions tre¬
000,000.
The day had been set
common stocks.

fact

only 4.5%.

have

.

demand deposits

general the cash-rich po¬ really is, and it will come to life
sition of industry.
This line of with a bang when the war is over.
thought leads to the theory that
Loans and Employment
corporations will have no need for
A study of history shows that
additional loans after the war.

v

In
will

increased

in

and

What is the function

will ask:

most of their time

Pre-war 1939:

June

ated to Government

of the

-

As

soon

as

farmers

credit

But

V
can' buy

2.3

Mackubin, Legg Casualty
registered an increase of
points for the month of De¬

cember

Copies

containing

a

action

the

16.6

and

for

the

year.

Index,
comparative chart of

of this interesting
of

fire

and

casualty

stocks, with a table of high, low

bids for 1943 and net
changes 1942-1943 for
insurance companies, may be

and closing

end

again, without restriction, trucks,
tractors
and
equipment
of all

year

kinds, they will be eager to take
advantage
of
the
opportunity.

had upon request from

Many returning soldiers will want
to start in normal life again by

ubin, Legg & Co., 22 Light Street,
Baltimore, Md., members of the
New York and Baltimore Stock

82

ance

Stocks

going back to the farm, and they
will
seek
financial aid.
Thus Exchanges.

the Insur¬
Department of Mack¬

Finance

Committee

of

the

State

of New York,
The floor of the Stock Exchange

appropriately decorated for
rally,
featuring
a
50-foot
Flag suspended from
its lofty ceiling and music was
provided by the U. S. Army Band
from Fort Jay.
Conrad Thibault

was

the

American

National

the

sang
which

commenced

Anthem,

the

rally at
o'clock,
and
The Marine
The Creed of the Rifle
Hymn.
was
delivered by Marine Serge¬

3:05

ant Dana N. Babcock.

Preceding the rally
change
Police

on the Ex¬
786th Military

the

floor,

from

Battalion

Island presented a

The

in Broad Street.
this colorful drill

tation

the

of

Governor's

precision drill

highlight of
the presen¬
the bat¬

was

colors

to

talion

by Julette Foster, a Stock
Exchange page girl, whose father,
Col. Valentine P. Foster,
U. S.
Army,
in
command
of
Fort
Hughes, Fort Drumm and Fort
Frank
at
Corregidor, was cap¬
tured by the Japanese.

FOR

Urges Gilses

Plan Public Works
President

Roosevelt

in

a

mes¬

to the United States Confer¬
ence of Mayors in Chicago, urged
on
Jan.
19
that
planning
be

sage

undertaken

municipal
the

ment

now

by

State

authorities
national

to

and

supple¬
of

program

post-war public works.
The President's message

Federal

"The

will plan great

and

said:

Government

national

can

pro¬

to aid veterans, to create
employment for those leaving war

grams

industries

and

to

meet

the

new

problems of the post-war world.
"We must get as many worth¬
while projects as possible fully
planned from initial study to final
blueprints so that as war pro¬
duction

ends

these

projects

be activated to take up

slack

able
as

To

war

to

change

civilian

vided

special work must be
where

possible

over

production.

supplement the national

gram,

and

in the industrial field

manufacturers

from

can

the inevit¬

by

municipal authorities."

pro¬

pro¬

State

Volume

Number 4252

159

THE COMMERCIAL & FINANCIAL CHRONICLE

Dcposits To Stay

Will

Deposits Decline?
(Continued from first page)

deflation might take place

early

by

budget will be accomplished.

(unless
handing the money back to
depositor so as to liquidate
the banking busines, or through
the sale of bank stocks by tne
billions).
Are they likely to be
operative after the "duration"?

balancing

As

the

ability

Voluntary Liquidation

A

•

voluntary liquidation of loans
any

loans"

"Slow

time

some

eliminated

were

and, the commer¬

ago,

cial portfolios are supposed to
whole

the

on

be

excellent shape.

in

if the
central
"money print¬

be

such

on

on

vast scale as would

a

for

necessary

Already,

its

the

inflated

to

reserve

ratio

reduced

60%.

over

purpose.

portfolio has been
$11 billions, and its

authorities
could force the banks to unload,
such as by raising the reserve re¬
quirements. In practice, they can
neither force

the

liquidation,

nor even

sonably liquid and of good quality.
As a mat'ter of fact, an expansion

budget, with an over-strained
machinery, and with an over¬

of the credit business rather than
a

retrenchment is to be

expected.

the
tax

extent, the same holds
for bond portfolios as well.
The
banks will keep at all times a

of their assets

part

in the form of short-term govern¬
ment

of

quick asset, and
long-term certifi¬

as a

paper

medium

or

as

bond

portfolios

an

totalling almost
to come!—are
disproportionately large from the
point of view of rational banking
policy. The desire to reduce them

^$70 billions—more

is most likely to arise, if it has not
arisen

But

already.

the

could

liquidation of bonds take such di¬
mensions as to affect seriously the

Inasmuch

deposit volume?

the

as

themselves

rid

would

banks

war

portfolios
whole have to stay after the
where they are.
That means

that

bank

of

deposits

where

they

are,

public

asks

for

into
SO.

will

too,

remain

holds for

same

folios

from

The

unaffected.

shifting of port¬

a

bank

one

to

another.

the

war

the

public will be

well saturated with sav¬
ings bonds and similar paper. As
it is, up to 20% of the currently
pretty

subscribed

bonds

war

the Treasury.

to

back

indications

that after the war, the invest¬

are

will be

or

All

flow

them

inclined to
than

rather

to

cash

in

buy

more.

on

By that time, it will take a very
substantial raising of the interest

be

kept

more

the

individual

New

York

porate

posits,

might

will

rate

of increase of bank

deposits,
question is whether this
hoarding of cash will continue

sist

and

the

bonds,

after the duration.

That

there

cash

in

4x/2

well

in

years

from

$20

over

$6

to

increase

in

of

areas

is

to

func¬

doubling

volume

of

in

West

pay

holding
short

or

practically
does

not

in

"freezing"

portfolios.

of

It all

work in a more or less vol¬
fashion, under the guid¬
(and pressure) of the cen¬

untary
tral

Whenever

bank.

called

be

the

to

upon

banks

out,

pay

be made available.
Bonds
paid on maturity, provid¬
ed the institutions repurchase new

that

they provide

join

to

While
mutual

it

is

mercial
avoid

credit

the

activities

need

tion of bonds.

for

so

as

to

the 'liquida¬

In other words, the

functional change in banking

that

may

be further

enhanced

CHRONICLE invites

com¬

the views expressed

by

a Class of Group Securities, Inc.

Prospectus

State

as

early
group

a

for

on

Request

DISTRIBUTORS
GROUP#

to have

the

Incorporated

63 wall street—new

Securities, Inc.
over

mutual

life

insurance

com¬

panies, it is not too much to hope
tW. a further period of
seasoning
will win for them such
recogni¬
tion, A continuing purpose of this
it

con¬

toward., ,the

can

achievement of that goal. In the
interest of clarity therefore, the

heading

has

been

changed

from

"INVESTMENT, TRUST" to "MU¬
TUAL FUNDS."

york

Last

companies

known

as

trusts,

should

like

we

"Are
-

or

thesis

respect

do

we

the

not

that

the

ap¬

three

heading.
Asleep?"

feel

obligated to

of

to

make

"Chronicle"

under

Investment Trusts

While

the

to

article which

an

the

investment

either
answer

with

was

all

has assets of

than 10,500.
the

company's history.
classes

of

best

in

the

"Total sales of

Group

Securities

last year amounted to $12,348,402.
This volume was achieved by 299

investment
For

this

received

dealers

and

brokers.

job of distribution they
a

total

compensation of

$756,619.
were

great last

over

year as

approximately

three

times

in 1942 and

twice

dealers participated

as

many

in the

dis¬

tribution of shares."

The record of Group

Securities,
particularly
the
rapid
growth last year, adds another
sterling performance to the grow¬
ing list in the mutual fund field.

Inc.,

We take this occasion to congrat¬
ulate Group Securities, Inc. and
*

article

closed-end

more

year

"Sales

leaving the subject of
mutual
funds, as differentiated
from the heterogeneous group of

now

$20,000,000 and shareholders

numbering

as

Before

qualified

on

Equipment Shares

and

in

The

Railroad

a

joyed by the mutual savings banks

ago

ments

heading,

achieved the state of venerability
public confidence now en¬

weeks

at

the

and

peared

l,east some amount of discard¬
ing to follow.
The
dishoarding

too

funds

Moreover,
war-psychology
is
inducive to cash hoarding, for mo¬
tives as irrational as ancient. With
war, such mo¬
to subside, with

careful

column is to make whatever

liquidity of
the system need not be affected,
nor its solvency.
But it will have
to be "co-operative," by avoiding
every
major attempt to liqui¬
date bonds, and by restricting com¬

under

The companies with which

of

in

tribution

technical

written

facil¬

may.

The

been

misnomer.

Federal regulation.

reference to

bound

the

number

together

increasingly

and

sion, changing the banks from
overwhelmingly
commercial
to
predominantly investing (bondholding) institutions, is likely to
stay with us "for good."

are

a

investment
field,
they
have
understandably become subject

developed since the great depres¬

tives

large

a

cash hoarded.

tjie ending of the

has

will be

ones.

LOS* ANGEI.ES

♦

A Misnomer

column

nature of these funds and
their growing importance in the

a

necessarily

mean

the institutional

may

y'•%r•

JERSEY CITY

lic"

fashion.

permanent

administrative

ance

•

MUTUAL enterprise for the at¬
tainment of specific investment
objectives. Because of the "pub¬

.

an

}

the same principle as
savings banks and mu¬
life
insurance
companies

for;
people
to

magnified de¬
But the price it
for it will con¬
the government

long paper,

this

years

ities

war¬

the facilities of the Reserve Banks

the

the

the

billions

further auto¬

matic

in

to

'

.

on

tual

to

will

billions)

related

bankers

return

(increased

circulation

erate

greatly

have

'

upon request

mutual

The banking system as a whole
a

"

this column is mainly concerned are
open-end funds with redeemable
shares. They are the "mutuals" of the
investment company field.
Mutual investment funds op——
.

stands to benefit by the stabiliza¬

of

'

•

Mutual Funds 152

"Investment Trusts." That is

prosperity will lose finan¬
as well as industrially.

tion

course, the public propen¬
sity to hoard and dishoard is un¬

For

centers.

lose

the

and similar

Coast

CHICAGO

•

'nHSn.

relative position

banking

posit structure.

Of

1|||

Ob¬

likely to gain cor¬
well as individual de¬

but

v

"ir

INCORPORATED
NEW YORK

is

as

fc

*

Fund

Lord, Abbett & Co.

deposit

regions and localities.

alter

'

vv-ava-^QfgA#,yj-y<.\--1-• .v<-• j

OF INVESTING COMPANIES

under

viously, the reshuffling of the na¬
tional economy into
peace-time
occupations, and the consequent
geographic
dislocations,
cannot
to

..

the

tity, not to their distribution be¬
tween

•

|

V

The long-run stability of de¬
posits refers to their total quan¬

tender

of

the

•

continue rising.

unprecedented

hoarding of legal
during the war has slowed
down,
by
many
billions,
the

that

less

or

Otherwise,

volume would

time

Deposits; may vanish into cash
depositor so wishes.
The

future

things:
budget
will

and

•

Prospectus

purchasing power
of- being accumulated

process

will

cially

words, a reduction of the
of
the
national
income
in
the
deposit volume can be expected
same
period.
The
higher
the
only if the proceeds from the
paid-out
national
income,
the
liquidation of bonds are kept in
larger p ercentage of • it is
cash.
"saved," especially in war-time;
But who would give the banks
the less money is being
spent, the
the
cash
in exchange
for their more is
likely to "stick" to the
portfolios? / Could they be sold pocketbooks. As soon as we
stop
(without
losses
which A might inflating - the
national
income,
wreck the banks) to the public?
there should be no
After

balanced,

•

vast amount of

in

•

11 3RD ABBETT 6H OUP

two

normalcy,

if the

tionally

In other

national

economic

Paying Out Deposits

But

This

conversion

their

on

deposit volume

one.)

With

VyJ:,.^

predictable.

the

use

money

be

•••"

•

.

II-1

P

higher level than

balances.

are some
proceeds to
fundamental factors at play which
commercial ac¬
it is reasonably safe to
gauge,
In
counts, the change in the compo¬
the first
place, the record volume
sition of assets would leave the

and

bonds
lend

then

.

Union Bond

\

precise¬

more

presupposes

the

mi

iii

by the end of

or

the

unless

cash, and is permitted to do

True,

investment.

cates

present

fail

a

much

a

that

of

some

considerable

.period,

stability

loaded Reserve System that needs

itself—bank

ii/7

the

ly, by the end of the era of de¬
posit-inflation.
(Presumably, it

unloading
as

To

war

control.

"

,s

Theoretically,

little

to

ing earning assets which are rea¬

interest in los¬

no

have attained

the

the

embarks

to

up

that, by and large, the
total deposit volume is
likely to
maintain the high level which it

cial

earthquake

adds

conclusion

will be

permit ib to happen.
With little
prospect of an early balancing of

The banker has

of which

the shock might turn into a finan¬

ing"

major scale is most un¬
likely to happen.
Why should
the banks want to get rid of their
loans unless to exchange them for
other and more lucrative assets?
on

to take
the banks,

bonds -from

All

will

System's

*

willingness

and

the

over

federal

the

of

Reserve

the

to

bank
/

509

(Continued

on

page

513

)

in¬

by the

vestment trusts, we would like
Dr. Palyi, in this article, or on
back-flow of dollar notes held in
to emphasize the point that it
large issues of bonds
any
related phases, of the sub¬
foreign
countries,
unless
run¬
had no application whatever so
palatable to the investing public.
ject under discussion.
Comments
away
inflations
abroad
should
far as mutual funds are con¬
should
be
addressed
to
Disregarding minor changes in Cause ~
Editor,
more
export-demand for
cerned.
And
we
the make-up of the national debt,
"Commercial and Financial Chron¬
might add
dollars.,
that, far from being asleep, no
it is. most unlikely that tens of
icle," 25 Spruce Street, New York
Other elements
influencing the
segment of the American finan¬
billions will be converted, in the
8, N; Y.
magnitude of hoarding, such as
••'Vvy'
}'■
v.'- '• V
'/a, V;
cial community is more aggres¬
visible future, into obligations of
the shifting of the
working popu¬
sively wide awake than are the
a considerably higher yield, so as
lation
from
and
to
industrial
managements
of
the
to permit their shifting from the
leading
Attractive RR. Situation
areas, the increased use of cash
mutual funds.
banks to the public.
But any at¬ due
to
y The current situation in Min¬
the
growth
of
illegal
tempt to do so would not only
(black) markets and to inherit¬ neapolis & St. Louis Railway Co.
greatly increase the Treasury's ance
tax-evasion, etc., may or (a new company) offers interest¬
Tenth Anniversary
burden in servicing the debt.
It
possibilities according to a
may not change, but they are not ing
On Jan. 12, 1944, Group Secur¬
may actually compel it to convert
likely to be~ more effective after circular issued by A. A. Bennett &
the total national debt to higher
its
tenth
than during the war.
Company,
105 South La Salle ities, Inc. completed
rates, and to create critical dis¬
Distributors
Street, Chicago, 111. Copies of their year of operation.
War, revolution, run-away cur¬
turbances in the capital market.
Group, Incorporated, the sponsor
study of the situation may be had
rency
inflation,
and
financial
of this fund, reports that Group
upon
request from A. A. Ben¬
panic are the four conditions un¬
Forced Liquidation
rl) ;
nett & Co.
der which great
vfcS,
1
changes in' the
Y:,
Nor is it possible that either
hoarding habits occur. It should
the Treasury itself or the Federal be
axiomatic that all four are
I
r|
Reserve System would be able to ruled out for
post-war America.
absorb the shock of a major bond A fun ort the
WE WILL accept a limited
banks, in particular,
number of accounts of holders of
liquidation.
Treasury
deposits, is ruled out under
rate to make

•'

*

A"

r

Republic
Investors Fund, Inc.
Distributing Agent

W. R. BULL MANAGEMENT CO. Inc.
40

Exchange Place, New York

.

Msi.

X <

^

„

«

•

-

NATIONAL

circumstances

large
of

as

they

bond

available

may

be at the close

campaigns,
for

debt

will

not

be

retirement.

when

their

rediscount.

be

reason

out

of

individuals'

and

consist

whelmingly of cash and
ernment paper

How much more tax revenues can

squeezed

assets

In

securities, for whom we will

over¬

of

gov¬

that is eligible for

put

and call options,

'•

•

on a

sell

Secwu^ihsJSeries

service

basis.

Prospectuses

short, there is good

to assume that cash in cir¬

corporations,- so as to permit
the repurchase
of bank-owned
bonds in measurable quantities?
It is

decline of the national
the other hand, need

vast

even

doubtful, in view of the

post-war

commitments

at

home and
of

the

abroad, and in the face
growing pressure toward

reduction of tax rates, whether an




national

income

stops rising.

income,
not

A
on

' hoarding.

Research

HER, SCHMIDT & CO.
Members

affect

the deposit volume at
all, while it
is likely to bring about some dis-

request

upon

National Securities &

culation—outside the banks—will
not continue to increase once the

Put

30
-

'•

.

-

./

Call Brokers and Dealers Inc.

&

•

Pine

Street,

N.

Y.

WHitehall 3-9177

H

Corporation

ISO BROADWAY, NEW YORK, (5)
LOS

ANGELES, 634

BOSTON,

CHICAGO,

10

S.

Spring

Post Office

20R

So.

La

St.,

Square

Salle

St.

(14)
(9)

Prospectus
from

may be

authorized

(4)

The PARKER

5
.

ONE

COURT

obtained

dealers,

or

CORPORATION
ST., BOSTON

the

bondholder
has to bear the cost of the sub¬
sidy.
Only those who are buying
the particular product bear the

Subsidies And Price Control
C. NUGENT

By

WEDDING*

highly controversial subject of subsidies is a question which
should be of great interest to Americans at the present time because
of the possible far reaching effects of the use or misuse of these
monetary outlays,■' •
••/.;:v•'/•
$...^
Tlfe

is

taxpayer or

a

Johnston, President of the
United States Chamber of Com¬
Eric

who has been one of the
outspoken critics of the sub¬

merce,

most

the

that

in
on

governments, jus¬
continued use.
And

these

of

cials

their

tifies

spite- of Congressional debate
the subject and general oppo¬
to

sition

subsidy
program,
been and are

a

subsidies have also

In

statement

a

the

to

the

comparing

price rises and subsidies
consuming public, Leon

of

Henderson, former

"It

said:

istrator,

Price Admin¬
(a price rise)

cery

restrictions

rise

The

on

parity prices would re¬
quire an increase of ceilings on
farm prices and this would result
in

in.

these

from

would

and

the

hands

use

of

cost-of-living stabiliza¬

a

subsidy.
Nor,
obviously,
would this "round" of general in¬

tion

most

,

copper,

•

Commodity

the

of

principally from funds
Credit Cor¬

for

paid

poration at a cost of approxi¬
mately $5,000,000 a year.
In de¬

the door to favoritism
and inequities, and they stifle in¬
dividual
initiative
and • .effi¬
open

Vinson says:
"The program will maintain fair
and equitable returns for the can¬
ning industry,, at the same time
preventing increases in the con¬
sumer prices of essential cost-ofthe action

scribing

of

much less than a billion

It takes

in subsidies

1% price
In

Opposition to Subsidy

subsidy paid
The opponents of the cost-ofto producers of copper, lead and living subsidy contend that it is
zinc, this subsidy is not an across- inflationary.; If the subsidy ac¬
the-board payment to all mining complishes its purpose and actu¬
companies producing these ores; ally does reduce the cost of living
it is paid only to those marginal by a billion dollars, for an ex¬
producers., whose output is necesr ample, at a cost to the Govern¬
sary to provide an adequate supply
ment
of
one
or
two
hundred
of these minerals for war producT million,
have they not directly
tion.
The alternative to these contributed to widening the in¬
subsidy payments, if these mines flationary
gap
by giving con¬
are to continue
production, is to sumers $1,000,000,000 additional
permit the price level of these purchasing power?
In

regard

essential

the

to

minerals

rise

to

to

a

point sufficiently high to enable
all necessary producers to operate
at a profit.
This premium price

for

plan

been

has

ruary,

lead and zinc

copper,

operating

since

Feb¬

According to Office

1942.

Administration estimates,
at least $28
every dollar spent through the

of Price

the Government saves
for
use

subsidy.3
to say, most of those
objecting to a subsidy

of the copper

Needless

individuals

They also contend that because
of

high level of employment
greatly increased pur¬

the

and

the

chasing
well

consumers
stand rises- in

power,

able

to

price level.
Dr.

Haney,

Lewis

Economics

versity,

'

.

at

New

price

favoring

in

rises

tion.

They

merely

change

the

not referring to this form of inflation. Instead of pay-,
type of subsidy when they voice
ing higher prices for, say, cloth¬
their protests.
The subsidies dis¬ ing, we pay higher prices for the
program are

far

cussed

thus

cepted

have

with little

or

been

no

ac¬

opposi¬

Government

activities

in

sub¬

The use

subsidies as a

of

sidizing

the

clothing

parity

farm

salary •; and

subsidies

far

there

when

time

need for these

po¬

certain

of

beyond

is

the

actual

any

payments.

they

respect

In this

resemble

another

type of subsidy, namely the tar¬

iff, imposed originally to protect
infant industries; these industries,
after

tasting the benefits of this

protection, showed a reluctance to
develop beyond the infant stage.
They have been perpetuated and
to have become

seem

part

of

This

criticism

the

permanent

a

economic

our

system.

hold

not

may

in

of the subsidy on copper,

case

zinc and

lead, or the payments to
higher insurance costs
shipping
coffee.
We
may
the

cover
on

.

that

assume

these

subsidies

will

automatically of their

cease

when

accord

the

need

own

them

for

with the end of the

ceases

war.

There is also another important

difference

between

these

two

types of subsidies, as to the diffi¬
of

administration

intimated by some
the increased na¬
distributed

been

income

there

approximately

are

the

of

subsidy, for example, and
the subsidy on butter and cheese..
instance the payments

one

made

be

can

to

relatively

a

mining

large

companies

-

few

which

with

dealt

on
a
persona!
basis; in the latter

and individual

examples
the
payments
must
eventually
find
their " way
to
of

thousands

farmers.

equitably among all classes of
people, if An Office of War*'In¬
formation
release a states
that

independent

Doubtless

dairy

great many

a

objections

ostensibly
aimed / at
points in a consumer sub¬

other

sidy

have

program

foundation

these'

difficulties.

as

their real

v

administrative
•

Conclusions

1

<

20,000,-

We are, considering all factors,
looking for
the most ' effective
already hurt by method of price control during a
rising living costs.
Of these, 9,- war period.
We are not working
000,000 are dependents of men out a permanent
pattern;for fu-*
now serving
in the armed forces ture economic policy. The use of
of the United States; 2,200,000 are
subsidies can be amply justified,
aged
persons • on ... State - public purely1 as a
wartime emergency
assistance rolls; and another mil¬
measure,' if they enable us to

people in the low and fixed

000

groups 1

income

lion

disabled

are

draw¬

veterans

establish

and'.' maintain

price

a

even

on

wage

While

we

have

no

prices

are

and

such cost-of-

incomes

the

who find

sidies

frequently,

Less

contention
used

to

through
in

used

can

permitted® to * rise;
incomes will adequate , methods of price
trol,- wage
And if

con¬

control and rationing.

real

a

be

prevent ; a
pushing
of price ceilings when
conjunction with other
r,.

other

be

established

valuable

maintained

not

a

adjunct to

other

direct
and

functional price controls

be

in

used

;

connection

rationing

reducing and absorbing excess

at

purchasing

mental

such

power

strong.; taxing

through

borrowing

a

as

Govern¬

program,

the

sale of war bonds or some form

price "line" can be, compulsory

and

are

but and the use of ceiling prices;' and
the certain functional'controls aimed

voiced
is

subsidies

that

themselves

in

with and to complement

of, consideration

worthy

is likewise closely
the price level.
If

the

efficiently

an

complete solution to the problem
of inflation.
They are merely a

should

as

subsidy desire*"19

of

;

subsidy
program.
However, it should be fully real¬
ized
and emphasized
that sub¬

op¬

of

accomplished'

be

can

aid

the

with

administered

and

r:

adjusted to the in¬
creased
cost
of living—labor
unions will see to that.
It is gen¬
to

are

objectives

be¬

ponents

-

wages

with

linked

to

workers and

limited

increases
pay ; more in
many non-de¬
persons living

wage

ment has to think about them

living bonus in the United States,
the
threat of demands for
in¬
creased

to

fore-it: lifts-ceilings

cost-of-living
earners
would

a

have become necessary.

high

price a increases deemed fair by
farmers a real hardship.
Govern¬

prices the cost of living
and under the

to

bonus

have

There

taxes.:
fense

have risen,

Canadian system,

by wartime

and, who

price ceiling,'1 Finance Min¬
Ilsley told the House of
on
April
23,
1942.14
In the absence of subsidies to re¬
would

pretty

seems

now

fited

ister

duce food

or

those workers who haven't bene¬

Commons

of

stabilization

savings;

by

of
salaries,' wages
and
farm
antiinflation ^program
would
be prices;: and stronger controls and
the greatest labor crisis will come
and
enforcement restrictions on consumer credit
between now and the end of the strengthened
year.
The recent coal mine crisis simplified, as the average house¬ than those now in effect under
wife would then know that the
and
its
settlement,
througha
Regulation W of the Federal Re¬
wage
increase, bears this out! price of a certain article of food serve
System. If these other con¬
in a retail store of Group No. 2 is,
The American Federation of Laand ef¬
and will be. indefinitely, for ex¬ trols are not carefully
bor, the Congress of Industrial
•
fectively enforced, subsidy pay¬
;
Organizations, and the , Railroad ample, 25 cents.

erally realized and admitted

these

that

methods,

the .whole

*

..

There

jointly demanded
on
last April 29 that there be,
"Immediately
put
into
effect,
Brotherhoods

manufac¬
turer.
In one case, the prise rises
principal
device
to -"hold
the enough to cover the increased without qualification, compromise
line" with respect to the cost of
costs of production, and you and or
exception, a vigorous price
living
is
a
subject
of much I
pay when we buy a suit or a [policy to the end that the costgreater controversy.
coat.
In the other case, our taxes of-living be rolled back to May
In Support of Subsidies
are raised,
and we are forced to! 15, 1942."13
This joint demand
The advocates of the use of sub¬ give or lend more money to the was in reality an attack on the
Government so that it can pay "Little
Steel"
formula.16
The
sidies on food and other cost of
large subsidies to producers who Congress of Industrial Organiza*Mr. Wedding is Instructor in Market¬
can't make money at lower fixed tions
continued this attack in
ing and Finance, The School of Business
prices.
In the second place, the their recent convention at PhilaAdministration of Miami University, Ox¬

tion.

for

demands

forestall

and

Nor, as is
writers, has

the

have

opposing subsidies, has stated:
"In the first place, note that sub¬
sidies do not help prevent infla¬

subsidy,

continue

to

pressure

are

that

tional

a

wages

and

of the cost-of-

litical groups or blocs may bring

In the

started,

price increases. /

of ensuring adequate supplies
particular product for the
consumer at prices permitted by
of

the

Professor of
York
Uni¬

re¬

disability com¬ "line," forestall demands for wage
widows and de¬ and salary increases and rises in
pendent children of veterans.18
farm parity prices, prevent undue
inception on Sept. 3, 1939, and
The / "Christian
Science
Monr
March 31, 1943.13
hardship on
the fixed income
Subsidies are
itor" gave warning last February
group,
and reduce the1 cost of
paid, "In the interests of the con¬
of this danger.
"The cost of food Governmental purchasing. These
sumer—when there is no other

are

'V

case

to

copper

wage,

way

Program

living items."4
•

to prevent a

rise.8

stabilization

in¬

once

difficult

In the

every

runaway

saving
ing pensions
spent $65,161,507 in import and
$1,000,000,000 to the taxpayers. domestic subsidies between/; its pensation; or

dollars

be

culties

level

Britain have been of great aid in
pointed out
stabilizing the British cost-of-liv¬
that the Government will spend
ing and reducing the annual sub¬
$100,000,000,000 in the fiscal year
sidy
cost.12
The
Canadian
1944 and that the prevention of a
Wartime Prices and Trade Board

rise Will meansan annual

subsidies

may

living

in

statement

that

move.

v

,

between

arises

the

stalled

subsidies do not help
prevent
inflation—they
merely
change its form.
Subsidies help
in
preventing inflation if v they
prevent a rise in the general price

Price Administration,

1 %

leads

■■

subsidies

with

above

leading

say,

.

being

accord.

factor

of

types

character¬
.

distinction

connection

ponents of a subsidy program who

■

are

the

also

are

further

inflation.
This
is in direct contrast to those op¬
toward

-

subsidies

own

one

already

spiral,

on

war

in

impetus to the inflationary

mense

>

These

in

increase

other factor
involved and would give an im¬

cheese
oilseed crushing and
subsidies

of its

stop

creases

production of
lead, and zinc; payments is that they encourage
production, production of needed farm prod¬ ciency."11
processing.2 ucts without an accompanying
The first subsidy to compensate price rise of those products.
The Evaluation of Subsidy Program;
for proposed wage increases was marginal farmer whose costs are
In an attempt to appraise the:
•authorized June 11, 1943, by the high and.the farmer who, lacking
value of subsidies in a program
monetary inducement,
would
Office of Economic Stabilization.3 a
of wartime price control, it may
This was a subsidy granted to grow some less essential crop, can
be
well
to
begin
by
looking
vegetable packers of four vege¬ be brought into a Government's
briefly at the Canadian ; expe¬
tables: canned green peas, snap production program by
a rela¬
rience with subsidies.
The Cana¬
small outlay of
public
beans, sweet corn and tomatoes. tively
dian experience is more compar¬
'
'
Previously ordered subsidies had funds.'"7
been based on increased costs of
In a radio debate on food sub¬ ably to our own situation than is
that of Great Britain, as Lendmaterials or transportation, or the sidies" Richard V. Gilbert,
Eco¬
Lease food
shipments to -Great
encouragement
of
production. nomic Advisor to the Office of
for

paid

high-cost

more

purchasing power left in
of consumers by the

ditional

An

miums

far

be

inflationary than would be the ad¬

to increases

They

would

adjustments

consumers

selves

will cost two or three times as important is that subsidies are in
widely used in our own
direct conflict with the American
much as subsidies, but the big
According to "Business
They
item is that since it adds to the system of free enterprise.
Week,"
16
wartime
subsidies
are a hidden method of collecting
cost of living then that will be¬
amounting to an annual expendi¬
money
through taxation which
come a claim on the part of wage
ture of $720,000,000 a year were
Mrs.
Housewife
pays
anyway.
in effect by May, 1943.1
These earners for an increase in their They are no saving to the public.
direct payments and absorptions wages, and that will in turn lead, On the
contrary, they involve the
unless it is restrained, to a de¬
by the Government include ex¬
enormous
added expense of ad¬
mand for an increase in price,
penditures for increased transpor¬
ministration.
Subsidies
involve
and we would be in the infla¬
tation costs on sugar, coal, and
long
and
uncertain
delays in
tionary spiral."6
gasoline; insurance premiums on
handling by Government bureaus.
Also, in support of subsidies:
transportation
of
coffee; pre¬

incentive

income.

far greater pur¬
chasing power than would be ab¬
sorbed by the higher prices them¬

give

country.

great advantage of

farm

of

increase

an

The increase of incomes resulting

being

"The

tjie

increases, the

wage

they

un-American.

as

A

these

demands

these

to

real¬

with
'

•

addition

In

ably opposed to subsidies.
There
are many cogent reasons why we
subsidies.

formula

that the War Labor Board lift

Manufacturers of America:
food industry is unalter¬

want

accord

in

longer

no

ity."17

"The

don't

Steel'

'Little

which, particularly in view of the
the
added burdens on the workers, is

'

costs

not
that, "It has
to eliminate the

and

rise in the cost of living and

used in

be.

fulfilled

so-called

The purpose of this brief discussion of this pertinent subject
sidy
program,
says:
"I
have
(1) to show what subsidies have been and are now being
always been a strong advocate of
the United States; (2) to present ♦->parity for farmers in the nation's
living items maintain that, in ad¬
the most frequently heard state¬
structure.
On the other
dition to incentives to farmers to price
ments in favor of and objections
hand, I am just as firmly opposed
increase their production, to pro¬
to
the use of subsidies;
(3) to
to Government subsidy for farm¬
duce certain much-needed items
attempt to evaluate these points
ers — or
for businessmen or for
in
preference
to
others,
this
in the light of our present war¬
labor—for a, string is attached to
method is less inflationary and
time emergency.
subsidies by the Government. . . .
more equitable than if a general
The string is State domination of
Present Uses of Subsidies
price rise were permitted with the
the business which accepts sub¬
Subsidies have been used in the consequent demands for higher
sidies, including very definitely
wages; and payment of subsidies
price control programs of Great
the business of farming:"19
is less costly to the Government,
Britain, Canada, Australia, New
Their danger to free enterprise
largest
consumer
in wartime,
Zealand,
and Germany with a
is pointed out by Paul S. Willis,
than a general price rise would
success which, according to offi¬
President of the Associated Gro¬

is

rollback of prices had

a

been

eiency,
ized

said

resolution

The

striction.

become necessary

price."9

rise in its

a
resolution demanding
scrapping of this wage re¬

passed

Everybody

does.

rise

price

who

Thursday, February 3, 1944

FINANCIAL CHRONICLE

THE COMMERCIAL &

510

are

.

certain

fundamental

ments

criticisms of the subsidy program
which should be given due con¬

ary

sideration

can

would

both

by Congress and

be

force,

definite inflation¬

a

subsidy

as

increase

payments

progressively

as

,

ford, Ohio.

*




subsidv does not 'hit tho 'cnnt< as
subsidy does nnt- 'hit the spot' oc

.

,.

.

uuyiiid

..

w^erc,

ou

w
i\uv.

m
6,

the

Administration.

It

is

con¬

time goes on.

,-v-.

•,

tended that it will be difficult to
1 "Business

get rid of subsidies once we have

June

political abuse; and that they will

June

lead

to

'

centralized

power

3

4

and
.

political control.

Since there is a

tney,

—
initiative

for

—j
and

them

to

j.
promote

destroy
ineffi-

17,

1943,

p. 16.
and Financial Chronicle,"

2204.

p.

•

'/Commercial and Financial Chronicle,"
17," 1943.

p.

of

2294.

2295.

"Ibid," p.

5 "Role

Subsidies

Program," OPA
6

i tendency

Week," May 22, 1943,

2 "Commercial

them; that they will be subject to

Henderson,

Release,
in

teon

in

a

Stabilization

June,
U.

S.

1943,

p.

6

Congress.

Senate Committee on'Appropriations. First

.suppiemenTaT'Nationai DefenreatA^propnrai

i

^Volume1159

Number 4252

.

THE COMMERCIAL & FINANCIAL CHRONICLR

\:V

These

of

,

000,000
under

Future For Fire Business
Unparalleled

opportunities

ahead for insurance agents in the

insurance field, according to
Bradford Smith, Jr., Vice Presi-

;

■

■

•

In

the

of

dent

.

Not
•

family

Company

cast of the fu-

pub¬

ture,
lished

in

the

vices

create

of "The North

America

customers

Fieldman '

been

r.

v

;"The tre¬

-for

demand

homes,

new

automo¬

biles, new re¬
frigerators and
durable consumer

agent.
.

Money for the replacement
requisites of living will
realize

the

value

for

of

and

come

X

existing piece

property—either

real

or

Efficient
hard

X "The year

per¬

sonal—is

fully covered against all
we
say that oppor¬
tunity in the property insurance
.field has been fully exhausted.
hazards

the

case

never

'

organization

work

-

sure

such

on

A

■

Ferguson added.
•,

^

Mr.
'

r

,

"In accord with this policy, FHA

field offices

are
npt accepting cur¬
price increases in their valua¬
tion .of existing home, properties
in
localities ;where
real estate
prices are now rising rapidly, and
FHA valuations are not exceeding
estimated market, prices during

rent

the last period of stabilized price
levels."
*
>

He pointed out that despite the
FHA's refusal to recognize current

price increases in its valuations,
the.FHA's volume of insurance

existing

homes

showed

little

or

levels.

1942

no

on

will} over¬

to

financing

buyers

against assuming
out

of

value

line

of

a

with

the

the

Senate

He

further

stated:;

•;

of

in

on

the

necesary

.-"standard

and

paper",
Treasury's regu¬
dutiable

paper

if

lighter than -32 pounds per tech¬
unit, and, in the case of rolls,

less

than

16

Vandenberg
newsprint
would

inches

said

wide.

in

this

-Mr.
event

"is

subject to a pro¬
duty."
The amendment

is that

to

25

pounds

weight
of
rolls " and

FHA's valuation procedure-

of the War Produc¬

Exchange
Weekly Firm Changes

.

has announced the

changes:.

hess of the insurance of long-term
mortgages under Title II of the

guard in the FHA's insurance pro¬
cedures, Mr. Ferguson said, is the

National Housing Act, Mr. Fergu-

ership of
for

1943,

Hearings—

on

H.

7319- 177th Congress/2nd. Session);;p;

/-7 "Washington

■v

Post"

involved,

R

27-28.-'

(Editorial)

39. .1943, p. 10.

April

..■;„

8

"Washington Post," June 7, 1943, p. .7.
u9 ^.'Commercial aittE Financial Chronicle,"
July. 16, .1942,,p.: 186.
.10 "Nation's Agriculture,',', January, 1943,
"The Future for-the Farjner.">:

British

13 "Canada

Release),* June
;

Food

at

War"

1943,

p.

Ministry; sells

p.

i4-"ibid.""

.

1943.

•-

'

City

an

insured mortgage,,.to

or.; -the .ref inancing
of % existing
liens, other obligations contracted

in. connection

■'

-

16 The ."Little

with the

'4

TV

January,

wage

1941, levels.

•

,

17 "New York Times,"

Nov. 3, 1943, p. 33.,

18 "Commercial and Financial

Aug.

19,

1943,

19 "Christian

1943,

p.

p.

696.

The

advices

from the FHA further state:

June,

stabilization
formula lifnits wage'rate increases to 15
above

items.

Chronicle,"

.

:;

3.




Feb.

mortgage loans of approximate¬
ly $202,000,000 on close to 45,000
existing home properties.
Since
start of the FHA

gages of close

10,
-

II

program

in

1934, the FHA has insured mort¬

•>

Science Monitor,"

■

A.

Price,

Shea, member of the

more

to

firm; continues
member. ' -,-V

y \

$1,700,000,000 on
than 400,000
existing homes.-

early

settlement

these

was

at

higher prices.

for

to

enable

the

boards

of

in

Locking

,,,

Canadian

pf the

Province

of

more

•

in

New

York

in

Brunswick

'

whole will

'

a

There
that

v

An

.

panies
been

is

increasing
investors

many

show

as

an

renewed

interest

for

and

Dec.

30,

of

leading

trust

1943,

actively par¬
forthcoming New
financing. In this case

Van VIeck of

Guaranty

Heads NY Corp. Fiduciaries

is believed that the issue will be

<A.

,

Nye Van Vleck, Vice-Presi¬

dent of
of

Guaranty Trust Company

New

York,

elected

of

24,

New York City.

Copies of

this interesting table may be had
upon

was

Corporate

Association^ of

Fiduciaries

other hand, public

Jan.

on

President

New

offerings would
bring about a broadening of in¬
terest and, from the psychological
point of view, there is no doubt

York

Vice-President

Trust Company of New' York, was

of

new

City.

formerly

„

Mr.

Vleck

Vice-President

Association.

public

Van

James

M.

of

United

of

request from the New York

Hanseatic Corporation.

was

the

Trenary,
States

cases,

a

suitable

type and, in
completely
ignore
private offerings.
:

elected

expressed

Officer

Trust

confidence

during a prolonged dull period has
been fully justified.
There has
recently developed a steady buy¬
ing

and

Trust

With regard to the market, the

constantly

Vice-President

Association,

Company,

Secretary

were

of

and

following
G.

New York Trust

were

placed

markets.

above

the
-X'-'-y-

ert

The

which
quoted
■

.:

Manufacturers
was

reelected

Curts,
C.

Vice-President,

Effinger,

Vice-President,'

Irving Trust Company,

Longstreet

The

Company; Rob¬

Hinton,

and,,

Vice-Presi-

;

dent, J. P. Morgan & Co., I rib.

BUY Fourth Wat Loan BONDS

Taylor, Deale
64 WALL

The

elected members

readily absorbed. During
the
past week there were important sales'from Canada of On¬
are

and Manitoba issues,

the

Berry,

of the Executive Committee: Boyd

interest and blocks of bonds

tario

of

W.

Treasurer.

of any size which appear for sale
now

E.

has

prepared by the New York

,

will

com¬

Hanseatic Corporation, 120 Broad¬
way,

the

on

Exchange

tabulation

figures

banks

of

>

buying side of the market.

X-xh;; v:? <*•>J;

interesting

as

be

anticipated

as

sidelines during the recent dull
period are now beginning
to

re¬

a

i

better.

future
now

and dealers who had kept to the

It is understood also that banks

ticipate

do

can

confidently

evidence

sulted in three commercial banks
in the Middle West
taking up the
fentire issue.
;

possible
it

that the market

securities

Manitoba

at

developments,

_

A further encouraging develop¬
ment is the evidence of
increasing
in

also strong

imminent call

an

the "free"
exchange market1
hardened in consequence to 10x/4% '
discount.
-y.-;

;•

interest

of

rumor

were

redemption of the 5s of 1954,
Internal issues continued in
steady
demand and the Canadian dollar

trustees
of
savings banks to
; shoulder their proper
responsi¬
bilities fail, the legal list should
; at
least be drastically revised

,

the

in

comparative

the

steady demand

a

issues

of

debt situa¬

N Y Bank Stocks Compared

New York

"In 1943, the FHA insured Title

the

tempt

property-,

..

(Letter),
1

Steel"

similar

and

-

Bank

Frank

.

&

Exchange, retired from partner¬
refinance;-, the' owner's
existing
in McMannus & Mackey,
debts shall be limited : approxi¬ ship
New York City, on Jan. 31.
The
mately to the' amount necessary

'

15 National

partnership
in Hicks
Chicago, on Jan. 31.

,

50.
this

(Canadian; Gov't
9.
' trt;
" "

John C. Stewart withdrew from

no change in own¬
existing property is

an

repairs, alterations, and additions
to the real estate/ and cost inci¬
food at current market, prices :.through the
dent to the refunding operation
regular food distribution channels and ap¬
such as title search,
recording fees,
plies the-proceeds to subsidy expenditures.
>11 "Business Week," Aug. 1, 1942,

,.' "12 The

following firm

.

-

the

quiet but firm.

Canadian Pacifies

.

headquarters at the firm's New
Haven, Conn;/ office.
• >
'

rule that where

tioxr Bill

,

his

anti-inflationary safe¬

.the

for

on

most

Freese made

.Another

were

tions, there

these are Canadian bonds, and
should the present laudable at¬

issues

..•-.The New York Stock Exchange

ket."

is essential to the economic sound-*

with

of

excess

seriously consider any

had

N. Y. Stock

is

in

for

were

that the commercial banks would

and

Car)
G,
Freese
retired
from
unduly high prices and the
partnership in R. L. Day & Co. of
development of a runaway mar-, Boston on Feb. 1. Mr.

lending institutions, he said.

in

the

tion Board.

of

far

Montreal and Alberta

duty-free

Association

the approval

firmer,-

Following increasing confidence

registered, which is a wise step, a
the policy followed for many years
newsprint
cuts
the by the various Canadian provinces
width to 14 inches.
The Senator of placing issues privately in this
said the amendment was
sought bountry has restricted the market
by
the
American
Newspaper here for their securities.' On the
reduce

minimum

valuations

wide¬

sound¬

mortgage
the part of home buyers

on

.-.The

,

the

On

should certainly be included in
the favored category.
Among
;

demand

wicks

would

removed.

the other hand, there are many
others
outside the
list which

newsprint

age

in

be

were

appearing

volume of trading. British Columbias, Nova Scotias and New Bruns-".

on

the commercial banks. The

nical

that

basis

which,

examination,

of

many

private refunding operation

hibitive

financing

mortgage

are

information

the

,

If

list

the

among

lation" makes

FHA must be geared to the longterm nature of. the commitments
•

the

doubtlessly

was

importation, free of duty,

which under the

practice by lend¬
ing institutions and sound mort¬
gage
insurance practice by the

available

in

infallibility
There

bids

supply. Ontarios and Quebecs also
showed improvement with a fair

re¬

recent

of

sound mortgage

made

the

sizable

longer issues. Nationals
strong throughout the list,

bond

blind

Dominions

the

system

competent

encourages

on

close

list

plained that the Tariff Act of 1930

.,

position

public

spite of

Publishers'
our

12,

—

with

long

permits

recognizes long-term adjust¬
in the general price level.

"However,

Jan.

on

limitation upon the over-all
sup¬
ply of necessary paper." He ex¬

ments

;

liance

.been

it cramps the initi¬

the

and

has

legal

the legal list.

new

by
Senator
Van(Rep., Mich.) who said

measure

the FHA's valuation policy is not
frozen to any fixed level of prices
and

The

archaic,

bonds

conservation proposal to

a

service

conditions

return.
' : Mr. Ferguson " emphasized

action

;

by

trusts

and

Direct

man

news¬

approved

insurance

"to print on
slightly lighter in weight,
i and the higher grade Canadian
perhaps from a roll of narrower
width, and thus maintain a larger j bonds should certainly be inj eluded.
•.<

home

;

life

Such

-

paper

long-term

market

the

as

!

permit;-newspapers

property;and hence

normal

was

a

substitution of

companies.-

pending: in confer¬

amendment,

securities, has

report recommending the abolition of the legal list and
new legislation which would
enable the savings
banks to act as freely in the
management of their bond portfolios

'

sponsored

subject to possible deflation when
more

permit

is contained in the

war

This

mortgage debt
the

to

ence.-

said, and also affords protec¬

tion

plan

reflects

brought in
the

ative* of

proposal

of the

ness of the FHA insured

This

confidence

law which governs savings banks in their
purchase of

overdue.

tax ; bill v now,,

keyed to short-term
price increases, the result will not
only countenance but also encour¬

spread

-

may

ported duty-free for the duration

:

^

made..

during
1943
change from

It is decidedly
encouraging to learn that the New York group of
savings banks has appointed a committee, which after
studying the

of print, of lighter weight to be im¬

deter-_|.purchases underrthe; FHA plan

properties,"

charges

Lighter Weight
Papers Be Duty-Free

producers an unlimited
opportunity for new business,and
new premiums. All you need to do
is to grasp it!"

son

Street, New York 5

HI! Canadian Securities

may

As is
home

Asks

1944 offers Fire In¬

short-term fluctuations in market

of the factors

20 years.
Title II

interest

80%

is

With real estate prices rising sharply in many areas because of
■vyartime market conditions, the Federal Housing Administration em¬
phasized on Jan. 8 that it is refusing to recognize inflated market
prices in insuring mortgages on existing home properties.
•%.
"The FHA's long-standng policy has been to base its valuation
of existing homes on long-term stabilized values, without regard to

one

to

and

premiums."

Adopts Anfi-Inflalionary
In ;
Insuring Mortgages On Existing Homes

in turn is

up

ances,

it

mining the maximum amount;,of
mortgage which the FHA will in¬

Incorporated

14 Wall

not exceed

surance

can

price," FHA Commissioner Abner
H. Ferguson said. "This valuation

as

with* all

denberg

FHA

cover

valuation

long

a

mortgages,

men

as

that obstacle.

"Not until every

,

of

FHA

for

unprecedented

time

<

the

run

and
have children, buy
long

as

sions.

i

will

insurance

satisfied

pects.

.

Wood, Gundy & Co.

"Insured mortgages on
existing

properties may

has of

property

insurance to protect their, posses¬
.

FOURTH WAR LOAN Bonds

pointed out.

;;:v'

proportions. You are in a business
that is not curtailed, rationed or
restricted by the war except in
so far as the manpower shortage
affects your ability to see. pros¬

these

will

whose

that opportunity to

be harder to accumulate and their
owners

hazards.

new

Victory

previous expiration date of July 1,

portunities for the sale of. fire in¬
surance. The future
will expand

types of
goods v will
create
unparalleled
opportunities for the insurance
of

create

to

•

Bradford Smith, Jr.

all

%Buy

4y2% of reducing bal¬
plus the FHA insurance
women marry,
premium of > y2 of 1%, and the
homes and fill them with furni¬ mortgages- are retired
by equal
ture
which retailers must stock monthly
payments, covering inter¬
and manufacturers must make.
est, amortization of principal, tax¬
"The present offers many., op¬ es,- hazard insurance
and
FHA
be

backlog of

.

ceased

properly

market

mendous

new

Invest in

war

:

new

protected may no
longer be prospects during -the
term
of their
policies—but, Vthe

J Smith

writes:

program.

"Congress recently extended the
authority to insure mort¬

can

M

war¬

home mort¬

new

FHA's

"The public will absorb all you
find time to sell. Individual

issue

January

the

that

treasures

fore¬

a

devices,

new

Amer¬

In

ica.

shifting of

homes

new

luxuries, new 1944, thereby enabling the FHA
people want
to to continue operations in this im¬
possess and have the means
to portant phase of the home mort¬
buy, can we consider : the job gage market and to help stabilize
done. And, - remember, new de¬ values in this field," Mr. Ferguson

f

o

on

of every gages on existing homes under
satisfied and Title II to July 1, 1946, from the

been

have

insured

mort¬

$2,800,-

want

every'

has

scientists

surance

North

until

to

Title II prior to

housing

expanding
economy
give
no
promise of further development!

fire

addition

approximately

.

gage insurance to the Title VI

needs of-an

future

until the

Not

are

time

in

are

gages

511

&

Company

STREET, NEW YORK 5

^Hitehall

3-1874

that quite

On Governments

"Our Reporter
The Public Debt,

.

Z

burden

Secretary; . . .
:
He was Acting Secretary on Dec. 5, 1933 when the Treasury is¬
sued the 314% Treasury bonds of 1945/43 for cash and in exchange
for called Fourth Liberty Loan bonds. . . .i This issue was retired on
its first optional date, Oct. 15, 1943. . . . The second refunding issue
for retirement of Fourth Liberty Loan bonds was offered April 4,
1934 and known as the 3J4S of 1946/44.
This issue has just re¬
cently been called for payment on April 15, 1944. . . .
/ :
On Jan. 1, 1934, when Secretary Morgenthau took office,
the interest bearing debt of the United States was $24,719,894,150, with a computed annual interest charge of $797,099,and

1, 1934, became

Jan.

on

559
in

of

rate of interest was 3.225%. . . . However,
March of 1933, when William Woodin became Secretary
the Treasury, the interest bearing debt was $18,189,798,-

that

$663,038,425

annual interest charge of
rate of interest was 3.646%.

average

..

,

,

/ :/ debt is retired.

v

machinery

far shorter than ten years.
In final analysis, a bank
.

.

. . .

ment

very
was

Administration.

not the Hoover

that this is

.

.

market up on anything.".

in putting the

.

.

...

.

•

v

.

,

not convertible into

are

readily

of

the

Federal

again

about

curities

We are not
It was not

years.

as

...

banks'

long afterward that he became Secretary of the Treasury and
instrumental in the purchase of hundreds of millions of Govern¬

market

open

Reserve

reserves

frozen.

are

in

of

special

the Veterans'

Admin¬

matter

A definite campaign is

which

icy

mustered

after

lapses

out

being,

reinstated/

be

can

within six months of lapse.
"The

...

life

continu¬

just being launched to conserve
this insurance and a special offer:
of reinstatement is being made to
all
those
previously discharged
who have /; lapsed their
policies.
Anyone, regardless of lapse date,
may reinstate his National Serv¬
ice Life Insurance policy up to
Feb. 24th and after that any pol¬

service

our

to civilian

numbers,

a

to

istration,

of

banking system will fail us
As a matter of fact the
Reserve banks, depositaries of its member banks' reserves,
10% of their $11,614,889,000 portfolio of Government se¬
of Dec. 29, 1943, in maturities running longer than five
It dare not be said that owing to those maturities, member
Bank, then

'

1

beginning

by those mustered out is

becoming
interest

by borrowing against them at

or

it did about ten years ago.

as

12 Federal

had

legal tender on a moment's notice and

to five-year obligations, either by actual sale

so as one

the securities in the

refusal during his
to aid the market
in Federal Land Bank bonds in the summer of 1933. . . . Our then
very righteous Mr. Morgenthau is quoted as saying, "I'll have you
interested

.

.

Henry Morgenthau, Jr. in spite of his vehement
role as head of the Federal Farm Loan Bureau

know

.

cannot be any more liquid with a Gov¬
ernment security portfolio of one to five year maturities than is its
neighbor with 10 to 20-year maturities.
/. Liquidity is the ability
to pay depositors legal tender to the full extent of the bank's deposit
liability.
If 10 to 20 year or any maturity bonds of our Govern¬

1933, to
interest
through

the regime

under

perfected

was

the maintenance of the

i'Ai:

9/\",V '

of National Service Life In¬

surance

,

V

are

men

returned

be

ance

liquidity of the banking system
because such policy gave commercial banks no Treasury securities
maturing beyond ten years for investment of demand deposits/ in fact
the great majority sold to commercial banks have had maturities

Thede-

service

vi; /':// ■ V/

li,
.

considerable

...

resulted in

as

control

'

,

'A

#

f: -Ar

"As
to

■

t

/-A'/-:1*

'

so-called economists have rated
liquidity of banks by the maturity distribution of the Government
security portfolio,
This was mentioned recently by Under Secre¬
tary Bell when he said that the Treasury borrowing policy has

THEN AND NOW

This

...

army's

Philippines. '■ /"/■

.

The Treasury officials and many

.

Federal Reserve Banks.

Market Committee of the

the Open

.

...

years

$1,808,160,000 and the average interest rate less than 2%.
cline in the average interest rate from 3.646/o in March,
less than 2% by Dec. 31, 1943, was d.ue to the exercise of
rate controls and market support of Government securities

income

.

.

.

.

ten

$125,000,000,000 national income. But should
be maintained .and the rate structure

a

one must hear in mind that every U of
advance in the service charge of that $258,000,000,000
debt is $645,000,000, just about the total debt service charge
in January of 1933—ten years ago.
That in itself con¬
firms how fatal it would be to abandon current rate objec¬
tives.
It also takes the convictions of a confirmed optimist
to believe that a national income of at least $125,000,000,000
will remain with us until a substantial amount of our public V

The

. . .

with

national

1%

from the date Henry Morgenthau, Jr. became
Secretary of the Treasury the interest bearing debt was $170,805,115,907
The interest on the debt for the fiscal year of 1943 was
Just

protection for the
families was the
last official act of the Army via
radio,'
Furthermore, Col. Jenks,
now retired, was one of those who
escaped from Corregidor and re¬
turned to this country; and his
files were the only official Army
records
brought, back from the,

.

.

insurance

Bataan

get out of control,

The average

090, with an

life

argument for perpetuation
rate structure lies within the economic possi¬
bilities of servicing the debt.
It is all very interesting
to be told by the President that a $258,000,000,000 debt at an
average rate of 2% interest thereon will not be an oppressive
Another and most potential

William H. Woodin as
Prior to thathe had been
17, 1933, to Dec. 31, 1933,

Washington.

This effort to establish maximum

/

of the existing

Jr. succeeded the late

Henry Morgenthau,

in

filed

thus

were

Past—Present—Future

Secretary of the Treasury ten years ago . ,
Under Secretary of the Treasury from Nov.

,

DEBT SERVICE BURDEN

RUMRAUGH

By JOHN II

obligations are not an idle threat and that is the amount transmitting them via radio and
probably will be outstanding late in 1945//; ;'•//■"/"■' ■'?'//
:> approximately 30,000 applications

such demand

#/

Thursday, February 3, 1944'

FINANCIAL CHRONICLE

THE COMMERCIAL &

512

of

return

of

millions

is

life

civilian

to

men

going to have an important edu¬
cational effect on the public, just
did

as

the

of

idea
ance

NEED FOR FLEXIBILITY

on

after

insurance

war,'f the Institute con¬
"It will also have a bene¬

effect

ficial

....

risk

war

last

tinued.

the

developing

in

setting up all life insur¬
an
income basis, as all-

National Service policies are on
through the Federal Reserve banks, certainly for no
It is not only possible but quite probable that it is the desire that basis.
Every policy/
other purpose than to manipulate the market, v .; 1 And today, the
of the "authorities" to keep the larger commercial banks in a more, in
force, except for those written
Secretary, the Under Secretary and more recently the President in
or less self liquidating position in order to have a higher degree of
on
aviation students and cadets
his budget message have ail proudly remarked about the manner in,
in flying courses at Government
which the Treasury has financed its expenditures and the low average flexibility when the Treasury can no longer depend upon the public
to provide cash for its expenditures.
The time must come when expense while taking the course,
cost of the money borrowed.
large amounts of the debt will be siphoned out of public hands into represents a voluntary purchase,/
On Jan. 13, 1944, the President predicted a public debt of $258,the banks..
Then also there will be a time when the larger Central
under the system of freedom of
000,000,000 by June 30, 1945. , . . With a debt of that amount every Reserve
City banks may wish to anticipate a demand for loans from choice, with the Army, Navy and
y4 of 1% advance in the borrowing rate creates additional interest their customers.
At such times in the past it has been customary
other service branches acting as
charges of $645,000,000 per annum. ... We can be thankful that the for the securities
representing the highest degree of market exposure sales units."
one time, amateurs investigated Wall Street ten years ago and learned
to be sold first.
It is not difficult to see the position in which this
how to manipulte markets.
Give them credit, they are now would
place the Open Market Committee of the Federal Reserve
masters of the art.
How else could" the rate of 414 % in the First
System in the desire to maintain markets and rate objectives, i Long
World War be reduced to an average of less than 2% in this war
;
term bonds by the billions would come pouring into the market from
and with a debt rapidly approaching ten times the amount of the
less than 100 banks if they were loaded up .with them.
If it is a
First War.
v
question of needed market support it no doubt will be there, but
it is natural for the Federal Reserve and Treasury to prefer buying
NEW ORLEANS, LA.—-During •
CONTROLS NECESSARY

ment securities

.

.

.

.

.

.

..

.

.

.

.

.

.

.

,

.

New Orleans Dealers

.

..

.

War Loan Gommiilee

.

■

•

It is not
demn

the intent of the foregoing

what has been

interest

controls

rate

at

interest

of

demand

on

balances

premiums

by

action

depositary

same

to create

power

not pay

balances,

it would be

an

$250,000,000,000 in
ket.

...

To

a

know

lends confidence

in

the

power

demonstrate

our

to

is

justified

...

control

that

to

in

its
0

Further¬

Government security

exists,

be

a

measure

mark this

even

owned

U.

market.

S.

who
willing to analyze the composition of our present debt and without
need of venturing whether or not there will be a change of admin¬
istration next November.

...

There has been wide-spread criticism of the Treasury issuing
billions of savings bonds which represent demand
obligations shortly
after their issuance.
/V:/,. However, if you look at it from a market

by

service

men,

life

the»———

nor

insurance

again

are

also

stated

in

nouncement

S.

life

the

It

Institute's

is

an¬

that members of the

armed

more

in service.

forces

now/own

insurance

than

all

people throughout the world other
the

basis

United

Of the

mation.

States,

best

on

Government

securities to maintain rate objectives, and actual re¬
demption directly from holders of these demand obligations.-, v
Under Secretary Bell made a very good explanation of the Treasury's
attitude toward these demand obligations in his speech Dec. 16th at
Worcester, Mass.
In short, he explained that redemption by the
Treasury of these demand obligations would be concurrently taken
care of by Treasury offerings in the market of the
type of security
feat would meet proper market response.
It is true that in 1920
fee market wanted short term paper rather than
Liberty Loan bonds
.

...

.

considered Jong term paper./. ., As a result
Fourth Liberty Loan bonds sell as low as
$82.54 per hundred
were

'

-

;

-

■';

'.■.■■/,'■

■/-■

available infor¬

From the announcement
..

,

Frank

T.

,

Hines, which adminis¬

to

100%

of

amount

.

.

.

Benefits under this insurance

beginning
total

to

be

felt

are

nationally,

claims

approved up to the
opening of this year by the Vet¬
Administration

erans

to

$232,000,000,"

,

amounting
under
41,165

redemption threat the
for

its

course

these

moment the

financing and refunding.




war

savings

Treasury

...

pays

bonds

become

Villere

"A

owned

a

higher than 2%%

jArmy, Major-General
Ulio,

approximately

the

to

overseas

showed

sured

the

enlisted
In

men

the

90%
and

age

per

maximum

them

the

be

to

of

and 99%

going

men

in¬

98.4%

of

of officers.

enlisted

men,

the

"From
war,

the
beginning of : the
the armed forces have made

every

effort to

protected
Earliest

James

A.

for

have
the

illustration

insurance

of

story

every

full
was

man

amount.
the

Bataan,

epic
now

time.

by the Army for the first
In
the
last days of the

stand

in

In-

Philippines,
all radio

ance

applications
from

dertook

Committee

have

leans

&

Dealers
of

New

Or¬

been

organized
to
subscriptions
from

the

customers, institutions,

City

funds,

pating./ ;'V. '■:://////; ''//•//////-:

the

those

for

life

trapped

insur¬
in

the

Brokers

ful in the

success

the

that

and

of the campaign

work

which

all

of

the Investment Dealers & Brokers
in

will

Orleans

New

the

do

during

campaign will be of great

sistance

in

Orleans

New

as¬

and

to

the Nation.

A War Producer With
Peace-Time

Prospects

Robbins & Myers, Inc. is a war

producer

with

excellent

peace¬

time prospects according to an in¬

teresting circular issued by Doyle,
O'Connor
Salle

&

Street,

Co.,

135

South

La

Chicago, 111. Copies

of this circular

discussing the sit¬

uation in

detail may be

from

the

request.

of securing and

and

of New Orleans will be most help¬

Col. Royal G. Jenks un-

job

Dealers

Investment

facilities

for the exclusive use of transmit¬

$80,000,000,- islands.

Upwards of $60,000,000,000 of BOO of National Service Life

the

Army cleared

ting

Investment

The
Brokers

the result

$10,000 maximum,
average per soldier/ in-,
the uninsured, is $9,500.
reported 98% own the
maximum and the aver¬
officer is $9,864.

own

$10,000

of

extent
of

case

the

of

/ The Committee believes that the

check

recent

to

&

Co., Robert M. WoolWoolfolk,
Huggins
&
Shober and George Williams of
Beer & Company.

folk

solicit

released

.

Of

the Committee

on

B.S.D'Antoni of B.S. D'Antoni

Co.,. Walter D. Kingston of
Lamar,
Kingston
& Labouisse,.
Ernest C. Villere of St. Denis J.

$10,000 available.

Officers

claims.

.

drive

has handled as many as
250,000 applications a week, more
than one every working second.
surance,

Treasury should not overlook the necessity of putting on a
"Of the $100,000,000,000 service
publicity campaign to have holders of war savings bonds keep life
insurance, the greatest single
to maturity.
Many reasons, selfish or not, can be used to block is naturally that covering
advantage 111 selling these bonds for permanent investment which
army men.
Under the direction
are now
admittedly being sold as a temporary mop-up of surplus of the Adjutant General of the
power.

as

Others

State and
corporations
and
others. An intensive selling cam¬
a special
paign is planned with the entire
increase ownership
to sales organization of every invest¬
personnel
and
the ment dealer and broker partici¬

mem

buying

are

-

been

of this in the past year,
of Army expansion and

eluding

real

.

a

applied for by
Army personnel, the greater part

ters the National Service Life In¬

The

.

those

.

has

surance

the

we also quote:
'
Standpoint, there is very lit'le diffence between Treasury and Federal
"The Veterans' Administration,
Reserve willingness to buy in the open market unlimited amounts of under the direction of
Brig. Gen.

we saw

in

Drive, Irving
Company Inc.Chairman of the In-/
Loan

of Weil &

serve

mittee.

passing the $100,000,000month, the Institute of Life Insurance said on Jan, 26.

government

than

.May 20, 1920.

liquidity

of flexibility.

War

vestment Dealers & Brokers Com¬

now

owned by veterans of the last war

is

which at that time

will

Government

That definitely

.

.

representing nearly 14,000,000 ap¬
plications, does not include either the regular civilian life insurance

U.

.

their

,

of

has the best insured army in all history,
with total applications from members of all branches of the armed
forces for National Service Life Insurance
000

That question might be answered by almost anyone

.

of

degree

This aggregate, says the Institute

occasionally,

power

The United States

tives.

.

two-thirds

any

At $100 Billion
•

who

.

of

;

■

Banks of United States with 40% to 60% of all deposits invested
in Government securities, feel entitled to know whether it is the
intent of the "Managers" to indefinitely continue current rate objec¬
.

It may

...

to

to five-year maturities.

4th

Weil

K.

&

impossible task to borrow upwards of
chaotic and uncontrolled money mar¬

that

to

necessary

not

than current rates to

more

close

run

one

measure

y

against Government

Treasury

the

not

banks.

Insurance

bank

currency

Then, too, the

...

on

Deposit

Federal

banks

securities in
is

require¬
depositary

requirements entirely

eliminating

assertion that it should

though

larger

as

reserve

borrow the money that it is actually creating.
more,

such

the

It may be fortunate for the authorities that iftost of the

The market and

.

deposits, lowering

reserve

and

the

on

mention the

securities.

facilitated

were

con¬

any

ments, removing
bank

...

.

those billions of securities from 14,000 banks rather than 100.

or

conceivable type of bank asset redisthe Federal Reserve banks, removing payment

making virtually
countable

accomplished.

to criticize

some

Doyle, O'Connor & Co.

had

upon

,Volume 159

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4252

N. Y. S. E. Amends

Royal Bank of Scotland

Margin Requirements On

Valuation Of Securities

Incorporated by Royal Charter 1727

Setting Under 5

A

HEAD

change in the margin requirements of the New York Stock
Exchange was approved by the Board of Governors at a meeting on

OFFICE—Edinburgh

Branches^ throughout Scotland

3

49

;

a

in

Smithfield, E. C. I

an

Burlington Gardens, IV, I

than 5.

required

Street, W. /

need

;

Deacon's

Bank,

Ltd.

Glyn Mills & Co.

in

Australia and New Zealand

be

YYY%/V;

of withdrawals

ities

780,000

Reserve

Fund

Reserve

Liability of Prop... 8,780,000

6,150,000

Assets

Aggregate

Sept.,

sell¬

a mar¬

a

of cash

making

or

secur¬

selling

at 5 and above, no
be given to securities

value may

selling under 5.

-£187,413,762

1943

DAVIDSON,
General Manager

the

whether

not

or

there

is

out¬

an

j

contains

the

minimum

mainte¬

margin valuing all secur¬
ities in the account, in accordance
with the other requirements of

London,

in Australasia.

in

Zealand,

all

it offers
banking

efficient

States

the

of

the

With

most

the rule.
"This rule does not

service
to
investors,
travellers
interested in
these

traders
and
countries.

\

■■

,

Threadneedle

Street,

E.

acceptance of

prohibit the

account from

an

an¬

other member

firm, if there is no
outstanding margin call due to a

OFFICES:

LONDON

47

over

Australia, in
Islands,
and
complete and

Pacific

C.

securities transaction.

new

Berkeley Square, W. 1

Agency arrangements with Banks
tnrouguout the U. 8, A.
A,

"Members
^

\

the

that

change in the margin require¬
of the Exchange does not

ments

NATIONAL BANK

••

'i

Head

Office

Commercial

FULLY PAID

RESERVE

end

7

No.

1

'

FUND

.

.

.

.

AGENCY

William

Cn

E.

Street,

Towns

all

Mutual Funds

and

the

in

have

Head

SUDAN

to

the

Government

-

Colony

Office:

and

26,

in India, Burma, Ceylon, Kenya
Colony and Aden and Zanzibar

Subscribed
Reserve

Capital
Capital

not be

of the fund.

and

Trusteeships

and

a

of

Is

It."

The

theme—

ing

per share, or any bond hav¬
market value of 5% or more

a

of

its

no

value shall be allowed

principal amount 'long' in
the account*
stock

having

less than
bond

less

any

value

or

on

of

any

market

5%

'long'

value

of

a

principal

its

thereafter

or

of

de¬

tions

in the account of

are

cialist

on

a

spe¬

national securities

a

ex¬

change and the transactions and
therein

confined

are

exclusively to those securities in
which he is registered as a

cialist,
tions

spe¬

or

"(2)

LOS

CONNECTING:

ANGELES,

NEW

SAN

HARTFORD,

•

Enterprise

6011

YORK,

BOSTON,

FRANCISCO

TELEPHONES

TO

Street

7535

AND

CHICAGO,

SEATTLE

•

■

PORTLAND,

PROVIDENCE,

Enterprise

Enterprise

7008

7008

Bank and Insurance Stocks

'long' securities posi¬
in a special omnibus ac¬

are

of

count

member

a

E. A. VAN DEUSEN

By
'

This Week—Insurance Stocks

1
In the

January 6th issue of the "Chronicle" this column pointed
the marked differences which exist between
fire insurance com¬
panies in regard to relative efficiency and economy of
operation, as
measured by recognized statistical
ratios, etc.
The operations of a
group of 21 "old line" stock companies were studied for the
five-year

period ending with 1942, and comparisons made of combined loss and
ratios, net underwriting^
profits on earned premiums, net

expense

investment

income

funds,
profits

total

It

firm

main¬

tained in accordance with Section

capital
operating
capital funds., v
4

and
on

found

was

Insurance

Co.

on

net

that

the

of

93.3%,

Hartford

94.0%

third

with

and

best

National Bank

second

came

Fidelity-Phenix
Bulletin

94.5%, compared with

System."

serve

Hanover.
first

Continental

place

in

percent

Laird, Bissell & Meeds

also

was

earned

Members

by

120

underwriting profits on "earned
premiums" with 6.7%, while Hart¬
ford
and
Fidelity-Phenix were
third, each with 5.5%, compared

regard

earned

the

to

York

8tock

Exchange

Telephone: BArclay 7-8500
Bell

Teletype—NY

1-1248-49

(L. A. Glbbs, Manager Trading Department

with 3.2% average and the lowest
of 0.47% for Hanover.
With

New

BROADWAY, NEW YORK 5, N. Y.

Phoenix

and

Continental

percent

with

4.6%./

third

lowest
ranked

with

capital funds by in¬ 8.3%, while Fidelity-Phenix and
assets, Franklin Fire Hartford each ranked fourth with
showed highest with 8.3% against 8.2%.
/y>': ^//:/ •
on

vested

an

.

of 5.-3%, and the low¬
Phoenix. Continen¬

average

These, ratios

and comparisons'
significant, for careful study
frequently provide a

est of 3.6% by

are

tal and

/

Available

average of 96.8% for the 21
^and the worst ratio of 100.1% for
an

,

(b) of Regulation T of the Bogrd
Governors of the Federal lie-

Chase

ii'f

Continental

showed

"combined loss and expense ratio"
with

the

than

eight months to make
operation possible."
current

Executorships

the

material they need.

most

up

inspiring presentation of a duty
regarding which no urging should

City
estate

Copies of this attractive
may

be

Lilley

had

&

upon

re¬

Co.—write

for Booklet C-l.

has

editions

published

of

Grade

its

re¬

folders

Stocks"

on

(S-l),

"Income Common Stocks" (S-2),

these folders are simply
Y..••/,

•;

\ # ' \

*

tops.
Y' .Y,'

-

.

Affiliated

Fund.
The plan,
al¬
though not yet final, is t& refund

these 4% Debentures with a
2V2%
bank loan in the same
amount
and
with
the
same
maturities.
The
to

Interesting Situation
Ira Haupt & Co.,

Ill Broadway,
New York City, members of the
New Yorfe Stock
Exchange and

is¬
sued an interesting circular dis¬
cussing the current situation in
Buffalo, Niagara & Eastern Power
Corporation.
Copies of this cir¬
cular, discussing the possibilities
of the situation, may be had upon
other leading Exchanges, have

request from Lra Haupt & Co.




of

Abstracts

of

the

Affiliated. Fund

in

$10,000 investment and

a

industries

represented.
Affiliated

on

of

purpose

"effect

the

refunding is

an

economy which will
be of direct benefit to sharehold¬
ers." Savings are shown at

$137,-

500

per

year

duction
This

of

after

rata

pro

estimated

saving amounts

de¬

expenses.

to

3.6

of them will

Fidelity-Phenix, however,
respectively fifth and fourth clue to probable market perform-^
out of the 21, with 6.2% ance
and
investment
gain over
and 6.5%, which are substantially medium to long-term periods.
The
above
the
average.
The
rate accompanying
tabulation
shows
earned on capital funds by total the market appreciation and total
net operating profits, i.e., net in¬
investment gain of each of the 21
vestment income plus net under¬
fire
insurance
stocks
over
the
writing profits, averaged 7.0% for
the
21
companies. Franklin and five-year period, arranged in the
Home were
"*'./.
highest with 9.3% order of relative gain.

Fund
Fund

"B"

outstanding.

is

further

stated

that:

underwriting commission
fee will accrue to

Co., Inc.,
company

nor

Stock

*

%

*

by Lord,
^ /^

"The $500,000 Order We Didn't
Get" is the title of a new folder

or

"No

other

Lord, Abbett &

will

the

managing

receive any extra

an

Fundamental
actual

the

which

was

vidual

history of

case

which

It

stocks

large

a

con¬

Eastern

bank.

The

Fundamental

reason

lost

of

cause

this

the

after

three

performance

order

charge.

of

years

the

In¬
be¬

was

distribution

estate

would have been

off

actual

involved

$96,295.80 better

its $500,000 investment had

on

it purchased Fundamental Inves¬
tors instead of the 20 "Blue

stocks

common

the

bank.

in

stocks

with

investment

itemize^

comparison

the

the
as

20

the
in

of

investment

$500,000•

made

by

"

.

The folder contains ah

actual

Chip"

recommended

V

performance

com¬

vestors.

Great

"Blue

results

of

Chip"
a

like

Fundamental

The moral is clear,

investor

modest

In¬

The

who

distribution

shies

at

charge

the

in¬

volved in the purchase of Funda¬
mental

thing,

—2- i-22-2 2_ ..2-22^
North

of

America-_

Investors

"cutting

spite his face."

is,
off

as

his

a

general
to

nose

4

...■

-

:

75.7

65.7

42.6

371/4

•

43.50

33.0

,

7.00

58.0

13.25

54.5

71%

3(1.5

27%

24.7

40%

—

94.5%
79.3

51%

,.26.4

27%

*

•

12.00

2214

—

Gain
-

55.6

55

Washington

810.20
10.00

268

'

28 :

_

American

Aetna
Prov.

-

Co.

Insurance

33%

19.4

6.0Q :

.

51.7

8.80

.V- 47.9

7.00

'

44.6

'

Average

;.

Franklin

—'

Heme

27

74%

Fire

50%

'

Fire.-i.___2

North

—

River

It •will

\

__—

be

noted

*

that

■»:

—

49 %

54% 2;

24%

Fidelity-

23%

40.5

38.4

8.00
14.50

10.00

30.5

2.4

42%

537

40.6

23.75

10.8

56 !4

24%

540

'::V

15.1

86

55%

——

41.1%

16.25
.

43.7%

8.8

48%

Association

Boston

%

23%

25%

—

___.

States

18.0

$7.00

13.9

124%'

41%

-_2_.

Hampshire

Hanover

United

*

YY

13.4%

$28%
69 %

105%

;—22—

19.4%

"

■;"v

SI

—

National Fire
New

- ;

$25 V4

________—_

Agricultural

Springfield F. & ;M.2-—2--2—-—

9.00

24.1

3.4

6.40

•<

34.5

21.7

1.0
—

—

—

10.00

21.5

2.3

12.50

20.3

0.6

105.00

18.9

5.1

5.00

15.2

<,

that Hanover had the poorest loss

head the and expense ratio and the lowest
94.5% and 79.3%, underwriting profit on "earned
respectively, while Hartford comes premiums," it also had a lowerthird with 75.7%. In all, there are than-^verage
return
on
capital
nine stocks which show a total in¬ funds; it is not surprising, there¬
vestment
gain
better than the fore, to find its stock close to th£
average of 43.7%. It is interesting bottom of the list as regards mar¬
and significant to note that the ket performance and investment
average "combined loss and ex¬ gain. Phoenix also, which showed
Phenix

and

Continental

list with gains of

pense" ratio of these nine stocks the lowest return on capital funds
is 95.7%,
compared with 97.6% for the period, is rather far down
for the 12 "under the average" on the list; although its under¬
stocks and 96.8% for the 21 stocks. writing experience has been bet¬
worth noting that the ter than average.
North River,
underwriting profit on last on the list, was below average
"earned premiums" was 4.22% for both in underwriting experience
the nine stocks, compared
with and in return on capital funds.
It

large

-

58.0%
44.8

93

188

_

Security'

-Investm't

42

V

59%

i

Cash
Dividends

Apprec.

$44 V4.

29

Phoenix

vestors

Yet

Hartford

an

after

1942

$28

____

Continental Insurance

is

finally placed in indi¬

with

Fidelity-Phenix

order
solicited but

sponsor

common

sultation

Investors.

Total

Total

Market

Dec. 31,

31,

1937

St. Paul

*

PRICE

ASKED

Dec.

and

been released
'.

in rank

Revised

cents

per share per year on the present
common stock
It

Common

have also

for

$10,000,000 par value of currently
outstanding 4%' Debentures
of

of New York

of

prepared by Hugh W. Long & Co.

be necessary.

Build¬

real

portfolio

issue

distribution

An

For

Packard

the

this

Abbett.

opportunity to back them

Pa., have just
interesting illus¬

Co.,

review

from

on

posited in the account, unless:
"(1) the 'long' securities posi¬

Union

our

Lord, Abbett has announced the
approval of the SEC to refund the

Philadelphia

quest

$5 per share

than

amount

market

a

having

soldier boys and girls .,.
this is it." For us at home this is

"For

•"Fast Moving Stocks" (S-3) and
"Inflation Hedge Stocks" (S-4).

Philadelphia,

brochure

securities transactions

new

commitments,

folders

"This

vised

Interesting Review Of
N. Y., Phila. Realty Bonds

bonds.

Salle

to

effecting

titled

clarity,
readability
and
typo graphical
attractiveness,

and

La

FRanklln

CG-105

SYSTEM

LOUIS,

the
can¬

gives
brief
comments
on
the
post-war outlook for the various

"High

also undertaken

&

WIRE

ST.

rec¬

"(ii) withdrawals of cash,
"(iii) withdrawals of any stock
having a market value of $5 or

The

War Loan drive. Under

Keystone

,

a

a

striking map of Europe in which
the likely invasion points are em¬
phasized is a short bit of text en¬

£2,200,000

Fund

conducts
every
description
banking and exchange business

trated

on

liquidated promptly.

"For the purposes of

terms of

£4,000,000
£2,000,000

Bank

issued

market

exchange, or where
amount carried is such that it

shows

with

Bishopsgate,
London, E. C.

Paid-Up

PRIVATE

all

ognized

the

in

Uganda

Branches

Lilley

active

an

Keystone Corporation devotes a
recent issue of Keynotes to
the

/ ''

of INDIA. LIMITED

ing,

required in

which has been going on for more

the

NATIONAL BANK

Kenya

S.

135

1-2875

subject-to unusually rapid or
violent changes in value, or do not

Fourth

The

be

pensation for the substantial work

(Continued from page 509)
its sponsor on
the tenth anni¬
versary

in

principal

Bankers

NY

conserva¬

£3,000,000
£3,000,000

.

Branches

EGYPT

Chicago 8
Square

0630

were

CAPITAL

ICing

r

0

Office

HUBbard

are

of

"t-v Margin Purposes

Cairo

Post

'

where the securities carried

cases

4

Cairo

Register

/LONDON
6

margin must

"(o) Determination of Value for

550

Boston
10

3-0782

might be realized upon
liquidation. Substantial additional

The amended paragraph of Rule
reads as follows: k

of EGYPT
.

affect the provisions of Regulation
T of the Board of Governors of
the Federal Reserve System."

5

Street

which

securities

reminded

are

York

Wall

WHitehall

a

tively in the light of the current
market
price and
the
amount

,

standing margin call due to a new
transaction, provided the account

K.B.E.,

George Street, SYDNEY

largest bank
branches

29

curities shall be valued

more

/.%/

'

other

hand, securities
selling under 5 may be withdrawn,

30th

ALFRED

Office:

"On

The Bank of New South Wales Is the oldest

New

on

recognized
exchange shall,
for
margin purposes, be valued at the
current market price. Other se¬

new

nance
and

"Active securities dealt in

.

£23,710,000

800

67

"(i)

"In connection with the

•

(ESTABLISHED 1817)

.

account.

an

•

Huff, Geyer & Hecht
New

—-—

transaction.

NEW SOUTH WALES

Head

transaction

new

ing below 5 will not satisfy
gin call resulting from

BANK OF-

SIR

the

on

"The deposit of securities

;

Paid-Up Capital

a3>

However, only the margin

■

Associated Banks:

Williams

made

obtained, assuming the
account has the required mainte¬
nance
margin." In the notice to
members Edward C. Gray, Direc¬
tor of the Department of Member
Firms, further said:
"The change in the rule permits
securities selling at less than 5 to
be valued
when computing the
margin required to be maintained

ASSETS

£108,171,956

has

transaction, no value may be
given to securities selling at less

64 New Bond

TOTAL

which

account

new

Charing Cross, S. W. !

REINSURANCE STOCKS

1.

ou\ on Jan. 26, the Department of Mem¬
ber Firms explains that "the rule remains unchanged as to new
transactions; in other words, as heretofore, in determining the margin

f

Bishopsgate, E. C. 2

<5 West

Feb.

on

PRIMARY MARKETS

notice to members sent

In

t LONDON OFFICES:

amendment to Rule 550 went into effect

Jan. 20 and the

513

is

also

average

2.42%

for

the

12, and 3.20% for

the 21.
It has

With
income

already been pointed out

regard
and

to

total

(Continued

on

net

investment

net

page

o-^ating
515)

below

Benjamin
proposals
post-war foreign exchange stabilization, which appeared in the
"Chronicle" of Dec. 16, bearing the caption "Post-War Foreign Ex¬
change
Stabilization Further Considered." In this article, Dr.
Anderson examined the subject in light of the revised plan issued
comments

are

in hand concerning Dr.
the British and American

Anderson's renewed discussion of

Treasury in July, 1943, *■
not
American
controlled
even
and the plan for an international
though America would be the
investment bank which was pro¬
chief lender," and that, "If we are
mulgated in October, 1943, and
going to lend let us do our own
also elaborated on his own con¬
lending." I quite agree with this
structive proposals for financial
observation.
Why
should
the
the

period

war

pros¬

Professor;•

article

currencies

sion

cently.

voiced

have

bankers

mented

public

must

tant matter prior to the presenta¬
tion of their views to and con¬

good

now

would

opinion

strictly

Congressional
pregrogative
Only a
few
months

tend

countries

production of either of
transfer

these metals must either

de¬

capital

ex¬

-further

Sen. Pat McCarran

export goods to other

or

willing

countries

part with

to

precious metals.
'?
the Presi"Thfere is ample supply of silver
dent's authorv; ■
and gold, once their values are ad¬
ity to reduce the gold content of
on
a
fair and unbiased
the, dollar and pegged the devalu¬ justed
to furnish adequate coin
ation at the currently authorized basis,
and backing for the currencies of
41%.
all nations.
Both metals should
It appears that too much cen¬
tralized control may be vested in circulate freely and flexible paper
the
Fund
under
the provision money should be supported ade¬
(VII. 4) which is designed to reg¬ quately by golC and silver re¬
L"
'
ulate
the movements of capital serves. '
these

•

from

one

country

to

another. It

feasible
to
earmark
through the Fund the allocation
of American capital with the ap¬

may

-.be

point that is insuffi¬
ciently covered in criticisms that
Another

I

have

is that

read

re¬

proper

a

adjustment of exchange values of

proval of Congress.
There has
already been, and there still ex¬

currencies

ists, too much disposition on the

before
be effected. The

"It

To

the Administration to
the prerogatives of Con¬
gress
in matters affecting our
foreign policy, both political and
economic. Therefore, I am very
much inclined to feel that Con¬

part

of

usurp

gress

will in the future not only

restore but also retain

the powers

stabilization

can

The Fund must be so

constituted

world trade and the
stabilization of currencies in an
to promote

equitable manner with respect to

kets

The devastating effect

on

and

satellite

nations and the invaded countries,

great
depression.
He is also
firm

pounds.

in cold storage this
enormous sum of blocked sterling;
but if the Fund could not readily
place

dispose of such

a

large sum, to¬

gether with other large amounts
of blocked exchange of Great Bri¬
tain
and
other
countries, they
constitute

so

much

dead

Furthermore,
as
the
blocked exchange of debtor coun¬
tries expands, the Fund would be

weight.

illusions

view

to

fixing the ex¬
change rates of the weaker na¬
tions
on
a
considerably higher
than

level

would

at

would

This

appropriate.
nations

first appear

give

advantage

an

in

making
purchases
abroad
and
greatly facilitate their recupera¬
tion.

,

-

...

Another

-•

'

back."

be taken into consideration.

ing

the

days

of

high

Dur¬

tariff and

devices designed to control
international
trade
following

other

World
that

War

I

it

in order to

was

offset

if

required

to

Anderson

states

the

that

proposed World Bank would
be "internationally controlled and

-

international

fit of
In

the

after
to

prove

is

no

vestment




are

experience
War

World

seems

thing

in

as

sound in¬

foreign country

any

dominate

not easily

Foreign nations

by force of arms.
all too

a

ready to

borrow, but

when Uncle Sam seeks repayment

he

Uncle

becomes

In¬

Shylock/

vesting money abroad results both
in

making Americans unpopular

the

effect

and

in

ments.

the
I

loss

of

their

would prefer to

invest¬
see

no

credits for terms of more than 90

extended
If

to

we

any

wish

foreign
to

give

currency ex¬

of these
considerably

Many
still

Our

conclusively, that there

we can

countries.

currencies

last

such

which

'T.f

respect I go further than

Anderson.

days

values.

to siphon off
for the bene¬

as

capital

indigent nations.

one

Dr.

an

institu¬

investment

designed

so

he

of

establishing

the

opposes

high tariff in other countries,
particularly in Latin America, the

change

would

America

though

even

them

money

and

is

risks.Indeed, stabiliza¬
are not productive loans

such should not be classi¬

as

would be conducive to

productive
there¬
fore should not be encouraged to
ity

private

and

investors

under

committments

make

set of circumstances.
as

they

long

immediate

and

production
goods, so long it is

senseless to talk about

be

any

long

so

political loans and so
they ape used not for

economic

of

For

are

as

direct

a

fair rate

of return and it is better for
vate investors

should be free
to negotiate with other countries
regarding conditions of; lending
its. own money.
In other words,

and

scene

the

job.

: ■

let

to keep out of

pri¬
the

the government do

believe

I

better

know

how

governments
to

with,

deal

governments.

action and not

wants national

foreign land where
often exposed to

a

fied with those investments which

is that, this country

he

This is true

tion loans

international con¬
control,

an

in

so

investor

greater

pro¬

'

■

/i

'

international cooperation concern¬

'".It

be argued that many
investments abroad like¬

may

ing matters of international finan¬

private

cial rehabilitation.
5

wise'are often made in industries

■

„

j~

•,

.

11

*

\

,

'■ "

•

.

!

.

Professor

designated

state-owned-andas the

as

,

international

of

matters

on

often

the

at

expense' of

so

called

-

heavy industries in
While granting the "po¬

China.

of this sort -of

affiliation

litical"

business, its economic character¬
istics,5 however, should not be
considered as different from those

business undertakings
operated by private
Here, as elsewhere,
Nevertheless,!' while
admitting
the
government operator
must
Professor Anderson's right to be
also pay due consideration to the
suspicious of : the policy of inter¬
national control or cooperation, so concept of cost, if he is to run the
far
as
regards the! lending of plant efficiently as an economic
unit and not merely as a tech¬
money abroad, it may do well to
nical
project. , Politicians/ who
bear in mind that to insist on
absolute control by America alone, usually are managers of stabiliza¬
in my opinion, is a bit unrealistic; tion funds or loans, do not even
have to pay their lip service to
Thus, as far as the Treasury plan
of October 8, 1943, is concerned, cost.
:
it is not true that this country will
Finally, I should like to add,
be the only lender, in which case if I may, that there is one partic¬
I would not hesitate to join Pro¬ ular point which is so well taken
fessor Anderson to deny other na¬ by
Professor Anderson in his
tions the right to have any say in article that I should like to take
it.
But since this country is only this occasion to congratulate him
one of, the countries that would be
on his far-sightedness and liberal
At theend * of the
expected to put up the entire cap¬ thinking.
ital in the Treasury plan, it seems article concerned Professor An¬
more appropriate, therefore, that
derson states that America "can
by England, France

country

countries.

of ordinary

and

owned

■>

international
certed action

do nothing financially sound to
for its help Europe unless we lower our
after the tariffs, and make it easily possible

andcon¬

control
are

necessary

Indeed,

management;

let's

do

it

with

a

grand gesture and then forget it,

to repay with goods."
soundness of this statement

final victory is won, the more in¬
ternational cooperation along con¬

for Europe

structive channels, the better are
the chances of solving the myriad

lies
to

of

nomic' recovery and

problems faced by the nations
of the. world. For just ; as it is
absolutely • necessary to resort to
international

action Uri

win

at

the

ment,
that

war.

it

so

recourse

is

the

order,

to

present mo¬

equally

essential

is made to interna¬

tional

cooperation, as far as pos¬
sible, 4n order to win the peace.
America

a

-

era

new

cannot

alone

In

peace.

order

,

to

of human

win

the

bring about
civilization,

discovered

of

depreciation of their

ends,

getting this money

He is certainly correct when

are

of the read¬
justment of exchange rates should
aspect

coun¬

should be under no

to

as

American

a

Willford I. King

to

tries in Europe after the war

exporting countries resorted to a

burdened

absorb it.
Professor

Na¬

we

is

,

on

ground

"but that

more

the chief lender." What he wants

.

the

in

equilibrium among nations in the
post-war world as to make this
task extremely difficult.
It may
be well to approach this problem

those

further

receded

costs

tion

It would greatly
benefit Great Britain if the Fund

would

mar¬

world

as

prices and

sympathetic give much help to stricken

extremely
the Axis

with

could

world's

the

export

it

individuals.

this

participating nations.
As is
pointed out in Dr. Anderson's
treatise, on July 16, 1943, the
blocked sterling balances of Great
Britain in India amounted to 500
all

in

ought

given

be

his investments.

the

trol and not an American

tionately

sult in such further economic dis¬

inclined.

million

would

and the other European

that

war

is

as

this

tion

delegated under the Constitution together with the highly efficient
and
economic
of foreign policies. Cer¬ industrialization
tainly the Senate of the United cooperation of the United States
States will, in my judgment, be and other United Nations, will re¬

as

lose

ditions, and any attempt to estab¬
lish sound exchange values must

of

such

dis p r opor-

in respect

so

31

-

unless
a

fair and reasonable rate of return
on

posed in the Treasury statement
of October 8, 1943, for the simple
reason
that & "thecontrol
of it

played

1930

when he states

treatment.

institution

ment

Britain

in

enterprise

good pros¬
pect for the investor to receive a

about when he says the he is

which made

in

of all nations, belliger¬
ent and neutral, has been badly
distorted by reason of war con¬

be

business

.

opposed to an international invest¬

istic

wages

prices

private capital

will not venture into any kind of

Chen

C.

Henry

begin with, Professor Ander¬
to have a great deal to

worry

;"

the 1920's and

economy

made

be

must

It is axiomatic that

#

cooperation. His apprehension is
perhaps justified in the light of
what happened to America in the
'20's
when
power -politics
was

and

of the borrowing nation and thus
continue to absorb private capital.

Anderson
certainly
has the perfect right to be real-? operated enterprises, such

the

rigidity of
British

v,

seems

son

most heartily with Dr.
general line of argu¬
He
makes
an
especially

was

■It
»

like, jvith the permission of my
readers, to add, even at the risk
of being accused of deliberately
finding flaws, a few words here.

agree

-

let

in the home country and it is even

isolate any

strong point when he states that

and

government take care of it,
thus
confining
themselves,
the
private investors, mainly to the
task of financing industrial
en¬
terprises,
which, ' other
things
being equal, would tend to in¬
crease
the physical productivity

opinion, could be further elabor¬
ated upon and to which I would

Anderson's
ment.

of "official business"

sort

certain that there is

Finance
I

appropriate for pri¬
to keep out of this-

more

combed, I am still grateful for
this opportunity to pick up some
of the crumbs, as it were, as there
are several points, which, in my

Commerce, Accounts, and

wprld.
Of course some
which have no control

the

over

ago

Congress
clined to

the

out

/,

may

been

have

expansion of given proposition and discuss it
world trade, especially among the in the abstract.
weaker and struggling countries.
WILLFORD I. KING
Silver and gold are held in high
esteem as money metals through¬ New York University School of

approval of
Congress. That

f,

Mf|

the

of

article

and to encourage an

meet with the

is

is very difficult to

as
bones

ough the con-tent

not

the

and meat con¬

multitude of essential details that
it

w- "

idea

Nevertheless,
however thor¬

of

nature

vate investors

tained therein.;,

,

my

is

pretty

a

the

to

,

balances, give more substance to
the effort to stabilize exchange,

>>

have by

of

countries.

Unitas
not in

♦

r

gen¬

the

in

less

or

:

it

on

the

and

eral

and

States

loans, how-'
ever
moderate, should be made
by private investors through in¬
vestment banking houses rather
than by the government.
Stabili¬
zation loans, as I see them, are
political loans; and I wonder if it

-

the

United

the

the

on

idea that stabilization

more

c o.m

British Government in conducting
secret conferences on this impor¬

of

Anderson

Professor

and financiers

criticizing the pro¬
cedure
followed
by representa¬
tives of the Treasury Department

currency

the

Many

even

war.

do not quite agree

Secondly, I
with

badly

so

conditions of

have

note

a

distrust in

•

of

.

mists

econ o

sultation with Members of Con¬
stabilization in the
Dr. An¬ country with the soundest credit gress.
This is indeed regrettable
and the only country able to.fiderson is Professor of Economics
especially in view of the constitu¬
nance
this
war-stricken
world tional
at the University of
California,
authority vested in Con¬
jeopardize its financial position to gress "To coin
Los Angeles,
and was formerly
Money, regulate
such
an
extent?
Congress will
the Value thereof, and of foreign
economist of the Chase National
weigh this proposal with great
Bank of New York City.
Coin," (Art. I, Sec. 8), also "No
care and caution.
State shall *** coin Money;***,
Some of the additional letters
Unfortunately the majority of
make
received in connection with the
any
Thing but gold and
commentaries that have come to
silver Coin a Tender in Payment
article in question are given here-'
my attention with respect to the of Debts
with:
***," (Art. I. Sec. 10.)
establishment of an International
While I have not had an oppor¬
Stabilization Fund and a World
HON. PAT McCARRAN
Bank have failed to recognize the tunity to give Professor Ander¬
United States Senator from
son's article the analysis and criti¬
full value, significance, and need
Nevada
cal study to which it is entitled, I
for
metallic backing (gold and
I
find
Professor
Anderson's
am
happy to submit these few
silver) for currencies. Its impor¬
article interesting, instructive and
observations to you in accordance
tance cannot be over-emphasized.
a
fair
criticism of the revised
with your very kind request.
>;
In the establishment of any Inter¬
White Stabilization Fund plan.
I hope you will pardon my hav¬
national Stabilization Fund there
The pro¬
must also be provided a means ing gone into this matter at some
vision
which
whereby
both of the precious length.; At the same time, I am
empowers Jhe
money metals
(gold and silver) sure you will appreciate the fact
Fund
to
will be accepted and utilized at a that in making a study of this allchange the
fixed ratio in order to facilitate important matter, one necessarily
gold
content
the
settlement
of international directs his attention to such a
and

war-stricken

..

lllig

prominent

outstanding economists

Several
and

of

finan-

in

Under' present

eco¬

cial circles re¬

(:■■/-■;:U';

?

contemporary

a

as

present

problem has excited great
interest and elicited wide" discus¬

offers ample justifi¬
adjustment of their
upwards in terms of

dollars,

Anderson's

-

nomic

cation for the

for

by

The

Allied nations need

Dr. IIENRY CHEN,

condition

this

and

corrected.

be

perity enjoyed and to be. further
enhanced
by
Latin
American
countries in the immediate post¬

Exchange Stabilization Discussed
Additional

parity,

should

Study Of

Dr. Anderson's New

Thursday, February 3, 1944

COMMERCIAL & FINANCIAL CHRONICLE

THE

514

the

efforts,

both

spiritual' and

material, of all peace-loving na¬
tions

must

fullest
to

be

mutual

be

extent.
better

enlisted
The

to

the

result ought

understanding

and

which

the

confidence,

The

the fact that any attempt

in

about world wide eco¬
hence the re¬
turn • of: an
international
gold
standard—a ' hope
which is no
doubt shared equally by Professor/
Anderson—America 1 must
make
bring

some

compromise .with the debtor
by lowering her tariffs

nations
so' as

to facilitate

the repayment
It may

of her loans made abroad.
be

for

this

recalled,' in
there

that

the

were

inflow

of

connection,

several

gold

•

reasons

into this

country in the pre-war years,

and-

principal of these was the ex-<
istence of a continued favorable
balance of trade on the part of
the United States and her unwill¬

the

ingness to accept payments other
than

gold.

international

The return to an
monetary' standard

Volume 159

based

Number 4252

THE COMMERCIAL & FINANCIAL CHRONICLE

on

gold, therefore, must be
predicated upon the hope that this
country will be realistic enough to
appreciate the impossibility of the

rubber

The Securities Salesman's Coiner leather,
facture

Personal Interest Plus Well Selected

debtor countries to repay in
gold.
As the Statist

put it, "It becomes
increasingly evident that even the
most elaborate currency clearing
union cannot be viewed
tion but at most can
to

a

of

part,
a

much

7

Radiation
accounts is

isola¬

than

only amount
indispensable part,

an

entente."

in

wider

in

the

centage of

economic

insurance

customer

which

results

business

in

new

automatically

secures

good

to

high as the pre-war period.
The load will be all the Governrnent can carry. Uncle Sam can¬
as

manu¬

In the build¬

loans.

thgre

keen

commodities

sales¬

large

a

of footwear.

the

not

was

the Securities business

A

used in

ing, industry, cement, brick, steel,

but in

per¬

ities

clients through the recommendations of his customers.

new

Doctors and

satisfied

one

difficult of achievement in

other lines of commercial endeavor.

many

in

man

from

more

wood, in addition

were

copper, glass,- plastics, and many
other
products were offered as
substitutes for lumber. Not only

Special Situations

Build Clientele

v

and

515

larger

a

were

another

the

"The granting of loans by Gov¬

uses,

ernment

all commod¬

sense

the

among

same

competing

for

most

rivalry

for

.become the burden bearer of
private
interests
by
providing
subsidies, doles and guaranteed

with

one

standards

dollar.

consumer

The

Statist,

vol.

-

principal nations

largely

are

fault. "V 7:;
.vv.LY
But radiation can

held in abeyance under wartime
conditions of lend-lease and other
forms of mutual
very treaties of trade have

interests

for

have

whose

been

there

and

great

deal

set

already

certainly
of

will

need

convincing

complete freedom of trade

satisfied

.

The

'V

basis

investor who several years ago came to

a

certain

sheltered

a

life

until

her

husband

died

and

left

margin account with
of the

success

fore

After two years of constant
reeducation, which took endless tact
and patience, this salesman
finally accomplished the liquidation of

the

19th

liberalism

century

be brought back alive.
fessor Anderson is, I
can

.

Pro¬

believe,

her

a

a

great believer of economic liber¬
alism. ^ His stand for freer inter*

speculative account.

day-to-day,

Instead of trying to play- the market on
week-to-week basis, he educated this investor on
planned investment program.
He broke up her

or

.

national trade should deserve the

the- efficacy of a
holdings into two classes.

support of all.

diversified

-

?

.

Editor's; Note— Although
Dr.
Henry C. Chen is associated with(
the Ntew York
Agency of the Bank
of China, only he is responsible for
the opinions expressed above.-

Bank & Insurance

About

of

75%. of the

list

The

prospect

profit. Certain forms of risk
with

such
be

can

such

regularity

protected
fire

as

and

ment

was

placed in

a

are

not

group

the

Si

When members

handouts, in the course
they surrender their free¬
become

ruled

vassals

by the

tually

Through knowledge

(Continued from page 513)
on* capital funds,; these

the

to

excellent

record

of

accomplished this salesman also made
Christmas time he sent her a

investment

a

that

success

friend of this customer;

the
of

the

bogging

down

even¬

of

the

factors in
of

aggression to detract from domes¬

ability to evaluate the various
a
situation, the elements
uncertainty can be reduced.

This

selective

sound

cision.

for

tic

de¬

happened in the

calls

process

judgment,

courage and

For the past two

decades,

Troubles;

a

has

as

situation

a

war

of

frequently
of history.

course

jyThe primary consideration for

the average net return on capital
invested in American industry has

pbst-war blueprints should be to
make risk
the

taking

great

attractive that

so

creative

forces of the
nation will be released. To make
such an. objective
possible will

.

In addition

-.7

of

hand

whole economy. Such
in' time might invite

and

or

was

iron

companied by business stagnation,

call for reasonable and
equitable
taxes, special incentives for proj¬
ects that have promise of
provid¬
ing jobs, sound Federal financial

policies, favorable

business cli¬
mate, flexible wage policies, and
the

like.

.

.

'•

\

other

subsidies

lower living standards, and

..

;.^|^SIocks*

and

"So when people shy
away from
risks they are taking the. greatest
gamble of all, for this results in
the loss of freedom
and
is ac¬

of income payers; 25% was invested in growth
averaged around 3%
This is small
specially analyzed situations. As the process of educa¬ compensation for the use of
capi¬
tion went along, this salesman
actually conducted a private course tal and of services for
directing
in investment for this client's
special benefit.
In time the special the business affairs of the nation.
situations began to show profits far
exceeding the former ventures in
"For about 150 years, business
the stock market.
Income also was increased.
This customer re¬ enterprisers
took their
chances
ceivedfar more from this .salesman's advice than she
ever knew because of the prospect of liberal
could come from the
ordinary relationship which had existed when rewards for contributions made.
She had her margin account with, the brokerage, firm that had been Then came the
Great Depression,
handling her trading account.
'
and
:,
amid
the
confusion
and
securities

credit

bureaucracy.

susceptible to accurate

measurement.

and

Governmental

and

State

of

occur

But

with

for

dom

they
insurance,

theft.

interferes

society reach the stage
they turn to the Govern¬

of time

that

by

-theory,

correctives,

the vision.

any

where

range

a member firm and was
trying to make a
extremely hazardous venture of increasing her prin¬
cipal through speculation.
• *

be¬

the

of

cloud

capital

without

in

narcotics that dull personal
intiative, stifle enterprise and be¬

always in¬
volves the possibility of loss, and
no one can afford for
long to incur

carrying and

reality in the postwar eco¬
nomic policy of all nations and be¬

come a

involved.

who

are

just usual business hazards are unin¬
Instead of surable. They cover a broad

enough of an estate to' get along comfortably.
investing in conservative, income-paying securities she was
a

hazards

credit

"Socialized

her with

about

a

the

investment of

risks

-1

7A7..V.7'

through the recommendation of one of his clients. This lady
having a very difficult time with her investments.
She had

led

with
;

always a good record of performance.
interest must be shown in the welfare of

-Vj-'/-■*;?

an

fellow's
.77-

clients.

is

V/

We know of

before
can

'

'

other

.VlV- ^/■. -'7';

secured from

dealer

still

are

personal

was

'protection
up

addition,

the client.

been written off the international
statute book.
Indeed, the vested

they

satisfaction

In

thd§l

customer

'■

the

are

unsound

necessary

forms

commensurate

acumen—losses

-;:v:> 'H-.V.'..

--

be

of

aid, but it is by

po means safe to assume that

credit for their financial

those

maladjustments accumulate.

-

•

the

is

warranted
the

,

of the

to

except in emergency periods, and
penalizes the competent and the
taxpayers. The extension of un¬

professional people depend upon recommendation
Competition was illusive, it re¬
CXL, No. 3432, December 4, 1942.) to increase their clientele. Although there are some securities buyers solved
itself into a mighty strife
The lowering of tariffs by the who will cooperate with their dealer or salesman in
helping them for consumers'
preference.
No
United States may well be con¬ secure new accounts there seems to be less inclination for this
group business can escape this
type of
sidered as one of the surest
steps to advocate investment services than other things which they need
competition in the future, and the
toward the organization of this and use from day to day.
*
best insurance is industrial re¬
economic entente.,,
The reason for this attitude is simple.
Most people assume that search
that makes possible ad¬
if a friend's investments turn out
V
advantageously they will never justments to.the
Nevertheless, the road toward
dynamic forces
receive any appreciation—if they don't, they will more than
a more liberal economic world is
likely at work.
still thorny and the obstacles to get the blame.. Naturally, they would rather not assume any respon¬
"Since risks are inherent in the
be overcome are
sibility directly or indirectly.- Investments seem to be in a class by
many and great.
very nature of business enterprise,
It is true, existing trade treaties themselves—most people when they make a profit like to take all
rewards should be
(See

agencies

cannot meet the established credit

apxiety of the times there devel¬
oped a defeatist theory that there

,

.

<4With favorable conditions
pro¬
vided for risk
taking, it is up to
all groups to take their
chance,
without the nursing aid of Gov¬

Remembrance; .-income-tax time he .was-no further outlet for business
helped her with her report;; several .occasions
the
country
had
during the year he capital since
/
efficiency, invited her to join both himself and his wife at
its maturity.
concerts and plays; reached
Hence it ernment.
when taken alone, do not seem to
Dollars should be placed
he made it a policy to
was
held by the proponents
telephone ate least ? once every two weeks
of in overalls
be so
and put to work, for
significant or conclusive.
whether or not there was any immediate-business reason
this new school of thought that
for; doing
a dynamic and
For example, Franklin and
expansive economy
Home, soR in other words, he built a solid
Government
should
obtain
customer relationship which was the
demands
which- show below-average mar¬
a
constant
supply of
certain to pay off in dividends.
money from taxation and borrow¬
fresh capital to keep it
ket performance and investment
ticking.
And pay off it did.
ing, and distribute it through the When
From this one account he has
this flow is shut off from
opened up
gain, achieve a high return on
a
dozen more—some
spending channels.
In line with
large and some some small.
The reason for
business sources, the only recourse
capital funds.
The investor pays
this policy, deficits
his success is as plain as
mounted, cor¬ is artificial
day—sound business ethics, good invest¬
for this, however, through a high
respiration through
ment technique,
porate taxes
increased
sharply,
good recommendations, personal
ratio
of
market
to
interest.; These are
pump-priming, which, if long con¬
liquidating
Governmental regulations multi¬
things which a customer buys, from a securities
value and hence, in the end, does
dealer, AND NO
tinued, makes inevitable the Gov¬
ARBITRARY RULING OF ANY BOARD OF
plied, and the rules of the game ernment's
GOVERNORS OF ANY
not necessarily profit from Frank¬
becoming
the
chief
were frequently changed.
NASD AS TO STANDARD GROSS
In other reservoir of
MARKUPS WILL EVER BE A
lin's and Home's higher return on
credit and capital."
SOUND
words,
new
and
PRINCIPLE
UPON
extraordinary
WHICH
TO
LIMIT
A
DEALER'S
capital funds. On the-other hand,
hazards were injected.
PROFITS WHEN THE SERVICE AND
The net
ADVICE THAT
profits

measures

of

relative

.

Insurance of North America shows

lower-than-average return on
capital funds from net investment
income and net operating profits,

a

but since its stock can be bought
a' discount
from
liquidating

at

/value,

the investor

can

enjoy

end profit better than in the
of

."

'

rnain^ purpose

cussion

is to

call

of

.

this

Risk

"Without

dis¬
the

average

investment results,

selection

reasonable

there

would

National Bank of Boston

which

over,

taking

or

better-than-

progress,"
observes that, "in
no

Boston
the

says

First

glancing back

centuries, it is found that

the, epochs characterized
by risk
while periods in which the people

were the most

capital

unemployment prevailed.

v

Stu¬

with^a

combined

ment that

successful

investment,:

in

risk

"old

mal

even

such time-tested securities

as

line" fire insurance stocks.

,

Muskogee Co., which is tax-

free in Pennsylvania, offers inter¬

possibilities

for

to

apprecia¬

a

circular

discussing the situation issued by
Buckley

Bros.,

1529

Walnut

St.,

Philadelphia, Pa., members of the
New York and Philadelphia Stock

Exchanges.
also

Copies of the circular,
contains

interesting-

yield tables for the preferred and
common

stocks,

may

be had upon

request from Buckley Bros.




their

fate

will

are on

trial, and

be

determined by
ability and willingness of the
takers

to

resume

their

functions, and of the

nor¬

various

to solve their own prob¬
lems without
leaning on Govern¬
mental crutches."?
It is pointed
groups

.

Muskogee Co. Interesting

according

"private enterprise and

free Government

out by the bank that "in

our

own

country every step in the forward
advance

was

marked

by risk tak¬

ing.
The Pilgrim Fathers • left
sheltered homes to brave the
un¬
known.
No one guaranteed them
security

liberty. ; During the
first winter in Plymouth one-half
of the entire colony died of
star¬
vation.
left

for

.or,

Yet when the

England

in

Mayflower
the

next

spring, not one of the Pilgrims
returned to what would have been
a life of
comparative comfort and
.

security.
They were willing to
pay the price for freedom." Con¬

tinuing, the bank

says:

v

spirit dominated the
pioneers who converted the wil¬
derness

into

empire
period

in

a

chines

mighty industrial

a

that

from

have
the

lifted

backs

of

that have brought forth
dance and variety
of

the

bur¬

workers,
an

By a vote off 338 to 54, the
House approved on Jan. 25 a bill

;

the

nancial

depression,

with

industrial

abun¬

setting

country in 'the United Nations
Relief and Rehabilitation Admin¬

outstanding as to win unstinted
praise in all quarters.
But since

priation

so

istration,

costs

have become

of

secon¬

"The

business

hazards\of

time, however, may find
sion

in

the

war¬

expres¬

post-war period.

In¬

the

scrapping of the old for

new

that

has

characterized

Reconversion of plant and

facilities,

American industry has paved the
way
for more and better goods

lishment

at

are

less

cost.

The

acid

test

survival of business is in the
sumers'

market

"Competition
was

on

and

the

oil
-

a

broad

of

con¬

Before

in

pre-war

front;
one

homes.

war

of

well
,

Unless

as

markets

liberal

made for these

profits

the

will

restab-

may
be
provisions

contingencies,
likely prove

days

Coal,
another

gas

in

Fabrics,

"The
the
and

nation

war

with

with
a

will
a

were

completing action

217 to

de¬

on

the

175 to leave the control of

the funds in the President's hands
instead

of

on

Jan.

under

the

The House

partment.

State

had

De¬

voted

24, by 116 to 102, to have
Department handle the

State

UNRRA

appropriations, as pro¬
Representative Vorys
(Rep., Ohio),
Two

by

amendments

were

included

in the final bill—one places Con¬
gress

on

record

as

favoring

the

of UNRRA funds in countries
where
famine is threatened, as
use

Well

as

in

countries

illusory.

place.

vied with

heating

for

costly.

as

the

each

the House rescinded its
action of the day before by voting

losses.

time

that

measure,

constant

same

agreement
share shall

This
of

feated.

posed

the

basis

Government, in' consequence of
marketing,; salesmanship 000,000 and $675,000,000

chinery and equipment may prove
to
be
inadequate and
involve

at

the

country's
not exceed
1% of its national income for 1943.

have

that

on

which
and

appro¬

Two attempts to reduce the limit
on
the appropriation to $1,000,-

possible increased leisure to
enjoy the fruits of labor.
The

and

is

UNRRA

the

made

authorizing the
$1,350,000,000,

of

amount

ventories may depreciate in value.
Reserves for depreciation of ma¬

products,

the machinery for fi¬
participation
by
this

up

production
in
1943
more
than
double the pre-war period. Amer¬
ican industrial performance was

comparatively short
dary importance. Practically all
of - time.
Technological
firms on the surface appear to be
progress
has been
attended
by
assured of profit during the war
great risks and a high mortality
period, with risks reduced to a
rate of business
enterprise.
But
minimum. '
? :
"
society has benefited by the ma¬
dens

House Votes $1.3 Billion

For UNRRA

;

-

the

which

; be

venture

hiding and large-scale

progressive,
at
war business is
security-'stood still'or stagnated.
primarily for de¬
It is also recorded
that when, freemen retreat
from risk, "they march toward
it
is non-productive,
serfdom." struction,
In its New
About 70% of the industrial pro¬
England Letter, dated^ ' "
'
Jan. 31, the bank makes the state¬
duction is for one customer, the
"This'same

tion appear

tion,

the

clutched

degree of diversifica¬
to be prerequisites to

esting

risks

that

was

into

——

average

The

Factor In Private

Enterprise, Says First National Of

;

attention to

achieve

,

jakingIndispensable

result

went

"Then came war, and with the
urgent and prodigious demand for
goods, business was lifted out of

an

necessity for careful study of the
comparative
characteristics
and
significant ratios: of individual fire
insurance' stocks,
if one is
to

dious

REN¬

SOME DEALERS IS SO MUCH
MORE PROFITABLE
EFFECTIVE THAN THAT WHICH
IS GIVEN BY OTHERS.

case

Home, and other stocks.
The

ARE

DERED BY

AND

liberated

by
emerge

from

staggering debt
budget for

Federal

the post-war period at least twice

the

ond

stipulates that the legislation

Allies,

expire two

years

tion of hostilities.

and

the

after the

sec*

cessa¬

t

Thursday, February 3, 1944

THE COMMERCIAL & FINANCIAL CHRONICLE

516

shortage,"

Municipal News & Notes

n

the

and

'their bond issues to Federal

despite strong pressure from the
Administration, to approve a bill

the

the

vast

in

transport.

war

plants has brought

even

a

the

Wall

Sub-Treasury

the site of the

located

on

erected

in

the category of essential travel."

the

of

In the

early months of 1943 the
Authority
crossings
were
an average

se¬

the
booth because it is

place of purchase as

Saturday,

proportion

Booth

Streets. He

Nassau

and

lected the

re¬

Building at

Sub-Treasury

Sunday and holiday travel into

large

of 326,000 ve¬
week.
It was during this
period than an extreme gasoline
drought occurred. During the last
four months of the year approxi¬
mately 511,000 Vehicles a week

subdivisions.

purchase at the Bond

cent

now

made the

building

which served

1700

as

until

City Hall of New York

City Hall was built in
1812. The original Municipal Hall
also served as the Federal capitol
the present

reported

is

at

$18,645,000,000, /. as
compared
with
$19,642,000,000
in
1942,
$20,182,000,000 in 1941, $20,225,000,000 in 1940 and $19,562,000,in

000

On June 30,

1932.

1943,

however, gross Federal debt was

(exclusive

$136,696,000,000

of

indebtedness

of

and

of
the Federal
having increased

agencies

Government),

corporations

during the

$64,201,000,000

year

from the 1.942 aggregate of

$72,-,

Comparable

495,000,000.

1791.

until

1785

from

1943,

30,

June

custodian.

as

McGoldrick

Mr.

vehicles

Seven-day-a-week operation of
war

for which he acts

indica¬

an

that

the

rolling represent

possibly prove of equal import to
Port
of the States and their local
used by
The Tax Court, in providing for termination of tax hicles a
exemption on local government
its decision of Jan. 28, rejected the

all

is

fact

of

majority

said.

Ferguson

Mr.

believe

we

of

tion

taxes.
|
Attempts to
have Congress
enact legislation of that character
have been entirely unsuccessful
the inter-State agency, also | and such abortive effects were
Triborough Bridge Authority j highlighted by the refusal of the
all similar bodies, and may Senate,
in September 1942,

the Tax
Court of the United States in the
Port of New York Authority case
constituted an important victory
Last week's decision of

for

"This

fig->

ures on
gross Federal debt for
Also taking part in the brief
securities. that the
earlier years are shown as fol¬
purchase ceremony were Joseph
With regard.' to the Treasury's
enterprises
lows: 1941, $48,979,000,000; 1940,
A. Bower, Director of the Bank¬
appeal of the Tax Court's decision
as the Port Authority should be
$42,971,000,000;
1932, $19,487,ing and Investment Division of
in the Port Authority case to the
subject to Federal taxation, in a
000,000.
*
•
used the crossings.
the War Finance Committee; H.
Circuit Court of Appeals, various
ruling which held that the quasiThe two crossings most intens
Donald
As i indicated
in
the
Campbell, President of
figures
sources
feel very strongly that
municipal body is a political sub¬
the ruling is not likely to be re- ively used by war workers, the The Chase National Bank of the i shown above, the $18,645,000,000
division within the language of
Lincoln Tunnel and the Bayonne City
of New York; Wm. Gage ! gross debt of States and local taxthe Internal Revenue Code.
The versed. Mention is made in this
connection of the respect in which Bridge, showed traffic gains over Brady, Jr., President of The Na¬ ling units on June 30, 1943, is the

Treasury's
contention
bonds issued by such

.

Revenue,
which brought the action in be¬
half of the Treasury, had con¬
tended that since the Port Authority
did
not exercise
sovereign
Internal

of

Bureau

police powers of the State (such
as
the right of taxation), it was
not a political unit per se and its
bonds could not therefore be im¬
mune from Federal Taxation.
A
similar action was filed against
-

.

a

,

•

i

Triborough Bridge Authority
same grounds.

the
on

.

-

the

10 to 5

Tax Court, by a

The

the Port
Authority "is a political sub¬
division of a State—the State of
that

held

decision,

of

State

State—the

po¬

of another
New Jer¬

subdivision

litical

the

also

York—and

New

declared that the
agency
in "its relationship to
those States in severalty lacks
none
of the attributes which
the
foregoing definitions pre¬
and

sey",

latter
was
in
the court's pre¬

This

scribe."

to

reference

remarks "that the at¬
tribute of taxation is but one
of
the
many
tests by which
Congress intended a political
vious,

identified and
that there could have been no
more
intention to exclude the

subdivision to be

public authority with its mani¬
influence in
the
whole

fold

,.

local

of

field

the

th£m

ment

public improvespecial assess-

district.

men t

to

developments of the great "motor

Court

.

are

other courts, including
the Supreme Court.
Reference to
by

this fact was made, for example,
by Frank C. Ferguson, Chairman
of the Port of New York Authority, in commenting on the recent
-P/\l 1
AttrC •

nrl

ruling, as follows:

light of the respect with
which decisions of the U. S. Tax
"In

SupUnited States,
we trust that this decision will
mark an end to efforts to in¬
terfere with fiscal affairs of the
Court

^

treated by the

are

Court of the

reme

States

The

cities.

their

and

-

should now be
forward with their

municipalities
to

able

go

plans for post-war development
without the fear of Federal in¬

financing."

terference with local

Ferguson also declared that
the decision of the Tax Court up¬
Mr.

the

holds

Authority's long¬

Port

standing contention that its bonds
"are on the same plane as the di¬

obligations of the States and

rect

position)
has been accepted as one of the at¬
tributes of Port Authority bonds
in the market."
The Por/t Author¬
ity, he said, has for many years
played
a
leading, role
in the
efforts of the States and cities

; ^ax

to

obligations
and
de¬
the authority "par-

their

i cjarec{

attempts

Federal

combat

to

that

organization

the

in

of

Defense",

the Conference on State

five years has
age" of the past quarter century successfully maintained the posiand
the
necessity for highway tion of local governments on the
construction and the prospect for "fundamental issue" of the taxfuture expansion of such facili- exempt status of their bonds.
ties.

_.

.......t.....

"It
...

.

that

conceive

to

that

states

then

It

:

hard

for

which

is

eral

provements by debt-burdened lo¬
calities should have been intended

case,

stop short merely because the
* selected
for
IUI
financing
xiucuiuijug

method

accommodations

to

current

issuance

of

obliga¬

needs

the

is

tions secured by

facility revenues,

opposed to the levy of special
assessments upon benefited prop¬

as

erties."

1

"

,

counsel

reportedly

opinion

be

-

.

expressed the
Tax Court's
upheld by the

the

that

will

ruling

„

-

,*

.

LC#^fL°m»
Supreme

that

in

Court

the

find

the

case

justify

to

,

will
will

constitu¬

no

of sufficient im¬

tional question

port

current

the

in

counsel

chief

jueuiuu

such

for many

the Port Authority's gen¬
and who acted as

years

tending to encourage and assist in
the
contribution
of public im¬

to

over

Julius Henry Cohen,

statute

a

1942.

review of the

a

lower court's findings.

Judge

by

dealt only
with the statutory question of
whether such agencies as the
V.

Clarence

Opper,

Port Authority are

divisions

taxes

1938

and

the

on

Revenue

on

of

Act

Revenue

Internal

Authority

their

Federal

from

In ruling in favor

Code.
Port

the

by
and

political sub¬

interest

exempt

bonds

of the

this impor¬

point, the court, however,

tant

judgment on
the infinitely broader question
of the constitutional immunity
of all State and municipal bonds
declined

to

pass

from Federal taxation.
This matter will

presumably be

by
the .Treasury
for
adjudication
by
the
United States Supreme Court. The
Treasury has already announced
that it will appeal the ruling in

pressed

ultimate

the

case

to

the

Circuit

Court of Appeals.
The judgment
of the Tax Court, however, gains
added
fact

significance in light of the

that

it

marked

for the
municipalities
tory

another

vic¬

States and their
in resisting
the

efforts of the national administra¬
tion

to

Revenues

subject

the

interest




on

$13,000,000

Over

During 1943, the first full year
of

gasoline rationing, traffic on
bridges and tunnels operated by
the Port of New York Authority
28%

was

of

less

which
months

than the peak year

under

12%

and

1941,

included

1942,

First

was used by 4,553,000
during the year, and has
virtually attained its full capacity
as a one-tube facility.
The heavy

than

eight

less

Frank

the

C.

Port

Ferguson, Chairman of
Authority.
A total of

21,987,000 vehicles used the cross¬
ings in the past year and, accord¬

revenues

were

maintained

is attributed to the larger propor¬

tion of buses and trucks

utilizing

ident of Bankers Trust Company,

traffic

this

at

tunnel

reflects

its

extensive usage by motor trucks,
buses
and
automobiles
carrying
workers.

Similarly, the Bay¬
onne Bridge, which is strategically
located in relation to important
war

military vehicles during the

last six months of the
"Traffic during
did not fall to

might

have

as

year.

the past year
low

been

a

level

expected

Leffingwell, Chair¬

and Russell C.

of the Executive Committee,

man

Co., Incorporated.

J. P. Morgan &

Reduced

Debt

Local

and

State

$1,000,000,000,

as

in

view of the continuing gasoline

smallest aggregate since 1940. The
reduction

debt

in

also

served

to

sharply

lowei; the amount re¬
quired for interest charges, the
total of $681,000,000 in the 1943
period being the lowest in the
past decade, according to the re¬
port.
*'•
r
^
In addition to sharply reducing
their outstanding gross indebted¬
ness during
1943, the States and
local subdivisions also made

Bureau Reports;

Census

sub¬

stantial

additions, in that period,
Federal Debt Up
war industries, handled more traf¬
to sinking fund assets applicable
fic than in 1941.
to the retirement of their obliga¬
$64,201,000,000
As in 1942 the George Washing¬
These offsets, the report
States and local subdivisions re¬ tions.
ton Bridge suffered the greatest
duced their outstanding indebted¬ says, totaled $2,095,000,000 on June
decline,
handling 5,620,000 ve¬ ness in the amount of approxi¬ 30, 1943, an increase of $125,000,hicles in 1943 as compared with
000 over 1942.
Practically all of
mately $1,000,000,000 during the
7,382,000 in 1942.
Hard hit also
year ended June 30, 1943.
The the total, it is said, is held as a
was the Holland Tunnel, at which*
actual reduciion was $997,000,000, reserve against $15,193,000,000 of
traffic dropped to 9,741,000 com*
of
which
$301,000,000 was ac¬ outstanding general obligations,
pared to 11,286,000 in the preced¬ counted for by the various States thereby reducing this burden to
ing year. Both these crossings in and the remainder by cities, coun¬ $13,171,000,000.
peacetime carried a substantial
All States and local units com¬
ties, villages, etc., according to a
volume of pleasure travel destined
bined
reduced their gross
debt
report issued by the Governments
for resorts in New Jersey and up¬
Division of the Bureau of the less sinking fund assets by 6.3%
state New York.

Port

The

Authority's net in¬

after

come

operating

interest

and

$6,540,000,

a

approximate

will

of

decrease

8.8%

Preliminary figures

from 1942.

that

indicate

expenses

the

during

year

its operating

the Authority cut

$415,500, or 10.4% as
compared to the preceding year.
This saving was effected in spite
of a war adjustment
payment
made to all employees earning
expenses

$6,000

principally from

maintenance

of

ment

which

rigid curtail¬

a

was

work

"Govern¬

captioned

report,

marked

contraction

various

levels

bringing the grand
aggregate on the June 30 date to
$136,969,000,000. This figure does
20.1,000,000,

,

of corpo¬

not include indebtedness

agencies of the United

rations and
States.

.

the

report,

the

in

stated

As

in Federal in¬
debtedness—"a natural conse¬
huge

increase

of the gigantic cost of
warfare"—dwarfed into
insignificance the sizable slash
in their indebtedness by the va¬
rious levels of local government.

global

transport," Mr. Ferguson said, "is
no
longer the establishment of
new restrictions; rather the accent
must be upon keeping vital equip¬
ment rolling.
It has been demon¬

by

strated

port

that- oveMhe-road

essential

of

trans¬

materials

and

and to victory itself.

Unless

effective conservation and

an

curtailment

in

the

use

and trucks which might

of

Although minute

buses

seriousLv

$997,000,000
States

a compar¬

states, the

Federal
the

accomplished

cut

stature
when
is excluded from

debt

overall

debt

Fur¬

picture.

thermore, the 5.1% decrease for
the

year

indicates the

"clearly

economic and financial

greater

strength

of

local

and,

States

governments in 1943."
addition

In

tioned

the

to

above-men¬

City Buys $40,300,000

Y.

Fourth

War

Loan

being devoted to the
and
character of State

and

the

of

Investments Now Exeed

with respect to

the

in

war

mately

bonds

now

investments

total

approxi¬

according to

$150,000,000,

Randolph
the

War

presented to W.
Burgess, Chairman of

was

Finance

Committee

the State of New York. The

for

city's

indebtedness
having popula¬

excess

of 25,000.

three

The

City of New York

cities

410

tions in

$150,000,000

June 30, 1943,
containing similar

other

studies

timely and represent
addition

to

of

status

an

very

important

all

of

levels

govern¬

Federal, State and local.
The reports dealing with the debts
of States and cities are particu¬
ment,-

larly informative as they contain
a variety of data pertaining to the
debt

structures

States

less

and

of

the

respective

valuable

overall

is

the

individual

cities.
report

No
on

grand holdings of $149,746,000 in¬
cludes purchase of $51,946,000 for
the
various
sinking funds and
$50.O00.b00 for ahcount of pension

has

trustee

of the

sinking funds

and the

pension funds have sepa¬
rate' Boards of Trustees, of which
the

Comptroller is

a

member a/id

governmental

been effected in such obliga¬

tions

for

made in the volume of

was

State debt,

the 1943 total of $1,~
849,000,000 comparing with the
previous year's figure of $2,033,000,000. The year 1943, it is said,
continued
a
trend
of declining
first of

the
a

which

debt

State

began in

1941,
to show

recent years

reduction.
debt

Gross

with

of

the

populations

410

cities

25,000

of

or

decreased

more

$269,000,000'
1943 year, accentu¬

during the

trend
started - in
year's reduction

the

ating
1942.

Recent

amounted to

with

only
As

3.3%, as compared
2.1% in the earlier
a result of this de¬

cline, city debt of $8,002,000,000
below

well

was

in

1941

in any

year

was

said.

54%

less:

was

1932, it

since

cities

five

tions

the

peak

the

>

total,

-

represented

the

Of

-

and

grand

obligations of
having popula¬

1,000,000: New York,

over

Chicago,

Detroit,

and

City of

Philadelphia,
Los Angeles.
The
York

alone

was

indebted

for 38% of the gross debt of

the

410 cities.

existing data on debt

debt,
an
outstanding feature being a re¬
view of the history of State and
local debt, with particular refer¬
ence to
the sharp reduction that

sole

crease

New
are

picture

outstanding net general obligation

than

data

Bonds;

the year
On that date
gross debt totaled $2,909,000,000,
this being 9% less than the $3,211,000,000 on the same date in
1942.
A similar percentage de¬

ajso released two additional debt
one

the
the

ending June 30, last.

reached

debt outstanding at

N.

State -debt

Division of the Census Bureau has

studies,

the

of

govern¬

characterized

decade

past

period.

Governments

the

report,

all

of

local

of

The sharpest decline in

ment.

municipalities'

and

major

assumes

volume

handicap the war effort."

on

able basis, the report

re¬

placement program is effectuated,
the coming year may see a drastic

the

1943," also reveals that during the
period there was a rise in
the Federal debt burden of $64,-

same

quence

deferred.

$16,399,000,000 in 1943, and as
case of gross debt, counties
States experienced the most

in

mental Debt in the United States:

ahead to the coming
year, Mr. Ferguson
stressed the
increasingly severe shortage of
tires, automotive
replacement
parts and manpower.
"The principal problem facing
all those concerned with highway
Looking

to

and

resulted

and

less,

or

Census, Department of Commerce.
This

funds. Comptroller McGoldrick is

the crossings in comparison with
peacetime.
Another
significant
factor was the collection of tolls
from

S. Sloan Colt, Pres¬

of New York;

comparatively high level at purchase

which

City

coln Tunnel

Joseph D. McGoldrick, Comptrol¬
ing to 'a preliminary
financial ler, who announced on Jan. 31
statement, revenues from tolls ag¬ the purchase of $40,300,000 2Y2%
gregated $13,239,000, a drop of bonds of the fourth loan offering.
22% from 1941 and 8% from 1942. The check to cover the additional
The

Fraser,
President of
National Bank of the

vehicles

of

gas rationing, it was
i announced earlier in the week by

.

instant

The Lin¬

York;
The

of New

Bank

City

Leon

workers is vital to our war econ¬

Authority 1943

Port Of N. Y.

tional

established

facilities

-

of the Tax Court,

written

was

both

all-time traffic records.

omy

The opinion
which

During November and De¬

cember

their cities * * * and (this

ticipated
attention

calls

decision

The

Tax

the

of

decisions
held

during

the

present

war

of the

States and local subdivisions at

Supreme Court To /

Reconsider Warrant

^

Funding Decision
Alvin C.

Strutz, State Attorney
General, advises us that the North
Dakota Supreme Court has
to

reconsider,

at

its

agreed

February

previous ruling holding
that refunding bonds issued by
local taxing units in exchange for
special assessment' improvement
term,

a

warrants issued
invalid.
copy

on

Mr.

prior to 1929

Strutz states

that

are
no

of the court's previous deci¬

sion has

will

period.
The gross indebtedness

N. Dak.

as

not be

yet been published and
until the court passes
raised at the re¬

the matters

hearing.

Volume 159

Number 4252

THE COMMERCIAL & FINANCIAL CHRONICLE

V

implications
trophe.
;

Outlook Foi T1 ie Oil Industry
•

.

ships, etc. that
muster.

Of

(Continued fr

,

belligenent

a

this is

course,

can

very

superficial measurement..
in general, along with in¬

dustrial

499)

page

with

counter

can

abouts.

wehr

No

odds

or

even
as

the Reichssuch uneven

Were it not for this fuel dis¬
food sup¬
plies, strategic materials, etc. are advantage, Germany might stand
of course, the basically important us off for a long time—several
components
that must be
con¬
years possibly.
As it is, Germany

potentialities,

appears

throughout the long; period
time
required
to
translate

within

these

call

we

into

components

of
all

the ' thing

effort, the con•sumption of oil plays an impor¬
tant part
at every step of the
road.
We see it every day on the
our

war

front

home

portance
tation

and

know

of

im¬

its

the marine transpor¬

on

front

and

in

the

battle

themselves.
Therefore, in
opinion, the best, or at least,

areas

my

the most convenient unit of

this observer to

to

mathematically
So
the

a

be

certain

a

loser

year.

much

the

for

part oil

national

a

catas¬

impracticable

for

outlook

will play

to

When

oil looked

wells..

in helping

of

the

national

look, but
for

you

oil

can

out¬

reserve

take my word

fifteen years

sitting

on

win,

else.

or

Now
which

•

the

is

1

'

industrial

the

on

must

war we

.

,

front,

Let

meas¬

first

us

look

that

old

we

have

been

comfortable

very

country.

Wallace

Pratt,

Vice mand.

a

President of the Jersey
Company,
and an eminent student of
petro¬
leum

It would

have

slowed

up

if prices had followed the
historic pattern of going down as
reserves built up.
However, the
more

economy, expressed the be¬
that there is another
forty
billion barrels cf oil

State

evolved

lief

awaiting dis¬
within the continental lim¬

its of the United States.

The

con¬

this

to-be-discovered

reserve,

we

regulation

and

of

law,

oil

production

known

as

by
proration,

during these lush years,
price of oil except for
periods during "the early

the

brief

days of the East Texas field never
got low enough to discourage ex¬
ploration altogether. At the same
time price during this period was
never
high enough to encourage

now
have in sight a proved re¬
demand—
gauging the military standby—supply -and
in
this
which will give us the best clue serve
country of some a volume of exploration that was
force of a belligerent these days
to our oil outlook as it generally twenty billion barrels.
anywhere near the volume that
is simply the amount of oil he can
does with *every other industry.
By simple arithmetic these two the industry as a whole was fi¬
allocate to his war effort over an
On
the
extended period—that is, over a
supply side
of this kinds of reserves add up to sixty nancially capable of maintaining,

urement for

period

long

enough

win

to

whether the time required be one
year or ten.

In

other

tion

may

words, oil consump¬
be thought of as the

common

denominator of

ment in

terms of which

measure¬

all

mili¬

potentialities can be
expressed—and
expressed much
tary

power

significantly

more

than

enumeration of the
themselves.

by

an

machines

war

Military force in its

most realistic

meaning is only be¬

applied

when the war ma¬
chines are moving, and when
they are moving they are con¬
suming fuel.
Leaving out the Japanese angle,
or
postponing
discussion of
it
until say
about this time;? next
January, the European phase of
ing

the

boils

war

most

down

a

very

Nazis

at

burn up no more than a

can

hundred

to

The

formula.

simple

million

of

barrels

oil

a

equation

it

be said

can

with

as¬

even

will have

we

ser¬

Natural gas, of

stalks.

corn

no

.much

more

than

the

present cost

sources

I

think"

sibility

we

dismiss

can

that

still

they

the

pos¬

have

any

the

press,

by

sundry

various periodicals, and
radio commentators.

in recent months a
accumulations to
throw in.
In my best judgment veritable
epidemic
of
articles
our
European * enemy is now on warning us of the crisis we are
a
hand to mouth basis so far as facing in what is referred to as
oil goes.
the alarmingly dangerous position
Of course,
he is building up of the Nation's oil reserves at
synthetic oil plants as fast as he thjs time.
The thesis developed
can, but the bombers are work¬ by these articles is that we are
ing just as hard in the other direc¬ now drawing on our oil reserve
had

.

tion.

It

sultant

these

construction

is,

and

destruction

likely to be
I

to

seems

of

am

me

two

that the

the

on

re¬

forces—that
one

hand

other—is

standoff.

a

the

Anyway

on

convinced that Hitler is held

at the limit of its

duce

capa-eity to pro¬
efficiently; that we are not

finding

new

oil

reserves

ing

our

reserve

position at

reasonably close to that hundred
million

barrels

or

his

show.

war

absorb

year

limit

on

critical

our war

about

five

effort will

times

that

fast

Now,

threat

as

to

an

a

rate

pletely

from

become

the

located

national

I

that such

don's
articles

as

to

say

twenty

and

would

have

maintained

had

it looked like

picture

for

Just

by

the

oil

a"

by

for example

not too

sumption
five

demand,

thousand
#

Bear

in

then
ten

or

ex¬

maybe

thousand

-

five

is

years

partly

responsible

to lack of tools to work with. For¬

mind

there

is

prac¬

limitation on the drill¬
ing of these exploratory wells so
far

as

geography goes.

plausible

proba¬

bility that the dire calamities of
which they warn us will never
materialize—at

least

within

the

lifetime of the grandchildren.

open

spaces

and

barrels

right at this

war

very

machine

moment

almost

This

wide

disparity

in

motor

daily calls

on

the telephone from




If

as

the

lasts through the
year, I look

war

for

a

on

domestic

considerably higher demand
production

in

1944

rate, will be at least somewhat
higher than it was last year, as I
do not look for Nazi
capitulation

before the latter part of the
year.
When the war on both fronts'
ends there will be a
considerable
contraction in
is

a

military

question

traction

will

use, and it

whether
be

buildup of the

this

con¬

sharper than the

normal civilian de¬

mand.

Many factors enter this question
my opinion, a
satisfactory

and, in

answer

cannot

be formulated at
We know, for
instance,
that motor vehicle
registration is
presently back down to the 1938
level
and
that
obsolescence is
carrying it on down steadily.
If
the war should end sooner
than
most of us
think, and demobiliza¬

this time.

tion

should

be very
rapid," as I,
personally, do not think it will be,
could

we

drop

experience

in

would

not

be

automotive

got

drop

arrested

that

until

industry tooled

few million

a

material

a

demand,—a

more

the

up

and

back

cars

the roads.

on

iThe

whole question is further
complicated by the rubber situa¬
tion.

••

The

■

thing to bear in mind

one

is that unlike
the
not

been

so

many

the

effect of

war

much

so

industries,
on

a

"oil has

matter

of

building up new business that will
disappear
after
the
war,
but

try in 1944

upward.

there will be

However,

a

cept for possibly a litle incentive
to work harder—to speak
frankly*
a little more
dough for their oilthere is

no

believing
able

to

reason

the

whatsoever for

industry

won't

be

hydrocarbons

include

petroleum
shale which
lions

of

same

likely to run about
little higher than

are

or

a

are

tons.

thousand

years

other
than
coal and oil

measured in tril¬
I

a

few

when

this

suppose

hence

You all know about the Disney

ceil¬

ing, at possibly double the current

these

the

in 1943.

supply begins to show signs of de¬

bill .now pending before

the Sen¬

ate, which bill seeks to raise the

price of oil
cents

a

on

barrel.

whether, this

average

an

Your guess

bill

becomes

is

as

If

or

earnings

land,

law

a

it does become the law

good,

of 35
as to

better, than mine.
in

1944

of the

will

be

better than in 1943 for most com¬

panies.
new

However,

net

that

much

would

taxes.1

To

sum

■

of the

result

such price increase for oil
be
absorbed -by
excess

from

would
profits

£;/;y':. '■/

up—I look for another

gasoline

of good demand like that ex¬
perienced in the year, just passed.
If we get an increase in price in¬
dividual companies will show in¬

atomic

creases

pletion, the commentators of that
day and age will be exhorting
their readers to be careful of their

consumption
as
the
which, the¬
oretically, will some day solve
all our power problems, may not
be

energy motor

perfected

even

in that far dis¬

tant time.

As

for

demand—we

have

just

Throughout the entire history witnessed the peak year of all
fuel potential between our side some agitated friend who wants
of the ml industry the reserves of time.
and the Nazis is, in my opinion, to know just how serious this oil
Production in the United States
producible oil in sight have been
among the most important advan¬ shortage is going to be.
I regret kept in some sort of balance with in 1943
was 1,500,000,000 barrels.
to say that a high
tages we have in this conflict.
proportion of demand by the activities of ex¬ It has been estimated that 27%, or
It means simply this,—that for my inquirers seem to be more
ploration
which
expanded
and 405,ODO,000 barrels was military
every
plane, tank or ship that worried about the outlook for contracted
through the years as consumption.
their gas coupons than the
Germany can throw against us we
broader oil became scarce or abundant.
This year military use is likely
,

1943.

marks that earnings of the indus¬

entirely reasonable to believe
that the long term trend will be

a

find oil fast enough to
is
Anyway, I know that much of avert any shortage that cannot be
look¬ the popular literature on oil re¬ made
up easily—first by imports,
ing down the muzzle of a five serves has created some
very er¬ ancf ultimately by the synthetic
hundred
million
barrel
calibre roneous
impressions in the minds oil industry, which industry will
gun—it may even be much larger, of many, and concern about
the develop in this country as dom¬
and certainly will be if the war national oil
reserve is
oil
becomes
widespread. estic
increasingly
goes very far into 1945.
I know this because of the
scarce.
million

certainly be
in

as

it is

This forty

few thousand more wildcat wells
lining the possibilities of calamity, a year wouldn't be noticed
by
while keeping in very small
print, anyone but the statisticians. Ex¬
or just forgetting to mention en¬
more

almost

1944

be¬
de¬

is not likely to skyrocket, though

no

compunctious about head¬

tirely the

in

goes

overall

the

(

wide

As a matter of fact
we
are
now
poised after long
preparation to throw a billion
barrel a year combat punch at
our enemies.
This year the Japs
may be honored to the extent of
a couple of hundred million
bar¬
rels thrown by us in their direc¬
tion, but Hitler, with his hundred
Germany can.

will

great

same.

Europe

mid-year,

mand

of

way

price, beyond which this upward
the ones that appeared recently
This ceil¬
billion barrels of to-be-discovered trend can never pass.
Russia,
the
Middle
East,
and in
Colliers
and
the
Saturday oil reserve is scattered around ing will be the cost of motor fuel
South America will certainly con¬
Evening Post are harmful.
They under approximately a million derived from hydrocarbons other
tribute as much again.
contain a lot of worthwhile infor¬
petroleum—so-called
syn¬
square miles of posible oil terri¬ than
Thus in 1944 we will be in a mation, but these articles are in
thetic fuels—which cost even' now
tory,
distributed
over
some
position to motivate several times popular style which is very much
would not make driving a car too
twenty or thirty states.
This is
the volume of striking power that concerned with reader
much
of a
appeal, and a lot of
luxury.
Of course
amount from domestic wells alone.

yond

in

war

,

tically

pretend

up—non-military probably

the

getting the lack of price improve¬ rather an internal shift within
ment which had always been a the industry itself from civilian to
The over¬
major influence before, this time military consumption.
the industry for a part of the five all demand for oil is probably not
year period had O; P. A. to deal running very much higher than it
With, loss of skilled labor and would had there been no war.
That is,
the normal peace-time
sundry other obstacles occasioned
one has estimated that in the last
the
war.
These
workers growth in consumption probably
five years we discovered a vol¬ by
would have brought the demand
ume of new reserve
equivalent to against the speed-rup in drilling
up to somewhere near the present
only three years consumption at that would ordinarily have taken
'
place in normal times.
Consider¬ level.
present rate. >
'
'• ' ■
The post-war adjustment back
It is getting harder to find oil-— ing the handicaps of the period,
to peace-time demand therefore
the industry knows this full well— maybe it is fair to say that the
doesn't involve a serious loss of
and by harder I also mean cost¬ industry did rather well to turn
in even three years' new supply revenue for the industry in the
lier.
However, if the forty bil¬
for the last five years of explora¬ long term viewpoint.
The worst
lion
barrels
Of unfound
oil is
that can happen, in my opinion,
tion.
really there, the most elementary
a
temporary drop of a few
While if is true that the domes¬ is
reasoning will demonstrate that it
oil
situation
will be found if we work hard tic
seemingly has months—possibly a year, during
the time required to adjust our¬
enough at. it.
In other words, if passed through the era of super¬
selves out of war and back into a
three thousand wildcat wells a abundance, oil will become scarce
100% peace-time economy.
' /
year—our 1943 rate— won't main¬ in this country at a rather slow
If there is no change in price, it
rate.
The price of oil, therefore,
tain a sufficient reserve of
pro¬
is evident from the foregoing re¬
ducible oil to balance annual con¬ based on the scarcity factor alone

alarming will.

our

and safety.

economy

During 1944

as

this present rate of withdrawal,
and that consequently we are los¬
as

which is described

a

which

plorer, or wildcatter, as he is gen¬
have to pay a little more for
erally called, will have an impor¬
motor fuel in future years, but it
tant bearing on short term
phases
will never be necessary to ration
of the supply outlook from time to
us between wars—that is certain.
time.
Presently we are not find¬
Now it so happens that this ing the oil as fast as* we
should
question of oil reserves, which is to be smugly comfortable.
Some
may

We have

storage

prewar

of

of gasoline to the oil refiners. We

in
is

barrels,

billion is proved, and

rounding out
which there is a great reserve in much
this story of exploration accom¬
longer time.
the country, is also a potential
Of course, the rate at which the plishment, it should be noted that
source
of gasoline at a cost not
presently undiscovered reserves the weak showing over the last

their war effort since the long term phase of the supply
approximately all their side of our equation is presently
of supply can provide, and receiving widespread attention in

year

that

billion

good business.
forty billion
ious problems this year, or for reasonably probable, even though
Now
the
first signals of ap¬
not actually spotted on the
several years to come.
We will
proaching
scarcity
have
made
map.
have adjustments to be sure, since,
Since our present production— their appearance, and while some
as
of us are viewing this with alarm
our domestic
reserves become
now at its all time
peak—is run¬
in the public prints, the
strained to supply our needs, we ning around one and a
industry
half bil¬
will
probably import more oil. lion barrels a year, it is evident is merely waiting for the price
Some day in the distant future that this
and,
incidentally,
some
sixty billion barrels of signal
we
will
be
making
part,
and domestic oil reserve is going to be more steel and labor that will
a
provide the incentive and make it
eventually all, of our motor fuel
big factor in this country for
out of other hydro-carbons such at least another
fifty years, and possible for it to step up its wild¬
as
coal, oil shale and possibly probably will not disappear com¬ catting activities.
that

surance

If

important fact to sized reserve. In fact, it was too than 1943. This could be
as much
bear in mind despite these some¬
big for comfort during much of as 10% more this
year than last.
what confusing writings and ut¬ that
period.
Wildcatting didn't My guess at this time is that de¬
terances to which I have just al¬
stop during these years, of course, mand this
year, which is presently
luded, is that we are a long way but it very definitely slowed
up running about 7.5%
above 1943
from running out of oil in this relative to the
expansion .in de¬

suppose

at

so

go

it that—the

I sensus of well informed opinion
should have stuck to, the outlook supports this view.
for the current year at least can
It is generally agreed
by com¬
be summed up in a few words.
petent estimators, that apart from
subject I

or

a

to

will hold about the

Ex¬

to

covery

win the war—the

us

the price

scarce

went up and with it the incentive
to drill more wildcat

ploration tapered off, as would be
into all the factors of quantity, expected, whenever oil
began to
there¬
time, technological skill, etc. that look like a drug on the market.
one as
enter into a' complete elucidation
It so happens that for the last

indefinitely.

sidered in any intelligent apprais¬
al
of
the
situation.
However,

of
be

go

five,

army,

stand up to

can

would

attempt in the time available

superlatively good

Trained manpower, indeed man¬
power

mri

It

year

more.

in earnings up to 25% or
Others will show 10 to 15%

improvement." If refined products
prices do not move in parallel
with crude oil some companies
might be pinched and show earn¬
ings declines.
All

in

all, I look for the year
earnings for the in¬

1944 to show

dustry as a whole somewhat bet¬
ter than in 1943.
If the price in¬
crease

materializes the overall im¬

provement might be of the order
of 15%.

.

Industry Must Consider World Needs In Post¬
war Period, Says K. T. Keller
of

separated

competitive

tools,

enter¬

maintained

be

cannot

prise,

against the
pressure
pushing other people

of blocs,
around for

advantage.
tary might.
"(4) Industry will have to think
"The gist of both of these docu¬
as
well as na¬
ments is that there is nothing in internationally,
their own temporary

the

military
of

tions

or

confidence

live,

We

economic situa¬ tionally.

enemies to justify
in their early down¬

our

economically

speaking, by the
exchange . of
goods and services. The needs and
wants of people do not recognize
State lines, whatever may be their

fall, except at, the cost of much
greater losses of men and mate¬
rials than this country has expe¬ political

and

social philosophies.
of knowledge,
well as cultural, is

rienced thus far.

Dissemination

"Complacency here now would
be as dangerous to our cause as

scientific

complacency at the
what

ter

front. No mat¬

as

It encourages men
the world to seek oppor¬

wide.

world

all over

political, social or tunities and to develop new re¬
it is up sources, new methods and new
continue to do every¬ markets. All of this and its possi¬
bilities should be
in industry's
can to / win the
war
our

economic views may be,
to

to

us

thing

we

vision.

fast."

.

day, and I pray soon,"
Mr.
Keller, "the need for

"(5)

"Some

Industry

recognizes

one

the

from

manufacturing skills of our engi¬

and

spend a great deal of
money
to
assure
ourselves the
best weapons obtainable.
"World security, which means

physical nature

be made

can

with

fering
tions

as

"To

now,

these:

the

have

War

.

what

determine

left
It

II.

from

over

will

be

can¬

machines that

war

based

World
on

the

should

make

clear

elementary things

clear

"certain

about

jobs," that it "needs to co¬

in

the

problems of

transition to

believe, that by and
operate with representatives, in
large, our Congressmen and Sen¬
Government in their efforts to
ators will take the time to analyze
formulate policies that are good
thoroughly the problems of in¬
for
the
American people," etc.
dustry, if industry will take the
His remarks follow:
trouble to
give them the facts,
"Getting into peace production and to help them arrive at sound
will again bring industry under
conclusions.
close public scrutiny.
Many peo¬
'"This is my own observation as
ple will, and should, pass from to the problem of terminating war
industry
to
other
occupations. contracts in such a way as to en¬
Many who have now experienced able industry to reconvert quickly
factory employment will desire to
peacetime production.
I per¬
I

peace.

The level of industry
sonally have found a very intelli-.
employment wilh adjust itself. to gent and realistic approach to this
the volume of consumption our
situation. It involves many things
to remain.

peace-time economy will support.
"Because so many people will
affected

be

1

war

by

the

manufacture

time

will

make

the

fore we

cessation
and

of

because

again be needed to
changes necessary be¬

can

take up peace-time

manufacture, it will be the job
of reconversion that will then try

that
any

can

be done now without

way

interfering

with

in

our

primary job of winning the war.

problem, it seems to me,
much a physical as a finan¬
one.
Reduced
to
simple

"This
is

as

cial

terms,

it

involves

principally

a
part of the
armed forces which can be readily

few

decisions

on

the

free

enterprise on

"Let

Gov¬

to ask industry

maintain, in the form of phy¬

the

thrifty,

the

able.

flying

the

on

industrious and
our boys to
come back to opportunities which
encouragement
of
risk
capital
opens up to those who are willing
to

the

We

want

as-well

earn

opportunities

work—to

reward indi¬
recognize in¬

It

merit.

is

our

sacred

to it that those liber¬

see

in-the

inherent

ties

to

as

that

effort—and

vidual

trust to

miles,

a

with

of life and
sound footing.

encouraging the honest,

dividual

example, to imagine an airplane
with a range of 15,000 to 20,000

way

build out future

us

of

future.

of the weapons of the
It is no idle thought, for

and

worth

dignity of the individual, the basis

altitude of of the freedom they are fighting
bomb loads for, are preserved for them at
destructive as our home. >;/'/'••'■/]/■■■,/■".:•/: /
at

an

support the
armed forces in preserving peace
after the war, and about this I

40,000 feet, carrying

will have more to

sives.

facilities,

sical

"To

in

later.
which of these in¬

decide

dustrial

units

operating

to

say

shall

be

condition

retained

by

the

times

10

most

as

And

when

such

it

should

fbe

comes

a

weapon

America's

the product of American
science and industry, and its se¬
weapon,

of design protected.
a very effective chan¬

present custodians and operators.
"To decide what facilities the
Government will wish to retain

crecy

itself for the

attention

protection and main¬
of peace.
'

"There is
nel

me

that these decisions should be

made
war

and

now.

That would be post¬

through which we can focus
on
the importance of

planning of a most effective
practical kind. It would not

take

industrial

executives

off

jobs, and, more than
anything else that either the Gov¬
ernment
or
industry could do

their

war

which

are

before their

necessary

manufacture

in

quantity

be

can

undertaken,
can
be stimulated
and this important necessity kept
before the American people.
"I should like to see the United
.

States

always

so

modernly pre¬

pared in its own industrial plants
would expedite getting that nobody at any future time
back to peacetime production.
will dare to upset the peace of
"Opportunity fori steady em¬ the world without reckoning de¬
ployment for the generation now liberately on America's influence
arising, whether in ownership, in to determine the outcome.
management, or in labor,-— and
"Let
us
make
sure
that the
mass distribution, to match mass
great forward strides we have
production of goods, — are all
made in the science of machine
tied up in the way in which we
tool development
for war pur¬
get free from this war.
poses are riveted in our domestic
"The physical change-over will
peace-time economy.
We have
be a difficult part. As I have al¬
not been stripped of our indus¬
ready pointed out, people got very
trial ability.
We have been en¬
impatient right after Pearl Har¬
hanced in it. Termination of the
bor when industry cleared out its
war should
terminate the use of
plants, set its own machinery in
machine tools driven from line
the
yard,
and
nothing
much
shafts.
Industries that use ma¬
seemed to
happen for a while.
chine tools should be completely
Real activity actually was going
modernized out of the surplus of
on.
New machines and the usable
machines
made
available when
machines we had, were getting
war production ceases.
set up, with tho necessary tools
"We
should
see
to
it
that
and
fixtures
for
making
war
now,

"I should like to see the United

present-day explo¬

modern

certain ele¬
tenance
continuing this development work,
weapons
of war will be inter¬ mentary things about jobs, that
"To
decide what Government that channel is the Army Ord¬
are
simple but stubborn facts.
rupted, and I hope interrupted
nance Association, of which there
Manufacturers
do
not
provide equipment and materials in its
for many years." Remarking that
own
or
I
privately owned plants is a Chicago post right here.
"peace-time needs will again be¬ jobs. Jobs are made by the cus¬ the Government will wish to dis¬ have no hesitancy in urging you
tomers who buy the things the
come important," he warned that
to join it.
'
Continuance in active
manufacturer produces.
Jobs be¬ pose of.:
"we will have to adjust to a peace¬
"To enlist them and earmark being of the Ordnance-Industry
We employ each other
time economy," adding that "this get jobs.
them for sale, under a sensible team that is giving our/Army to¬
is going to be very urgent busi¬ through the processes of purchase,
pricing and disposal procedure, day
its
superior
weapons,
if
ness
when the time arrives.
We production, distribution and ser¬ then sell them now under condi¬ backed up by hundreds of thou¬
vice. This is merely primer eco¬
shall have problems that are real,
tions
that
will
let
them
stay sands of Americans, would be a
but
primer economics
actual and inescapable. They will nomics,
where they are
as long
as the powerful influence in seeing to it
need to become fashionable.
call for more than paper plan¬
war
needs them.
that we do not again sink to the
"(6) Industry needs to cooperate
ning."
/'■
■,/ .y...
"Finally,
to arrange for the depths
of
unpreparedness
in
with representatives in Govern¬
He
cited
the demands which
prompt removal of machines and which Pearl Harbor found us.
ment in their efforts to formulate
would be made on industry, as
materials that will be in the way
"Through the channel of the
that are good for the
to which he said it "will have to policies
of
peacetime production
when Army Ordnance Association, the
American
people.
Businessmen
think internationally as well as
the war ends.
research, the designing, the prov¬
should constructively advise and
nationally," that it should make
"It seems altogether sensible to
ing and perfecting of weapons,
counsel with Government groups
said

American

basis

United

out of this war

come

the

supremacy

considera¬

■

other

and

we

without inter¬

obvious

ernment is going
to

the number of tanks and

non

believe

production, re¬

war

such

to

late

I

that

security, cannot be based

own

our
on

decisions

to

peace,

of the job.
"The

be

"I should like to see the

States

willing, in the interests of world

plants and vice versa. And about
the same thing can be said for
materials.
That
will
give
you
idea of the

indus¬

This country should

trialists.

for example, are scattered
through
privately - owned

some

production

and

neering

other.

machine

Government-owned
all

free

our

is physicists and' scientists with the

Government*owned, is not nicely

(Continued from page 500)
|

what

and

owned,

privately

haps some of you may have read
a
recently published summary of
what the Army's Intelligence Ser¬
vice finds about the enemy's mili¬

Thursday, February 3, 1944

COMMERCIAL & FINANCIAL CHRONICLE

THE

518

it

States, in its social, economic, po¬
litical and spiritual life, set such
a
fine pattern that other peoples
of the world and other nations,
instead of regarding us as seek¬
ing to inflict our ways upon them,
wish

will

emulate

,to

our

ways

themselves.
"If

such

realizing,
make

icies,
ual

it

is

well

as

up

that

sure

is worth
us now to
public pol¬
own individ¬

picture

a

,

to

our

as our

activities, lead in that direc¬

tion."

WFA Takes Over
Some Of CCC's Power
Marvin Jones, War Food Ad¬
ministrator, on Jan. 22 stripped
the
$3,000,000,000
Commodity
Credit Corporation and its Presi¬
dent, J. B. Hutson, of important

policy-making
WFA's

food

powers

the

over

production program,

according
to
Associated,
Press
Washington advices on Jan. 22,
which went

on

to say:

;

"The control taken from the CCC
and its chief
a

new

was

Office

divided between

of Distribution,

set

in place of the Food Distribu¬

up

Administration

tion

Office

of

Price,

and

with

a

the

new

latter

getting important farm price pol¬
icy functions.
.
"Under

the previous WFA

set¬

the CCC and Mr. Hutson had
become the top ranking- agency

up

official

and

food

in

production

aspects of the war food program.
Mr.

director of the
Administration,
as head of the CCC, had con¬
over
the Agricultural
Ad¬
Hutson,

Food
and
trol

as

Production

Agency, the Farm
Administration and

Se¬
the

Soil Conservation Service as

well

justment
curity
as

supervision over price support

programs

for

agricultural

com¬

7-'\
/:
V
"In today's order, the AAA., the
made, at least for this purpose,
physical rearrangement of
without diverting the attention of
FSA and the SCS regained the
our
production
facilities
will the manufacturers from their war
status of independent agencies, re¬
again call for the finest skills and
jobs. In fact, if these decisions
sponsible only to Mr. Jones or his
the greatest ingenuity of expe¬
would be made now, the result
immediate assistants.
Mr. Jones,
goods, and we were getting some America's shops and plants are
rienced production engineers/Will
from an industry morale stand¬
in announcing the changes, said
pieces run off, preparatory to equipped to produce the highest
this change be retarded by unfair
point would aid rather than hin¬ production itself. Even that was standards of quality and at high they were merely designed to
criticism and officious bungling?
der the war effort.
a
simple situation as compared productive levels. And to the ex¬ speed up WFA operations, through
Or will it be facilitated by real¬
machines more clearly defining administra¬
/ / • V;/vsXV// tent that our surplus
country
has
converted with reconversoin.
istic handling
of our economic 5' "The
most of its manufacturing facil¬
"Here, it seems to me, is a fine are needed here to replace the tive responsibilities and proced¬
problems?
ities from peacetime operations to opportunity for the kind of in¬ 10-, 20- and 30-year-old machines ures, and eliminating duplication."
"Industry itself can do much to
with which we went iqto this war,
lead in a return to a normal and production of war goods. At least telligent cooperation between in¬
1,500 additional plants have been dustry and Government, which I they should be left at home and
healthy peace-time economy.

the

patience of all of us.

"The

modities.

.

built and equipped for war prepa¬
"(1) A great demand will exist
rations.
Now more than one-half
immediately for known goods and
the nation's total industrial output
services.
Efficient production of
is war production. That offers one
these goods, and economic ren¬
reason why we can build at least
dering of these services must be
airplanes
a
month, five
industry's goal if our future econ¬ 9,000
ocean-going ships a day, tanks and
omy is to be sound.

think

is essential if the

jobs that
will want, when
are going to be avail¬
able to them as quickly as pos¬

utilized.

It

has

been

demon¬

that' the manu¬
facture of large quantities of the
latest
weapons
can
be quickly
sible.
It is the kind of coopera¬ accomplished when America's in¬
tion which will help to get war dustrial plants are filled with the
industries back working for their highest quality of machine-toool

fighting
they return,
our

men

Pittsburgh Rys. Look Good
The" current situation in

strated in this war

Pitts¬

burgh Railways System, particu¬
larly certain of the underlying
bonds, offers attractive possibili¬

appreciation, according to
T. J. FeibleCo., 41 Broad St., New
York City.
Copies of this inter¬
esting study, which is available to
dealers only, may be had upon
request from T. J. Feibleman &

ties for
a

study prepared by
&

cannon
at whatever quantity is customers, the people, when their equipment.
:
"(2)
New devices and new
"I should like to see the United
desired, ammunition in astronom¬ present customer, the Govern¬
services,
in keeping with our
ical amounts, and about every¬ ment, turns them loose.
; / / States protect and guarantee its
broadened knowledge and expe¬
"After all, what is the America ability to produce its own needs
thing else that war requires.
rience, will be offered to enliven
we
wish
to
live in when this in such basic commodities as alloy
and expand our desires, and the
"Thus, over $50,000,000,000 of
/;
world struggle ends?
I should steels, synthetic rubber and other Co.
benefits thereof should give us all pre-war, privately owned manu¬
like to give you, in closing, some strategic items.
the urge to work harder to have facturing
plant and equipment
"Let us find some way to main¬
has been increased by about $15,- of the broad strokes of the picture
more.
Interesting Situation
as
it appears to me from an in¬ tain, at least in standby condition,
"(3) While competitive in its 000,000,000 worth of governmentLaird,
Bissell & Meeds, 120
the plants we have built to assure
dustrial point of view:
business enterprise, industry will owned plant and equipment. Vis¬
"I should like a realistic ap¬ America's position in such com¬ Broadway, New, York City, mem¬
have many common problems re¬ ualize all of this in terms of build¬
Before we decide to bers of the New York Stock Ex¬
Many modities.
lated to
our
national economy. ing and machinery, and add to it proach to world security.
We shall get nowhere in the long the stockpiles of all sorts of sup¬ important new war devices have pick these plants up bodily and
change, have preparecLjan inter¬
from
closely coordinated. ship them abroad, let us make
run
if every one deals \vith the plies owned by the Government, come
esting bulletin discussing the at¬
industry and sci¬ sure that America, in its desir¬
little segment that represents his which it is estimated will amount Government,
able
efforts to rehabilitate the tractions of issues of the Chase
own
special interest, instead of to about $50,000,000,000 when the ence.
"We should continue this .re¬ world,
shall
continue
to
be National Bank. Copies of this
You will then have
looking at things broadly, with war ends.
the common interest of industry some idea of the .physical size of search and development of war equipped itself with the best fa¬ bulletin may be had from Laird,
cilities for producing these es¬
machines
and materials
by co¬
at large
in mind.
Equality of the job.
Bissell & Meeds upon request.
"Now bear in mind that what is ordinating the knowledge of our sentials.
opportunity, which is a keystone




man

.

u

'

It

*

519

Increased Pay For"

policy

Hecessary Senate Subcommittee Told

Policy As To Salesmen's Commissions, Etc.

;

Hearings to consider the situation facing "white collar" workers

handicapped

in meeting higher living costs by reason of the failure

of this group to receive
wage increases accorded those in other lines
of work were begun in
Washington on Jan. 25 before a special sub'committee of the Senate's Education and Labor
Committee and were

concluded on Jan. 29.
The plight of this class of

<?>-

,

work-

ers, and others living
largely on
fixed incomes—estimated it is said

'at

witnesses

at

the

first

day's

to have developed
interest
by ' three

1914.

advices Jan. 25
by Frederick R.
Barkley to the New York "Times,"

which

it

is

stated

1

sub-Committee has

it,

and

proached any

of

has

not

answer to the

the

According to Mr. Barkley's
"Times," the com¬
plaints came chiefly from Philip
.Murray, President of the Congress
-of Industrial
Organizations, who
jsaid steel workers'
living costs had

at

advices

same

.the following:

/:•'■■■$)

.

between

A.

F.

Mr.

:

sioner

of

the

Statistics,

"The-Bureau's figure

„1

of

in

the

week

in

informed,

are

to

to say that "the

on

show

tors

also

whther

is
not

or

been

plans,

composed of Sena¬
of Florida,
Chair¬

mittee

in

the

Department
of
Labor is not calling on insurance
exclusively in its study of whitecollar workers, but their investi¬
gation

also

industries '
and

loan,

includes
as

such

banking,

utilities

and

allied

building
all

other

groups employing large numbers
of white-collar workers.
Similar
studies to this have been made in

later

after

law.

Court Dismisses SEC

Exchange

asked

that

the

investigate

sub-Com¬

whether

t,he
/Bureau's index really reflected the
rise in food prices,
quality dete¬
and

•

MINNEAPOLIS, MINN
E. Von
Kuster, President
David

C.

Bell

.—

Paul

of

Investment

the

Com¬

of -Minneapolis;
John
M.
Harrison, Vice President of Marsh
and
McLennan, Minneapolis; and
pany

'VMpV

"Mr. Flaxer held that the health
of the country's communities and
their

publicly employed workers
had been endangered by substand¬
ard
■

economic

conditions

mainly by the
Mr.
ment

Flaxer

war.

.

dwelt

in New York.

.•employees, he said,

created

.'

.

f

-

on

employ¬
Many public

were

continu¬

ally "in hock" because of inade¬
quate salaries.'
//••/'•
*

Mr. Flaxer summarized his

ommendations

as

rec¬

'standards in the local government
'service by 25%, time-and-a-half
for

overtime, and establishment of
'boards of arbitration and review
Federal and/or State and local

government

levels,

where

they

'may obtain redress of their griev.ances on
wages, hours and work¬
ing conditions."
Advices to insurance executives

bearing

on

the hearings

dressed

on

Jan.

ance

Department

Chamber
it

was

20

of

were

ad¬

by the Insur¬
of

the

Commerce

in

tion.-/'/

U.

S.

which

noted that certain informa-




Court

of

the

ing

counts

in

the

action

of

and

Investors

settlement of the action have been
under

both

way,

in

Philadelphia,

neapolis

and

a

director

Min¬

of

the

Real* Estate Title Insurance Com¬

of Minneapolis. He is prom¬
inently identified with the civic
and

business

life

of

Minneapolis

and has served

as a member of the
Charter Commission for the
City
of Minneapolis. /..

Mr.
in

the

Harrison, actively engaged
insurance

business

since

1900, has long been prominent in
civic and business affairs in Min¬
neapolis.

He is also Chairman of

the

-

the

companies from engaging in cer¬
sales
practices — practices

tain

which Investors Syndicate denied
it or its affiliated
companies ever
had or intended to

of

the

Minnesota

Supreme Court in 1937, resigning
that office

ohfJanuary 2, 1944, to

sus¬

However,

these employees will now be re¬
that the dollar limit has
been .formally
revoked, as to em¬
ployees whose rate of commission
and
base
salary has - not been
assured

changed.
"2.

/

Executives,
and

agers

,

'

,

Branch

Man¬

Others

Earning Over¬
riding Commissions or Percentage

Bonuses—Employers

are
author¬
ized to adjust
any 1943 payments
accord with the new
policy.
For example, if an

of

based

are

new

sales,

the

*'V

■"'

the

or

a

ment is

//•. :"//':;'/7'

for

conditions,

above

dollar

the

amount.

The

new

policy rescinds former provisions
which limited the dollar
amounts
the level of 1941-42.

the
in

•/

>

.•••.•••

•'

,'>/••':

■

:'s

•

■

"Commissioner

'

'

;V-

"

•-

to

"

'

Hannegan

ex¬

plained that the effect of the

new

warranted, he may apply
ruling to the field office of
Salary Stabilization Unit of

a

Bureau
the

of

Internal

region

in

Revenue,

which

the

em¬

ployer has his principal place of
business."

Previous

to
•

salary has changed and
employer believes an adjust¬

the

similar

policy permits payment
percentages without regard

the

base

or

per¬

profits,

new

of the
to

salary,

business

factors.
"Under

on

because

the
percentage, method of compu¬
tation, or base salary. If the per¬
centage, method of computation

pay¬

which

$900

regulations, he may
paid the remaining $100
without formal approval
provided
that no change has been
made in
be

now

approved

items

in

in

these

the

matter

columns

Nov.

18, 1943, page 2019; Nov. 4, page
1798, and Oct. 14, page 1506.

Editor, Commercial

& Financial Chronicle:
American stockholders are
subject to double taxation. British
stockholders are not. Yet Britain had
balanced budgets and
high
employment before 1939.
Our corporation income tax
penalizes
risk taking.
Its other evils are cited in the
attached brief and letters.
What is the remedy? We
can. apply the experience in
improving the
capital gains tax.

engage in.
In
1938, purely as a public $
Judge
Nordbye's
order
thus
t
sbrings to a termination the action service, I initiated a move to re¬ turns, the tax in
some
cases
is
lax
the
capital gains tax, and
brought
against / the
Syndicate
confiscatory and may be uncon¬
it repeatedly
group of companies by the Securi¬ urged
before the stitutional. Elimination of
the tax
Senate
and
ties
and
House
Committees, would lower
Exchange Commission
costs, expand vol¬
and in 1942 enlisted the
last July, and described
aid of the
by the
ume, benefit consumers, and per¬
American Taxpayers
SEC at that time as "the
Association, mit the legally authorized return.
biggest

it

ever

Mr.

handled."

Oppenheimer, Counsel for

any

admission

the
way

the

on

or

been actuated by a desire to
avoid

protracted litigation which it

Godfrey N. Nelson of the New
"Times,"
and
Mr.
Emi)

Schram

of

the

New

York

Stock

Exchange.

As a result the 1942
Revenue Act cut the
holding
to

six

months, as
1938 brief. • Copies

my

able.

urged
are

"

.

Thereafter,

felt would, regardless of the
out¬

service,
both

in

again
1942 and

as

a

1943

Senate and House

arrive at
a

fair

a

settlement of this
and

constructive

than, to

proceed

case

basis,

with

a

laivsuit which at best would have

Taxpayers

Association

before

and

the

Investors Fairplay League issued
summaries of these briefs to.their
members. But wider public inter¬

legis¬

lative relief.
The

in

1943

and

thereby

re¬

duced the market value of shares
of American corporations
by about

$80,000,000,000.
The
Treasury's
prolonged/ expensive to the loss of revenue in
eliminating the
companies and disturbing to the
corporation income tax would be

been

security holders.

largely

"We have entered into
trust
agreement
which

a

recouped.

v

Higher

dends

names

from individual income taxes. The

would

increase

corresponding
the prices
would

These trustees who have been
elected directors of Investors

Syn¬

dicate
until

If

recovery

the David C. Bell Investment Co.
of Minneapolis.

"The solvency of our companies
was not questioned in this
action."

in

1

stock

revenue

burden

income."

The

the

on

small

enclosed
our

stockholder

is much greater than the British.
Each stockholder could also
figure
his own "double tax" burden.

My

If these facts

are
clearly stated
widely disseminated, public
opinion should support legislative

and

proposals not to increase our
poration income tax during
war,

and after the

war

cor¬

the

to abolish

it and shift to the British basis of

taxing stockholders

once

only.

ELISHA M. FRIEDMAN.
40 Wall

Street,

New York City,

Jan.

18, 1944.

yields would fall.
would

sues

Class

Stock

Eastern

New stock is¬

increase,

Business

would expand. Employment would
rise.
Transition to peace would
smoother.

would

sides,

Private

function

taxes

regulated

more

are

railroads

rates

enterprise
freely. Be¬

item

an

and

of

cost.

utilities, with

and

Attractive Situation

Confidence

grow.

For

"other

Treasury analysis shows that

corporation income tax
eliminated after the war.

were

be

and
large stockholders
owning varying number of shares
and also having
varying typical

the

are
Henry M. Gallagher, what would
happen?
January 1 Chief Justice of in
stocks
would

the Supreme Court of the State of
Minnesota:
John
M.
Harrison,

individual income

medium

revenue

Syndicate, men of
increase
highest standing in this commun¬ from estate taxes.
ity.

holder of both

tax
and
corporate
income
tax
should be shown for typical
small,

divi¬

voting

three independent trustees of In¬
vestors

the

present

Brief may be quoted.

corporation
income
tax
about
$5,000,000,000 of

yielded
revenue

to the TNEC.

;/■
/
companying dividend checks. The
public combined burden on each stock¬

Commit¬

est seems desirable to obtain

Stock¬

ir

assuring the Securities and tees I pleaded against any further
Exchange Commission of the de¬ rise in the corporation income tax
sire of the defendants to
comply during the war, and favored a
with all applicable statutes
and shift to the British basis after the
the rules,
regulations, and orders war. On my advice the American
of the Commission."
Earl E. Crabb, Chairman of the
Board of Directors of Investors

be done now?

can

holders must be educated.
They
number about 9,000,000,
according

Corporations should
facts, through the
forthcoming annual report, quar¬
avail¬
terly statements and notices ac¬
pe¬

riod

come, be harmful to all
and of

concerned;

What

York

was

Hennepin County Chapter of
Executive Vice-President of Marsh
& McLennan of
Minneapolis; and
Paul E. von
Justice Gallagher was
Kuster, President of
appointed
Justice

was

,'

the American Red Cross.

Chief

rule
cases.

several

enjoining

on

Bank 'Of

these

Minneapolis
for

•

The other fourteen counts were
disposed of on Oct. 18, 1943, by a
Consent
Decree

heading the firm of David C. Bell
rather
Company, is a director of The
National

are

volume,

Mutual, Inc.VAv-••••'•
Conferences
working
toward

and

Midland

in

of the former

in

$5,000
under the Commission¬

jurisdiction).

ments

the

H/':

in addition to

dollar-limit

mer

pended

only

year; Oct. 27, 1942,
of salaries under

centage

States
for the District of
Minnesota, on
Jan. 17 dismissed the two remain¬

E.

Mr. Von Kuster,

Based

in

"These percentage types of com¬
include / commissions,
bonuses and similar types of

United

.

;

the

pensation

Dis¬

:;VSyndicate, said, "We believe that,
Crabb, President, and E. •in the interest of the companies
M. Richardson, Vice President and and their many security holders
Treasurer,- were, re-elected to the residing in all parts of the United
Board of Directors.
States, that the thing to do was to
E.

pany

follows:

"Upward adjustment of the Lit¬
tle
Steel
formula, raising pay

.on

seca,; Minnesota, were elected di¬
rectors of Investors Syndicate
by
the stockholders of the
corpora¬

in

a con¬

no

per

case

er's

of

any of
wrongdoing, but has

/

upgrading,

black market operations.

the

Judge

Nordbye, of the

part of the defendants
them of any

The
Honorable
Henry M. Gal¬
disap¬
lagher. Ex-Chief Justice of The
pearance of cheaper goods, rent Minnesota
Supreme Court, Wa¬
increases and price increases and

rioration

Commission,

H.

involves

Action

cordance

"He

.practice

corporations, stated to
Court, "This settlement in no

study
of. 1,500
steel
workers chosen at random in ac¬

mittee

private

the

.scientific

made

$5,000

//'///;

W. H.

living costs. The two examples,
he
said, were selected from a

.

been

H. Cashion, Counsel for the Securities and

;his point about the 50% increase
in

..

policy of the
chang£ has

employer, provided

Upon motion of Edward

/

case

workers in his CIO Union to make

■

percentage-type compensation

which

the

weeks.

LaFollette of Wisconsin. The Com¬

23.5%

with instructions from
the Bureau of Labor Statistics on
how to do the job.
*

1943

Hannegan advised employ-

resume

Nebraska,

t

,

sioner

and

Utah, Wherry of
Tunnell of Delaware,

policy.
policy

new

earned by employees under
tract or established

au¬

Securities and Exchange Commis¬
sion against Investors

.

making a de¬
Murray's fig¬ other industries
during the past
-;y;/' /
■ •>,$
/■/;.,/ >/./ year by the Department of Labor."
"Mr. Murray, speaking extem¬
poraneously, submitted budgets of
what he called two 'typical' steel
ures.

any

Syndicate

Pepper

Salesmen Earning Commis¬
on
Their Own Indi¬

sions

percentage,
hardship. Formal regulations method of
computation, or the
employee in
embodying the changes are being employee's base
salary (if any) 1943 was entitled by contract or
drafted, but the new policy is ef¬ since the
beginning of the salary established policy to receive a
fective
per¬
immediately. -'■/ ///•/ / /;/■/: stabilization
program
(Oct.
3, centage bonus amounting to
"Since most 1943
$1,000
payments al¬ 1942, in the case of salaries over but
was
paid

man; Thomas of

railed study of Mr.

:

we

Committee is

living

back

had

Wartime Health and Education of
the Senate's Education and Labor

/typical' steql worker was a 'very
daring' one for anyone to present
.as typical.
The Committee asked
come

have

supplementary

permits em¬
ployers to pay-~without the for¬
mality of obtaining approval—

Hardesty further said:V J and its affiliated
companies, In¬
"The Special sub-Committee on vestors
Syndicate of America, Inc.,

Hinrichs admitted, but he held that
Mr. Murray's 50% estimate for a

Mr, Hinrichs to

prevent

new

"The

policy in
discrimination

Mr.

since January, 1941,
might well be
;subject, to some questioning, Mr.

:

orders

workers
have
forced to surrender savings
insurance plans, etc."

Labor

how much
'costs had increased.

to the

ready have been made, Commis¬

increases to meet

wage

white-collar

and
Commis¬

Bureau ' of

to

may make

payments to adjust 1943 payments

,

on Dec.
30,
Commissioner Hannegan has

1943.

trict

/

over

subse¬

Economic Stabilization

Gunnar

assumed

Murray

Hinrichs, Acting

secure

study,

a

"The only differences of
opinion
arose in the
day's testimony

.came

these

and

policy for 1944 was
by the Director of

announced

Hardesty went

.which
.

of

purpose

quent years.
"The new

1944

as

and

De¬

informed

well

as

to

employees, >
policy to cover ers they

extended the

1943

preventing companies from grant¬
ing increases to this group." Mr.

take

we

and

Government

'

From the

r

object

are

compensation

order

insurance

increased costs of living, and fur¬
show what effect various

25% pay increase to raise them
/above the level of barest subsist-ence.

the

and

ther to

and

least

Insurance

today the new salary stabilization
policy which governs pay¬
by employers of commissions, bonuses and other
percentage-

type

thority to harmonize the
regulations with the 1944

Hardesty, Manager

Chamber's

fied

ments

inability

to

Flaxer, President of the
CIO's State, County and
Municipal
Workers Union, who; held that
needed

fol¬

as

Exchange has been advised by the Treas¬ vidual Sales—As a practical mat¬
ury Department of the
following statement issued by Robert E. ter, the new policy makes no
Hannegan, Commissioner of Internal Revenue, under date of Jan.
20: change in the compensation status
"Robert E.
Hannegan, Commissioner of Internal Revenue, clari¬ of these employees since the for¬

since requested and received

since

what- extent white-collar workers
have suffered because of

/. Abraham

^such-workers

supplemented

Paul L.

the

the

prob¬

1941;

or

hearings (before the Senate subCommittee) is to determine to

ap¬

lem.

since

the

by

the

executives that "we

•advices to the

'increased- 50%

of

partment/ advised

bill before

no

apparently

that

behalf

increased

Washington

in

—

requested

employees, with a view to learn¬
ing whether salary scales were

members of the( sub-Committee
present at the hearing. This was
indicated in special

•

been

Special Senate
sub-Committee from life, fire and
casualty
companies " relative
to
home, ; office and branch office

■hearing, is said
sympathetic

has

Commissiqner of Labor Statistics
in

15,000,000—as made known by

"six

——

tion

"1.

The New York Stock

Murray Appeals For Increase

;

1943 payments is

on

lows:

limited

re¬

tive

A

stock

situation

according to

at

an

sis prepared by
143 State

of

this

tained

of

Chicago and

Illinois offers

an

attrac¬

current

levels

interesting analy¬
Raymond & Co.,

St., Boston, Mass. Copies
discussion

upon

mond & Co.

may

request

be

from

ob¬

Ray¬

.

*

Thursday, February 3, 1944

520

Emergency Board Judgments In Rail Disputes
Should Be Final During War Period
500)'
,
,
the purport of mediation efforts becomes aphere endeavor, parent it is the duty of the Medianot at all sure tion Board to endeavor to bring
(Continued from page

employees, asked Congress to ap¬
prove the settlement by special
enactment.
A bill to that effect
passed the Senate but has been
delayed in the House. That body
has under consideration a bill to

of last

J. P. Morgan

& Co., Inc.

Earnings $4,332,020
In his

the

report to stockholders at
meeting on Jan. 19,

annual

at

us

•

'(also referred to by
after more than

year

the' time)

50 years

of continuous service in
'and observes that

the., business,

"prior to

becoming Chairman of

the incorporation
he had been the
senior partner in the firm of J. P.
Morgan & Co. since the death of

the Board upon

of the company,

the George Whitney,; President of J.
P. Morgan & Co., Inc., New York,
pointed out that operations dur¬ his father in 1913. His loss is irre¬
to express.
1 am
ing
1943 had "naturally been parable. But the uncompromising
that my sentiments and opinions about an agreement to arbitrate be worked out under the machi¬
shaped largely by the nation's standards of business integrity for
would be ' endorsed
by anyone'by a board of three or six, corn- nery of the Railway Labor Act,
war effort."
Mr. Whitney's report which he stood will continue t6
prominent
in the domain
of posed of neutral and party is without reference to provisions of showed that net earnings for 1943 guide those whom he has left be¬
arbitrators.
Neither
either management or labor. But,
the Stabilization Act.
were $4,332,020 against $3,251,131
hind."
/
obliged to agree to arbitration, but
despite
these considerations, . I
There is something to be said in 1942/The bank's net earnings
if there is an agreement to arbi¬
Following Mr: Morgan's death,
have concluded to express my in¬
before security profits of $987,302 Thomas W. Lamont became Chair¬
trate the decision of such a board for this point of view. Certainly
dividual opinion as to how these
is binding upon both parties to the the entrance of the Stabilization were $3,344,718,
compared;-, with man of the Board of Directors,
labor disputes should be handled
dispute. It is interesting to note Director into the theater of action $2,998,428 in 1942, when security and R.. C. Leffing well became
for the balance of the war period."
Chairman of the Executive Com¬
that
in every nationwide labor did not result favorably, either profits were $252,703. *
.
In presenting his suggestions he
The report also says:
mittee. The offices of Vice-Chairdispute that has arisen in recent from the viewpoint of good labor
said:';-';'
// ■V'-.vN.'.-: •
relations or in relation to the prob¬
"A post-war adjustment reserve man of the Board and Vice-Chairyears management has invariably
For years the press has teemed
agreed to arbitrate and labor has lem of inflation. For a long time has been established and there has man of the Executive Committee
with references to the Railway
the legislative tendency has been been
credited
thereto > $140,000 were abolished.
'
just as consistently refused. It is
Labor Act and its admirable ma¬
to
regard
transportation,
and charged to expenses in 1943, in
my understanding that this atti¬
chinery for settling controversies
tude on the part of labor is due particularly the railroads, as de¬ addition to $100,000 which was
as
to rates of pay and working
to the fact that it is the settled serving of treatment other than similarly charged in 1942.
conditions.
Reference is made
that accorded to industry general¬
/'The
net
earnings
for
1943
policy of the unions to agree to
constantly to the fact that as a
ly.
Thus
railroads
have their amounting to $4,332,020 as above,
no type of procedure that will pre¬
result of its beneficent operation
vent it from exercising its eco¬ separate systems of retirement and were credited to undivided profits,
there has been no serious inter¬
Secretary
of
the
Treasury
allowances; they from which account
$1,200,000
nomic power, which is an eupho¬ unemployment
ruption of traffic as a result of
without has been disbursed to the stock¬ Morgenthau announced on Feb. T
nious reference to the privilege compensate for injuries
strikes for nearly 22 years, the last
that the tenders for $1,000,000,000,
of striking. If arbitration is not reference to the ordinary Work¬ holders in dividends, and $1,847,serious difficulty of this nature
or thereabouts, of 91-day Treasury
accepted by the parties and the men's Compensation Acts; they 904 transferred to general reserve,
bills to be dated Feb. 3 and to
being in 1922, when a nationwide
Mediation Board, looking at the have this special plan for dispos¬ leaving a net balance in undivided
strike occurred among the me¬
mature May 4, 1944, which were
picture as a while, believes there ing of labor controversies about profits of $3,101,624 on Dec. 31,
chanical forces on the roads. That
It 1943, an increase during the year offered on Jan. 28, were opened
is danger of an interruption of which we have been talking.
strike resulted from dissatisfac¬
at the Federal Reserve Banks on
traffic the President is notified may be plausibly argued, there¬ bf::$l,284,116,///^
tion with the decision of the old
Jan. 3////HS /■:' //// /// ^'SMr. Whitney said that, in gen¬
and he appoints an
Emergency fore, that this historical differ¬
Labor Board, created by the legis¬
The details of this issue are as
Board, charged with the duty of ence in treatment justifies the eral, deposits have stood at higher
lation of 1920,
follows:
•
/■/'
//;'
levels. He added that loans con¬
ascertaining the facts and making proposal..
Total applied for, $2,459,243,000;
That Board, composed of repre¬
But if the railroads are to be nected^with the y^ai: effort^ espe-?
recommendations to the President

ing anybody as to
the views I shall

^

prohibit

by

interference

Stabilization Director. Or, in

other

words, the suggestion "is that all
railroad labor controversies should

partisan

-

,

.

,

•

.

total accepted, $1,003,742,000 (in¬
of the matters in governed in the matter of wage cially Regulation V loans, which
cludes $71,527,000 entered on a
disputes soley by the procedure of are partly guaranteed by the U. S.
,
/
fixed-price basis at 99.905 and
have / increased,
This is the Board which has al¬ the Railway Labor Act, at least Government,
.
/ '
for the war's duration, the judg¬ while loans for normal commer¬ accepted in full).
ways (functioned in the
Average price, 99.906; equiva¬
major labor disputes arising since ments of the fact-finding board cial purposes have remained at
lent
rate
of
discount
approxi¬
He also stated that
the passage of the Railway Labor should be final, conclusive and low levels.
mately 0.374% per annum.
Act. As I have pointed out, the binding on all the parties. As the participation in the financing pro¬
Range of accepted competitive
conclusions of this Board are not law stands now, neither party is gram of the Government has con¬
bids:
;
'
1
privileged to ignore the judgments tinued and its holdings of United
binding upon
a of the Emergency Board. Without States Government securities have High, 99.920; equivalent rate of
of 1Q22
One of its decisions was matter of
fact, the
discount
approximately
0.316%
raising any question as to the increased.
Eharnlv challenged in court by an have not always
fairness and adequacy of such an /Capital funds and general re¬ per annum. Low, 99.905; equivalent rate of
railroad, resulting in a In
duction in rates of pay which the arrangement in normal times, and serves of company totaled $50,discount
approximately
0.376%
Supreme Court decision in 1923, Emergency 'f Board disapproved; realizing the force of objections to
333,924 on Dec. 31, 1943, and con¬
holding that the decisions of the the carriers acquiesced.
But in any law that arbitrarily controls sisted
of
capital,
$20,000,000; per annum.
Board were not enforcible by legal
(23% of the amount bid for at
individual
or
collective surplus,
1941, when an Emergency Board either
$20,000,000;* undivided
the low price was accepted.) /;
process and that they had no force recommended : increases- 'which
action, it seems to me that in time profits, $3,101,624,; and general
There .was a maturity of a sim¬
except as an appeal to public were / unsatisfactory to the err/ of war, when sacrifice is
the reserves, $7,232,300. ,/..'/■/ //'/
ilar issue of bills on Feb. 3 in the
opinion..
y/y/y
nation,
the
The bank's holdings of U. S.
ployees and a strike was called by watchword of the
amount of $1,002,630,000/// ///
Here then was a Board with an
the leaders of labor
to enforce legislative body may well pro¬ Government securities of $487,/With respect to the previous
anomalous
status, neither flesh
their demands,
the strike was vide that the decisions of the arbi¬ 615,089 amounted to about 64% of
week's offering of $1,000,000,000
nor fowl. It was something more
tral body shall have the force of the total
assets compared with
averted only as a result , of an
than an advisory board, clothed
of 91-day bills dated Jan. 27 and
about 60% at the close of 1942.
agreement by management to pay compulsion.
maturing April 27, the Treasury
only with power to recommend. more than the Emergency Board
Nor do I believe that the nation's Mr. Whitney said they averaged
disclosed the following results on
It purported actually to fix wages
thought justified, which agree¬ policy of stabilization in the in¬ about five and one-half years to
Jan. 24:
and determine working conditions.
■///'//:/^/>
ment grew out of the mediatorial terest of avoiding inflation would maturity or about three years and
Total applied for, $2,290,465,000;
And yet there were no sanctions
efforts of the President / of the be grievously, wounded by leaving one month to earlier call date.
*
in the Act that compelled obe¬
total accepted, $1,015,849,000 (in¬
United States and the members of all matters at issue to the judg¬
From Mr. Whitney's report we
dience. It was just a voice crying
cludes $66,702,000 entered on a
the Emergency Board functioning ment of a board organized under also quote:
/•/
in the wilderness to which angry
fixed-price basis at 99.905 and
as mediators.
"The company's investment in
the Railway Labor Act. If compe¬
and excited partisans paid little
accepted in full).
In the latest dispute, coming, to tent and patriotic men are selected Morgan Grenfell & Co., Ltd., was
heed. I may be justified in saying
Average price, 99.905; equiva¬
to make the decisions it cannot be reduced and somewhat changed
a climax late in 1943, the award of
lent
rate of discount
approxi¬
also that the public members, in
the Emergency Board as to the assumed that they will disregard in character^ during the year. The
whom resided the power of deci¬
mately 0.374% per annum.
wages of the non-operating broth¬ the interests of the nation in this investment formerly consisted of
Range of accepted competitive
sion, were not always selected
erhoods was,, after §ome delay, very important1 matter of price
£267,600 4%% preference shares bids:
'
solely by reason of their demon¬
control.
Indeed, the board that and
£1,000,000
"A"
ordinary
strated competency to pass upon accepted by both men and man¬
High, 99.925; equivalent rate of
shares. As the result of a recap¬
gave the eight cent award in the
discount
the technical niceties that attend agement, only to be rejected by
approximately 0.297 %
the Director of Economic Stabi¬ recent case of the non-operating italization and reclassification of
labor disputes. :-'////&
per annum.
.
in its shares by Morgan Grenfell & Co.,
lization as being, in his opinion, unions expressly recited
And so it came about that when
Low, 99.905; equivalent rate of
not in accord with the standards judgment that due consideration Ltd., and of disposals by the com¬
discount
approximately 0.376%
the futility of this Board had been
of the Stabilization Act as inter¬ had been given to the provisions pany
of preference shares, the
amply demonstrated the railroads
per annum.
v •.
' -;
.
of the Stabilization Act and the company's holdings were reduced
and their employees, after pro¬ preted by the War Labor Board.
(32% of the amount bid for at
In the case of the operating unions Executive Orders interpreting and to £ 183,000 4% preference shares
tracted consideration and as a re¬
the low price was accepted.)
the award of the Emergency Board applying
it.
If it should be and
£250,000
ordinary shares,
sult of many conferences, agreed
There was a maturity of a sim¬
was
rejected by the unions and concluded that an expert in stabi¬ and the company received £801,- ilar issue of bills on Jan. 27 in
upon the provisions of the 1926
accepted by the carriers.
But in lization should participate in the 140 in cash which, being subject amount of $1,008,065,000.
Railway Labor Act, and the agreed
justice to the unions involved it hearings and decisions it may very to the restrictions of the British
With respect to the offering of
measure was promptly ratified by
should be stated that this deci¬ well be provided that the Stabili¬ finance regulations, has been in¬
two weeks ago of $1,000,000,000
Congress.
Over the protest of
Director or his selected vested
sion reflected the views of the zation
in relatively short-term of
91-day bills, dated Jan. 20 and
management the Act was amend¬
Stabilization Director rather than representative should sit upon the sterling
securities.
The voting maturing April 20, the Treasury
ed
in
important particulars in
the
independent views of the arbitral board, with power to vote, trust, mentioned in the last report disclosed the following results on
1934, but we need not concern our¬
members of the Emergency Board. though not to veto.
to stockholders, relating to the
Jan. 17:
selves, at this moment with the de¬
If it be thought that such author¬ company's
It is safe to say that the machinery
holdings of ordinary
Total applied for, $2,273,537,000;
tails of the amendments.
We are
of the Act would have been suffi¬ ity is inconsistent with the gene¬ shares of Morgan Grenfell & Co.,
total accepted, $1,017,180,000 (in¬
concerned, rather, with the opera¬
cient to
settle the
controversy ral theory as to the function of a Ltd., was terminated during the
tion of the original Act and the
cludes $59,463,000 entered on a
Emergency
Board, year."
amicably if the Stabilization Di¬ Presidential
Act as amended.
fixed-price basis at 99.905 and ac¬
consideration might be given to
rector had not intervened.
Reference is made in the report
The theory of the Railway La¬
cepted in full).
making
arbitration compulsory, to the admission of the company
This is by no means to say that
bor Act is that there should be
Average price, 99.905; equiva¬
with the Stabilization Office rep¬ as
a
member
of
the Clearing
his action was necessarily unjusti¬
no
lent
rate
of discount approxi¬
provision for decisions that
resented as an additional arbi¬ House Association,
on
Oct. 29, mately 0.374 % per annum.
fied. If the Stabilization Act called
either party is legally bound to
trator. In this connection all who
1943, which has previously been
for his intervention unquestion¬
Range of accepted competitive
accept. It provides for conference,
are
interested in the
question noted in these columns. Likewise
was
his duty to act.
bids:
mediation, arbitration and fact¬ ably it
Whether
the
Stabilization Act may profit by reading the unani¬ the report makes mention of the
finding. The law prohibits strikes
High, 99.925; equivalent rate of
mous
opinion of the Supreme death of Mr. J. P. Morgan, Chair¬
or lock-outs until the procedures
actually applied to railroads may
discount
approximately 0.297%
Court of the United States in the man of the Board, on March 13
be the subject of a lively laVyers'
prescribed in the Act have been

sentatives of the public, manage¬

passed out of ex¬
istence in 1926 with the enact¬
ment of the Railway Labor Act,
amended in important particulars
in
1934.
The 1920 Act proved
satisfactory to neither labor nor
management. Its conclusions were
large segment of
in the shwstrike
ment and labor,

lfbofrlsuftin'
important

as

to

the right

controversy.

.

the parties. -As
conclusions
been accepted,
1938 the carriers ProPosed a re"

.

.

.

•

.

followed
the

Toledo

Peoria

and Western

compose
the
differences
friendly negotiation. Ii; no major

debate.
To

rence

me

of

it is clear that a recur¬

what

in which the

Court, only ten days

lately

refused to arbitrate.
dispute in recent years have these fact, the non-operating brother¬
Whether the views I have ex¬
mediating efforts been successful. hoods, after there had been an
When
the
futility
of
furtner agreement between employers and pressed are sound or not, some-




per annum.

case

Low, 99.905; equivalent rate of
approximately 0.376%
thing should be done to prevent discount
happened ago, refused to allow a court of another like Comedy of Errors, per annum.
*
.
should not be permitted and that equity to enjoin acts of violence
(33% of the amount bid for at
which but for good luck and the
by striking employees solely on
the low price was accepted.)
by it should be prevented -at all costs,(
the ground that the railroad had good, sense and cool judgment of
even if legislation is necessary. In
There was a maturity of a sim¬

through. If negotiations
properties

fail, as they
nearly always do, the Mediation
Board steps in and endeavors to
on

some

well

of

the

have

Errors.

participants might
a Tragedy of

become

(

ilar

issue

amount of

of

bills

on

Jan.

$1,000,766,000.

20 in

THE COMMERCIAL

SEC Asks To Vacate Order

Permitting
Department intervention in NASD Case

The filing by the National Association of Securities
Dealers Inc.
of a motion and
supporting brief, with the Securities and

Exchange

Commission requesting that the Department of Justice's
appearance
be vacated in the
proceedings before the Commission involving the
NASD and certain of the Underwriters of the
$38,000,000 Bond issue
of the Public Service
Company of Indiana that was sold in 1938, was
made known by the SEC on Jan.*^
29.
The latter in its announce¬ tion of the
ment stated that the NASD asserts

an

opportunity for oral argument be¬

"among other things that the De¬
partment. of

Justice

has

set aside its

clared

fore the Commission

if requested

order, the NASD de¬

that

the

of

concept

fair

play had been clearly violated, it
was reported in
Philadelphia ad'vices

Jan.

26

to

"Times":;'which
the

Jan. 5 had

partment
whether

the

New

pointed

Commission

in

its

York

out

that

action

of

indicated that the De¬

interested

was

not

or

agreements,
volved

NASD, will afford

& FINANCIAL
CHRONICLE

in

one

the

in

underwriting

of the factors in¬

Public

Service

the

Jan.

in¬

26

account

from

by either of the parties, and will
Philadelphia to the "Times" we
terest in the proceedings which render its decision
upon the ques¬ also
quote:
entitles it to intervention, that the tion of
participation in these pro¬
The NASD not
only challenged
rule does not apply to proceedings ceedings
by the Department of the
right of the department to in¬
of this type, ; andX that it is in¬ Justice."
i
tervene, but criticized the SEC for
valid."
Reference do the granting of
Accordingly,
says
the
its failure to notify the Associa¬
SEC -"the Commission will con¬
permission to the Department of
sider the briefs filed by the NASD Justice to intervene was made in tion that the Department had ap¬
and to be filed

no

by the Department these columns Jan.

of Justice with respect to the mo¬

13, page 168.
In calling upon the Commission to

plied for such
after

the

intervention until

application

had

right

been!

:

a.

on

Dec.

propriate forum, it is only on be¬
in the interest and in the

..

charged

intervene

to

granted

that
had

27,

but

the

half,

been

that

name

said

it

had

been

to intervene to

served

with

granting

the

which

familiar with

*

distinct,

States"

the

could

deter¬

mine regarding whether there had
been a violation of the anti-trust
laws could affect the
Department's

a

a leave

to

power

enforce, those

laws, the

NASD

continued, declaring
circumstance "deprives the

partment

of

Justice

of

that
De¬
those

sought to be made the justifica¬
tion of extra-legal action."

case.
^

are

*

extra-legal arguments of alleged
showing necessity which are sometimes

by

legitimate interest in the
"We

quite

United

charged.
Nothing the SEC

Department.

agencies,

entity

the

States *

sort of an anomal¬

NASD

Department did not, the
NASD charged, fulfill the
require¬
ment of Rule XVII
(A) of the
commission, regarding interven¬
tion by governmental
representa¬
and

the United
some

legal

from

The

tives

as

ous

petition to intervene until it had
requested one in writing on Jan.
14.
In the meantime the NASD
copy of the order

of

(not)

it

not served with a
copy of the

was

of

Indiana case, were in violation of
the
Sherman
Anti-Trust
Act.
From

granted,
The
NASD

no

statute

The

authorizes the Department

NASD

said

that

the

pro¬

of Justice to
appear as a party in

ceeding begun in 1941 had been a
of
any proceeding or in any forum. matter
public
record
since
Where the Department of Justice March, 1942, and that the
Depart¬
may
invoke intervention in. ap- ment was, or should have been, on
notice of it

"Now,

since.

ever

after

briefs

have
submitted by both interested
ties in the controversy and
the proceedings would have
submitted

on

for,

other

first,

been
par¬

after
been

oral

argument but
commitments of

the

commission, and second, the
subsequent illness of counsel, the
Department of Justice seeks leave
.to

intervene."

brief

as

merely to file

friend

a

'■*,'/

...

An application

of

the

a

court

would

have been "altogether too
late" at that stage, the NASD said.

The NASD complained that the
Department of Justice was at¬

tempting;,; with
make
ana

SEC

approval to
Service of Indi¬

the Public

"the vehicle of

case

larged

inquiry,"

and

some

en¬

that

said

nothing in the legislative history
the Maloney act, under which

of

the., Association

established,

was

carried any suggestion or

implica¬
case.!

tion that such could be the
'

"Needless to say, if any such
possibility had been considered to
exist, however remotely, no se¬
curities

association
could
evet
have been organized for
registra¬
tion or would ever have been
reg¬
istered

under

the Maloney act;
Congressional purpose to

and the

encourage

self-regulation

securities,

business

been

nullified at

NASD

of

would

the

have

the outset,"

the

^id.': ;X .

The

case.involves

w

the

right of

the NASD to punish members who*
violate the agreed offering price
of a; security, In this instance the
association fined about >70 of the
.

underwriters of the 1938 issue for

alleged

failure

hold

to

the

to

agreed offering price of 102.

...YOUR

HPTH

WAR

LOAN

In its announcement of Jan. 2&
the SEC in indicating the basis of

QUOTA

its action

in support of interven¬

tion by the

Department of Justice

said:

WHETHER in plant meets its leadershipfails, lies
largely your
hands. Your quota, or
put
your

it over—but

if

you

can

haven't already got

smooth

a

run¬

War Loan Organization at work in
plant, there's not a minute to lose.

ning, hard hitting
your

Take

over

the active direction of this drive to meet

And while

you're at it, now's

a

good time to check*

those special cases—growing more numerous
every

day—where increased family incomes make pos¬
sible, and imperative, far greater than usual invest-*
ment through your plant's Pay-Roll Deduction Plan.
Indeed, so common are the cases of two, three, or

"On

December 28, 1943, the De¬

partment of Justice filed with the
Commission

document

a

request¬

ing intervention in the proceed¬
ings before the Commission under
the

Securities

Exchange Act of
the disciplinary
action taken by the National As¬
1934

to

review

,

—anc/

break—your plant's quota. And

ent to

to it that

associates, from plant superintend¬
foreman, goes all-out for Victory!

every one

of

see

your

To meet your
to

hold your

ments

plant's quota means that you'll have
present Pay-Roll Deduction Plan pay¬

at their

amounts

as

assigned to
of at least

all-time high—plus such additional

local War Finance Committee has
In most cases this will mean the sale

your
you.
one

$100 bond per worker. It

means

hav¬

fast-cracking sales organization, geared to reach
personally and effectively every individual in your
plant. And it means hammering right along until
you've reached a 100% record in those extra $100
ing

a

—or

better—bonds!,

-

v

even

more, wage-earners

do well to
sonable

forget having

in

a

ever

single family, that you'll
heard of 10%' as a rea-.

investment.

Why, for thousands of these
'multiple-income' families 10% or 15% represents but
a
paltry fraction of an investment which should be

Securities

for

violation

certainly not going to let anything stand in the

of
plant's breaking its quota for the 4th War Loan!
way

Particularly since all you are being asked to do is to
sell your own people the finest investment in the
own

share in

Victory!'

Dealers,

the

of

mem¬

priceof
the

maintenance
provisions
syndicate agreement used in
nection with

Public

con¬

offering of bonds

an

Service
Rule

Commission's

you've gone at your wartime pro4
quotas—and topped them every time—you're

world— their

bers

Indiana.

After the way

your

of

Inc., against certain of its

of

running at 25%, 50%, or more!

duction

sociation

Company

XVII
Rules

(a)
of

of

of
the

Practice

provides, in part: "Any interested
.

agency ;.

.

.

...

to any

proceeding

of

a

shall

become
upon

United
a

party

the filing

written notice of appearance

therein."
no

of the

.

States

The Commission raised

question

as

to the form of the

application and granted interven¬
tion.

•,

Rottenberg With Noyes
This space contributed to Victory by

bach
This is

an

official U. S. Treasury




THE

the
advertisement—prepared undet

COMMERCIAL

FINANCIAL

auspices

AND

CHRONICLE

o{ Treasury Departmerit ^arid Wat, Advetthitl&.Council*^

CHICAGO, ILL.—Arthur I. Rot¬
tenberg
has become
associated
with

David

South

La

A.

Salle

Noyes & Co., 203
St.', members of

the New York and

Chicago Stock
Exchanges.
Mr. Rottenberg was
previously connected with Brailsford & Co.. Webber, Darch & Co.
and other La Salle St. firms. '

.

THE

522

STANY

Appoints 1944
Standing teimitlees
standing commit¬
for 1944 have been appointed

NASD Profit Limitation

Markets To Small Business

the losses.

(Continued from page 499)

■

:

longer in doubt on
received a copy of a letter dated Nov. 9,
1943, which had been previously sent to all members of the
Arrangement Committee—District business Conduct Committees, and read the follow¬
Michael
J.
Heaney,
Chairman,
Joseph McManus & Co.; Frank A. ing paragraph: "In the final analysis, the Business Conduct
Pavis, Chas. E. Quincey & Co.; Committee must be impelled to act where a member sells
William T. Schmidt, Laird, Bissell securities at a
price which bears no reasonable relationship
& Meeds; Stanley C. Eaton, Bento the current market.
Isolated transactions, where the

by The Security Traders Associa¬
tion of New York, Inc.:
v',:

dix, Luitweiler & Co.; C, Jerome
Aal, Abraham &. Company; Wil¬

(Pflugfelder, Pflugfelder,
Bampton
&
Rust;
Allison W.
Marsland, Wood, Gundy & Co.;
Stanley M. Waldron, Wertheim &
Co.; Gustave J. Schlosser, Union
Securities Corp; John M. Mayer,
Merrill Lynch, Pierce, Fenner &
liam

_

H.

Tax

tee—P.

Co.; E. Everett Van

&

tioned this.

this

score

In any event, they were no

when they

spread or mark-up is in excess of 5 %, may warrant only in¬
formal inquiry or a precautionary letter but where practice
is established, formal complaint procedure is the recom¬
mended course."

Tuyl

-

% y!■.■

■

Lyv

Recently, the Secretary

"**

remains after the war or
ducers and

•.
.

When the rule was

,

first promulgated the contention was

:

'

*

in the

A;

from the survey were made in articles
readers.

"Chronicle" and in letters received from its

not, the many small pro-

distributors will be needed in a

state.

,'

thriving
■

r

"**Small

advanced that since large

Tuyl, implications drawn

& Abbe; Wellington
Hunter, Hunter & Company; Wil¬
Van

*

.

of Commerce, Mr. Jesse H.
Jones, in speaking of that largest segment of our so-called
free enterprise system, said in part, .V
',yy
Small business role concerns its essentiality to :
small community life. Our Nation is predominant,
ly made up of small towns and cities. Their busi¬
ness life is predominantly in the hands of smaller
establishments.
When they ail financially the en?|| tire community suffers. And whether the wartime
>
expediency of decentralization in manufacturing

Wall Street firms doing a volume
business and those not having a retail sales force can operate
'
f
on a smaller mark-up basis they, therefore, should have been
and Legislation
Commit¬
excluded from the survey.
Other objections to the official
Fred Fox, Chairman, P. F.

Beane.

Fox

sity for risk capital. Even some of them go so far as to advo¬
cate that the Government or the Federal Reserve banks make
loans to these small businesses and be prepared to "absorb

Rule Would Close Capital

"

The following

tees

Thursday, February 3, 1944

COMMERCIAL & FINANCIAL CHRONICLE

enterprises must be maintained because

they are the essence of democracy. Without them,
private initiative with its accompanying risk-taking
will be stifled. ' Without them the democratic sys¬
tem as we have known it will cease to exist."
Perhaps no one in this country

; r

\%

has better reason to

But his
Wholly aside from this phase of the subject, the fact of know the problems of business than Mr. Jones.
the matter is that if this rule is not rescinded or abrogated excellent recommendations cannot be carried out unless
&
minion Securities Corp.
and is enforced, it will have the effect of changing the entire small businesses can have free access to the capital markets.
Municipal Committee—Harry J. custom of the securities business 2 regarding mark-ups since If the capital markets are strangled with control and regula¬
Peiser, Chairman, Ira Haupt &
the survey in question shows that a large percentage of the tions which make it impossible to serve this risky and specu¬
Co.; John M. Gertler,
Gertler,
lative field of small enterprise, our system of free enterprise
Stearns & Co.; J. William Roos, members do not comply with the 5% gross mark-up rule. In
Noyes
Co.; Walter F. Saunders, Do¬

liam

Porter, Hemphill,

K.

the result will be that at least 30% of the small and private initiative will be undermined and destroyed in
obliged to close their doors and seek employ the cradle of its mainspring.
ment in another line of business or become salesmen for one
Another matter concerning this principle of a gross fixed
List.
Auditing Committee—David R. of the large investment firms. It must be remembered, too, charge which should be borne in mind by the security deal¬
Mitchell, Chairman, Blair F. Clay- that the Rule does not take expenses into consideration. It ers and by all others concerned is the fact that a fixed charge
baugh & Co.; Walter
Mewing, does not limit a dealer's net profits but his gross mark-ups. or fixed rate of
any kind, whether it be a minimum or a
Geof¬
J. Mericka &
Co., Inc.; Roald Morton, The Blue

MacBride, Miller & Co.; T.

this event,

frey Horsfield, Wm.

dealers will be

John Butler, Huff,

D'Assern & Co.;

And since the "powers that "be" in this association do not maximum, has always tended to become the flat charge be¬
Committee — John have the power to fix rents, fix wages, fix wire service fees cause it is legal. This fact is well known by labor. One of
Kassebaum, Chairman, Ingalls & and all other costs pertaining to maintaining a business, who their most difficult fights has been the conflict between a
Snyder; Harold B. Smith, Collin, is to
say what the effect of this Rule will be a year or two, minimum wage and a wage which should be paid to em¬
Norton
&
Co.;
Benjamin Van
or more from now?
What will be its effect if dealers are con¬ ployees on their merits. The strong tendency has been for
Keegan, Frank C. Masterson &
Co.; Wilbur R. Wittich, Wyeth & fronted with a few years of sluggish, inactive business? The the minimum wage to become the wage. This wage has been
Co.;
Walter
F.
Saunders, Do¬ answer, of course, is that only large dealer organizations more than some employees have been worth, often, but more
Geyer & Hecht.

«

,

Reception

Securities Corp.; Stanley with
enough capital to live through a
Roggenburg, Roggenburg & Co.;
costs and a small volume of business will
B. Winthrop Pizzini, B. W. Pizzini
& Co.; T. Frank Mackessy, Ab¬
^
: To the rank and file of large
bott, Proctor & Paine; William K.
very large gross charge and many

long period of high

minion

Hemphill, Noyes>& Co.;
Joseph Janarelli, Freeman & Co.;
John
J.
O'Kane
Jr., • John
J.
Porter,

O'Kane

Jr.

&

Co.

dealers 5% seems like a
of them will, on reflec¬
tion, observe that their profits would have been quite satis-,
factory in recent years if they had applied the 5 % maximum
charge rule. Despite the fact that this rule did not exist,
it is observed that a large percent of the membership charged
less than 5% and, in fact, it appears that a large volume of

Committee — Arthur
Burian, Chairman, Strauss Bros.,'
George Leone, Frank CjgMasterson
&
Co.;
Joseph
Colandro, business is done at 3% or less.
.White, Weld & Co.
sound, undemocratic, unfair and
Bowling

Committee—Herbert
Allen & Co.
Employment
Committee—Wil¬
bur R. Wittich, Chairman, Wyeth
& Co,; T. Frank Mackessy, Abbott,
Publicity

Allen, Chairman,

Proctor &

Paine.

Reorganization Rails
Comprehensive Analysis
The fourth of the

ries

of

analytical

Campbell Se¬

studies of re¬

organization railroad securities is
now on the press.'
More compre¬
hensive than the previous analy¬

survive.

is just another rule toward
regimentation of the capital markets on the road to

this

and
statistical
resume showing trends and stand¬
ard of measurement for these rail

traffic

factors

securities as compared with 20 of
the leading solvent roads; 20-year
record of earnings applicable to
fixed

and contingent

charges to¬

and all divi¬
dend requirements of new issues
to be traded; arbitrage tables cov¬
ering these seven roads so that

gether with fundings

charge has always tended to become the

mum

charge, and

who could do business at lower
charges are always well within the law by making the maxi¬
mum
charge, and thus they have a sheltered monopoly
the efficient entrepreneurs

profit.

.

1

\

>

^

If the NASD Board would extend its vague

thinking into

"philosophy" and express a clear interpretation
the
of this principle in words that the trade could understand,
bureaucratic control and totalitarianism.
it would undoubtedly make clear the fact that while 71 % of j
% If the NASD Governing Board wishes to engage in the the transactions reported by those who answered their ques¬
realm of philosophy, suppose we ask the simple question, tionnaire involved a gross charge of 5% or less, with this
Why was a large percent of the business done at a gross of rule established the tendency will be for the gross charge to
3% or less as indicated by the survey? (And keep in mind be 5%. (The Board fears this and cautions members against
very definitely that these charges and these business prac¬ raising their usual mark-up.) This will be the legal charge.
tices developed without any rules or regulations handed It will be the charge within the rules of the association, It1
down from the inner sanctum at Philadelphia.)
It seems will be the charge that every clerk and every partner can
clear that the reason is the cost of doing business, the com¬ immediately levy in each trade and save valuable time and j
petitive effort^ of dealers to get and hold business and that discussion and, this charge being legal, most customers will j
strong underlying

desire of every business

that wishes to

build

new

at which many deserving

employees work because it was the legal wage. Similar state¬
ments might be made about attempts to fix prices of products
and to fix rates for services. The gross charge or the maxi¬

The principle itself is un¬

up and live to deal fairly with its customers and make
report covers the
securities of the following seven a good impression of dependability, honesty and fair practice.
reorganization rails: Seaboard Air
The fact, however, that some dealers have found it
Line; Denver & Rio Grande West¬
necessary to charge 5%, and some even more, is no indict¬
ern;
St.
Louis-San
Francisco;
The
Missouri
Pacific
System;
New ment of these dealers until each case is examined.
York, New Haven & Hartford; volume of business, the costs of doing business,'the costs
Chicago, Milwaukee, St. Paul &
of running offices in different places, and a great variety
Pacific; and Chicago, Rock Island
& Pacific.
The report includes of factors in each particular transaction must determine,the

ses,

often it has established the wage

costs and the fair

.

If the

charge for performing

The 5% Rule

such services.

and Small Business

5% rule stands and is enforced many

dealers will,

of the
stocks

only, as these
can be placed with only a fraction of the time and effort.
This policy will have an adverse effect on the securities of
large, well known corporations

Competition in the business will go out the win-1
the rising costs which most dealers expect and;
almost everyone else expects in the next few years.
The
small independent dealers will be driven out of business and®
a few
large dealer organizations will monopolize this trade:
to the detriment of not only the small dealers that are forced
out, but to the detriment of the public wl\o are seeking in-j
vestment service in the over-the-counter business, and to the®

accept it.
dow

with

small businesses who need capital, as j
stagnation of business with reduced pro-j
employment.
.v. v .
•
.

detriment of the many
well

as

add to the

duction and
•'

as previously pointed out, cease selling the securities
smaller, little known companies and will handle the

and bonds of

the realm of

No

one

would

question the need for ethics in, this

busi-i

in any other business,, for that; matter, but law and,
rules in violation of sound business principles have, never yet
ness, or

created honest

individuals and have maintained honest busi-i

practices only on the surface. It is just as unethical for;
a dealer to do business at substantially less than cost, which
will sooner or later force him out of business and deprive

ness

the smaller corporations now on the market and as time goes him and his family of satisfactory living conditions, as it is
at the low¬ on it will
consequently make it more and more difficult to do business at an unfair charge above costs which is un¬
est
possible
prices
predicated
for small corporations to raise funds through our capital just to the buyer or seller.
upon the Campbell evaluations.
The 5% gross mark-up rule is unfortunate and unsound
markets as heretofore.
The price of this new report is
It seems difficult for any public official to make an in principle hnd should not be permitted to. stand.
§7.50. Checks should be sent with
all orders
address Thomas G. announcement these days without adding his sympathy for
(1)
No inkling as to the use the information was to be put
small businesses and praising their valuable service and
Campbell,
Railroad
Consultant,
to was given in the letter accompanying the questionnaire.
These
C. E. Stoltz & Co., 25 Broad St., necessity in post-war employment and production.,
In fact, a reading of it would have led the recipient of it to
same
public officials point out from time to time the neces¬
the,buyer may

obtain the new. re¬

organization securities

-—

New

York City.




Volume

159

Number 4252

New Tax Bill
Agreement

view by the Court of Tax
Appeals
of all contracts that had been
re¬
negotiated, whether there was a

Agreed To In Conference

reached

was

THE COMMERCIAL & FINANCIAL
CHRONICLE

Jan. 31

on

the

tax-bill

by the
Senate and House conferees, who undertook to
adjust the .differing
provisions of
the
revenue-raising legislation proposed by both
branches of Congress. As approved
by the conferees, it is estimated
that the bill will
yield $2,315,800,000 in new revenue, which com¬
pares with $2,139,300,000 as the bill
passed the House on Nov. 24,
and

$2,275,600,000

the

Senate

adopted

as

Jan.

on

21.

It

.

on

new

a

20%

new

The

rate.

tax

considerably short of the Admin¬

railroad,

tickets rises from 10% to 15%.

request

<

for

$10,500,-

000,000,
crease

nual

but is expected to
the Government's total

income

500,000,000

to

than

more

similar

in¬

local

an¬

security

taxes

bus,

boat

boost

and

Act, but the House redefined
contracts in

A

limited

gotiation.

provided the bill
law by Feb. 19. 1"

comes

:

Postal rate increases total $96,-

ancl survivors'

benefits at 1%

for

1944,

instead

of

the

rates

to

double

age

permitting

1, as
provided under existing law; the
conferees

in

their

concluding

ac¬

tion agreed to retain the 1% rate.
One of the final acts of the con¬
ferees was the acceptance of a
series of amendments to the War
Contracts
Renegotiation
Act
.

whereby

the

Government

noted in the Associated Press

the conferees before dis¬
posing of the bill rejected a House
accounts,

amendment

which

would

have

taxed

pari-mutuel betting at race
tracks 5%.
Senator Barkley (D.Ky.); one of the Senate conferees,

postage rates

were

empt

not

were

George

changed,
and

both

Senator

.

.

unfair

and

for

ment

tracks

race

version

to

the

it

would

in

step

levy

sons,

Govern¬

and

its

tax.

own

The

Press

and

advices

from Washington, Jan. 31, further
stated:

Individuals will be called

.

to

bear

a

an

in

year

tax

upon

were

tions

\

disallowance

forFederal

I,

paid.,

of

abandoned on the ground
the resultant system would be too

However,

the

less.

income

and

victory

tax

which

on

March

15.

more

bill

new

at

More
from
on

than

a

increased
new

and

articles

The

billion

revenue

dollars
will

it

as

revenue.

of

The

come

stiff est

is

rate

is

result¬

primarily

-

said

"Times"

the

ton

articles

rises

Admissions

places

of

taxed

1%

cosmetics and toilet

from

to

10%

movies

entertainment
each

on

five

will

be

emasculated

cents

of

Act.

from

some

rates on wine
:

$8,

also go up.

and

the

Senate

too

v

the

Renegotiation

far.

rewrote

and,
House

the renegotiation

in

the

opinion

conferees,

of

went

■

intended to supplant examina■■VA

A

marking

The

up

up securities on the average
NASD Business Conduct Com¬

a member dealer $500 for
making a practice
securities by only approximately 10%.

Commission

contended

that

when

to

Hence

the

Commission's

citation of the disciplinary
an NASD Committee
in a 10% mark-up case.
The
Court affirmed the
Commission's order revoking Hughes &
Co.'s dealer-broker
registration and in its opinion made ref¬
erence to
this citation.
action of




of

close

such
of

stock

business

Walter A. Peterson, Treasurer

the

held January
31, 1944, a dividend of
twenty-five cents per share was declared

March 15, 1944, to stock¬
holders of, record at the close of bus¬

1944,

iness

GEORGE L.

of

into

Dec.

the

be'mailed.

THE BUCKEYE
26

renegotiate

war

New

York,

are

1944

business February

The

Commission,

18,

that the bill be signed.

the

conferees

said

No. 136

1944.

An

J. R.

FAST, Secretary.

One

after

the

meeting that while Congress had

taxes, the Administra¬

BAY

Board
Five

Class

capital

of

Five

percent

and

amount

No.

stockholders

York,

payable

stockholders of record
business February 15,

the

on

percent to
Debentures

will be mailed.

for
Exchange

The

20
after

February

one-half

January

No.

at

and

on

of

stock

the

on

ure

the

appeared in

our

meas¬

Jan. 27 issue,

400, and Jan. 20,

page

tax

page 266.

A

UNITED

quarterly

b?en

declared

record

W.

31,

at

will

dividend
on

the

Comoany
to
holders
of
record

close

the

COX,

Bond Glub Of

Chicago

10,

To Hold Annual Dinner

United Shoe
The

-

ruary

the

Slate Of Officers
nual

dinner

members

and

of

The

meeting
Bond

I.-;;:

tal

Ballroom

Hotel

of

the

sisting

of

T.

Blackstone

Weller

ap¬

proval the following nominations

coming

year:

directors

1944,
of

the

All

to

for the

r

year,

directors

%:■ /

the

to

officers

serve

stock,

February

National

State

of

Bank

Nebraska

of

the

1,

is

Dated

to

of

of business

record

at

1944.

located

claims

one

and. Milton S.

Hawes, Harris Trust &

,

Savings Bank; Eugene Hotchkiss,
Lee

Higginson

Corporation;

^

™

Dean

McCormick,

^

Cormick &

^

uu

Kebbon,

D.
n/r

Mc-j

the close

at

H. C. STUESSY,
Secretary • Treasurer

January 28,
1944
Butte

are

for

FINANCIAL NOTICE

therefore
payment.

:

1943.

Chicago, Milwaukee, St. Paul
and Pacific Railroad

NASD Business Conduct

Finance Gommiitees
The National Association of Se¬
curities Dealers, Inc.
announces

appointment

of

the

following

committees to serve in 1944:

Committee:

Higginson Corporation, Chi¬
cago;
Albert Theis, Jr., Albert
Theis & Sons, Inc., St.
Louis; Wal¬
lace H. Fulton (ex
officio), Phila¬
delphia.
National Business Conduct Com¬
mittee:

Ralph E. Phillips, Chairman, Dean Witter & Co., Los An
Seies; Peter Ball, Ball, Coons &
Co., Cleveland; John H.
Barret,

Company

SEEKS NAMES AND ADDRESSES
OF BONDHOLDERS.

Trustees

of

the

Railroad are seeking names
their addresses and the amount
by them to enable the Interstate
Commerce Commission to submit such plan of
reorganization as may have their approval and
that of the District Court. The following are
the issues outstanding:
■
4
•
'
of

the holders,

of bonds held

CM & St. P. Ry. Co. General Mortgage

CMStP. & P. RR Co. 5% bonds of 1975

.

CMStP. & P. RR Co. Convertible Adjustment
Milwaukee & Northern RR Co. First Mortgage

Milwaukee & Northern RR Co. Consolidated

Lee

for

at

February 10, 1944.

Treasurer

ED. S. DONAHUE, President.
December 2.

shareholders of record

payable- Feb¬

closing it$ affairs.

association

hereby notified to present

Finance

Emrich,. Harris, Hall & Company;
Hardin H.

of Eaton Manufacturing
Company has declared a dividend of
Seventy-rive Cents (75c) per share on
the outstanding common stock of the
Company, payable February 25, 1944,

treasurer.

Corporation have de¬
of
62',20 per share

stockholders

business

First

creditors

'■■ydHy,
_

Kimball,

Patton, will submit for

and

this

capital

NO. 76

The Board of Directors

con¬

Chairman, S. E. Johanigman and
F.

to

1944

business

1944.

a WALLACE- M.. KEMP.

The

of

Crys¬

nominating committee,

1.
of

the

Friday, Feb. 4, 1944.

on

The

of

April
close

DIVIDEND

LIQUIDATION NOTICE

Club

the

per share lias
Preference stock of

dividend

28,

Company

NOETZEL, Treasurer

Cleveland, Ohio

CO.

an¬

In

Chicago will be held in

26,

Common

close

Borden

EATON MANUFACTURING CUMPANY

CAMERON,

of

Checks

$1.75

paid
the

special

a

the close of

1944.

of

Machinery Corporation

Directors

the

on

of

at

January

at

,

E. L.

1944.

York,

clared

on

Secretary.

LEATHER

Prior

be

C.
New

cents

be

1944,

STATES

this

March

forty

1944.
C.

TIIE

on

of

outstanding common stock of this
Company, payable March I, 1944, to

CO.

tion had its way on
renegotiation.
Recent items

dividend

share has been declared

per

payable on Class B
31) out of- the net earnings

business February 11,
New

be

to

and

one

the
year
1943,
payable
Place, New York. N. Y.
21,
1944.
The dividend

to

RAILROAD

of
Directors
has fixed
and
de¬
to be the amount payable
Debentures
(Payment No. 48). a

stock

the

WESTERN

&

percent

A

(Payment

paid

interim

(40tf)
the

dividend
be

COMMON DIVIDEND

■

this Company, payable March 15,
stockholders of record at the close of

to

con¬

expected to recommend, how¬

ever,

of

January 26, 1944.

value of

par

on'

Maritime

PIPE LINE

Broadway

A dividend
of Twenty (20) Cents per share
has- been declared on the capital stock without

ex¬

Secretary

COMPANY

,

bill,

will

w M, O'CONNOR

January 31,1944

31,

may

February 21, 1944. Checks

BUBB

Treasurer

,

Company,

payable

M.

at 3 P.

the Common Stock of the

on

share,

per

1941, to stock- ;,

10,

by

renegotiation.
White House favor
date

NUMBER
154

regular

a

of record February 11,

holders

clared

and

For

...

practice constituted fraud and deceit upon the custo¬
mer.
Now the way the SEC is
attempting to show that a
dealer's mark-up practices do not have a reasonable rela¬
tionship to the current market price is to establish the fact
that the "custom of the trade" is to
go in for smaller mark¬

March

payable

-

tion

the

such

ups.

to

accruing

William A. Fuller & Co.

Hughes firm
sold securities substantially above the
prevailing market
price without disclosure of the mark-up to the customer,
.

the
1944.

At,a meeting of the Board of Directors

Harry W.
Secretary: James P. Feeley, The Beebe, Chairman, Harriman, Rip¬
ley & Co., Inc., New York; Ralph
First National Bank of Chicago.
Chapman, Farwell, Chapman &
Treasurer:
William A.
Fuller, Co.,
Chicago; R. Winfield Ellis,

mittee had fined
of

conferees

The Northern Trust Company.

registration for marking
an

also.

President: George F. Spaulding,

In the Charles Hughes & Co. case the SEC, in an at¬
tempt to prove to the U. S. Circuit Court of Appeals in this«
District that it was justified in revoking the firm's dealerby 25%v pointed out that

declared
quarterly dividend of $1.00
Company have

Reconstruction..Finance Corpora¬

F.

(2)

broker

holders

at

THE ATLANTIC REFINING CO.

Carbon

Directors of Columbian

The

from
the

for officers

believe that the report was
tions by field inspectors.

'•"*

Eighty-Ninth Consecutive
Quarterly Dividend

conferees

CHICAGO, ILL.—The 33rd

The House had provided for re¬

Furs, jewelry and luggage take

to

February 15.

COMMON

GREEN

'31,

After a strong protest by
Secretary Morgenthau and other
Administration
spokesmen,
the
sections

to

1944,
record

CARBON COMPANY

tracts, the Army, Navy, Treasury,

,■

Liquor will bear a tax of $9 per
100-proof gallon in place of the
present $6. The tax on beer rises
barrel

Jan.

opinion

-

a

advices,

gotiation provisions which, in the
of
the
Administrator

other

charge—double the current rate.

$7

the

written

Washing¬

The Senate had approved rene¬

20%.

to

and

Corporation, payable March

1,
of

'COLUMBIAN

-

which further stated:

patrons' checks at caba¬
night clubs.
*

Preferred Stock

January 27, 1944.

The five Federal agencies with

■

renegotiation
the scope of

rets and

on

out

an

its way on

-

over

levied on'

The rate

The

termination

powers

on corpo¬

.

sub-contracts,

30%,

February

on

Hew Tor\, January 26, 1944.

tend this period for six months.

esti¬

court review and the definition of

services.
new

by

1944,

1943

,

The total

is.

dispute

involved

higher excise taxes

and

6%

that a divi¬
dend of 75<* per share for the
quarter
ending February 29, 1944. has been
declared on the ,6% Preferred Stock

C. A. San ford, Treasurer

•:

as

profits

the

'

the

stqrk

business

is hereby given

Checks will be mailed.

increase in the value

invested capital

on

well

as

ing from the changes is estimated
at
$502,700,000
in
additional

-

of

Notice

in

that

Nor does

in

same

reduced

mains

due

are

March*

such

Close

Dividend No. 30

V

23,1944...

ac¬

exempted

slightly.
Otherwise
the corporation tax schedule re¬

changes do not affect 1943 taxes,
returns

the

under

and the credit

'

the

on

of large
inventories, accumulated
to fill war contracts, should be

rations is raised from 90% to 95%,

is

renegotiation,

although the President

$664,900,000.
The excess profits tax

,

holders of

of Atlas

the close of business

recon¬

into

excise

of

pay

taken

of

pay

mated

On all income over $624 a
year, in
place of the present 5% gross tax
with
varying
adjustments
for
family status.

The

disallowance

arising

post-war

be

credit

income

The total increase in income

taxes

vic¬

payable

to
at

February IS, 1944.

per

declared, payable March 20,
to stockholders of record at

pro¬

effect

about $1.16 less, and
earning $10,000 about $18.65

one

flat 3% rate

a

r

deductions, will

would

tax

divi¬

dairy

reason

married person, with two de¬
pendents, earning $2,500, would
pay. about $19.60
more
in
1944
than
in
1943, and one earning
$10,000 about $80.87 more. On the

were

cumbersome.

the

earned

with

these

serted

hand,, a
single
person,
the without dependents, earning $2,500

Houseplans to integrate
victory tax with the income

tory levy was made

and

other"

;

as

The Administration had
some
objections to an amendment in¬

a

taxes

•

,

1944,

/

Estimates have been made that

deduc¬

excise

■

of

and

inserted

problems

excessive.

struck

income.

additional $664,900,000
income taxes.

been

the

a

if V they
earn
the
amount, than they did on

lition of the earned income credit

from

paying'

now

1944,

wThe additional income tax re¬
ceipts will come largely from abo¬
and

are

repeal

Associated

Corporation,

1944,
record

on the Preferred Stock and
dividend of 20^ per share on the
par value Common Stock have

question of whether profits
remaining after payment of taxes

Victory
tax rate of 3.75.
Most taxpayers,
however, taking into account the

be

Federal

debts

foods

had

should

count in

other payments than married per¬

borne by

was

that

insurance,

that

connection

.

for

Senate

visions

and

carry.

processed

The

v

credit

States

a

no

products.

Representative
Doughton, Chairman of the Ways
Means Committee, agreeing
that the average person had about
as
big a tax load as he could
•

declaring that the
ulating

10,
of

that

share has been
Common Stock of

per

the

and provisions
in
both
which were intended to" ex¬

bills

The individual income tax rates

had fought the tax, it was
stated,

the

Atlas

181
145

quarterly dividend of $1.50

25(1
on

tiation,

the New York "Times" stated:

.The change in the Victory tax
will help single taxpayers who,
because
they are allowed less

expense of reg¬

broad

as

No.
No.

of

share
a

was

just about

Dividend
Dividend

Common Stock

on

is hereby given

declared

exempted most ma¬
chine tool contracts from
renego¬

Third
left un¬

changed.
Washington advices, Jan. 31, to

re¬

covers, allegedly excessive pay¬
ments for war material.: Also, it
was

class

charges.

A

The conferees also struck
out a
provision in the Senate bill which
would have

letters, and higher C. O: D.,
registration,
insured
mail
and
order

rene¬

it is now, with the
exception that
amendment was added to ex¬
clude office supplies.
vyfkJr

ered

money

of

Common

an

rate, application of the full
three-cent rate for locally deliv¬

March

on

Preferred

v-'-i":rVi1-"

.

contract is

mail

old

application

sub¬

sharply

limited to contracts in
which a unilateral decision was
made, and the redefinition of sub¬

900,000 a year, and include a rise
from six-to ■ eight cents in the air

for

way which

dend

COMPANY

w

,As the bill stood tonight, court
review

be¬
'

a

the

Atlas Corporation
Dividend
Notice

Renegotiation

against

1,

NOTICES

OTIS

consent of the con¬
The Senate definition of
sub-contract also was almost as
broad as it is in the

airplane

voted

was

DIVIDEND

ELEVATOR

the

tractor.

excise rates take effect

new

March

House conferees agreed to
accept
the Senate's
proposal to freeze
social

without

telephone service.

The

$43,

On Jan. 28 the

a year.

agreement or whether
the Government decided
upon the
amount to be
repaid in war orofits

on

istration

DIVIDEND NOTICES

voluntary

byf-

falls

523

Mortgage

Chicago, Milwaukee & Gary First Mortgage
Section

17

(c)

(5)

of

the

Bankruptcy Act

requires
names

any one having information as to the'
and addresses of holders of any securities

of the Debtor

Company to divulge such informa¬
Responses are to be mads
Fiscal Representa¬
tive, 52 Wall Street, New York 5, N. V.
tion to the Trustees.
to

R. J. Marony, New York

Co.; Paul L. Mullaney, [Stern Brothers & Co., Kansas
City; ningham & Co., Inc., Pittsburgh;
Robert S. Morris, Robert S. Mor¬
Mullaney, Ross & Company; and!Hagood Clarke,
Johnson, Lane, i
ris & Co., Hartford; Norman Nel¬
Alfred S. Wiltberger, Blyth & Co., I Space and
Co., Inc., Atlanta; Sam-'
son, Piper, Jaffray & Hopwood,
Inc.
iuel K.

Cunningham,, S.

K.

Cun-

Minneapolis.

*'■

I

524

THE

would not

it

cause

released
where

conditions, be¬
place all the

prevailing

under

Market Outlook

Bankers Trust Go. On Money
(Continued from page

succeeds
drives, the
Treasury will not need to borrow
directly
from
the
commercial
banks during the
remainder of
this fiscal year ending June 30,'
1944, and. if the European war is
over in 1944, perhaps not for the
duration.
The government deficit
for this fiscal year will probably \
not be over $53 billion, including

Fourth War Loan Drive
well

previous

as

expenditures of government
corporations and agencies, and the
Treasury had already borrowed

net

$29 billion by Dec.
billion to be

of

billion

31, leaving $24 1

financed. Probably $6
that
wil be raised

499)

bilities are that we will have a
nigh level of deposits for many

and the general trend may
be slowly upward rather than
downward.
There may be important shifts
in deposits after the war, however. The uneven growth in the
various parts of the country during the war period has been indicated in a previous section. The
reconversion from war production
to civilian enterprise may bring
important shifts in both population and deposits. Some communities that have had a mushroom growth as a result of war
years

savings industries may lose deposits;
during others whose industries are still
by the predominantly civilian may gain,
next war
loan.
If the Fourth The older communities, with a
War Loan Drive should succeed tradition for saving, may gain dein
raising
$18
billion,
the posits, while some of the newer
Treasury,
without any further ones
may
lose.
Communities
borrowing, could end the fiscal whose war industries cannot be
year with about the same working converted to civilian production
balance it had on June 30, 1943— willM probably
face the biggest
nearly $9 billion.
I problems. The agricultural comThe Secretary of the Treasury munities may continue quite proshas stated, however, that he anti- perous during the first year or
cipated another war loan drive in so after the war when we are
May with about the same goal as helping to feed Europe.
But if
the fourth drive—$14 billion.' A demands
for agricultural proddrive at that time would avoid the ucts
should fall off materially
necessity for a campaign during after that, some of the agriculthe summer months.
It may also tural districts might lose deposits
through savings bonds,
notes, and special issues
the period not
covered

policy on the part of
the Treasury of endeavoring to
maintain a larger working balance.
If sales should aggregate
indicate

a

on

balance.

would

financing the war.

be

-needed

it

be accumulating more ex¬

rapidly.

The

large

investment

.

not

volume of available
funds that undoubt¬

of Governors said:

"Under exist¬

ing Federal Reserve policies

edly

that

lieve

will

savings

outrun

tend

and

demands

capital

.

to

interest rates even
as
well as of bills, now held by without money market controls.
banks provide the means for ob¬
If,
as
is
anticipated, there
return
taining at low rates any amount should be a substantial
flow of currency, it might build
of additional reserves that banks

the

large amounts of certificates,

maintain

the ap¬

plications of the New York Curb
Exchange to extend unlisted trad¬

privileges to
the common
of six corporations devel¬

ing

stocks

hearings before Willis R—

as

Monty, SEC trial examiner, open¬

J..;

Philadelphia, Jan. 26.

ed at

in the

exists

Opposed

Four-fold opposition to

oped

.

country will
probably be an important offset¬
ting factor to the demands listed
above.
Furthermore, it a high
level of business activity is main¬
tained
in
the post-war period,
not be reduced in 1944.
In the savings will no doubt rise corre¬
to met capital de¬
December, 1943, issue of the Fed¬ spondingly
There are some who be¬
eral Reserve Bulletin, the Board mands.

volved

Steel

the

of,

Three

Merck

—

and

Co.

'in¬
Co., Lukens

companies
&

&

Warner

Swasey

opposing the applications

Co.—are

and

thus

the

National

curities

supporting the cause of
Association of Se¬

has

which

Inc.,

Dealers,

the

taken

position that the ap¬
plications of the Curb Exchange
are a "raid" on its membership.
Association

The

low

that

since

nies involved

contending

is

of the

several

compa¬

closely-held

are

or¬

#

need."

may

up

.

Rates—Thei'e

bank reserves fast

enough to

prevent, for a period at least, any
particular upward pressure on in¬
In fact, as pointed
the Federal Reserve System will terest rates.
attempt to maintain substantial out above, the Federal Reserve
Post-War

doubt

stability
some

the

structure

exact

war.

of

after

years

and

rates

long-term

in

is little

Government

the

that

rates

for System may be faced at times
The with the problem of absorbing ex¬
and cess reserves rather than supply¬

ganizations, whose securities are
heavily owned by families, the
over-the-counter
market is
the
logical

the

when

refunding

prob¬

Over-Counter Favored

of

a

their

to

its

Committee

of

&

$l-par-value

common

stock

until such time as it was in a po¬
sition to list the stock on the New

York Stock Exchange, thus enter¬

exchange

ing

':

.

explained that more

Green

Mr.

"through

trading

the front door."

by the

be supplied

Chairman

Green,

Co., Inc., testified that
his company would prefer to con¬
tinue over-the-counter trading in

gold or convert some
dollar assets into gold,

the necessity for
high degree of con¬ which could

H.

Finance

the

Merck

earmarked
of

for the limited number

Edward

improbable that the Government will be any important outflow of
would
permit any material de¬ gold for the first few years after
war.
Some countries may
cline in the prices of its securi¬ the
ties during the period af adjust¬ want to take home a part of their
ment

one

of shares available for trading.

1
security prices, of course, may not ing additional reserves.
It is not anticipated that there
be maintained, but it seems highly

vol- maintaining

0f money in circulation may

N. Y. Curb

exaggerate

to

supposed, and bank loans may

In view of the probable

changes
in 1944, such as the reduced rate
of increase in bank deposits and
money in circulation, and the pos¬
sibility that later on money in
circulation may actually begin to
decline, it is reasonable to assume
that
reserve
requirements
will

easy

possible credit and capital de¬
mands that may arise.
Redemp¬
tions of savings bonds may be
more
modest than is sometimes

lem is great and

Money in Circulation—The

be

would

the

rise very

reserves.

Unlisted Trading Plea of

for
Furthermore,

the borrowings now necessary

market

i.e., in the central reserve
cities.
It might leave New York
and Chicago still in need of funds,
while
some
other
communities
cess

large-in comparison with

"not bulk

the

would

they

••

in

reserves

most,

as

Thursday, February 3, 1944

COMMERCIAL & FINANCIAL CHRONICLE

-

500,000 of the 1,000,000 out¬

than

stabilization fund.

standing shares of Merck & Co.'s
The probabilities are, however,
reach a peak in 1944. Payrolls and the
Government
and
risks in¬
common
are
held by the Merck
the May drive, the national income have about volved for both the Government that for a few years after the war and Rosengarten families, and
Treasury might end the fiscal year reached maximum levels, barring and the banking system would be the United States may gain gold that other large blocks are owned
Most foreign coun¬ by Harvard University, Smith¬
on June 30,
1944 with a working a sharp rise in wages and prices, too great.
In their own interests on balance.
balance of nearly $25 billion. The and there is already some indica- the banks will probably give full tries need our goods more than sonian Institute and other large
policy of carrying a larger work- tion that the rate of increase in support and cooperation to the our gold. They may spend or in¬ institutions. Because of this there
in
its
efforts
to vest in this country substantial is little trading at present, he
ing balance will put the Treasury money
in circulation may be Government
in
better position to
meet any slackening, f: The increase over the maintain stability in the prices of amounts of their funds already said, and any trading on the Curb
here, perhaps to the extent of re¬ "would not reflect the true mar¬
possible extraordinary expendi-1 corresponding month of the pre- its securities., '
In
tures after the end of the war, vious ' year was sligfhtly less at
Aprl,
1943,
Sir Kingsley leasing some of their earmarked ket value of the securities."
such as mustering-out pay or out- the end of December than it was Wood, the late Chancellor of the gold, and some of them may ship
Curb's Position Stated
lays in connection with the term- inV August.'.
r . • r,
British Exchequer, in commenting new gold in exchange for buying
Under
questioning
by
Orrin
on post-war financial policy, said
power
in
this country. ". Most
Hvpn thnS thp hankfl TYinv not rnrrpnpv w;ii ^p oftPr thp 'flowr?p it was the Government's intention countries of the world have some Knudsen, counsel' for the SEC's.
H°W much the return war Of
Even though the banks may
trading and exchange division,
be asked to subscribe directly to £end?tarfielv on general
to maintain its present policy of gold, and many have substantial
Mr. Green stated that listing of
further Treasury issues, they may Conditions
It'is estimated
cheap money after the war.
He gold reserves.
incomes of manv war
the company's stock on the Curb
that about
ume

fidence

is

so

essential.

Costs

$16 billion in

-

nnt'

Sness

purchase government
securities in the open market in
connection with future war loan
continue

to

£?
° and there
J f
some unemployment. A
J™ less" cinrencv^and8 some^f

workers

.

wiII

,

sad further:

lutionized
what

.

fair

are

.

public

we

have

opinion

rates

for

$13 billion

revo¬

as

to

Govern¬

owned

Furthermore,

of gold is
States.

the world produc¬
will probably rise

In com¬ tion of gold
the latter statement again to over a billion dollar? per
much
the Under-Secretary of the U. S. year after the war.
The public may react against
1944,
Treasury, in his address referred
become available.
five or ten billion dollars.
to above, said: "I believe that this many kind£ of government con¬
The return of currency from
Bank Deposits—The growth in
revolution in my opinion has a trols after the war, but there is
circulation will increase bank re¬
bank deposits will probably fol¬
sound
basis in underlying eco¬ no reason to suppose that this will
serves and help to offset the effect
low about the same trend as bank
nomic realities, and is applicable apply to money market controls
of any
further increase in de¬ to the
to
maintain low and
holdings of government securities.
coming times of peace also. designed
posits. In fact, it is possible that
I hope that the policies of the stable interest rates.
Changes in the volume of loans
the Federal Reserve System may
Maintaining stability of longone way or the other will prob¬
Government will be directed to
find
it necessary to
reduce its
term rates over a period of years
this end."
ably not be large enough to affect
does not necessarily mean that all
total
deposits materially.
It is holdings of government securities
The question may be raised as
in order to absorb excess reserves
rates will continue to be pegged
conceivable,
therefore, that de¬
to whether some or all of the fol¬
if the
return flow of
currency
at exactly present levels.
Some
posits in 1944 might increase only
lowing factors might not tend to
should prove to be too rapid.
one-half or one-third as much as
changes may occur, especially in
push rates upward in the post¬
short-term rates.
The very fact
in 1943.
Future of Interest Rates
war ; period regardless of present
that rates
are
stabilized works
While it is impossible to predict
The present pattern of interest policies
and intentions; further
with any certainty what the ac¬ rates will no doubt be maintained deficit financing, redemptions of against the present structure be¬
cause
it gradually removes the
tual post-war changes in deposits for the duration of the war.
Mr. bonds held by the public, increas¬
fear
of
price
fluctuations
in
will be, there is little reason to Daniel W. Bell, the Under-Secre¬ ing
bank loans, large security
anticipate a major decline.
The tary of the Treasury, in an ad¬ issues by municipalities and cor¬ longer-term securities and lessens
the inducement for concentrating
recent growth has been based on dress
at
substantial
foreign
Worcester,
Mass.,
on porations,
so-heavily in short-term obliga-.
the expansion in bank holdings of Dec.
16,
1943,
said:
"Interest lending, possible outflow of gold,
tions.
As the debt gets into more
government
securities,
rather rates have remained stable during and public reaction against Gov¬
manageable
shape,
short-term
than on business loans that might the
war-time
period, and con¬ ernment controls.
rates
could be
allowed to rise
be liquidated in a period of de¬ fidence in the continuation of this
It will take a year or so after
somewhat,
and
the- spread be¬
pression.
About the only way stability has been and is wide¬ the end of the war for the Gov¬
tween
short
and
long
rates
that
deposits could be reduced spread and well justified, and has ernment to reduce expenditures
reduced.
-V;..v
substantially would be through caused investors to subscribe to to the level of receipts. - It is en¬
Extensive
corporate financing
debt retirement or the sale to the new issues of Government securi¬ tirely possible that this continued
after the war might tend to in¬
public of securities now held by ties in successive war loans with¬ deficit financing, together with
crease
somewhat the spread be¬
the
banks, neither of which is out any sign of holding back in the redemptions of savings bonds
tween rates on Government secur¬
held by the people and the reduc¬
likely to materialize in the period anticipation of hgher rates."
ities and rates on corporate se¬
Immediately following the war. ?
The
Federal
Reserve
System tion of Government security hold¬
curities. The small amount of cor¬
:
] In fact, there is a possibility will probably continue to supply, ings by corporations, might make
porate financing in recent years
some
further
borrowing
from
that deposits might expand some¬ through open market operations
has tended to depress corporate
The revival of
what further in the post-war pe¬ and by the purchase of Treasury banks essential.
bills offered by member banks, orivate industry may result in an yields and to reduce unduly the
riod,
especially
if
continued
in
bank
loans,
and spread between
deficit financing and the redemp¬ any reserves needed during the increase
corporates and
tion of securities held by the pub¬ war period.
activity in the capital Governments.
The Reserve authori¬ greater
The maintenance
lic should make it essential for the ties have been reluctant to reduce issues market may also lead to
drives,

as

they have in

previous

how
such purchases may be in
but they might aggregate

drives.

v

It is impossible to say

the

currency

S L l„„„ ™
that has been saved

ment

war

menting

borrowing."

would not cure the
"spread" of from 2 to 2% points
in the stock which is said to exist
in the, over-the-counter, markets
in some sections of the country.
The advantages of trading on
the Curb Exchange were listed by
Fred
E.
Moffati, President pro
tern of the exchange. > These he
enumerated as the open competi¬
tive method of doing business, the
Exchange

United

outside the

on

m°re g°°dS

by

supervision

active

the

ex¬

commit¬
the fact that the secur¬

change and its staff and
tees, and
traded

in are

ities
use

as

available for

collateral.

Other securities

has

Exchange

which the Curb

for per¬
unlisted trading

applied

mission to extend

stocks
Light
Northern Natural Gas Co.,

privileges are the common
Puget Sound Power - &

of

Co.,

and Public

Service Co., of Indiana.

_

.

requirements,
believing
that post-war adjustments can be
cline in deposits as a result of debt met more easily by selling securi¬
retirement
might be offset by ties than by raising reserve re¬
to
borrow
from
the
banks after the war.
Even a de¬

Treasury

*

other

factors

such

as

business

loans, securitv loans, or the pur¬
chase by banks of municipal and

corporate securities.

The proba-




reserve

substantial
credit

demands

and

for

investment

of

funds.

lending may add to the
demands, but will probably not
quirements again.
Reducing re¬ reach very large proportions, at
serve
All
requirements,
moreover, least not for a few years.
might not be the most
method

for

providing

effective
reserves

Foreign

for

however,

would

mean

compara¬

tively low rates all along
Money market controls
factors

which

effect

on

other

very

high-

grade securities.

1
maintaining a reserve po¬
that
will
preserve
sub¬
stantial stability in interest rates
and Government securty prices,1 it
necessarily follows that banks will
have sufficient funds, to take care
of loan demands.
It would defeat
the whole purpose of market man¬
By

sition

agement to leave banks in a po- ,
sition where they are forced to
sell substantial amounts of securi- ;
ties in order to make necessary
loans.
The commercial banks of I
the country increased their hold- j
ings of Government securities by .
$19 billion in 1943, and this was
done without any difficulty be¬

cause the Federal
Reserve banks
Governments, supplied the reserves. It will be j

stabilize

the line.

and other,
rates

on

Government
securities
at
low
demands added to¬
however, will probably levels will necessarily have a sim-

these possible

gether,

rates

low

more

ilar

just as essential for the Federal
to supply the reserves in the caseof business borrowing as in the ,
case

of Government

stability

security
tained.

borrowing, if ;

of interest rates
and ;
prices is to be main- ;
,

.Volume 159

Number 4252

THE COMMERCIAL

The

"Are We To Fcresake Our Traditional System Of
Free Enterprise And Adopt A System Of

founding fathers recognized

of

Independence, in our State
Constitutions, and in

decisions
lower

By Hon. FRED L. CRAWFORD

of

the

courts

down

Walter

and

Federal

and

nominated

Abraham

the stock.

these

billion;

find

of

him

of

no

as

you

one

this

more

issue

successfully

to

sound

the

and

radio

world.

Radio

owned

by

59

over

to

fun¬

"the-

ceeds

our

'•

But it

was

ba^s,

wrong

stops.

observations just made

I

me

less patriotism.
Starvation pro¬
comparison?
However, let me duces mob psychology and action.
emphasize the fact in this man¬ With more than 125
relief
agen¬

ner:
A standard of
living is one
of the four freedoms so
often re¬

ferred to.

Now, let

make

us

comparisons of relative
standards of living.
With

sufficient

cies
soliciting funds from our
people, for foreign relief, still just
this week the Congress approved

some

national

to

information

goods

utilized

annually in

tries, let

us

and

given

counuse

it

farm

stood

at

slightly over 32 mlipeople.
But while in 1910

j lion

j there

were on the farms of this
for
comparison
the
leading 14'country only 1,000 tractors, 50,000
nations and apply our indicators
automobiles, and no motor trucks,

thereto.
is

We find

death

our

rate

in 1940 the farmers

only 11.5 people per 1,000. in¬
while the average is

the

habitants,
13.5.

percentage of occupa¬
tional population
engaged in pro¬
fessional service amounts to little
over

4%

20

to

And

above

so

years

do

you

phone?
such

ever

Why,

instant

use

the tele¬

certainly—and

service.

We

have

148
telephone instruments
1,000 population, but the aver¬
is just over 52.
Telegrams

over

per
age

transmitted

per

capita

are

more

than two times the average.
Those

big

railway

locomotives

we have 52
per 1,000 inhabitants,
but the average for all the coun¬
tries (and you have seen some of

their very small ones)

only 31.
far

amounts to

In motor vehicles

excel

in

ownership

inhabitants

that

one.

we

per

so

1,000

/

Take
tion:

our

In

was

have

luxury food
about

six

we

108

to

consump¬

peace-time

consuming
sugar

we

were

pounds

of

capita, but the average

per

less than 70 pounds.

And in

coffee, tea, and cacao, with prac¬
tically all imports, we were using
over 16 pounds
per capita with an

These

1

million

those

great

owned

degree,

a

by

the

hands

quired

to

duction

up

farm

rank

one

far

other

any

aghast when calculations
to cover the

motor

individual

possessions

farm group in the world.

attending elemen¬
tary and secondary schools, while
the average is only 45%.
And we
all enjoy
receiving mail amount¬
ing
to
207
pieces
per
capita
against an average of only 124
pieces.
1
■

than

more

equipment

5% against slightly less than
the average.
We have
61% of our population aged

enjoying

were

over 1.5 million trac¬
4 million automobiles,

over

trucks.

for

over

5

and

of

use

tors,

Our

And to
stands
made

are

necessity for tools in

of

other

nationals

bring foodstuffs
to the point of a

sonable standard of

re¬

pro¬
rea¬

living for all

people.

let

nomic

us

measure

blessings

yardstick.
income

In

in

with

terms

the

of

our

eco¬

another
national

United

States, as
compared to that of foreign coun¬
tries, using 1937 as a fairly normal
year, we
come

for

have in total national inthe

United

States $71.5




,

advocate

traditional

our

free

system of

adopt a sys¬
regimentation and bu¬
reaucracy, reflect moral decay.
To surrender freedom for social

security only
but

surely,

soon

that shortly,
security would

means

the

pass.

»

.

Our moral

decay has strength¬

ened the power of the State. In¬
dividuals have and practice mor¬

als.

Individuals

serve

freedom.

.

define
State

for

the State

pre¬

will

But

and

you

State

will

freedom

From

me

morals?

more

attain

day to

exercise

more

or

day
and

revolt against such,
For

dividuals

place

and

the

citizens

State

in

would,

position to

a

practically determine the material
status of

would

citizens.

our

then

The citizens

be permitted

to

own,

to

produce, and to consume only
according to the plans of the

State.

The

stock

latter

would

measure

cer¬

acts

for /sale

at

a

certain

point that if the stock does

too

hold the follow¬

now

Hold with stop at 23 M>.

Borg-

36, hits offerings
from 38 to 39.
Stop it at 34.
National Gypsum at 9V2 runs
stock

10 Ml

at

Lockheed

holds
the

its

at 15.

a

Hold

own.

time

hit there it
may

one

for

on

being with

a

at 43 V2

bring,about
wide-open break. Obviously
everybody can't get out at

Western Union

stop

bought

broke its stop at 42.
You took a loss. Stocks
rec¬

price. So if the stop price ommended

here

last

week,

is

brpken, stop orders auto¬ Armstrong Cork, 37-38; Kro¬
matically become "sell at ger Grocery, 31-32, and Pull¬
man, 37-38, are repeated.
He

Twin City Federal
Elects Officers
MINNEAPOLIS, MINN.

A

—At

cancelling.

assistant

secre¬

^

For

tion,

•

.

A.

Association

established

was

in

1923, and today is the largest
insured savings and loan institu¬
tion

in

sources

the

/

■■

Northwest, with

re¬

any

:

sje

sjc

looks
34

at

carry it under 33.
*'

*

More next
Thursday.
—Walter Whyte
[The

views

article
time

do

expressed

not

Chronicle.

in

necessarily at

coincide

with

They

those

of

this
any

the

are presented as

those of the author
only.]

of $26,000,000. On Dec. 31,

1943, it paid its 42nd consecutive
semi-annual dividend to all
bers

on

mem¬

record.

Illinois Dealers Form

LAMBORN & CO.
99
:

WALL

STREET

NEW YORK 5, N. Y.

Hew Association

government
money

buying

distribute

more

to the people to serve as
power—this group pro¬

motes dollars

as

must

be

goods

and

services

to

buy. The role of production is to
provide these goods! and services.
A

worker's wealth is represented

by the goods and services at his
command.

Without

services

is

creature.

he

a

goods

and

materially

poor

CGO Tractions Interesting
Gruttenden
La

Salle

issued
dum
ation

&

St.,

an

Co.,

209

South

Chicago, 111.,

interesting

have

memoran¬

discussing the current situ¬
in

ties, in

"Chicago traction securi¬

view

of the

Council

offer

Chicago

Surface

to

Chicago City
purchase

Lines

and

the
the

Chicago Rapid Transit properties.
Copies of this memorandum
be

had

tenden

upon

&

Co.

may

request from Crut-

sions.

Members
committee

of

the

Henry D. McFarlane, Alfred O'Gara & Co., Chair¬
man; W. A. Gorman, Link Gorman
&

Co., Inc.; Walter R. Brailsford,
Brailsford & Co.; Owen V. Van
Camp, Enyart. Van Camp & Co.,
Inc.; and W. W. Sims, Sills-Min¬
:

1
.

of

the

Illinois

securities

law, which members state is an¬
tiquated and unnecessarily ham¬
pers thei business of state deal¬
ers.

Exports—Imports—Futures

DIgby 4-2727

Established

1856

H. Hentz & Co.
Members
New

York

New

York

New

Stock

Exchange

Curb

Exchange

York

Cotton

Commodity
Chicago

Board

New Orleans
And

Exchange
Exchange,
Inc.

Cotton

other

of

>

Trade

Exchange

Exchanges

-

One of the principal aims of the
new association is to work for re¬
vision

SUGAR

organization

are:

ton & Co.

/;'■ ■■

suggest

Buy Case

M.

Blaisdell, Chairman of the Board;
Roy W. Larsen, President; Henry
Rines, Vice-President; and B. N.
Bell, Secretary-Treasurer. /:///
Twin City Federal Savings and
Loan

....

organiza¬

are:

•/;

Threshing

but don't
offices

/

an out-and-out specula¬
Case

cashier.

their

X

ago

"

H*

.

attractive.

and

.

orders for these two I

taries; Martin L. Jordan, assistant
treasurer; and Walter W. Erbes,
Other officials of the

sic

advised here
for purchase.
Neither got down to
buying
levels.
If you still have

Welch, Harry E. Myers, and Ruffas

sic

I;;

weeks

„

a

Association of Minneapolis and St.
Paul, it was announced by Roy "W.
Larsen,
President:
Charles
I.
sell M. Johnson

few

Bethle¬
hem Steel and
Ex-Cell-0 were

meeting held Jan. 24, the follow¬
ing were elected officers of Twin
City /Federal Savings and Loan

tion

our

people to reverse their
history; to forsake their tradi¬
tions; to forfeit the right to ac¬
quire,
own,
and
manage,
and
dispose of property as private in¬
.

is

-

until the people again

power

latter

Stop at
bought at 16
actual stops, uses mental ones. doesn't seem
to be
getting
The one
danger of stops in thin anywhere. I suggest stepping
out.
Curtiss
markets lies in the
Wright "A"
possibility
that there
1634 just about
may be so much bought at

.

of

the

Warner at

into

we

enterprise and

tem

that

a

according to its concept, what
This war, as no other conflict
the citizen was to have or enjoy.
of all history, has demonstrated
The citizen would
through this
government
desperately
needs
procedure, be largely influenced
management,
industrial
power, to "sit and
wait," unless he was
and efficiency and confidence of
driven by the State to
produce.
the people in government worse
That would, of course, mean a
CHICAGO, ILL.—The Illinois
than it needs soldiers.
Any gov¬ less production and a lower stand¬
Securities Dealers Association, a
ernment rule or law which inter¬
ard of living for all.
new
organization of investment
feres with production impedes the
To forsake our traditional
firms, was formed at a meeting
sys¬
war effort.
tem of free enterprise and
adopt held at the offices of Sills, Minton
We mobilize for war, we de¬
a
system of regimentation
and & Co. and attended by represen¬
mobilize from war, but we must
bureaucracy would simply be to tatives of about forty dealer firms.
remobilize for peace.
Only from surrender our ideals and institu¬
Henry T. Berblinger of Sills,
employment in private enterprise tions of freedom.
This
Co.
would Minton &
presided at the
are
we
to obtain the goods and
bring a great people to total State meeting as he did at a preliminary
services emphatically necessary to
slavery under the direction of the gathering in December. No offi¬
remove
our
peoples' fear from State which would allow its citi¬ cers
were
chosen
but
by-laws
want.
zens
to live ! only by
permission. were read and referred to an or¬
Certain groups of people con¬
ganizing
committee
for
revi¬
stantly preach we must have the

.

Now

,

who

Being

out

buying power, as
the key.
/;;/■
-r
average
of
about
13
pounds.
This, of course, is a highly de¬
Citrus
fruits
and
bananas
2V2 structive fallacy.
Money unspent
pounds to one pound average.'
brings no material benefit. There
,

forsake

$1,350,000,000

our

population has de¬
creased steadily since 1935, where

services

We shall

proceed.

Our

capita

per

of

cover

opening contribution
for the purchase of foodstuffs for
hungry people abroad, and to
provide other types of relief.

available to enable us to deter¬
mine broad international
ranking,
and through a series of
indicators
of differences in the

quantum

authorization of

an

Those

insurance.

as

But

trader to follow.

accordingly.
But even the
professional, if he doesn't use 8V2.

history has dem¬

enforcement.

the
uses

point will hold and

always be

4

a

that

another

ing stocks: American Steel
profes¬ Foundry at 25. It runs into
actual offerings
from 261/2 to 28.

decides before whether
tain

with

to

*

seldom

is

complicated for the average

You
*

admit

stops

tions.

-

closer to the action he often

of
government,
France's 5 million; Japan's
among
other
things, postulates
million,.'and Russia's 4 million, that
some statistical data
individuals; are of infinite
which
or
less than 5% each; and with
-will in more detail
worth.
We assert an individual
impress upon
Sweden, Australia, Belgium, the citizen of this
your minds the value of our tra¬
Republic has rights
Netherlands, Italy, and Argentina whmh tower above that of
ditional system of free
the
enterprise.
owning sets of less than 1,500,000 State.
Do you know that here
in the each, while the other countries
And these we must not forfeit.
United States our
people enjoy a each owned less than 1% of the
Our
citizens
have
level of individual
enjoyed
a
possessions so total.
maximum of freedom, a minimum
much higher than that
enjoyed
Everyone is interested in food. of restraint. We further assert
the
by any other people on earth that The less food in
the stomach, the
State shall not rule by plan or
it is rather academic to even
make

by Senator Hawkes, permit

;

sional

Great Britain's

submit

/'/

■

*

there

course

too, the selling, or buy¬
overall
ing, of options against posi¬
1

an

* ;

,

our
nation
the wrong ba^s.
not launched on the

as

^'/;>

Of

way,

only thing it cannot
anticipate or guard against is
the
unexpected, hence the

on

Germany's 13 million, or 12%; onstrated^;.::'^.
9 million, or •8%;
Our
concept

into

only long¬

be

can

The

honest,"

launched

was

will

means

considered

million.

These represent over 53% of all
sets in the world.
This compares

/;•'// /

Supporting the

the

receiving
sets
people number

are, and I know
fitted to present

country than he.
damental

proud

in

total of

sum

picture.

-

as

The

transactions

translated

.

Governor's home state is

drawbacks it is the

distance method of protection
available to the rank and file.

price of

Dred
Scott, his wife Harriet,
Germany,
32.4;
United
and his two daughters Eliza and
Lincoln for the Presidency and i
Kingdom, 28.5; France, 9.5; Japan,
saved the Union.
Lizzie, were slaves.
Their mas¬
Your Govern¬ 5.9;
Canada, 4.3; Australia, 3.1;
ters had the power to determine
or
is a graduate of the Univer¬
with
the* Netherlands,
Sweden,
their material status.
It might be
sity of Michigan and came here Denmark,
Norway and New Zea¬
reasoned that therein their mas¬
to study and
practice law.
land all each ranging under $3
ters had the power to
I do not know how
really de¬
you feel billion national income.
The per
termine whether or not
about it.
But in Michigan, we
they were
capita national income in dollars
are
*
*
hopeful that the Republican in the United States was 536; to be.
Party in 1944 will nominate a
Henry Wriston points out that
Australia,
446;
Canada,
374;
"if you accept the
candidate
for
the
postulate that
Presidency France,
234;
Germany
(under
who
there is no absolute except
will
meet
the
real
issue heavy
power,
war
stimulation),
421;
which is very
Hitler
is
justified; so also are
concretely stated Japan,
7-3; 'New Zealand, 408;
in the
Mussolini and the Japanese
subject that we are dis¬ United
jin¬
Kingdom
(moving into
cussing today.
goes.
Unless there is a moral ab¬
I do .not wish to war), 500.
mention any names because
solute the totalitarians are
right.
your
Another
popular
illustration If Machiavelli was
Governor is not a candidate. But
correct in as¬
which we might use is that we
it is in order to observe
serting that after' conquest suc¬
that your

thereafter

Whyte

(Continued from page 501)
that will affect the

our

history. All of which support the
private enterprise concept.

(Continued from first page)

market"*

orders, resulting in
larger losses than first en¬
visaged.
But with all its

Savs

the

Supreme
through

525

Tomorrow's Markets

all of this, and thus the
enuncia¬
tions set forth in'the Declaration

Regimentation And Bureaucracy?"
/

& FINANCIAL CHRONICLE

N. Y. Cotton

NEW
CHICAGO

Exchange Bldg.

YORK 4,

N. Y.

DETROIT

PITTSBURGH

GENEVA, SWITZERLAND

526
to think
that the accom-tactions are subject only to a minimum of judicial review.
The re¬
plishments of the human race can
be regulated and directed by gov¬ sult of this has created the mon¬
strous
bureaucracy which exer¬
ernment, which will relieve the
cises
authority
ever-increasing
people of their responsibilities
over the affairs of the individual,
and
provide all of their needs

made

"Are We To Foresake Our Traditional System

Of

Enterprise And Adopt A System Of
Regimentation And Bureaucracy?"

Free

ALBERT W. HAWKES

By Hon.

impossible for free

it

make

enterprise and freedom of the in¬
dividual to survive.

Strange

it

as

the

seem,

may

greatest freedom for
compatible with
like freedom for others. The ex¬
individual

each

ercising

of

energy,

the

variable

results obtained by

dif¬
and

people throughout the world, and
even
the
people of this great

ferent

country of ours, fail to learn the
lessons of life from the experi¬

ercise

written

ence

the wall of his¬

on

hand of time.

tory by the

v

price of liberty is not only
eternal vigilance, but eternal vig¬
ilance must be coupled with the
The

the

and

understanding

continual

performance of our duty in pro¬
tecting it against those who would
offer

cure-alls

and

panaceas

with
Lib¬

compatible
freedom of the individual.
which

freedom,

is

erty

not

are

but freedom

is

Freedom is the highest-

not free.

possession in the world,
the reason people have been

priced
and

willing to pay the price of free¬
dom is that its value is far in ex¬
cess
of the value of any other
earthly human possession.
The foundation of the

the

belief

principles which were re¬
sponsible for the Declaration of
Independence and the Constitu¬
tion of the United States.
The
Declaration of Independence ex¬
great

of

philosophy

the

presses

the

system. The Constitu¬
the machinery through

American

is

tion

which

have made these prin¬

we

practical every¬
approximately 155

ciples effective in

for

life

day

years.

The

.V

.

first

is faith in

improve themselves.
The difference between a free

Let

government a fair
price for doing its job as the
servant of the people, rather than
us

have

pay

government, is that free people
impose restraints upon themselves
through their Representatives and
they thus control the limits within

bodies which

they may exercise their
The controlled people

which

freedoms.

imposed upon them
without or some¬
who has seized the power and

have restraint
from
one

someone

longer

no

conduct his

to

free agerit

a

business and

own

private affairs.

■/

We all know there is an appro¬

reaucracies

the

administrative

and

consume

and

Nation

people only
they
have

a

the wealth

return

to

the

small part of what
created
and
what

other

principle

in

man

the letter of the law.

the

with

familiar

names

that we, to a

half

of

before

ever

threatened

is

country

this

in

result

The

greater extent than
in our history, are

with

such

in

lished

a

way

as

to ac¬

complish the objective desired by
the people?
Third: Is the restraint forbid¬
den
is

by

it

Constitution?

our

not

fact

a

than

to make failures no less

suc¬

the

of

American
act

on

citizens

time

choose

in

to

such

way

administration

an

in

speak

a

which

formed

men

their

own

and
judgments, not one in which a
to
board, a commission, qr a system
whose
as

The very essence

does it for him.

is to preserve the perma¬
of freedom is the right to learn
If- so, nent thing—government.
individually by trial and error.
future
Again referring to free enter¬ Whenever any form of govern¬

that the
people dictates

should change the Con¬
stitution before adopting the re¬
that they

form of
and must

government, which was
be the tool and servant

purpose

prise, it is what this nation estab¬ ment substitutes its
lished and maintained, under its
that of its citizens
creed, for individual and social
power to determine
progress.
It is personal liberty in for them—whether
It

action.

is

the

individual

and

or

judgment for
and has the

what is good
they think

not, and regardless of the fact

cooperative effort of free men to they have not been represented
better their personal and social in
forming the conclusion—then
position through the release and you are approaching the same
use of all their varying capacities
kind of a government which has
and energies.
Under it they are
destroyed the freedom of the in¬

of

the

hands of those who earned it, nor
can

this

free

enterprise

system

survive if the restraints put upon
it

benevolent

be¬

ruler

be

cause

when any individual accu¬

mulates

the

not,

or

to act outside

power

unreasonable and unneces¬

are

of

the

prohibitions

—

understand

that

ment.

proposals of socialism

the

All

have met their fate and will con¬

tinue to do so wherever

the indi¬

permitted to exercise
.these rights and is willing to pay
the price of protecting that gov¬
ernment
which
represents
the
vidual

is

things the individual must have
successfully perform.
Perform through the use of the

to

God-given powers and qualities
recognized
by
our
forefathers
when they wrote the Declaration
Independence and established
Constitution of the United
States.
These
documents came

experiences of centu¬
ries of effort born in sweat, blood,
out

toil

of the
and

tragedy—efforts

of the

Ipjman family to throw off the
yoke of restraint and subjugation.
The test of the value of this
American creed is found in what

people in the fair interest of all
if we are to expect the people

their
they

business to
come from

the crucible of human

experience

sary

and

excess

as

the

result

of his authority because of

his very
erson

come

popularity.

said:

"Speak not to

me

from

any

tragedy.

probably
of

human

the greatest protection
liberty in that great

document.
Under

example

before

the

outlived its usefulness.
American
dom

from

anarchy.

liberty is
restraint.

Liberty

not free¬
That
is

under




Our

to

prepare

duty

is

to

see

officials—let
them
The very difficulty trusting
in
It is ironical that
bringing
about
proper
and bound by the chains of the Con¬ held sacred.
We
have
no
other while we send millions of our
lawful constitutional changes is stitution.

and

been

world, that our great system has

enemies

attack us.
that the in¬
of alienable rights of the American
be people to govern themselves are

Thomas Jeff¬

effective

protection."

our

great

men

to

battle—while

we

spend billions of dollars to fight
from
the
enormous
amount
of a system that would take from us
business being transacted by the our Bill of Rights and all our free¬
government under existing con¬ doms—there are those who would

against
anonymous
Deal, which, in name, ourselves
being abandoned by some and officials who cannot be identified
who are appointed—not elected
continued by others of the sobut whose rules and regulations
called "New Dealers," has know¬
ingly or unknowingly fooled the in a vast numbber of matters have
The New

is

law | people.

finest

The second great danger comes

constitutional
accomplished by the
American
people who guarded, system the restraints upon action
ditions.
There is a temptation to
protected and lived up. to it for by government are more numer¬
ous than the grants of power to
create unnecessary agencies which
a century
and a half. "By their
that government. The reason for administer
important
activities
fruits ye shall know them, for a
good tree bringeth forth
good this is the desire to protect indi¬ dealng with the rights of prop¬
vidual liberty and initiative. In¬ erty
of the
citizen and those
fruit and a bad tree, bad fruit."
liberty
and initiative, agencies have no electoral re¬
No system ever established in the dividual
restrained only insofar as is neces¬ sponsibility.
Those whom
we
world has given to its people so
much of the necessities of life, to sary to give equal rights and op¬ elect we can condemn and con¬
say nothing of the luxuries of life, portunity to others is the founda¬ sign to private life if they fail in
but we. cannot protect
and there is no reason to believe, tion of our free enterprise system. service,
has

the

in

people—who,
analysis,
are
and

last

will , be
all-powerful—
notwithstanding temporary usur¬

always

of

pation
who

rights

their

seek

would

is

It

by

power

those
rather

neither

labor wishes to de¬
enterprise.
Each of

nor

free

stroy

that

opinion

my

capital

them have the same vital interest
in its preservation.

its

make

There is evi¬

possible.

preservation

Many people have been all the effect of law and whose

plunge

headlong

us

American

version

of

into
an
a
system

where the people are subordinate
to the State—where free enter¬

prise is replaced by governmentoperated or excessively-controlled
private activities and where the
fundamentals
the

American

of

the

freedoms

people

are

means

that it

forsake our traditional system

of free

enterprise for

regimentation

and

forward

to

a system of
bureaucracy.

The two things cannot survive to-

stand¬

rather than to

vancement
ardized

government employment.

Discount Corp.

Of N. Y.
Mills, Repp

Elects

(Continued from first page)
after the Armistice was

shortly

signed in 1918.
Throughout

\

,

,

'r
i

<

existence,

its

been

has

it

the

of

one

chief

factors

New

the

in

York

money

and

market

a

leading dealer
S.

Gov¬

ernment

obli¬

U.

in

A t

gations.

present its ac¬
tivities

are

largely

con¬

cerned

with

the

financing
war

effort.

When

the

Federal

Re¬

serve
came

law

Herbert N. Repp

Act be-

it

1913,

in

contained

provisions aimed at creating a
money market comparable to the
money market of London.
After

of New York
organized
the
Discount
Corporation, as a step in this di¬
rection, to deal in bankers' ac¬
the last war a group

banks

ceptances, an- instrument which
Federal Reserve Act brought

the

into existence.

The corporation's

capital funds consisted originally
of $5,000,000 capital and $1,000,000 surplus.
The corporation in
early

the

1920's

began

Government

in

actively
Its

deal
securi¬

to

C

ties.;

original directors were:—

Francis

L.

Hine,

President" First £

National Bank
Edwin

S.

Farmers

pany

■'

'

jj

Marston,
President ■:
Loan & Trust Com- ■

McGarrah, President
Mechanics & Metals National
W.

Gates

of

whether

of looking
opportunity and ad¬

will have the privilege

Bank
John

is up to the people as to

we

and

stran¬

gled by bureaucracy.
What I have said

enterprise system so that we,
our
boys when they return,

free

so

the scope of authority established
of by the people themselves through
bureaucratic decree or adminis¬
their electoral power, then free¬
to give it the support and pro¬
trative directives, having the ef¬
dom dies and the individual loses
tection necessary to preserve it.
fect of law, which supplants or
his right to determine the details
The voice of the people is still
unjustly expands the laws estab¬ of his own life and the acceptance
more
powerful than any docu¬
lished by the representatives of
of the risks that go with liberty.
ment
or
system
ever
devised.
the people themselves.
American
liberty and oppor¬
That, in itself, should cause those
Constitutional
representative tunity will last just so long as its
who speak to weigh well their
rests
upon
rules people believe in the faith of its
lest
they
unknowingly government
words,
destroy the very form of govern¬ which the people themselves may founders and act to protect and
ment required to preserve free¬ alter through the ballot but which preserve that faith.
they have not authorized others
dom of the individual.
Popular government is in dan¬
alter
for
them.
The great ger
I warn those who think lightly to
today,
not only
here but
threat to & representative system throughout the world, and for us
with reference to circumvention
of the constitutional prohibitions like ours rises chiefly from two that
danger rises not so much
to make it their business to un¬ dangers.
First, a popular ruler from our enemies in this war as
derstand the importance of these who loves power may gain it in from the ideology that made those

enterprise system which of¬
fers fair reward for accomplish¬

free

is at the will of the

r

his

dependent upon him, he
becomes the mainspring in our

understands that its tenure of life;

'

erty as established in our

own

en¬

government of than render service.

a

.

Ourihope for the future lies in

stimulated by the
others

A free

a

cess.
The individual takes risks
Enlightened self-interest seems to
Under the fact that government is pre¬
in accordance with his judgment.
be
raising
its head from the
our
system freedom was pre¬ sumed to be permanent, whereas
Ours is a business system of not
ground.
I urge you to accept
sumed to be the rule—restraint the administration of government
only profit, but profit and loss. your full responsibilities, deter¬
the exception—therefore, the first is only temporary.
Whenever the
We must be free to fair as well as mined to do
everything necessary
inquiry of the people should be temporary does things that are in¬
to succeed, for a system of liberty
to win complete victory in this
to
or
destructive of the
—is the proposed restraint neces¬ imical
is a system of risk.
Americans war and, therefore, determined to
permanent
thing—government—
sary in the public interest?
have always wanted an economy
preserve the home front and the
Second: Is the restraint estab¬ then it is the duty of each of our

necessary?

it

Is

First:

is

desire to better
condition and that of

the

rights and accomplishments of all
engaged in its processes.
Fair
consideration
from
capital
and
management to labor and
fair
consideration from labor to capi¬
tal and management.
A free en¬

that

day

the system the people, in establishing
equally strong and practical be¬ our government, imposed certain stimulated to greater opportunity
dividual
throughout
the world
lief that
the individual is
the restraints upon it for the purpose
by fair reward as an incentive to and throughout history.
dynamo of social progress—the of protecting their own funda¬
accomplishment.
It cannot sur¬
Americans do not wish a ruler
mental liberties.
When we say
source of creative energy which,
vive unless that reward is fairly
—they wish public servants.
It
allowed to go into action in the a thing is unconstitutional, what
and
honestly
protected
in
the matters not to them whether the
form of individual initiative and we mean is that it is against lib¬
second

justice
for

dence during the past year that
unnecessary
large numbers are awakening to
will of the stitutional guarantees, produced
personal rule.
Americans under¬ the necessity of protecting and
people. The test of restraint un¬ the foundation upon which prac¬
stand that our way of life is one
preserving it, and doing those
der
our
constitutional govern¬ tically all of our individual lib¬
where the individual must be free
things which
are
necessary
to
ment is determined by three con¬ erties rest.

imposes unfair and
restraints against the

*

The

consideration

challenge the
terprise system which recognizes
there was not a
its obligation to the people and
Washington
who was

issued

ington

personal inclination and attitude
rightfully belongs to them under
rather than a government under
American - free
enterprise
rule of law.
This is a condition
system. Let us not break the free
crying for reform if our people
enterprise mainspring and crush
wish to get back to the fair and
the spirit of the people in this
normal pursuit of their own busi¬
Nation who have, under our con¬
ness
and
free themselves from
0ur

a

consideration

fair

and

free
sound basis that

one," choose

for
on

into

takes

terprise in which no group grows
priate place for an administrative
to be as strong as or stronger than
law, and that certain powers and
the government and thus imposes
administrative
agencies
must
its will upon the people.
A free
exist, but they have grown by
enterprise under which all have
such leaps and bounds that even
respect for the spirit as well as
one
of the wisest men in Wash¬

possessed. of the bureaus or knew what tjieir
and over-ridden with bu¬ authority or objective was.

power

of

he is

and

government

people and a people dominated by
a
ruler or an administrator of

dignity, worth and nobility of
the individual, separated from the straint, and in their own protec¬
mass of individuals.
By the in¬ tion make the change by the
dividual's very nature and crea¬ provision so
wisely established
tion he is the source of govern¬ for amendment in the Constitu¬
ment
and
endowed with indi¬ tion itself.
Let us understand that in our
vidual rights.

the

•

capacities
freedom to ex¬
and the de¬
of human beings to excel and
individual

such qualities

welfare

*■■■■'■

principle

producing those things which
need. Let us remem¬
ber—government never had any
money and the only way it has of
doing things for the people is to
use
the power to tax, and there
is nothing to tax unless it is cre¬
ated
through individual effort
and genius.

siderations:

American

of human relationship is
of our people in two

system

creative

talents rests upon

sire

full meas¬
genius

the people

the

means

a

of work and the use of

in

(Continued from first page)
will

demanding

without
ure

gether.
I,
enterprise

J.

P.

:1

V;

• •

:

McHugh, President
Morgan, J. P. Morgan

&

Company
Seward Prosser, President Bank-:
ers Trust Company
Charles H. Sabin,

President Guar-;

anty Trust Company

j

Volume '159

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4252

the right to care for themselves in
their own ways.
This they can do

Greatest Fight Ahead—Thai Against Possible
Totalitarian State In U. SRobertson

infinitely better than
vide for them.
of

W--

(Continued from page 501)

of which

pers

in

American
rection

alysis it could bring about world
sion.
I stated then that the United economic and social collapse.
States
had
"I have observed recently the
6%
of
the
world's
population and 36% of the world's plan of United Nations Relief and
income.
By dividing population Rehabilitation, which as yet has
into

are

my

posses-

to

sibility.
yield to

a

should

world

.

policy

American income to such a
degree as to increase the average

which

standard for the rest of the world
at
the expense of. substantially

ual

reducing our
units then I

responsibilty

of the world

would demand

of such that such responsibility be pre¬
will bring served for ourselves.
upon
themselves; we will
"Without question, we should
then be incapacitated to maintain
give these peoples every assist¬
any lasting constructive influence ance that
is
wise, honest, and
on the rest of the world.
average

say

They

practicable.

"We

must

utilize

not

for the

sistent

with

nomic

and

individual,

our

and

eral

Electric
is not

Co.

and

the

Elfun

limited

to

the

has

the

to

Co.

The

hereto¬

-trusts

created

by

the

Gen¬

Electric

General

party to the trust agreement,
responsibility whatever for the

a

no

S-5.

V:.

': V

'«•.

eco¬

ELECTROCHEMICAL

Hooker

Electrochemical

registered
tive

shares

50,000

preferred

has

Company

of

$4.25

cumula¬

stock.

industries.

—

caustic soda, chlorine and

hydrogen.

agement of money and credit, and

Offering—To be supplied by amendment.
;/>: Proceeds—Of the net proceeds, $2,349,705 will
be applied to the redemption of

effect for winning the
such as rationing, the draft,
Government international
man¬

will

ments were

the American economy. American

between

their

of

rate

and what is taken home. We

if

der

such

Government

pay
won¬

proce¬

of

hirii

locomotive

a

permit
only $10 a

home

take

to

and

week! It may

for

a

time

serve

world

outside

States from

% of

a

the

preferred
balance

to

by such distribution of the Ameri¬
can income, but in the final an-

filed

bonds,

mortgage
1,

In 1934, Mr.

Mills, who was one
of the first employees of the cor¬
poration, became President, and

:

has now been /elevated to

.

man,

■■

.••j.-vV;.;./-.

By; 1940,

the

Chair¬

:

capital funds of

the

corporation
had; increased
through earnings to about $12,000,000.;.;. Because
of
disturbed
-world

conditions,;, bankers'
ac¬
ceptances •. had
practically
dis¬
appeared, and it was accordingly
decided to return $6,000,000 from
earnings to the stockholders, a

step which was taken in that
"year.Capital; funds now stand
at

$2,000,000 capital, $2,000,000
surplus, and about $2,000,000 in
undivided
profits and reserves.
•The Directors

today are: .
W. Aldrich, Chairman

.Winthrop

Chase National Bank
John E. Bierwirth,

President New

York Trust Company
S.
-

,

<

.

,

,

Sloan Colt, President Bankers
Trust Company
>•''
S. Gray, Jr., President

William

Central Hanover Bank & Trust

lay, O,

Company
:
Percy
H. * Johnston,
Chemical

Bank

- " Chairman
&, Trust Com-

Dudley H. Mills, Chairman
George Whitney, President J. P.
Morgan & Company Incoporated
William C, Potter, Chairman of
the Executive Committee Guar¬

anty Trust Company
:
Gordon S. Hentschler, Chairman
National City Bank
Herbert N. Repp, President
Lynde
Selden,
Vice - Chairman
The • American
Express Com¬
v

B.

;

Sherer,. Chairman

The

bankers'
war,

corporation
that

it

bill

when

will

has

made

reenter

the

after

the

market

normal foreign

trade

is resumed.




net

SATURDAY,

and

utility

Find-

operating
;

Underwriting—To

S-l.

be

supplied

DANIEL

post-

Daniel

for

statement

due

will

1,

1966,

interest

the

$4,656,522

share,

a

petitive
sion's

bidding

Rule

issue

sale

pursuant

requirements

U-50.

and

to.

may

,,

the

Company
to

sell

banks

of

Jan.

20,

with

1944,

to

the right

Proceeds—Will

be

used

majority
March

of

the

1,

date

a

the

1959,

to

securities

to

first

extend

$4,000,000 face
,i

...

pay the $4,999,000. face amount of St. Paul Gas Light
Co.
general
mortgage
gold
5%
bonds,
assumed by Northern States which mature
on

March

amount

of

Feb. 28.

1944,

and

promissory

dated

pany
on

1,

June

14,

the $4,000,000 face
notes

1943,

1944.

of

the

which
V,

than

date of
bonds of

maturity

mortgage

THE

(1-21-44.)
SOUTH

The
a

South

Coast

mortgage

CORPORATION

Corporation

statement

5%

has

for

bonds

$1,500,000

due

Dec.,

1955.

.

,

Address—Carondelet

leans, La.

ture

Building,
'

.
_

filed

■;

-•

New

31,
,

-

Or¬

,

,

the cul¬

sugar cane and the manufac¬
and sale of products and by-products

resulting from
cane,
including
syrups,

the
raw

processing
and

of

refined

sugar
sugars,

black strap molasses and bagasse.

Underwriting—To
ment.

,

be

named

by

amend¬

Offering—lo be named by amendment.
Proceeds—Will
be
applied to
the re¬
demption, at the principal amount thereof
plus annual interest, of the $998,405 in

be

available

funds.

Some

for

general

alloca¬

the

of

funds

supplied

be

amendment.,

bidding
Rule

Commission's

by

3(4%
sale

bonds

the

following* securities:

ida

Power

due

first

Corp.

Dec.

1,

Public

first

serial

and

1966,

at

Florida

104%

Co.

On Jan.

Public
and

;

first

35,565

and

registra¬

a

shares

5'/ac¬

of

preferred stock, $50

108,913

shares

of

common

.

stock

registered, at the "present rate of
conversion, which may vary from time to
the event

of certain

contingencies.

The shares

are issued and
outstanding and
offering does not represent new financ¬
ing by the company.

the

Address—721

Fifth Avenue,
New York
:%

City.

Business—Owns and operates one of the

outstanding
United

large

specialty

Underwriting—Allen &
City, is named principal
both

stores

the

in.

States.

the

preferred

and

Co.,

York

New

underwriter

for

stock.

common

Offering—The offering price to the pub¬
lic

of

both

the

preferred

stock will be supplied

and

common

by amendment.

The
35,565
shares
of
preferred and 20,000 shares of com¬

prospectus
5 va%

offers

mon

and

the

The

shares

stock.

sued

chased

are

outstanding and

by

the

of

ganization.

presently is¬
being pur¬

are

underwriters

from

Atlas

the

since

company

its

or¬

/•/:

Proceeds—Proceeds will go to the selling

Registration Statement No. 2-5245. Form
(10-29-43).

Amendment

to

defer effective

date

filed

Jan, 17, 1944.
EASTERN

COOPERATIVE

INC,

;■;■■/■

•

WHOLESALE,

v.,...

V
;

.-</.■...

Eastern Cooperative Wholesale,
Inc., has
filed a registration statement for $100,000

4%

registered

Issue

of

debenture

York

bonds

West

143rd

Street,

City,;,./

1 ■/

Business—Wholesale
and

allied

other

authorized

1943.

Address—44

dealer

products,

related

New

-

/ *1 -•

,,

in

groceries

including,
among
warehousing and

activities,

packaging.

Underwriting—None.
Offering—The price of the bonds is $25

for

each

The

$25

principal amount thereof.
being sold by the co¬
to its stockholders and

securities

operative

are

directly

friends interested in the cooperative move¬
ment

without

underwriter,

the

in

interposition

dealer,

commission

No

is

conjunction

broker

being

with

house

the
and

July,

office

1943,

in

price of which
title

and

chase

money

ments

over

a

to

of

New
was

York,

the

used

to

ware¬

new

purchased in
the purchase

$50,000 cash

in

any

anyone

be

the

building

$12,000

to

sale.

are

purchase

of

salesman.

or

paid

such

Proceeds—Proceeds
finance

form

taking

on

of

a

pur¬

mortgage payable in install¬
period of seven years..

Registration Statement No. 2-5283*
(12-31-43.)
a ; / V

Form

S-l.

Amendment filed

are

unknown

to

for

other

de¬

be
of

Flor¬

filed
whose
deter

were

Jan.

14,

1944, to defer
/V/;

STORES,

Fair

Storey,

statement

INC.

'//

filed

Inc.,

for

/,

a

$3,500,000

regis¬
15-year

sinking fund debentures, due Feb. 1,

1959.

-

Address—2223

Philadelphia,

us.

REALTY

meat

CO.

Realty

mortgage

deed

of.

the
McPherson

trust

East

Allegheny

Avenue,

Pav

\/

■

.

"

•

■

,

the noteholders

amount
10%,

41/a%

purposes

of

Registration Statement No. 2-5282.

affiliated

S-l,

sub¬

Form

(12-30-43.)

Amendment

effective date,

filed

14,

1944,/: to defer

the

Proceeds—To

bank

notes

payment

of

out¬

$3,150,000,

of

with

Registration Statement No. 2-5280.
(12-24-43.)

S-L

Amendment

Form

y

filed

Jan.

28,

1944, to defer

effective date.

KRUPP-FLAHERTY

OIL

CORP.

Krupp-Fla.herty Oil Corporation has filed
registration statement for 20,000 shares

a

of

stock.

common

Address—Caples Building, El Paso, Texas.

Business—Corporation
March
11, 1940,
under
has

for

of Delaware

been

oil

for

was

the

the

organized on
laws of the

purpose

of,

and

in the drilling of wells
and the operation thereof.

engaged

and

gas

Underwriting—None named.
Offering—Price $35

per

share.

Proceeds—All proceeds go to issuer, sub¬
ject to cost of sale of issue.
Proceeds will
used for

be

all

of

Jan.

/•;

by amendment.

standing

the notes outstanding b.\
after
such
reduction ol
aggregate first mortgage in¬
$240,750,

1

prepayment premium and accrued interest,
and to increase working capital.

all

an

debtedness of

14, 1944, Florida Public

plied

leaving,

principal,

'<<

Offering—Price to the public to be sup¬

State

v

Offering—Purpose of present offering ti
is to reduce the principal

mortgage

amendment/

on

.■;

products, vegetables, etc.

Underwriting—Eastman,
Dillon & Co.,
York, head the underwriting group,,
with
names
of others to be supplied by
New

■

Underwriting—None,

$5,148,400

a

3% %

statement

$40,500.

4s, Series

companies, and Sante Fe Land Co.,

FAIR

tration

Issues

Business—Apartment
building.
Amer¬
was incorporated July 21,
1943, to acquire and own the equity in
the Ranelagh
Apartments subject to the
first mortgage deed of trust, securing the
outstanding and unpaid mortgage
serial
notes of the par value of $267,000 which,
by the plan of reorganization, are to be
reduced by 10% to $240,750 of par value,
and on outstanding second deed of
trust
on
which there is an unpaid balance oi

sidiary, were merged into Florida Power
'Corp', as the continuing corporation. Com¬
pany is controlled by General Gas & Elec¬
tric Corp., which is part of the Associated
Gas & Electric Corp. system,.

or

company

drilling expenses and payment
of the obligations of the

part

incurred

in

development

work.

.

Registration Statement No. 2-5256. Form
BEN-HUE PRODUCTS,

Ben-Hur

Registration' Statement No. 2-5293. Form
(1-24-44).

INC.

for

par $1
per share.
The latter in¬
88,913 shares of common reserved
issuance upon the conversion of the
5 (4%
cumulative ■ convertible
preferred

Food

cf

ican Realty Co.

Pro¬

Service

Service Co.. and Sanford Gas Co.,

A-2

fist

a

Louis, Mo.;;:;;/
/

:

serial

$11,000,000

mortgage

Service

debentures

$730,451.

TELLER,

for

FOOD

Apartments,: 5707
Avenue, St. Louis, Mo., in the aggregate
principal amount of $240,750. ■;
Address—5707
McPherson
Avenue,
St.

4s, Series C, due 1955, at 102.90; $1,622,000
Power 3V2% serial debentures and

$2,300,000

pur¬

Co. has filed a regis¬
relating to the offering
for the extension of first mortgage serial
notes of Housam Realty Co., secured by a

Success¬

debentures.

serial
of

or

American

requirements

U-50.

the interest rate.

name

below

present

AMERICAN
tration

post-

company to the extent required, will
applied as follows: To. the redemption

C,

to defer

Business—Operates ; supermarkets
en¬
gaged in the retail sale of groceries, meats,

Proceeds—Company also proposes to sell
privately to. John Hancock Mutual Life In¬
C'O.
Of
Boston
$4,000,000
face

Florida

originally

1944,

effective date. "

registration statements

mined

surance

of

time

OF OFFERING

Ranelagh

der, the. competitive

from

of

.,

twenty days or more ago, but
offering dates have not been

,

of

ceeds

23,

Teller, Inc.. has filed

cumulative convertible

UNDETERMINED
whose

Of feeing—Price to the public to be sup¬
plied bjr amendment,
Company will invite
bids for the purchase of bonds from it un¬

ful bidder will

Some

One of the

(1-31-44).'

We

Power

Underwriting—To

the

balances.*

of

DATES

SATURDAY, FEB. 12

effective

Jan.

•

statement

value,

Form

.

FLORIDA POWER CORP.
Florida

bank

increase

provide for expansion of the company's

S-l.

Form

Florida

primarily of

of

such

1944.

opportunities which may present
themselves for the expansion of the com¬
pany's business.
;
1
u
Registration Statement No. 2-5296. Form

bentures, together with other funds of the

COAST

registration

first

Form

will be transferable

post-war

the
the
1

(1-22-44.)

amount

Registration Statement No. 2-5290.
A-2. ;■

com¬

mature

Sub¬

this financing is to provide the
company with funds with which to
meet

the

later

not

Registration Statement No. 2-5292.

Commis¬

to

of

poses

com¬

proposes

1944.

manufacturing facilities.

majority of the trustees and holders
trust certificates representing a

F-l.

also

18,

1944.

the funds may be used at some future

voting

■

the

Feb.

17,

to

from

BONWIT

held of record at the

will be exerciseable be¬

warrants

Proceeds—Will

.

for

each

be used to carry additional receivables
inventories, to pay current liabilities,

a

and

loans

Statement

filed

effective, date.

/

tion

.

bonds

share for

one

and will expire at 3 p.m. on March 1,

Corp. has registered $16...
500,000 first mortgage
bonds series due
Address—15 South. Fifth Street, Minne¬
Jan.,1, ,1974. .Interest rate will be supplied
apolis, Minn.
////':;
by amendment
Business—Operating public utility com¬
Address—101
Fifth
Street,
South,
St.
pany-and is also a registered public utility
Petersburg. Fla.
holding company.
Business—Public utility operating wholly
Underwriting—To
be
filed
by
post- within the - State of
Florida, except for
effective' amendment.
transmission
line
connecting
with
the
Offering—Price to the public to be filed
transmission
facilities of
Georgia Power
by amendment.
Company proposes to offer Co.
the

at $45

and

outstanding

1, 1974.

the rate of

business on Feb.

ginning

(MINNESOTA)

Feb.

at

scription

.

corporation.

Northern States Power Co.
(Minnesota)
has
filed
a
registration
statement "for
$5,000,000 first mortgage bonds, series due

shares, 'for subscription

common

and

years

Form

POWER CO,

follows: A. G. Becker

as

ef¬

termination

WEDNESDAY, FEB. 9

are

corporate purposes pending specific

of

(1-15-44.)

NORTHERN STATES

them,

qf

in
re¬

<

Registration Statement No. 2-5289.
S-l.

of

Inc., 50% ; F. S. Moseley& Co., and
& Co.,
25%
each,
all firms of
Chicago.

its

following the

100.

bank

Francisco.

Udu

Amendment

manufacture,

common; shares

of

retire

(12-20-43.)

tued in

A-2.

V

>

registration statement.
Purpose—To form a voting trust for five

exclusive

and. expenses.

sale

and

v

close

date

S-l.

Shields

Philip C. Gifford

Offering—Immediately

total amount of

a

stockholders.

/

,

;

f

,

Offering—The 94,439 shares are being
offered by the company to the holders of

Underwriting—None.

3 Vh %,
two

■

111.
in the

& Cq.,

filed

fective

Proceeds—To

common

and

each of

Form

AL

.

or

pubic,

working capital.
Registration Statement No. 2-5273.

stockholder

the percentages of the unsub¬
scribed common shares to be purchased by

/Business—Generation of electricity.

103

at

$406,805,

demptions aggregating
accrued

bonds,

mortgage

March

require

Abercrombie,

94,439

eight

-

D,

P.

:
•

regis¬

a

Mich.

from
sale 7 of
the
together with other funds of the
will be applied to the redemp¬
tion
of
$3,981,000
principal amount of
first mortgage bonds,
4%, series C, due
Aug. 1, 1964, at 106%%, which will re/
quire
$4,249,717, ' and
of- $394,000
face

which

writers

voting

Proceeds—Proceeds

first

15-

10

ET

19

filed

Greenough, voting trustees,
a
registration
statement for
trust, certificates for 40,000 shares
of common. stock,
par $5 per
share, of
Wolverine Power Corp.
Address — Of
corporation,
Bay
City,
have'

bonds,

of

ABERCROMBIE

of

mustard

Corporation and its subsidiary Rotary Elec¬
tric Steel Co,
Atlas Corporation,; directly
and
indirectly, has been the controlling

pharmaceutical,
medicinal, chemical, biological and Vitamin
products.
\
Underwriting—The names of the under¬

and Charles W.

company,

amount

P.

Offering—Price to

•;

Address—Fourteenth Street and Sheridan

lv

THURSDAY, FEB.

.

by

the Commission's Rule U-50.

of

.

added

:

has

shares, without par value.

.■/••

(1-21-43.)

ex¬

Offerihg—Price to -/ the public will be
supplied
by
post-effective
amendment.
Company proposes to ask for bids under
the
competitive bidding requirements of

series

materials.

raw

Registration Statement No. 2-5291.

The

be

FEB.

Laboratories

tration"

due Sept. 1, 1950,
working capital and

to

will

LABORATORIES

Abbott

be applied to the reduction of current
bank loans' and the. purchase of supplies

,

Street,

added

share.

per

proceeds

(1-28-44).

ABBOTT

may

1974.

clusively-,in Ohio.

tivation

Corn Exchange Bank & Trust
Company

known

A,

1,

balance

and

'

Business—Consists

pany

series
Main

amount of its serial notes.

pany

Dunham

North

Business—Public

to

•'

;

CO.

effective amendmen t.

James NV Wallace, President Central Union- Trust Company

t

POWER

1944, due Feb.

Address-r-120

v

the

cumulative

capital.
/■
Registration Statement No. 2-5295. Form

S-L

income bonds,

6%

year

&

Light & Power Co. has
registration statement for $4,300,000

a

first

LIGHT

Ohio

dated Feb.

<

principal amount of general mortgage

THURSDAY, FEB. 3
CENTRAL OHIO

due

working

distribution

United

;;

of

$105

at

Business—Engaged

Central

Chase National Bank

stock

Road, North Chicago,

unit to 1 unit

bonds,

mortgage

outstanding 9,983 shares of 6%

to

James A. Stijlman, Chairman National City Bank ;
Eugene V. R. Thayer, President

first

company's

the principal amount
of $2,298,000, at 102(4 %, and $1,048,215 to
the redemption on March 31, 1944 of the

increase 50% the average per cap¬
ita standard of living income of
the

debentures at 92l/a%,

1952, outstanding in

days after filing (unless accelerated at the dis¬
cretion of the SEC), except in the case of the securities of
certain foreign public authorities which normally become
effective in seven days.
These dates± unless otherwise specified, are as of 4:30
P.M. Eastern War Time as per rule 930 (b).
Offerings will rarely be made before the day follow-

eventually give a rate of
of $60 a week to a man in the

cab

the

is twenty

dure will
pay

a

are grouped according to the dates on which the registrar
Hon statements will in normal course become effective, that

workingmen are watching their
pay checks and today they find a
substantial
and
growing differ¬
ence

list of issues whose registration statefiled less than twenty days ago.
These issues

Following is

wholesale

at

extracts,. prepared

$277,500.

time in

Principal
operations involve
the decomposition of salt solution in elec¬
trolytic cells resulting in the production of

into

which
only end in the insolvency of

Los
proc¬

cludes

COMPANY

Address—Niagara Falls, N. Y.

potentialities,

devices

rehabilitation,

of

stock,

WEDNESDAY, FEB. 16
HOOKER

war,

■relief ,and

tea,

business

Underwriting—Pacific Company of Cali¬
fornia,
and
Wyeth & Co., both of Los'
Angeles,
are
named
underwriters,
each
having agreed to purchase $150,000 of the

par

Underwriting—Smith, Barney & Co. head
the
underwriting group.
Others will be
named by amendment.
> '"'V;

put

con¬

Avenue,

spices.

Bonwit

(1-26-44),

preferred
such

Cal.

coffee,

tion

Registration Statement No. 2-5294. Form

of

Traction

Business—Engaged in
essing
and
marketing

ing" charge is included, : '
Proceeds—For investment,

prior

purposes

''

Angeles,

trustees

administration of the trust funds. Offering
price is determined in the agreement.
In
calculating the price, no "service" or "load¬

private ownership and
our

be

profit-sharing

hereafter

Business

and under

general,

in

11.400

and
the

-

Address—800-812

and

Participation

in

certain

fore

con¬

great

very

social

have" operation of

should

of

increasing standard of liv¬
and the highest obtainable

freedom

we

ruin

New

company.
named.

companies -and

an

ing

—

will,

trolled

productive and prof¬
itable; equal economic justice for

the peoples all,

of

as we

/

Avenue,

.

list
of
executives, officials,
leading em¬
ployes and former employes of the General
Electric "Co,
and
its
subsidiary or con¬

ment that is

promote and preserve the individ¬

1

Underwriting—None

employ¬

However, the approach must be to

away

representing a pro¬
offering price

Lexington

•/

Offering
Trusts

would result in making our stand¬

,

City.

of

Business—Investment

been

not

20,000 'units

aggregate

Address—570

we

approved by Congress, ards generally sub-standard, there
per capita income measured the wherein many billions of Ameri¬ is only one ultimate result,—we
American standard of living.
On can dollars are to be used to sat¬ would be incapable of serving the
the other hand, the average per urate the world.
Now, don't mis¬ world .as well as incapable of
capita income of all the peoples understand me, I think it is to serving our own people.
pf the world, outside of the United the eventual benefit of the United
"In conclusion, I am for a plan
States, gave each individual % of States that we give aid and com¬ which
is
based
on
an
ever¬
a unit of income.
If the operation fort to the distressed nations; Of
growing economic security, the
of
post-war,'-, planning
following
the
war. greatest chance to secure
syphons the world

income, six units of average

certificates

maximum

York

1951,
for

version.

registered

the public of $2,100,000.

to

first respon¬

our

However,

Trusts

trustees

posed

in

living which need cor¬
improvement. It seems

or

that this is

me

Elfun

plenty

are

conditions

Feb.
1,
shares,

MONDAY, FEB. 14
ELF UN TRUSTS

we can pro¬

There

substandard

527

registration
„

convertible

Products,
statement
debentures,

for
series

S-2.

'

INC.
Inc.,

has

filed

$300,000

of

a

5%

1943, due

(11-18-43).

Registration

29,

statement

withdrawn

1943.
(This list is incomplete this week)

Dec.

Thursday, February 3, 1944

THE COMMERCIAL & FINANCIAL CHRONICLE

528

New
'•
First Things

\

s-- •

For Dealers

Teletype—N. Y. 1-971

IIAnover 2-0050
:

••

.

.

First

Common

Telecoin

BONDS

BUY 4TH WAR LOAN

$5

Corporation

N.

Old; Common

Cumulative Convertible Preferred Stock

par

•

Corporation
======

New York 4, N. Y.

Peabody

Three New Partners For Kidder,

-

Members

:

He

TELEPHONE

RECTOR

versity.

'

.

.

since

firm

the

with

•

.

Uni¬
>

years ago

syndicate

succeed

to

leave of absence to serve the War

Shipping Administration.
\ Mr. Rauch has been associated
with the Philadelphia
office of
Kidder, Peabody & Co* since the
of- the
office
in

establishment

He

1934.

gaged

in

since his

Clifford

C.

has

been

ing

actively

en¬

of the buying and
departments*
Before

with

he

Peabody

Kidder,

a

was
of years

number

of
joining the firm, he had been, Harris, Forbes & Co, and subse¬
since
1928, with the Guaranty quently became Vice-President of
Trust Co. and its
affiliate, the the Philadelphia National Co., in¬
Guaranty Company. Mr. Moffitt vestment affiliate of the Phila¬
is a director and member of the delphia National Bank.

statistical

committee

executive
Worsted

of

Penn

ners

Commerce

of

these

part¬
previously reported in
new

the "Financial Chronicle" of Jan¬

the Lincoln Mortgage

the

and

was

office

Philadelphia

Admission

Co., Philadelphia, and a

director in

the

Manage-

uary

2oth.Or"v.-v-

Industry
Is Formed for Post-War Development of China
It

announced on Jan. 31, in New York City that the Chinaof Commerce and Industry had been formed to

was

American

Council

interest American business in the post-war development of China.
the

The following concerning the new council has been taken from
New York "Herald Tribune" of Feb. 1.
'

•

Heading the Council

are

Thomas J. Watson, President of Inter¬

national Business Machines Corp.,<8>

—

——

chairman, and Richard C. Pat- J: American concerns which have a
interest
in
Chinese
terson Jr., former Assistant Sec¬ potential
trade. .•
O/'! r;^
<.
retary of Commerce, president.
Offices are being established at
Pointing out that this is the
Seattle and
San
Francisco
and
first major co-operative effort by
American business to build our others will" be opened shortly at
Chungking.
: trade in China on the basis of Washington ■%', and
Julean
Arnold,
former United
organization, study and planning,
announcement

pointed

out

that the future economic develop¬
ment of China is one of the most
*

vital phases of world reconstruc¬
tion.
,

The projected services of the
council, some of which are al¬
ready being developed, include
analyses of China's natural re¬

commercial !

States

Other

on

Watson-:
Charles

the

officers

attache

and

west

and

freedom

insure

will

as

and

management,

and the

for

kets

preservation of free mar¬
the protection of con¬

sumers/'

;

'•

The New York
of

Feb.

v':

"Herald-Tribune"

also indicated his further

follows:

as

■

does

control

of

possi¬

bilities,

Chinese

with

private enterprise in co-ordinat¬
ing thd two nations' economid
programs.

business

industrial

It is also

praisals
law
the

and

and

of

planned to make ap¬
China's commercial

economic

protection

interests
the

mittee,

and

Executive

Mildred
Secretary.

B.

Hughes,
:

of

of

American

rendering

commercial

organization;
equitable

the

services

business

of ! various
here

and

in

Urge Conscription For
Military Service
For Women

CORRESPONDENTS IN

PRINCIPAL MINING CENTERS

HUNTER $ CO.
■■

/

Members New York Security Dealers Assn,.

BROADWAY, NEW YORK 4, N.Y.

42

WHitehall

4-2968

NY

-

1-110

Explaining his philosophy, Mr.;
Richberg gave a short outline of
he

termed

a

"labor-peace

Du Mont Laboratories "A"

Electrol, Inc.
South Shore Oil

ligations—first, the duty of every

Southwest Natural Gas

citizen to make his services avail¬
able whenever and wherever most

however,

needed,; something,

*

Triumph Explosives

;

V

Venezuela Syndicate

which should not be continued as

legal duty in times of peace;
second, the duty of every citizen;

:

a

J. Arthur Warner Is

Nashua

Mfg. Director

J. Arthur Warner,

of

ner

Arthur
elected

senior part¬

the investment firm of J.
Warner
a

&

Co., has been

director and member of
executive

the

peaceful and prompt settlement of
economic
disputes, which duty
should be continued in times of

of

Nashua

known textile

ufactur-i

ers.

-::

E
in

s

tablished

1823,

the

company is
one
of
the

oldest

enter¬

MORRIS STEIN & CO.
1924

New York 4, N. Y.

50 Broad Street,

Telephone HAnover-2-4341

-

•

!•• "We should require by

said,

peaceful

"the

and

law," he
maintenance
contracts

labor

of

revision

between chosen

labor- and management,

vision."

rv

"'■/.

..■;/■

livelihood and
from coercion

management
"We

tect

and

that

more

will

make

(1) fraud and coercion, (2)

mon-j

produc- f;
and (3) unfair com-!

tion

or wages,

petition^iri;'labor:conditions.
.k
Also, Mr. Richberg said," wej
own employer, free
by either organized need constructive regulation ofj
organized labor.

or

should

political regula-[
free enter-;:
prise impractical.
Outlining his,;
free
competition program, Mr.
Richberg. asserted • that we, need
constructive regulation of compet-y
itive practices in order to prevent.
more

tion

opoly controls of" prices,

"The
worker, should be pro¬
tected by law, Mr. Richberg said,
in his freedom to choose his own

indus-

trial

•

Over-the-Counter Securities since

.

peace.

representatives of
aided by
Man ufactur- government mediators, with all
ing: Co.,
of parties obligated to submit un¬
Nashua, N. H., settled disputes to impartial arbi¬
national ly tration under government super¬
committe

the

■.■nv-,,,.

available means for

to utilize all

preserve

competitive practices in order toy

and pro¬

permit (1)

the

right of collective bar¬
prises in the
gaining and for justifiable causes
United States."
the right to strike, subject to such
It operates
governmental controls as will pre¬
d o v a
Ala.; vent abuses of
power by labor or¬
mills in CorJ. Arthur Warner
ganizations," he said.
,;
Lewiston, Me.
Unless free competition is pre¬
and Nashua, N. H., and does an
annual volume of business in ex¬ served, Mr. Richberg warned, it

operation
and

(2)

socially desirable co¬
between

long-range

competitors,:!;

by|

planning

industrial managers with

the aid/

,

cess

is

of $36,000,000.

untary

recruiting of

women

inevitable

ed

and

stated

that

women

per¬

that

will

there

be

of

government.!

,

-

U. S. Realty and

Improvement 6s

for

INDEX

the armed forces has not succeed¬

China, such as reports on condi¬
The
women's
division of the forming
non-combatant
duties
tions affecting trade with China American Labor
Party at a meet¬ 'can speed victory by releasing
and information about commer¬
ing in New York City, on Jan. 29, combat-trained men and conserv¬
cial opportunities.
adopted a resolution
proposing ing skilled workers for war pro¬
Ten
months
of
preliminary conscription for military service duction and at the same time pre¬
study of American-Chinese1 eco¬ of women between the ages of 20 vent family dislocation by reduc¬
nomic
relations
preceded
the and 31 who are without depend¬ ing the need for inducting men
launching of the new organiza¬ ents, said the New York "Herald with dependents.' It was present¬
tion, which now seeks the par¬ Tribune" of Jan. 30, which added: ed by Mrs, Pearl L. Willen, Chair¬
"The resolution noted that vol- man of the women's division."ticipation
of
and
small
large




lie interests.":

;;

man¬

products.

Walter S. Mack Jr.,

,

money or

the

agement. This does not mean that
the
government should fix the
amount and quality and prices of

Hook, President of
Rolling Mills Co., and

Chairman of the Executive Com¬

^commercial

that

mean

are:

and China and also

and

Inquiries Invited

the economic powers

what
not

man

co-operation
with
the
governments of the United States

.

of organized;
organized labor are ex-!
ercised to promote, and not to im-j
pede
a
peaceful
cooperation!
among, and a free competition be-f
tween,
workers, managers, and;
capitalists to advance their pri-1
vate interests by serving the pub-,

ISSUES

DOMESTIC & CANADIAN

program" and a "free competition:
program." The labor-peace pro¬
government should favor one type
gram, he explained, is founded on
of labor organization or support
the establishment of two legal ob¬
"This

to

President of
Pepsi-Cola Co., Vice-Presidents;
James
G.
Blaine, President of
Marine Midland Trust Co., Treas¬
urer;
Wayne Johnson,. attorney,

sources

remarks

V<■

R.

American

re¬

quoted

marks of Mr* Richberg are

Messrs.

Patterson

these

which

from

2

Ass'n

Specialists In

relations ^
~~
"It simply means that the gov-,
of labor
ernment should' make sure that!
also such

ernment control of labor relations

'

Street, New York 5

MINING

ernment control of labor

coast.

besides

1

[Tel. WHitehall 4-7970 Tele. NY 1-2218

enterprise is to be restored in the post-war world and the
freedom of business management protected, "there must be such gov¬

China, is director of the council's
activities

Util.

Electric

of the

If free

.

the

Pine

railway labor act and the National Industrial Recovery Act, speaking
at a forum, in New York City, sponsored by its Sales Executive Club
of New York and the Committee for Economic Development, said:

labor

Ohma-American Council of Commerce &

Program

Washington attorney and co-author

R. Richberg,

Donald

the-security business governmental control of produc¬
graduation from Cornell tion and price policies as will in¬
1924. Before join¬ sure the freedom of competition

identified for

been in charge

&

Y. Security Dealers

Members N.

30

Outlines Free Competition

University in

Walter V. Moffitt

Pub.

Gas

L. D. SHERMAN & CO.

Enterprises, Richberg Declares

To Restore Free

1936. r Two

manager

-

United Public Utilities

'

Post-War Governmental Controls Needed

he was made sales anc

jAmyas Ames, who has taken

Harry

Consol. Electric & Gas

Derby Gas & Electric

1-576

yore

new

Gas

Community Gas & Power

National

Mr. Clifford has been connected

|

5

Teletype

Bell

telephone

\

Service

com¬

Columbia

and

University

1-1397

& Power

Util.

General

after

business

entered

HAnover 2-8780
Y.

Citizens Utilities

YORK

N E W

t

N.

Birmingham

•

-

:

graduate • work in eco¬
nomics and finance at both Duke

.;

;

Enterprise 6015

2-3600

Amer.

Co., both of Newark, N. J

pleting

;

STREET

Pfd.

Y. Security Dealers Ass'n

Amer. Gas

'

✓

Association

Dealers

Security

philadelphia

,

-

Company
&

INCORPORATED

York

NASSAU

45

Walter V. Moffitt and Harry C. Clifford, both of the New
Alfred Rauch of Philadelphia.
Mr. Mofitt, who has been with the firm since 1935, has recently

New

<6

4-4^2

are

<$>
i ment

Members N.

25 Broad St., N.Y.

<

:

York office, and

V-

Trading Market:

Kobbe, Gearhart

Kidder, Peabody & Co., 17 Wall Street, New York City, mem¬
bers of the New York Stock Exchange and other exchanges, an¬
nounces that three
new partners have been admitted to the! firm.

Co.

:

Teletype

Current

They

Laundries

Home

Bendix

CHICAG0===^==

AFFILIATE: CARL MARKS & CO. Inc.

Pfd,

M. S. Wien & Co.

and operates coin-operated

owns

Common

Old

Convertible into 3 Shares of Common

SPECIALISTS
-

&

Missouri Pacific

FOREIGN SECURITIES

50 Broad Street

& Pfd.

Y., N. H. & Hartford

Cumulative Dividend 50c per annum

r.ARL marks & r.o. inc.
,

Pidl-Stocks

Plain

Merrimack Mfg. Co.

.V/.«

.s

England Pub. Serv.

'

v

.

| Bank and Insurance Stocks....

....

513

Calendar of New Security Flotations 527
Canadian Securities
511
Investment

Trusts

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

Municipal News and Notes

.

Our

Reporter's Report.............. 507
Utility Securities..
602
Securities
502

Governments

Public

Railroad

Estate

Securities

.....

Whyte

501

Says
*See

under Mutual

504

515

Security Salesman's Corner
Tomorrow's Markets—Walter
Funds

on

Mailed

on

request.

512

Fenorter

Real

Memorandum in preparation.

*

516

Our

on

Fuller Building 6s

page

Hill; Thompson & Co., Inc.
Markets and Situations

120

for Dealers

Broadway, New York 5

Tel. REctor 2-2020

Tele. NY 1-2660

509

Hi