Full text of Commercial and Financial Chronicle : February 9, 1950, Vol. 171, No. 4880

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BUS. ADM,

io

*.;?

LIBRARY
ESTABLISHED JS39

Beg. U. S. Pat. Office

Volume

171

Number 4880

New York, N.

Y., Thursday, February 9, 1950

Price 30 Cents

a

Copy

EDITORIAL

Investing Policy Undei
Today's Economic Stains

As We See It
An Old

Controversy in

a

By GEN. ROBERT E. WOOD*

Professor of Finance, New York University

suggested that all insured banks of the
country should be subject to certain minimum
reserve

President of the Federal Reserve

Bank

On the

day and

same

upon

the

of New

rather than static attitude.

Every
ments

been

generation

and

problems.

new

-

_

bulwark of

our

with

new

of

has there
political sta¬

and

those

trust funds.
}

;

American system of

-

important:

be successful

who

to

administer

the

mass

of

and

their

attacks

be

deliberate

or

merely

the rise and spread

nism

at correct conclusions

hopeless task,
in

inadvertent.

"Now I

am

sorry

world

ruffled

place,

they

accomplish
their

*

WHAT'S

by

Ford Motor

Company

are

witnessed

United

States,

It

is, indeed,

were

their

able to

perform

assigned

tasks

their

to

the

duties

a

and

ade
R.

E,

Wood

address

An

19

ciation,

AHEAD

of

New

FOR

by

the

York

Dr.

Trust

Nadler

before

Division

City, Feb.

THIS

7,

of

the

31st

Midwinter

American

Bankers

age

it

had

lowest

1930-1940

as

been
in

since

the

absolute

•An

Funds,

Shillings Par

Shares

Sold

probable

trend

address

by

Gen.

Merchants of New

of business

the

&

inc.

Quoted

.

Members Neiv York Stock

Wood

before

York, New

Exchange

compared with
on

York

page

Association

City,

Feb.

2,

of

16

Cottom

1950.

during

THE NATIONAL CITY BANK

Prospectus

64 Wall

on

OF COMMERCE

request

DISTRIBUTORS, Inc.

Bond

Street, New York 5

Head Office: Toronto

Dept. Teletype: NY 1-708

Portland,Ore.

CHASE

NATIONAL BANK
THE

CITY OF

NEW

YOftK

San Francisco Los Angeles

New

CANADIAN

England

bonds & stocks

Public Service Co.
An

Distributors of Municipal

interesting workout situation

Bonds

and

Prospectus for this Open-End

Booklet available for

Corporate Securities

be obtained

Institutions and

Dealers

or

OTIS & CO.

VANCE, SANDERS
& COMPANY

Established

1899

(Incorporated)

BOSTON
ANGELES




-

,

Goodbody
*

*

,

& Co.

ESTABLISHED 1891
MEMBERS NEW YORK STOCK EXCH.

115 BROADWAY

New York

Chicago

Cincinnati

Columbus

DoMBaoM Securities
Grporatio?i
■

-

CLEVELAND

CHICAGO

"-

THE

Department

Agency: 20 Exchange Pi.

Stocks and

Underwriters and

Bond

OF

ISeio York

Canadian

Second Fund
may

Bonds

CANADIAN BANK

OF NEW YORK

INCOME (BALANCED) FUND

Investors

from authorised dealers,

Municipal

THE

UTILITIES FUND

FRANKLIN

Chicago

LOS

the

and

War,

upon request

Massachusetts

YORK

Civil

Monthly Commercial Letter

Seattle

NEW

as

the

the

percent¬

PREFERRED STOCK FUND

Wall Street, New York 5

Boston

Company

in

in

Revolution

since

by 8,800,000

Canada

across

A Mutual Fund.

White,Weld&Co.

Investment

country

lowest

American

increase

550 Branches

BOND FUND

40

that

this

of

Turn to page 30 for additional opinions

to the

Depositary Receipts
.

fol¬
sta¬

of
or

the present year.

COMMON STOCK FUND
Bought

you

any

Trust

Textile

Franklin Custodian

Preference Shares

English

If

statistics

State and

4Vj}% Redeemable

American

of

top

would have known

you

was

The population increased

Asso¬

1950.

YEAR?

and Finance

the

the

at

vital

growth

Ltd.

16

important.

put

Continued

BUSINESS

leaders in Trade, Industry

38

decade

past

the

page

would

census

tistics,
the

of

on

I

1940-1950.

lowed
Gea,

to

satisfaction

economic

these forces the growth of population
in the United States during this dec¬

great credit to

a

of the most

some

First,

the

clients.

Conference

page

has

Continued

...

on

in the

and,

feelings among banking leaders and
supervisory authorities, both

among the other
state and local.

Continued

It.

that, in spite of the tremendous changes that have taken

a

some

States.

devaluations throughout

entire

our

I

thought you gentlemen
might be interested in what I believe

trust companies and to their officers

System seems to have been hav¬
good deal of trouble regaining its independ¬
ence from the
Treasury. At the same time it has
managed to stir up some unhappy suspicions and
ing

underlying- forces which
influencing our business life—

life—and

reduction in the gold content of the

Federal Reserve

great

are

through two periods of

dollar.

the

war

the

of Commu¬

for that matter

United

Dr. Marcus Nadler

to say that since the

particular industry in a country
large and widespread as ours.

large part of the world.

several

Denver
Toledo

Dallas
Buffalo

NEW YORK

105 W. ADAMS ST.

CHICAGO

IRA HAUPT & CO.
Members Neu)

•

and

40 Exchange

Teletype NY

a

But it is possible to detect some of

inflation and one of the greatest de¬
pressions that has ever befallen the

reasonably in¬
dependent and it must have the good will and
cooperation of the entire banking system of the
country.

almost

seem

get all the facts

a

as

lived

It has

"In order best to
carry out its vital purpose, the
Federal Reserve System must be

even to

a

over

into

matter that he may attempt to
digest. To sift the facts and to arrive

perhaps by the greatest
convulsions and the greatest changes
of all, inasmuch as the present gen¬

whether

us

reading

been marked

eration lived through and partici¬
pated in two major wars. It saw the
rise and fall of Fascism and Nazism,

-

Warns

years.

It is trite to say that we are living in a
complex and
fast-moving civilization. Any modern businessman who
even attempts to
keep up, with events is swamped by

The immediate past has

It must be vigilantly and militantly
maintained against those who would weaken
it,

| freedom.

number of

over

plow back profits will lead

obsolete condition of Brilish industry.

develop¬

Seldom in history

required

•

recently Superintendent

can

most

failure of business

bility which permitted the long-range planning that is

of Banks for the State of New York, expressed
j himself as follows: "I believe our dual banking
a

confronted

prolonged period of economic

a

I

I system is

is

as

war,

conservation of principal;
(4) intensified selec¬
tivity not tied to past performance; and (5) a dynamic
mere

occasion

same

influencing business, Gen. Wood
(1) population growth; (2)
government control of banking, credit and money supply;
and (3) decentralization of industry. Says abandonment
of gold standard put in hands of
politicians most power¬
ful tool to stave-ofF incipient depressions, which barring
lists

investment officers: (1) less reliance on bonds;
(2) larger proportions of well-selected equities; (3) pro¬
tection against decreased
purchasing-power in lieu of

*

Company

In commenting on forces

trust

York, in a recent address.
"My proposal," he
added, "it seems to me, is wholly in accord with
jour whole Federal
political organization and our
whole Federal
tradition, which grants certain
4 powers
to a national authority and reserves the
.rest to the states and to the
people."
Elliott V. Bell, until
quite

Chairman of Board, Sears, Roebuck and

Urging close scrutiny of present economic and political
developments, Dr. Nadler advocates following policies by

requirements and thus share in
the
responsibility for and the burden of neces¬
sary national credit policy," said Allan Sproul,

/

Bar to Recessions

By DR. MARCUS NADLER*

Different Setting

"I have

national

Money Control—

Place, New York 5.N.Y.

other

lit

Broadway, N. Y. 6

WOrth 4-6000

1 -702-3

WHStefcall 4-8161

Boston

York Stock Exchange
Principal Exchanges

Teletype NY 1-2708
Telephone: Enterprise 1820

2

The Security

Thursday, February 9, 1950

FINANCIAL CHRONICLE

&

COMMERCIAL

THE

(602)

I Like Best

This Week's

and

Participants

Forum

Alabama &

,
-

different group of experts
and advisory field from all sections of the country
which, each week,

A continuous forum in
in the investment

participate and give their reasons

valu¬

sis that the criterion in the

of

ation

stock is what

common

a

get for each dollar of invest¬

you

Low

t.

or e n
'•

priced "stocks
not neces¬

are

cheap
high

sarily
and

shares

priced

necessari¬

not

ly overvalued.
this

With

introduction, I
have

recom¬

mending
as
"The Security

an

issue which

sells

for

over

Morris Goldstein

$4,000

share.

Se¬

Christiana

is

candidate

My

a

at a

Company — "duPont

curities

Discount."

the

Company

Se¬
stock
of acquiring
I. duPont

indirect ownership of E.

Co.;common stock
substantial discount with a
&

deNemours
a

corresponding increase in yield.
of

Christiana

Company

common

share

each

For

Securities

equity in

stock, the holder has an

following:

the

Co.

&

common

stock.
share General Motors

$14.15 representing
cash and
equivalent and the value of
other
securities
held
by
>■ (stock

Christiana

Trading Markets

rent

Bassett Furniture

as

calcu¬

all

liabilities,

lated

Ind.

Dan River Mills

Lynchburg, Va.

allowing

after

Even

the

for

stock at its
price, each share of Christiana

Christiana
call

preferred

Securities Co. common stock rep¬

indirect holding of over

an

addition

in

to

a

Christiana's

in

stock

rata interest
other assets. Yet
pro

Christiana Securities common may
be

cost of 68 shares

MEMBERS

MIDWEST

STOCK

EXCHANGE

Mexican Eagle Oil

than

the

of duPont com¬

common

at cost, given
stock
on
the

stock

duPont

giving

manner,

75

of

valuation

a

Motors 90—after al¬

General

lowing for the preferred stock at
120—the net asset value of Chris¬
tiana

$6,045

a

would

common

about

be

Taking duPont at

share.

General Motors at 45, the

and

Christiana

of

valuation

common

would be $3,986.

dissolution of

of

event

the

Securities

which

Co.,

presumably would be effected by
rata distribution of assets, the
purchaser of Christiana common
would
receive roughly 11 more
duPont shares than he paid for.
No such dissolution impends, so
as

Christiana

that the
stockholder

show

to

common

nothing to fear therefrom.
Actually, the yield on Christi¬

has

Securities

ana

Co. common stock

exceeded that
common by about Vz

in recent years has

of

duPont

annually,

1 %

on

the average.

dividends of
Securities were paid

Christiana

1949,

$47
on

Sept.

15

follows:

as

each

share

common

a

on

a

share

on

Dec.

$48

and $116.60

total of $258.60.^ At their
current prices and calculated on
1949
dividend payments,
Chris¬
15,

a

Securities

tiana
sells
the

common

yield almost 6.1%,
return
on
duPont is
to

This differential is

stock
while

the more

5.4%.
note¬

considered that
only do Christiana's dividends

worthy when it is
not

come

the

from

same

directors
are

of

source

as

of the 10

Christiana Securities

also directors




Tel. CG 451

callable at $120

is

entitled

and

$100

involuntary.

a share
share in

Co.

duPont

was

J. B. Maguire & Co., Inc.
Members

Christiana

to

predecessor

Securities

a

either voluntary or
There is no debt.1

liquidation,
The

to

Secu¬

Tel.

Co., incorporated on March
1, 1915 to acquire and hold a sub¬

rities

stantial
stock

of

amount

of

E.

I.

the

common

Nat'l

HUbbard

equity

common

Hartford, Conn. Enterprise 6800
Open End Phone to New York Canal 6-181 $

SPECIAL CALLS OFFERED
(PLUS TAX)

16% July 27 $112.50
45% Mar. 6 150.00
17
May 4 150.00
Intl. Tel. & Tel. 12% July 26 162.50
Schenley Indus. 32% May 15 225.00
U. S. Rubber.. 42% May 12
250.00
Richfield Oil..
39% Apr. 24 262.50
Alleghany Pfd. 85% Mar. 31 350.00

Socony Vacuum
Homestake

represented by

was

Amer.Wool. Co.

33

Christiana
Securities Co.
75,000 additional shares of

Chrysler Corp.

65%) May 15

stock

ferred

stock,

Stock

as

Atch.T.&S. F.105

par

Anaconda Cop.

subscription

Richfield Oil..

dividends,

Stand. Oil

the open
stock split

in

purchases

market and the 4-for-l

Chrysler Corp.
South. Railway

stock

Allied Ch.& Dye

duPont de Nemours common

shares,
or
about
of the outstanding total, as

12,199,200

27%

of Dec. 31,

Booklet

on

General

Put

Members

Motors

30 Pine St.,

owned subsidiary, which
publishes two daily newspapers in
Wilmington, Delaware.

m

I
!>!
i?

Inc.

WHitehall 3-9177

Established

11

11

1856

H. Hentz & Co

increase in the
deNemours
in 1949 as a result of the
stock split of that com¬

Except for the

Members
Stock

Exchange

Curb

Exchange
Exchange

York

New

no

Cotton

York

New

changes were made in
Christiana Securities Co.'s port¬
folio in any of the years since

pany,

Calls

and

Assn.,

N. Y. 5

shares of E. I. duPont

4-for-l

li

Cull Brokers Si

&

Dealers

wholly

Co.

Puts

Filer, Schmidt & Co.

85,000

held

Corp.
common
stock on Dec. 31, 1949
and
7,210 shares of Wilmington
Trust Co. capital stock. Christiana
Securities also owns 7,460 shares
of
The
News-Journal
Co.,
a

&

Si'R

OFFERED

Request

on

the investment in

Christiana
of

shares

%

1949.

In addition to

duPont,

jrf

525.00

29% Aug. 14 $225.00
40
May 13 262.51
68% May 9 275.00
65% May 15 375.00
34 %> Aug. 18 375.00
210 Aug. 14 1125.00

(NJ)

holdings of E. I.

1949 increased

375.00

24

Apr.

SPECIAL PUTS

pre¬

stock dividend.

a

375.00

2/7/51

l

150,000 shares

and

cumulative $100

7%

to

Mg.

Magnavox.....

shares. In October,

common

in

141

BS

2904

(predecessor to E. I.
& Co.).
The

Co.

75,000

of

Enterprise

Me.

deNemours

duPont

stock

1922,

Tele.

2-5500

Portland,

Iti#»

Dealers

10, Mass,

deNemours

duPont

issued

Securities

of

Assn.

75 Federal St., Boston

York

New

Chicago

1942.

Inc.

Exchange,

Commodity

Trade

of

Board

New Orleans Cotton Exchange

of duPont.

1.250,000

Christiana

organized as an

was

And

other

Exchanges

.16

N. Y.

Cotton

Exchange Bld:>,

N. Y.

NEW YORK 4,
CHICAGO

DETROIT

GENEVA.

PITTSBURGH

SWITZERLAND

Over-the-Counter

Quotation Services

Administrative
expenses
taxes, the only charges prior

stock.
-

—$768,108,582 100.00%

and
to

Value

Asset

share

of

352,1251*

A

share

*As
reserve

of

at
Dec.

against

Stock

par}
Stock

31,

tAfter deducting
Federal Income Tax.
1949.

$
_____$

dividends

stock,

$2,318,072 Treasury Tax Notes as

of

minor

importance,
about 4%2%

in 1949.

in

Incorporated

on

page

Established 1913

of

dividends practi-

Continued

National Quotation Bureau

two dec¬
The com¬

has followed the policy

distributing

for 37 Years

preferred

the

income over the last

ades and 5%%
pany

4,998

are

on

having absorbed only
of

5,018

(allowing for pre¬

120)—

1949

—$767,756,457

(allowing for pre¬
——

Common

of

ferred

-

Common

ferred at

RAndolph 6-4696

MARKETS

possibility rights,

I know, but the

mentioned

is

value)

A

Tele.

TRADING

P.

J.

Co., Chicago, 111,

O'Rourke &

pro

far

branch offices

our

Co.—

O'Rourke,

P.

to

and

Co.

Telephone

Bell

Capitalization of Christiana Se¬ investment and holding company
curities consists of 150,000 shares
by six executives of E. I. duPont
stock preceded by de Nemours & Co. The. manage¬
1949, was only $3.66 a share or but of common
150,000< shares of 7% cumulative ment of the two companies is
a small fraction of its actual mar¬
$100 par value preferred stock, practically the same and seven
ket value at Dec. 31, 1949 of 61%.
% of Total out of the 10 directors of Chris¬
tiana Securities are also directors
Assets
381,352*
.05% of duPont. Approximately oneCash
$
third of the outstanding preferred
E. E. duPont de Nemours common (12,199,200
and common stocks of Christiana
shares at 62%)
—
759,400,200 98.87
Securities Co. are owned by Dela¬
General Motors common (85,000 shares at 731/4)-6,226,250
.81
ware
Realty and Investment Co.
Wilmington Trust Co. (7,210 shares at 118)___ —
850,780
.11
The chief source of Christiana's
"News-Journal" (7,460 shares at Director's fair
income is dividends on its duPont

Net

Chicago 4

Edison

Commonwealth

John

Mobile, Ala.
Direct wires

New York City.

lat(er paid off out of earnings. The

rival.

Total Current Liabilities.

208 South La Salle St.,

Messing, Herz-

mon—Arthur J.
feld & Stern,

Illinois

NewOrleans, La.- Birmingham, Ala.

be a personal name of the company was changed
The company from duPont Securities to General
Industries Co. on June 9, 1919 and
however, is registered under the
Investment Company Act of 1940. then to Christiana Securities Co.
Considered as an investment trust, on June 26, 1919. Collateral notes,
with
the
Christiana
Securities,
with
its issued in connection
more
than $765,000,000 portfolio, acquisition of E. I. duPont de¬
Nemours Powder Co. stock, were
is over 2% times the size of its
Ill

NY 1-1557

HAnover 2-0700

Maryland Railway Com¬

Western

Exchange

St., New York 4, N. Y.

25 Broad

company.

Christiana

Stock

York

New

Members

Co., Chicago, 111.

&

Hutchinson

Steiner, Rouse & Co.

McMaster

Long,

assumed to

erally

holding

request

zippin & company

A.

—Harold

Company

Paper

&

Power

published balance sheet of Chris¬
tiana
Securities as of Dec. 31,

Total Assets

on

Her¬

—

Harris, Dayton, Ohio.

bert E.

Abitibi

Powder

Christiana Securities Co. is gen¬

Bought—Sold—Quoted
Memorandum

Bought—Sold—Quoted
Supervision"

"Investment

which

;

similar

a

and

Co., New

City.

Jan. 31, 1950 is in¬

DuPont's but seven out

valuation,

duPont

ST.Louisl.Mot

less

stock.

The

SECURITIES
STREET

for

purchased

,

mon

OLIVE

Co., as of
dicated below.

March 15 and June 15;

resents

509

ties

In

Louisiana Securities

Goldstein,

duPont &

I.

Francis

Morris

—

by Christiana Securi¬

In

79 shares of duPont common

INVESTMENT

assets held

common.

Scott, Horner &
Mason, Inc.

Stix & Co,

directors of Chrisi-

of

Securities, is $1,250,000.
The actual market value of the

ana

preferred stock out¬
standing, one share of pre¬
ferred
for
each share of
value

fliiHiiHiimniiiujiiimiiiiiiiiimimi

The fair value

$846,106.

board

the

Common

York

•'
Company

Securities

Christiana

investment, considered by

of this

on

of 7%

shares

000

LD 33

at cost of

There are 150,$100 par

call price.

—★—

Tele. LY 83

Co., is carried

1949 balance sheet

the Dec. 31,

on

subsidiary,

owned

wholly

News-Journal

The

of Dec. 31, 1949.

$120 representing the Chris¬
tiana preferred stock at its

Less

.

Wil¬

of

mington Trust Co. and The
News-Journal Co.) less cur¬

Co.

American Furniture

Corp.

stock.

common

^11111 lilllllltllllMllf III IIII III! Ill IIIllll'

on

pany's

nearest

Nemours

.567

share

of E. I. duPont de¬

shares

81.328

share, or about $8 above
quotation of $117 a
Dec. 31, 1949. The com¬

a

market

the

common

is that it is a means

at

of

advantage

Christiana

of

purchase

curities

$125.32

50

outstanding

The

mington Trust Co. stock, likewise
carried
at
cost, was valued ai

Best"

Like

I

carried at $49.27 a

was

share, compared with the Dec. 31,
1949 market price at 71%. Wil¬

hesi¬

no

tation

General Motors com¬

stock

mon

elementary security analy¬

sheet

little indication of
position
of

'/v.'..',f V

financial

real

Christiana.

City

York

New

the

balance

the

figures afford

of Research,
Francis I. duPont & Co.,

Partner in Charge

It is

particular security.

a

Accordingly,

GOLDSTEIN

MORRIS

for favoring

Selections

Their

a

29

46 Front Street
t

CHICAGO

New York 4,
SAN

N.Y.

FRANCISCO

Volume

171

Number 4-880

I

THE

COMMERCIAL

NJD E X

Oil

Articles and Newt
Money Contral—Bar

to

The

Security I Like

Recessions—Robert E. Wood

Best

Industry Outlook
^

:_____a

B>

competition of natural

—Michael A. Heiloerin

4

_____"

*

6

' g0

;__7

(Part II)

—Howard F. Vultee

1

System—Benjamin

H. Griswold, III—:

Economy—Clement

11

—

12

1

n

of Honest Money—Leland
..

—

,

_

'

_

.

_

_

*

SEC
An

*

thaVs
able.
was

21

"Odd Lot" Portfolio..

_T

■

>.

-

.

„

25

___

_

practical-

_

crease

24

.__

C, J. Devine Reviews 1949
Treasury Market

24

States

iactorsv

Peter Guy Evans
Resigns From Tax Council to Resume
Law liactice _•

_____

have

1950 Economic

on

Outlook)

..47

added
of

the

1
thgt

1950.

don>t

British Coal"

large.

That's

staying

up

could drop, but

them

____

_

Our Reporter

on

.,

The S

y

t

«i

~

-

----

_

1

•"

25

B.

DANA

Park Place,
REctor

Reentered
ary

COMPANY, Publishers

to

WILLIAM D.

how I arrived at

8,

enced

these
'

vertising issue)
plete statistical
records,
Other

Chicago

—

and

Monday

(com¬

3,

111.

Y.,

B.

Eng¬

quotation

bank

clearings,

South

(Telephone:

my

own,

research
probably mfluthoughts of other

are

the

same

are

our

industry who study

problems.

We

talk

by

Mr.

Mcintosh

try to

before

Feb.

6,r

we

when

Walter J.

under

the

to

are

Q%

pretty

say

of

La

Salle

State




in

United

TJ.
Members

Dominion

of

Canada.

Countries, $42.00
Other

per

$38.00
per

St.,
0G13);

year;

per

are

interested in

iri total

because

that

domestic

includes

adjustment

for

allowing for

25

Monthly,

New

York

funds.

AN

1V2%

RIVERSIDE CEMENT CO.
CALIFORNIA

a

decline in exports,
the overall increase
may be with¬
a

CLASS B (common) STOCK

half percentage of the above.

and

Ill

What
of the

petroleum industry condi¬
pretty good. The con¬
sumers paid less for their oil
in

Earned

look

The

refiners

have

been

in

product
closed

1948

and
the

stand

healthy

losses.

That

condition.

branch cannot

and

k

arrears

to Class A,

accelerated depreciation of $174

LERNER &

CO.

Investment Securities

a

10 Post Office
Tel.

Square, Boston 9, Ite..

HUbbard

2-1990

is

The

not

a

refining

BUY

long operate in the

red, which it appears to have been

U.

doing.
producers

1949

loss

as

B/D.

S.

SAVINGS

production

compared

465,000

was

lost

to

Half

1948—
of

BONDS

this

due to the elimination of

the overproduction of
1948, or the
production for stock building in
1948
not
needed again in
1949.
Warm weather also hurt the
pro¬
ducer and

probably

was

the

cause

of 15 % of the decline in his crude

requirements.
producers lost production,
their,;prices remained fairly
stable, except for Pennsylvania
Grades, which prices had been out
but

of

line

as

compared

to

finished

lubricating oil prices which really
govern these particularly crude
oils. Some heavy
gravity crudes
also declined in price.
The economic incentive to
pro¬
ducers, remained

high enough to
drilling in the

encourage new well

on

page

19

NEW

ISSUES

reach national market
Investors all

the

over

Stock

Exchange

4

Members

50

11,000

communities

states

and

-

York

Hubbard

Glens Falls

Curb

the

whole

financial

covers

community

banking officials, corporation

tutional

professional and insti¬

security buyers, end in¬

dividual investors.
I

2-8200

Sljc jNrto Ifork

Gurus

"All the News That's Fit to Print"

Schenectady

-

of

why financial

Exchange

1-5
-

in all the

District

the

advertising in The Times

of

Congress Street, Boston 8

2-4390

Chicago

New

country

read The New York Times... in

Columbia. That's

Teletype—NY
-•

$10.00

•disregarding

prices.
Some
refiners
up
or
slowed up rather

offerings of

Broad Street, New. York

Albany

Selling about

$5.22*

tight spot with high crude prices,
higher wages and lower finished

than

Industry.

industry?

The

tions

brief review of

a

the Cement

the general conditions

are

ANALYSIS OF

,

York

HAnover

eign subscriptions and advertisements
must
New

Now Available—

After

Spencer Trask & Co,
Members

remittances for for¬

in

the

weather.

in

year.

Teletype-BS 128

5%

demand

of

•

made

HUbbard 2-3790

executives,

extra.)
Note—On account of the
fluctuations in
the rate of exchange,
be

you

of

PREFERRED STOCKS

S.

year.

1923

STREET, BOSTON W

1950

So

High Grade Public Utility and Industrial

Publications

Bank and Quotation Record
$25.00 per year.
(Foreign postage

30 FEDERAL

48

March

States,

Territories and
Pan-American Union. .835.00

in

Connolly & Co.

INCORPORATED

conservative

increase

an

Continued

Subscription Rates
Subscriptions

if

Dana

We

Act

bear

customers.

new

we

1950.

second-class matter Febru¬
at
the mst office at New

—

market

news,

135

as

1943.

N,

ad¬

city news, etc.).

Offices:

by

these conclu-

Security Analysts Society, Boston Mass.,

1879.

Other

1950

news

every

issue

corporation

state and
.1

(general

and

C.,

overall

keep informed of a11 forecasts

Smith.

Possessions,

SEIBERT, President

RIGGS, Business Manager

Thursday

from

felows in the

9576

Thursday, February 9,
Every

25.

York,

N. Y.

HERBERT D. SEIBERT, Editor & Publisher
WILLIAM DANA

&

E.

Copyright 1950 by William
Company

Office

New York 8,

2-9570

Edwards

London,

Oils—

much.

and

CHRONICLE
Patent

c/o

Gardens.

for

be interested

are

48

_

Fuel

2% drop, or may in¬

a

The

you would

some

38

_____

Drapers'

land

WII-LIAM

5%

Some figures

_

Weekly

The COMMERCIAL

S.

of

sions.

*A

U.

the

expect

increase

Maybe

5

_

Reg.

-^e can

i
net

people and all

_

FINANCIAL

for

requirements.

2

Tomorrow's Markets (Walter
Whyte Says)

Washington and lrou___

j

B/D

in

The State of Trade and
Industry

Twice

350,000
domestic

42

_

t»

curity I Like Best

Published

.

increase some-

24
_

.«44

•„

they will

like

com-

a

26

Corner

any

see

some

27

Salesman's

Bought—Sold—Quoted

is just normal, we will
gain of at least 1%% with¬

a

out

The

business, but
exports will undoubtedly fall off

45
___

Securities Now in Registration
rr-K

where

1950?

m

xl.

country's

a

Offerings

Securities.

Railroad Securities

Securities

sticking

seem

12

""

.

Security

Utility

factors

46

Governments
_

Prospective
Public

t

I think

thing

5

„

,.

c

sales

r

-

14

Our Reporter's Report

~

They

are.

What will happen to oil

8

~

_

Observations—A. Wilfred May

CORP.

weather
have

in

Pany

:
•

,

prices

^

40

22

~~

News About Banks and
Bankers

some-

to

where they
more

our

High "l"?
them that

threat

a

find

running

^

new

6

■■__(

„

PRENTICE

Common Stock

of

*

need

ws

may

tend to keep

prices

26

.

(I

year

figure, and

additional

we

discoveries

8

__

.

So

8

Washington Ahead of the News—Carlisle
Bargeron
Indications of Business Activity

billion

last

think

much

From

Notes

REED

last

oil

15

Coming Events in the Investment Field
Dealer-Broker Investment Recommendations

oil

several

new

10

47

......

Securities

1.2

exact

for

quite

_

..

another

reserves

years-

Business Man's Bookshelf..

crude

Industrial

One thing we should
mind," and that is that

exploration for
requirements.
We
may

oil in

__Cover
__

Funds

weather

months, but
2-year industry 1949 than they did in 1948, due
average). If.that is the figure, we | mostly to the lower average fuel
found enough in 1949 at that
oil prices,
That's primarily why
rate
(o give us a
production of about 1949 earnings dropped 25%-30%
275,000 barrels a day for twelve from 1948.

30

Stocks____

on

difficult

major products.

in

that's

Regular r eaiures
neguiar Features

Einzig—"Dual Price

NEW YORK

WHitehall 4-6551

now—say

Other products should
follow
the general trend of the above

blTesut

barrels

4

Bank and Insurance

warm

much

don,t know the

_

i

firm

won't

r .,,,/i
A»^
it,
Merrill Lynch v.
Issues Annual Report

As We See It (Editorial)

a

of

28

___

Business and Finance Speaks After
the Turn of tne Year

(Additional Opinions

'7™^- Tthese
favorable
to

27

FIC Banks Place Debentures
_

too

present

27

.__

jn

m-

1949 to take

over

^nt i^h

ing

inf the
to

have

may

all

are

maintenance

27

$30 Million Central Bank for
Cooperatives Debentures Offered

Demand appears

about 4%

24

NSTA

Mcintosh

Pro'iucti.on

United

Marriage and Divorce to Be
Discussed..............

Mutual

Albert

be

24

ITO and Point Four Guarantees
Opposed

Market

WALL STREET,

Telephone:

in¬

follows:

as

the

that

crease

some

14

_
_

on

of

show

may

on the increase
again after
adjustments and hesitations.
Imports may slow up somewhat

10

'

FHLB Notes

think

we

may show

Heating Oils and Diesels
light fuels—consider¬
higher at 14% partly be¬

Heavy

™VOr~
There

That>s also good
to

Frear Bill

on

a

1949.

yentory levels
'
*
5
during 1949, while in 1948 stocks
were piling up almost
300,000 B/D.

23

„

"No, No, No" Policy (Boxed)

Canadian

t

So

change° ii^in-

*

Chairman McDonald Testifies

buy

just

you

other

ably

20

___

Rex Robinson
_

we

little teched in the head!

Home

cause'

18

Proposed Reduced Federal Budget—Sen.
Harry F. Byrd
,

obsoletes—we're

better.

or

and

■

j

those

"

Raymond Peterson

«

then,

Kerosene—a
most
to judge right

_

6%

are'

______

a

specific

product

J§j|

trial, but they
ou

idea

good

hardly daft when

Gasoline—4%.

have

b

darn

a

about

creases

completed.

Government's Challenge to Private
Banking

A

be

15

Monetary Policy for the Opposition—E. S.
Pillsbury

The Issue

has

that domestic sales

then

a

We're

99

To

drop.

®t "without

.

ACT

Foresees greater

just didn't think about.

17

The Credit
Outlook—William A.' McDonnell..

—F.

fellow

considerable

Government Lending—Earl R. Muir

A

going to

oil

been made in

A. Evans

McCormick

crude

,ments

America's Twin Hazards—Supports and Subsidies
—William J.

crude

(nil f3 adjust-

National

to

of

Year a8° I thought the price

Since

Securities Business—Important to Efficicent
Economic

Over-the-Counter Securities Business Essential

price

THE

study them and their backgrounds.
Sometimes, you know, the other

down and. if so, how much?

might

8

_

the

A

,

ot

Anti-Trust Suits and Investment Values

The

Is

COMPANY

DAFT-HARDLY

with liquid petroleum.

gas

'

»
•

Dangers of the Propped-Up Economic
Stability—Allan Sproul
Insurance Stocks—Roger W. Babson

AND

along with threat

treasury to reduce depletion allowances.

4

3

licHTfnsnin

"

Company, Inc.

jnduTstr)'is unprofitableness of refining branch
by

•'

The Havana
Charter—Obstacle to World Reconstruction

_

Oil

Economist foresees stable prices and
rising sales in oil indus*ry> despite falling off in exports.
Says unhealthy condition in

2

Follow-Up of Salesn.ai.-J. J. Kenney..

(603)

ALBERT J. McINTOSII*

Economist, Socony-VacuUm

3

.

CHRONICLE

Industry Outlook in 1950

;___Cover

In 1950-Albert J. Mcintosh....

The Supervision and

FINANCIAL

Page

Investing Under Today's Economic Status—Marcus
Nadler__Cover

Oil

&

Worcester

1

THE

(604)

4

The

lished by the

Supervision and
Follow-Up of Salesmen

of Sunday Picture
it was

Machines Corporation

''Plan

mental maxim:

your

work—work

have

i.owever,I

As

finest

assured

was

this

have

to

have

tend

not

did

I

of

par¬

your

ticular invest¬
market¬

ment

problems,

ing
but

that

would

prefer

hearing about
selling,
gen¬
erally, or as it
is
•

J.

J.

Kenney

handled

the

and

in

am

talk

on

realize

office ap¬

going to try to keep this
general basis, because I
and
appreciate the fact

am

The

I

on

have,

that

of

therefore,

salesmen by
teach them
of

teach them to do

you

may

a

your

in

help your

In

the

the insider

business,

my

of

case

my

self-supervision
a

as

well as to

well-rounded

job of selling. You know, in the
selling profession all of us, as
salesmen, must constantly refur¬
bish our thinking, as to the im¬

better job, or where

do a better job of self-

supervision.
men

as

stressing the need to
to do a thorough job

dicate where you

clients do

chosen

subject, "Supervision and Selfsupervision.'*
I propose to build
this case on the supervision of

salesmen, I shall endeavor to in¬
may

day is that they waste time.

call,

often,

too

and

known

where

liked,

They

they

are

than

rather

you

operations of

portance of the job of selling.
I do not know of

objective will

•Stenographic
report
of lecture by
Kenney, 17th in a series on Invest¬
Salesmanship sponsored by Invest¬
ment Association of New York, New York
City, Jan. 26, 1950.

anything that

bring that home to you bet¬
than
an
advertisement that

ter

helped to bring it home to me. It

ment

ceptional

sometimes

is

It

of

fenders

International

the

that

argued by

Havana

the

propriate

de¬

believers

in the free

tional

—

■

ance

of world

Indeed

of

carpet."
I think that is true.

lowed

must

and always in doing so you
have a well-planned sales

that, there are many sales
of a personal nature, that
be brought into play, and

tools

must

awake
your
you

to be alive and wide
continually build onto

have

you

to

selling repertoire, so that
may have a storehouse of in¬

formation to pass along

to a pros¬

pect, because we have found

that

few prospects buy.

very

might

securities

or

the

that

machines.

business

sell

You don't

sell

say

securities but you

advantages

owning

of

them,
thing

usually
that

you

because

Continued

appeared in the ''Herald-Tribune"

of

some¬

tell the prospect,
on

page

34

sults

which

United States.

achieve

exactly

are

the

re¬

op¬

\ these provisions are immediately

|

ganization

throughout the world

desirable, provided na¬
policies of the member gov¬
ernments are directed towards the

is

very

tional

of

objective

world

lateral

economy,

free

of

mechanism

the

multi¬

well-knit

a

ruled by
markets

prices

scope

enterprise.
such

were

and

In¬
Organization

of the various governments, an

Trade

ternational

almost

follow

matter

a

as

and, without being really

course

as

the experience of

second half of the

19th Cen¬

.

clear

very

and

and

only - by pro¬
painstaking

very

to the "virtue" of freer
throughout
the * Havana
That is the best that
can be
said about that document
as an instrument of freer trade.
;

homage
trade

Charter.

No Devotion to

charter

The

of

a •

"good"

ITO

It will be readily

the kind of ITO
United States

objected that

I think that the

might properly jok*

would find in the world of today

Charter
a

there weren't more tharj

really dte-~

half dozen countries
to

All

liberalism.

economic

of

principles

hacl

others

the

prohibit the use of import
quotas, exchange controls/" subsi¬
dies of all kinds, and all discrim¬

governments which, to a varying:
degree, believed in the virtues of
dnd

would

economic

domestic

SAN FRANCISCO

affairs

as

to

possible for that country
economically solvent
without the use of restrictive and

PHILADELPHIA

remain

to

commercial

and
It would pro¬
emergency procedure

discriminatory

nationalistic
in

the

PORTLAND

unlimited

planning.

by which

a

country faced with ex¬

*An

address

Synthetic

facturers

fcy Dr. Heilperin before
Organic Chem:cal Manu¬

Association,

Feb. 8,! 1950.

/

'

New

York

City,

a-

with re¬
national economk
This being the state of
sovereignty /

to their

affairs
an

the

is

government

of

They attached the greatest possi¬
ble
importance
to maintaining
gards

Branches, maintained in 17 other cities

it

that

Strictly to control a country's for¬
eign trade and foreign payments
(as well as its domestic economy)„'

monetary policies.
an

planning

economic
notion

function

proper

vide for

SEATTLE

Economic

Liberalism

voted

make it




discrimination pays occasional;

of

inatory trade practices.
It would
declare it a duty of every govern¬
ment so to conduct its country's

Blyth &Co..Inc

LOS ANGELES

"vice" of trade restrictionism and-

simple

studies.

PRESIDENTS

BOSTON

obligation which one is at liberty

j not to live up to ceases to be a

very few adherents.
This, to roy
agreed upon at Havana,, mind, is a valid observation.
At
which can be ren¬ the time of drafting the Havana

intelligible

tracted

(r

CHICAGO

alleged objectives of the ITO
obligations of its members. An,

and

document

dered

NEW YORK

which stands in crass conflict with
the

cumbersome, uncandid, ambiguous
a

VICE

These are
provisions leading to action or
permitting action to take place

A char^

and
to
in
brief, the exact opposite of the

C. Sheets

ELECTED

are

group,

provisions.

organization would

readily understandable even
lay reader; it would be,

document

BEEN

first

the

to

contrast

operating

to private initiative and

ter of such an

AND

HAVE

It is possible for ad-

full itrue obligation. The French phifree | losoplier La Rochefoucauld deIf—and I repeat, if— | fined hypocrisy as "the homage
the—national policies that vice pays to virtue."
The
affording

and

the

Ralph

thoroughly clarified by exeep-

| significance.

promote better in¬

to

freer trade

render valuable services.

Glassmeyer, Jr.

so

enterprise system and America's j vocates of the Charter to point
position in the world, that 1 be¬
| to these provisions in support of
lieve Congress should decline on I their contentions.
Opponents of
behalf of the United States mem¬ the Charter, however, can point to
bership in the proposed ITO. The a multitude of provisions which
idea of an International Trade Or¬
go the other way and which, by

be

Edward

of

tory practices'in the Charter but

would nevertheless
perform important functions and

Conley

no

you will find provisions
prohibit the use of import

which

tury shows, it

A.

bears

document

true that

jeopardize both the free-

it would

the

Paul

the

posite of those anticipated by its
j tions, reservations, and special diadvocates, because in my opinion, I receives, as to lose all practical

indispensable

THAT

to

tried to outline
the major required contents.
It is

because, in my

would

Charter

of

ANNOUNCE

their

International Trade quotas, subsidies, and discrimina¬
based 011 the Ha¬

as

Organization
vana

would

WE

Charter

Havana

resemblance

A. Heilperin

ternational economic relations and

in another
way: We have found that you do
not sell something, you sell some¬
body. And that is a most impor¬
tant thing to think about, regard¬
less of whether your products is
I

be al¬

take

to

which I have just

is essentially

ooiiiion,

in the past

so

again in the future,
again

once

The
Michael

best interests of the
It

in¬

course.

system as well
as s e r v e the

uct,

con¬

multi¬

if economic forces were to

will

that, in selling, you have
to create a desire for your prod¬

Gentlemen

It did

would

it

and

free
enterprise

I believe

privately

governmental

major

ter of course.

the

help

an

lateral pattern develops as a mat¬

Organ¬

ization

States

terferences its world-wide

do

Trade

whenever

without

United

the

of

United

ducted trade is allowed to proceed

the

prosperity

charter

the

really want to be a mem¬
multilateral trade
and iree private enterprise on top
of the list of desirable objectives.

"import¬
for

which

ber would place

the

trade

with¬

would

those

realize

who

difficulties

The

trade.

of

ITO

en¬

terprise systern. and

external

resorting to measures which
disrupt the network of interna¬

ganization should be supported by
all

be

out

Or¬

Trade

would

these

overcome

Charter

beyond its
given ap¬
assistance, to-

difficulties

control

own

they have to work hard/ States. They
not use the few sales claim that the
aids that the company provides,
International

They

could
Mr.

direction of state controls.

where

To do

sales training
or management respon¬
sibility in assisting the salesmen.

of you

case

-\

...,

"The trouble with, salesmen to¬

place in the final important
matter of closing the order.

subject to which I am re¬

ferring is
follow-up,

full-employment legislation and adopt other extreme '

extreme

To my

Thinking

general sales plan, hoping that
may interpret it as it may
best fit into your particular op¬
the

follows:

streamlined selling, and they have forgotten how to
other topic on get in there and bleed all over a

Salesmen Must Refurbish

a

And in

Salesmanship."

paragraph in. it that im¬
pressed me, as a salesman, was as
One

tant

you

eration.

"American

called

mind it is one of approach. It must be well thought
the most important functions of
out,
so
that
every
point
you
sales management.
bring to bear has a very impor¬

you are

going to talk

interested in
That article was

are

every

there is one subject
mentioned,
seldom
covered at the

ecutives.

in the
buying end, in the specialized se¬
curities end, in the trading phases
of your business, in research and
statistics, in public relations, mar¬
ket analysis — and. I understand
that some of you also function in
an advisory capacity.
Therefore, I

to

hope

and I

magazine,

of you,

all

man's

is

was

who
selling, read it.

meetings I attend, and it is seldom
covered
by operating sales ex¬

that you are not connected with
the direct selling phases of your

Many of

similar

that is salesman¬
also impressed with
article that appeared in

I

"Fortune"

in the list that I have

that

tional order.

The Essentials

another

However,

pliance indus¬

a

business.

I at¬

planning is given precedence over internaPredicts if U. S. joins ITO, Congress will pass

watch, without

Gentlemen,

selling.

try.
I

about

document socialistic

bats."

ship.

Says for first in official

prise and America's world position.

world's cham¬
baseball team, without

pionship

v

the

main-springs;

I hear some of the cur¬

price market,

Heilperin maintains ITO based on Havana Charter would
opposite of those hoped-for by its advocates,
actually would result in jeopardizing of both free enter¬

and

supporting cast,

and

world's finest

the

salesmen, market analysis, market
expansion, advertising, sales pro¬
motion, sales compensation, sales
and distribution costs, selling in a

you

world's

the

baker,

i

v.t

achieve results

book, the

manship and you have the world's
finest
automobile,
without gas;

rently outstanding speakers, covr
ering the various phases of sell¬
ing operations in all types of busi¬
nesses.
Many of the subjects have
to do with selecting and training

knowledge

a

meetings

many
one..

Dr.

"Yes, leave our America's sales¬

how you

ecutives' Club of New York,

Mr. Noyes

by

that

finest

,

.

what

Figuratively, you

got?

world's finest

props

By DR. MICHAEL A. HEILPERIN*
Economic Adviser, Bristol-Myers Company

without stars.

member of the Sales Ex¬

a

the

world's

plan."

your

you

have

might give
I am somewhat at a loss as to
the salesmen the necessary assist¬
how to interpret the type of sell¬
ance
to
help them do a welling that I am going to talk about
iin
terms
of
selling
securities. rounded and better job.
to show

be

To World Reconstruction

money,

out salesmanship, and

leave

in selling profession must

men

body of the copy, it had
quote: "Add up

all the materials,
all the machines, all the mana¬
gerial know-how in this land, but

constantly refurbish
their thinking, prominent sales executive gives pointers in gen¬
eral salesmanship. Stresses value of self-supervision along with
supervision of a good sales manager working on the firing line.
Gives data regarding proper salesmen's reports and character
of knowledge which salesmen should possess. Advises sales¬
men seek help frequently from their managers and be unmind¬
ful of either buyer's or seller's markets. Lays down as funda¬

Asserting

the

all

Promotion,

Director of Sales

International Business

the

In

The Havana Charter—Obstacle

this to say, and I

J. KENNEY*

J.

By

ago.
It was pub¬
Metropolitan Group
Magazines, and
titled: "Sell, Sell, Sell!"

weeks

few

a

Thursday, February 9, 1

CHRONICLE

&- FINANCIAL

COMMERCIAL

in

the

obvious

drawn,

world,

there

conclusion

namely,

that

Continued

the

on

was

to

be

kmc!

page

41

Volume

171

Number 4880

THE

COMMERCIAL

&

FINANCIAL

Hannaford & Talbot

CHRONICLE

(F

Add Four to Staff

Observations.

FRANCISCO,

nia

Are We to

formerly with Wilson, John¬
son
& Higgins in their statistical
department. Mr. Maib was Petaluma

representative

Johnson

&

Oeschler

for

Higgins,

Wilson,

McMahon's

Specifically

Co.

Security

But

radio

Miller

&

&

Mr.

of

mis¬

that

idea

$50

a

insurance against an

the

discussion

current

about

the

future

on

of

our

between the two.

results

partly from the fact that—
planning generally—so many
concerned.

are

an

motion

machinery, and the Congress are pro¬
ceeding with the formulation of Point Four as

May

essentially

United

States

proposition

(and

correctly so, for
policy, etc., the
U. S. Treasury will be footing most of the bill); the United Nations
(including some of our representatives thereto) is still proclaim¬
ing that it is one of its principle projects, and that it is going ahead
full-steam with the preparation of its technical-assistance and
whatever

social

its

final

form

in

relation

to

foreign

features

In such

under the aegis of its own well-populated staff.
concept of Point Four as a UN internationally-directed

a

project plumps full

into the contradictory fact that Amer¬

square

ican officialdom appraises it as one of the main tools in
our

foreign

own

Kee

Bills

policy; to
preambles

whose

whit

the

amended

identically

state

furthering

Herter

pur¬
.

.

life. ..."

American Interests Versus UN

Irrespective of whether these legislative declarations together
State Deparament interpretations mean that a motivation

with
Forest

W.

Shipley

tied

LOS

ANGELES,

Forest

W.

with

Co.,

South

458

members

of

has

become

Marache, Sims &
Spring

the

Street,

Los

Angeles

Mr. Shipley was

formerly vice-president of Quincy
Cass Associates.

ism

and

such

disserve

utilization

United

hand

available

for

fiscal

credits

the

Bank

in

dealers

the

15 Broad
Tel.:

New

York

Stock

as

Exchange

of U.
a

Surely

S. foreign

function of the

side

too

there

is

similar

conflict

the

on

one

multilaterally-granted by the International Bank.
is chartered to perform precisely the functions as

Point Four legislation
detailed in this column of Nov. 24). Or will it come to
pass that Point Four is to provide the key to the backdoor for
making uncreditworthy loans refused by the International Bank?

(as

was

Another

of

source

investment

constitutes

confused

contradiction

an

characteristics,

investment

program

Mr. James

and
at

over

lies

is

in

increasing
and

more

whether

all—under

an

it

more

really

untortureel

Warburg, former banker, monetary
circulated pamphlet uses the

expert and economist, in his widely
money

TOWNSEND, GRAFF & CO.
of

encroachment.

instrument

as

level

much

we

umbrella

to

abroad

spend

investment," thus

say:
as

"We

must

and

expense,

justifying expenditure

stop
think

of

thinking

of

the

of it instead
$60 billion

over

$161,000,000. It was approximately threefigures of the previous week and the;

to

the

as

*

President

Truman

*

*

Monday of this week finally resorted
to the machinery of the Taft-Hartley law in an effort to
restore;
full production in the soft coal industry. Following reports from
the

mine

on

which indicated that the

areas

members

the

of

80

were

days.. Mr. Truman acted after receiving

the

400,000 soft coal miners had

Until

last

mainder

Monday about 100,000 had been

were

working three days
*

Steel

word that nearly all'

remained

from -the pits.-

away
on

strike

the

and

Tele.:

NY

Away
But

even

such

From

SPECULATION

orders,

Immediate future steel production policy, according to

magazine, rests
troversy.

Seminole Oil

& Gas

There

22

•

Proven

»

Controls

Corp.

for

action

court

under

West

Reserves

765

Texas,

County,
terest

in

County,
•

Has

•

Bank

•

Dividend

560

Okla.,
about

$8.00

in

acres

in

acres

and

per

collision with the fact that (irrespec¬
pity over the demolition of the American taxpayer) the
provision for $600 billion—or even a paltry $60 billion through

County,
Seminole

controls

8,000

half

in

acres

share.

any

Crane

Taft-Hartley Act
suggestion for full-scale mining pending find¬
ings of a proposed fact-finding board emphasize the seriousness*
of the coal situation. Coal stocks at most steel
mills are adequate
to support operations at
high level for several weeks. But some,
important producers have short supplies and may be forced to cut
production within a week or

unless the outlook improves.

so

in¬

*

■

*

Final official factory sales figures show
motive

industry built

total

a

of

6,238,088

that the U. S. auto¬

cars, trucks and
1949, the Automobile Manufacturers Association reports.

buses in

Establishing

a

new

all-time

new

best previous years—1929,

record, output topped
by 16%, and 1948, by 18%.

the

Nearly 6,000,000 units of the 1949 production were sold in thei
market, the association said, as export sales were dras¬
tically reduced.
'.y:'.
.

-Vi'y,-"'"Jy

Only 277,745 motor vehicles, 36% less than in 1948, were
shipped abroad. Exports accounted for a mere 4% of total output
in 1949, as against 8% in 1948.

P/oduction of passenger cars increased 31% over the year
before; manufacture of trucks, however, decreased by 18%. The
respective totals: last year 5,108,841 cars, 1,123,736
trucks; the pre*!
vious year, 3,909,270 cars, 1,363,856 trucks.
*

*

*

1

-

''

•

...

.

.

.

.*

•

Unemployment in January hit a new postwar high of 4,480,000, a jump of 991,000 over December.

leased

loans

Commerce, which issued the
said the increase was due to seasonal factors.
These
included the after-Christmas slump in retail
employment and bad

figures,

weather,

which

There
of

over

cut

into

farm

and

construction

work.

drop in employment in January from
December
1,500,000. The difference between the drop in
was

a

employ#

Continued

•

/

;

on page

Calculating Machine Company

^Rochester Gas & Electric Corporation
Durez

Plastics &

Chemicals, Inc.

"Prospectus

or.

Request

whom

we

are

concerned.

How Long the Dole?

1,200

acres

being

outlook

Members, New

Marchant

Grimes

in

Tennessee.

repaid rapidly.
favorable.

York

Broad St.,

Curb

share

Exchange

New York 4

'•

HAnover

2-6284




of

The other conflict lies with the sound aim of
getting the rest
world off the dole, of
getting the perpetual borrowers

the

houses

Pulis, Bowling & Go.
25

over

in

order.

As

of

trade

restrictions,

flation—and

pouring

of

the
more

currency

lowering of

controls,

our

own

double-pricing,
tariff

barriers.

and
Our

Trading Department

in¬

a

WERTHEIM & CO.
Members New York Slink Exchange

out¬

billions

would thus constitute

Unlisted

again

emphatically broached by Marshall
Aid Administrator Hoffman, in Washington this
week, the pre¬
requisite for getting more American dollars must be the abolition

before such hygienic steps are taken
sliot-in-thc-arm decisively sabotaging Mr.

Hoffman's "get-tough policy", and insuring the world's
permanentstatus on the dole.

■;

The United States Department of

must undermine the dollar whose stability surely con¬
the basic hope of the world economic
future, including

tliose foreign countries

two

domestic

means

stitutes

VtV.

!

of

Texas.

Price about $1.00 per

.

further

con¬

the

and the President's

pikering. First it is in head-on

Producing Wells.
Oil

two

important channels of contradiction
stemming from this complaint by promoting groups that any pro¬
gram
within financial reason constitutes "Bargain Basement"
tive

«

are

"Steel"(

pending developments in the coal labor

on

Pressure

"Peanuts"

the Point Four expenditure of $500
billion, citing some vague ideas
of "capital formation" for our hope of reimbursement.

j

pronounced rise,

has

UNDER-PRICED

;

*t ;
;

*

"economic" confusion

in the $60 billion class
already become "peanuts" (no pun on the Britain's Tangan¬
yika fiasco intended). For Mr. Dewey Anderson, Director of the
Public Affairs Institute, last
Sunday figuratively blew this colum¬
nist off his mike in a joint radio, roundtable
by coolly advocating

r
(

while they have not in recent weeks shown
a definite trend in this direction is developing
because of threatened steel curtailments occasioned
by diminishing
coal supplies.

a

the TVA-ization of the world.

1-1563

re-

week.

a

*

Street, New York 5, N. Y.

HA 2-6500

United;

ignoring his request of last week that;
they return to work, Mr. Truman at 11:35 a.m. on Monday signed'
an executive order
appointing a three-man board to look into the
facts of the coal dispute and report to him by next Monday.''
This paves the way for the President to ask a Federal court in¬
junction next week ordering the miners back to work for at least

as
on

■

similar period of a year ago.

Iranian Fair Deal-

the American Administration's

"investment"

Member

an

high

fourths

be

And
offer to the Shah

contemplated financial procedure by the U. S.
Government and private enterprise
guarantees; and on the other

definition of that term.

$4.50

Memorandum

neighbors'
as

evidence that in its advancement the
program

Estimated 1949

$2.98

Four

i
declined substantially from last

.

the

losing its

Earned 1948

Moscow

Point

to

Nations.

outlined

excellent growth prospects

its

of

serve

is

be).

may

cor¬

ago.

Civil engineering construction

certainly

between the

hand

A pharmaceutical issue with

ring in Point Four millions to

policy is contradictory to its alleged functions

For

Allied Laboratories, Inc.

(whatever that

this is confirmed by Mr. Truman's recent eager

On

Stock Exchange.

political foreign policy

our

of Iran to

Shipley

associated

CALIF.—

to

was

year

a

•

of the Point Four program is to contain
Communism, it
at least does mean that the administration of our role

(Special to The Financial Chronicle)

which

of

period

vious.

and

the

as

pose—"To promote the foreign policy of the United States.
The Bills then go on to assert that "such
[economic] progress
will further the advance of human
freedom, the secure growth
of democratic ways of

level

Mine Workers Union

example, at the same time that Presi¬
Truman, the State Department's pro¬

dent

the

last

The cut in industrial effort was
principally due to drops registered by three heavily weighted i
factors such
as
steel, coal and civil engineering construction, j
Unemployment held approximately at the level of the week pre- j

atomic

For

Wilfred

week

in over-all industrial output
moderately under that of the

occured

decline

slight

week's
all

different interests

Co., Inc.

Marache, Sims & Go.

characteristically

Senator's

platform

as

A

responding

buy from the Russians and the

characteristic of

Geo.

Shipley With

the

can

and

This

A.

Forest

to

almost

well

—as

Hurry,
Pearson

officer

an

J
ft

"bold"

most

help abroad reveals startlingly increasing con¬
fusion over the political and economic issues

associated

Walter

Building.

formerly

was

R.

become

quite

$50 billion check, is just
over our future

a

Production

Business Failures

Contradictions)

conflagration.

PASADENA, CALIF.—David C.
has

not

and

of the world

rest

(Special to The Financial Chronicle)

Bingham,

Four

billion bill

Bingham, Walter Firm

with

of

Industry

Price Index

Auto

and

guided is the widespread reaction in coupling

D, Pearson Now With

Pearson

if

with

peace

Sea

a

Trade

Commodity FYice Index
Food

another step along the road to growing confusion
role in foreign aid.

Point

;

in

"new"

most

for buying world

program

Mr.

and

with Eaton &

was

Senator

Retail

Stave of Trade

Develop the World's Resources?

(A Question Becoming Drowned

Oeschler to their staff. Mr. Herget
was

Production

Carloadings

Street, have added Arthur M.

Breckenridge, Ralph W. Herget,
Carl
T.
Maib,
and
Reynold

5

Electric Output

..

ssBy A. WILFRED MAY

CALIF.—

Hannaford & Talbot, 519 Califor¬

'Steel

,

The

(Special to The Financial Chronicle)

SAN

(605)

NEW YORK

33

6

COMMERCIAL

THE

(606)

Holioway, Sorenson

FINANCIAL

&

CHRONICLE

Dangers of the Propped-Up
Economic Stability
ALLAN

By

Thursday, February 9, 1950

From

Washington

Ahead

SPROUL*

of the News

of New York

President, Federal Reserve Bank

By CARLISLE

Mr.

chief contributing forces to economic
coordination of fiscal policy, credit policy

Sproul lays down

stability,

proper

a

and debt management,

but

this does not make

warns

us

resolution which would change the system of
Presidents and Vice-Presidents, recently passed by
Senate, is one of the most revolutionary proposals we have
entertained in a long time. This does not mean that it is all bad
The

Lodge

electing

immune

our

the

depressions. Warns of propped-up economy and lays down
among chief causes of instabil.ty: (1) war;
(2) uneven
rate of investment;
(3) changes in consuming habits; and
to

unwise but it is
of soulsearching and it is my impression that is
exactly what it will get before it passes the

affecting domestic

as

tain
A.

Olaf

ioway and Olaf A. Sorenson have
become associated with Mitchell,

La
Street, members of the New

Salle
York

South

231

Co.,

&

Ex¬

Stock

Midwest

and

Both were formerly as¬
sociates of the Chicago office of

changes.
Jas.

H.

is in the field of credit

cal

fis-

policy.

cession

a

b 1

I

for credit

if

bility:

Hilgers and H. Gordon Bleckner

South

du

I,

&

Pont

Bingham,

with

634

Co.,

Both were

Spring Street.

formerly

with

associated

become

Francis

Walter

& Co.

cal

false

seeking to avoid.

p o

credit

Thomas

A.

Borden

W.

Stevens

and

with

are

—

William

&

Weeden

fluence
on

our

mulative

of

inflation

in

intervention

upon

th;e

Co., 815 Montgomery Street.

likely
more

and

is

that

the consequence of
physical controls,
would spell the end
as

we

completely,
therefore, with those who say that

Dealers in

the
can

implication
assure

Exchange Place, N. Y. (5)
or

Telephone—WHitehall 4-8247

any

that

that

avoid

have

we

those

overall

extreme

swings

activity

Continued

on

it;

ORGANIZE!

Let

s

.

.

.

Bondholders

Organize—Management,

bor and

—WIiv

Agriculture
not

.

.

but

in

which

individual

investors.

36

power,

ilill!lllllllllllllllllllllll!ll!lllllll!llllllllll[|||||||||lill!llllllllllllllll!!ll!llllll!llllllllll!llill!IIIilllllllllllllllllllllllllllll=

either in Washington

or

PLEASURE

Well

THAT THE

ANNOUNCING

IN

done
FOLLOWING

in In¬

BEEN

HAVE

ADMITTED TO

MEMBER,

is

"Job
19

Makers

\

W. 50th St. (Rockefeller Center),
New

York

•

M.

A. Javits,

establish¬

parties vying for

is the

as

an

sir, it

to

in the Eastern States.

case

intolerable

situation in
minority group a tall.
to

seems

me

the

South

This would

where

pave

the

that what the Southern Senators have

way

•

G. Woodward
PARTNER

a

now

have

view

incentive to

an

come

out and cast their ballot not

of the

President

Mr. A. Glen Acheson
FEBRUARY

LAMBORN & CO., Inc.
9 9

WALL

STREET

MR. JAMES A.

FAYNE, GENERAL PARTNER,

LIMITED

PARTNER

FEBRUARY

1,

PLEASURE

IN

e.

mr.

<&

Baciie

SUGAR
—

Robert j.

Mr.

Co.
HAVE

Founded 1879

Refined

peter

Mr.

—

Joseph

BEEN

LEADING

NEW

YORK

STOCK

STOCK

AND

EXCHANGE

COMMODITY

AND

OF OUR

OTHER

WALL

ST., NEW

FIRM

Bonner & Gregory

YORK 5, N. Y.

MEMBERS

30 pine street

DIgby 4-2727




Kelly

Krasowich

EXCHANGES

Exports—Imports—Futures
3G

D.

follar

ADMITTED AS GENERAL PARTNERS

Liquid
MEMBERS

1950

ANNOUNCING THAT

1950.

NEW YORK 5, N. Y.

Raw

1,

BECAME
WE TAKE

a

the

Republicans carrying the State but to get as
many electoral votes here and there as possible.
And with this
rivalry getting underway it would seem inevitable that bartering
between the two parties for Negro votes would not be far off.

ft

LIMITED

Benj.

with

'

Mr.

City

resisted the

But

Robert Proddow, Jr.

Mr.

America"

of

have

thing and the Republicans go about the process of voting listlessly.
there are still more Republican votes in the woods and they

NEW YORK STOCK EXCHANGE

would

INDEPENDENT INVESTORS, INC.

they

for this two-party system at long last
Every one of the Southern States, particularly Florida, Alabama,
Tennessee, North Carolina, Virginia and Texas, turns up a re¬
spectable Republican vote every lour years. It doesn't mean any¬

PARTNERSHIP:

A. Schiffer

Walter

Mr.

dustry. Write for particulars now!

,

other

about

Negroes are not a
WE TAKE

War

two-party system.

and politicians being what they are, there would be con¬
contesting for the Negro vote with each party trying to

outdo the

Your money must not work against
you

the

The South has understood that with the two

page

.

La¬

Civil

the

since

This has been their main weapon
handling their racial problem. They have had measures de¬
signed to prevent the Negro from voting in any appreciable num¬
bers, of course. But year in and year out their main reliance has
been upon the one party system.
There are Republicans down
there, any number of them, and they have party machinery. But
under the one party system all elections are determined in the
Democratic primaries.
The November vote is a mere formality.

organized

are

the South whose Senators embraced the

eagerly.

of

bring

Stockholders

get back to

so

Ever
ment of

tinual

!

to

proposal

social disorder.

verge on

influence of the

conglomeration and I should be prepared, as should the
country, to accept most any change that would re¬

But

try to keep these

economic

Senator Taft pointed out, they lose in
But it would have been

the

of

duce

*An address

by Mr. Sproul at the 46th
Annual Banquet of the New York Chapter
of
the
American
Institute
of
Banking,
New York City, Feb. 4, 1950.

as

My complex, however, is more against the
rest

adjustments within bounds, and to

victory in the struggle,

implication that

should

we

Republicans have managed to come through pretty reg¬

labor vote and

Eastern

developments

from time to time,

necessary

an

to have

come

sharply to their advantage in 1948 in Ohio, Illinois and Califcrnia.

ganization of the
country and
some
mobility in its labor force.
It means that readjustments are

alone

these

York,

such States under the new arrangement.

place. It means
that there must be some pla'y in
the
business
and
industrial or¬

vigorous,

The

heavy

others are ex¬

new

at

ularly in Ohio and Michigan during the revolution, in spite of the

fit themselves into

and
co¬
ordinated monetary, debt, and fis¬
cal
policies should constitute a
primary defense against economic
instability, I would also deplore

Reorganization Securities

and

Georgia

400,000 votes which he can throw around at will.

half.

localities, must be fading in

panding

While I would agree

appropriate,

a

possibly

and

proportional

Eastern
European immigrant,
Dave
tremendous power with his 300,000
He is a de¬
cisive factor as to which way that State will go and both parties
are
usually desperately fighting for that State and shaping their
campaigns accordingly.
Under the Lodge proposal, New York State becomes just about
half as important; so does Pennsylvania and other large States.
This means that the foreign born, racial conscious, labor vote
which has been the mainstay of the New Deal revolution is cut in

or

This
time

given

any

importance, while

have known it.

ID. j. McMILLEN co.

at

that

industries,

some
some

capitalism

productivity.

rising

means

the

on

provides.

New

In

rising productivity, and the equit¬
able distribution of the fruits of

be

which

not

23

Dubinsky, has

characterized by

is steady growth,

detailed

democratic

of

Announcing the formation of

to

if

static,

and

thing for the country, of course.

stagnant, economy. What we want

specific transactions
which

I

As I

complete absence
change, we would,
a

The

State, for example, instead of voting its 47 votes
split approximately

York

resolution

a

have

indeed,

of the more populous States.

expense

populated States generally supported the resolution but then
did the Senators from New York, Illinois and one, Myers, from

representation plan which the
present would split 10 and 2,
giving 10 votes to the Democratic nominees and two to the Re¬
publican, instead of 12 to the Democrats.
New York's great
strength would be cut in half which would certainly be a healthy
24

degeneration of severe
depression.
If sta¬
or

fashion. As they see it, and as Sen¬
argued, the change would give them

for the candidates who carried the State would

or

motion

of

country.

bear
without that in¬

individuals

between

what

at the

power

New

stability is
statistician's

define

me

bility* meant

brought -to

be

may

economy,

trusion

a

it, the essence of economic sta¬
bility lies in
regular progress;
progress
which has its ups and
downs, but which avoids the cu¬

Through their use a pervasive in¬

CALIF

FRANCISCO,

wooly

the

Wayne Morse,

as

Pennsylvania.

Socialists's dream.

a

or

let

occasion,
means

economic processes of the

(Special to The Financial Chronicle)

SAN

so

see

powerful

a

as

another

on

government

than

by economic stability.

mean

established

are

economic

more

First,

one

said

have

these

Adds Two

Sproul

which
suffers
greatly from inflexibility ar.d high
exposure to political pressures. As
I

Weed en Co.

Allan

policy,

but

baf¬

lesser

Definition of Instability

c y,

debt

force,

if

projection

fis¬

management
and

more

therefore, to some of the
of instability in our econ¬

be

to

are

with which we must concern

omy

sta¬

1 i

we

ator Tal't

going to address myself to¬

am

ourselves

to

rebel yell

Carlisle Bargeron

dangerously to the

causes

And I

with

gentry

such

by

as

disease

con¬

associate

a

It is understandable why the Southerners

night,

economic

-

presents

eyed Humphrey and paradoxically such states¬
men
as
Walter George of Georgia.

1949,

well expose us

flexible

tributing

CAL.—Ira C.

making

forces

accommodate.

/

generally embraced the proposal in their usual

A

pol¬

prop¬

of

his

between

proof of our immunity.
sense
of immunity may

I

means

of

cepted

coordin¬

a

torn

quent recovery, should not be ac¬

respect

e

is

fling situation.
Lodge, the sponsor, is cer¬
tainly no Leftist yet he finds himself supported

Certainly the mild re¬
and the subse¬

still strong.

r™~r

have consider-

as

(Syecial to The Financial Chronicle)

The

depressions.

and

one

The roll call in the Senate

for instability in our economy are

manage¬

ment

it

studying

wants to

or

debt

erly

Francis I. Du

booms

more

no

policy, and in the related fields of

management,

have

maintain

to

of

be

need

ated with debt

ANGELES.

how

learned

there

icy,

Oliphant & Co.

LOS

In

steady economic progress, and that

course,

or

prejudices and in the end he is likely to end
up undecided as to which of his prejudices he

concern

CHICAGO, ILL.—John W. Hol¬

Hutehins

last

at

My most personal and intimate
with economic stability,

wise

even

or

House.

is to main¬

recovery

stable economy.

a

Sorenson

CTpecial to The Financial Chronicle)
,

economy

make to world

greatest contribution we can

good,

something that certainly needs a lot

Stresses interna¬
and concludes

(4) "rigidities" which delay readjustments.

all

or

as

tional situation

BARGERON

as

=

nllllllllllliilliiilllilllllliiilllllllllijlilllllllllllllllllllllllllllllllllililllllllllHIIIIIIIHIIIIlllllliilillllllllllllllllllillllilllli;

t

NEW

YORK STOCK

EXCHANGE

v " "

new york 4, n. y.

Volume

171

Number

4880

THE

Morgan Stanley Group

COMMERCIAL

&

FINANCIAL

CHRONICLE

great confidence in its President,

Insurance Stocks

Of Consumers Pwr. Co.

other

By ROGER W. BABSON

Underwrites Com. Stk.

Great

Mr. Babson recommends insurance stocks

Harold V. Smith.

investments which

as

A group

diversification, fair yield and freedom from labor
troubles, as well as being an inflation hedge. Holds prices of
shares of long established fire insurance
companies are low in
relation to liquidating values and with
leveling off of premiums,
these companies, because of end of drain on
surplus required
by high premium reserves on unexpired risks, will be in position

of 76 investment firms

Stanley & Co.
is underwriting the offer by Con¬
Power

sumers

ditional
stock

Co.

shares

for

of

454,457 ad¬
its

of

common

subscription

by

stock¬

holders and. employees at a price
of $34.25 per share.
Stockholders

have the right to subscribe
basis

of

each

ten

of

shares

record

of

on

the

share

additional

one

to pay

for

Many letters have
asking

held

common

that

I

31.' Transferrable

Jan.

subject

person,

stock

than

not

allotment, of
for through

the exercise of

loans

and

company's
which

on

000

will

finance

to

in

construction

freedom

been

two-year period ending Dec.
31, 1950.

stocks

established

B. H.

Lapham Forms

nies,

and

fire

insurance

herewith

are

Syracuse

rec¬

SYRACUSE,

N.

Y. —Beverley

University Building to
has

manager

recently

been

ond

prior

own

conducted

source

income

which

BEVERLY

Robert

the

W.

this

form

staff

HILLS,

of

Mr.

Reed

sells

previously

was

with

King Merritt & Co.

at

the

85%

Insurance

Co.

Insurance

Co.

$35

of

security

the
a

nual

its

range

—

stock

stocks may

The

a

most

the

and

on

fire

gradually; in¬

to

N.

Y.

a

50%

labor

INSURANCE GROUP

Any

;

gives

increased

the

into

great ad¬

a

labor

expenses

rates

well

as

We

BAiclay
(L.

If

should

occur,

drastic

having

pany,
in

plant,

costs

and

are

locality.
dom

go

this

But

the

so

That's

type

of

percentage

small, this is sel¬

Distributed

well

as

fire

LTD.

RECTOR

STREET

use

the

a

Stock to Buy

Home

tion

because

United

number

a

it

is

as

the

States

assets

an

of

other

well-known

more

about these

securities.

and

you'd like to know

stocks

.

.

want

.

to

be

a

more

details

illustra¬

largest

in

in

total

in

on

prices,

yields, prospects, just call—

premiums

ad¬

Trading Department

written, although only the fourth
in policyholders' surplus. I hap¬
director

and

have

Merrill Lynch, Pierce, Fenner & Beane
PINE

STREET, NEW YORK 5, N. Y.
Offices in 98 Cities

Request

on

Buying Zone
Request

on

Stock

Underwriters

Exchange

—

Distributors

Dealers

NEW YORK 5, N. Y.
Bell

Gibbs, Manager

Teletype

NY

1-1248-49

Trading Dept.)

Insurance

PUBLIC

UTILITY, RAILROAD

Stocks

W. C.

Paine, AVebber. Jackson & Curtis
Established

Langley &1 Co.

Members New York Stock Exchange

1879

6, N. Y.

Members I\eic York Stock
above

be

as

insurance

by

HARE'S

may

Company

Common Stock

and INDUSTRIAL SECURITIES

INSTITUTIONAL SNARES,
LID.

Prospectus

market for

a

Home Insurance

com¬

If

pen

maintain

trouble

of

of

YORK

we

necessary.

Selecting
I

why

fixing of

labor

(ijl Mutual Investment Fund)

NEW

Mr. Babson!...

taken

a small investment
be moved to a new

can

labor cost is

7-3500
A.

offices in Principal Cities

with

agree

compa¬

in the payment of

as

taxes.

York

120 BROADWAY,
Telephone:

SHARES

New

WOrth 4-4000

cost

in most in¬

Laird, Bissell & Meeds
Members

•

nies.

Bank Stocks in
Circular

to

business.

of

with

to

70

Analyses

NEW YORK 5

Private Hires

insurance stocks

C.

BOSTON

industry is around

This

the

Cycles

•

troubles

witnessing to¬

volume

40%

from

fire

fair inflation hedge.

stocks

of labor

vantage to fire insurance

are

they

FIRST

again decline for

are

insurance

dustries.

which

Generally dividends

insurance

we

compares

of

liquidating

As

Outlook

period

of

all fire insurance

REctor 2-4383

the

The

losses increase,

into consideration in the

current

value.

A

10%

stocks

Washington

CORPORATION

This

share, has invested

for

Tele. NK-473

Phone

End

19

Hartford Fire Ins.

St., Newark 2, N. J.

Tel. Market 3-3430

Open

Springfield Fire & Marine

Providence

too high.
again begin to be re¬

trust

folio of good common stocks,

(3)

18 Clinton

Aetna Insurance

so

property

and/or fire

—

the

than by

of

National Union Fire Ins.

ordinarily reduced
five-year-average
results

mitted

Rippel & Co.

been

Insurance Co. of N. A.

(Hartford)

not

of

insurance companies have a port¬

Dividend

J. S.

in

Phoenix Ins.

Boston Insurance

should direct attention to

income—and

more

Ins.

advantage of insurance com¬
pany stocks.
The cost of labor for

Since 1935 the average an¬

should be

(Newark)

before

day

and

purchasers

Accident

.the

as

owns.

investment

more

liquidating

American

has

government

never

as

companies has been less than the

Newark

in

are

Perhaps

(5)

Home Insurance Co. again as
example, it is sellin? at about

value.

of

assets

a

—such

sec¬

stocks

Glens Falls Insurance

(Newark)

period.

a

.selling at a low ratio to liquidat¬
ing value.
To take the case of
an

Firemen's

the

$60 a share.
Fire insurance

(2)

.

Ins.

100 Broadway

from

This

produce

Company Stocks

sur¬

Small Labor Expense

assets of

Cantor,. Fitzgerald &

Co., Inc., 211 South Beverly Drive.

with

company

the

of

Co.,

surance

joined

Insurance

pre¬

on

The cycle now
period of good earn¬

a

are

ance

the direct purchase of most securi¬
ties.
For instance, the Home In¬

CALIF.—

has

Jr.,

the

are

earnings

as

receive

certainly

Financial Chronicle)

Reed,

trusts"

often

the

Furthermore,
should

to The

will

bonds

his

With Cai\tor, Fitzgerald
(Special

of

source

much

firm in Syracuse.

thereto

of

duced

a

the insurance business.

Syracuse

of

cycles in the in¬

are

When rates

rea¬

companies

"investment

second

for Shields & Company

and

Insurance

anced

the investment business. Mr. Lap-

iham

off

business.

that

actually well diversified and bal¬

in

engage

stocks.

Fireman's Fund Ins.

until

compa¬

my

of

obtained

from

and

pr'.' local dealer.




25

Broad

other

115

Exchange

principal Stock and Commodity Exchanges

Street

NEW

YORK

745

Fiflth

Avenue

Broadway
Tel.

and

unfortunate loss.

We maintain markets in

re¬

dividends and prices of fire insur¬

(1)

an

demonstrate them to be

Hedges
H. Lapham has formed B. H. Lap& Co. with
offices in the

who has

Standard

rates

Diversification and Inflation

Tarn

accident

aver¬

nearly insured to full value.

sons.

Own Firm in

fire,

escape

Great American Ins.

history

long,

good,

leveling

There

bonds.

siderable

of

of

combination

possible

based

other troubles, all unite to help the

Home Insurance

of

After

c o n

thought, I
ommend

one

best

is

dividends

yield between
4% and 5% although a large part

impor¬

tant.
Babson

Roger W.

who

are

you

The business of

company

100% upon the principle that those

the

income

classes

ings, which give

Lis

a s

very

during

insurance

an

ultra-conserva¬
tive, buy some stock in all ten
companies. Then you should have

conservative manage¬

The

surance

from

This 1

spent

If

to invest in.

you

American

is

labor troubles.

approximately $76,000,have

(3)

program

other

shows

(4)

(4)

part the

the

field Fire & Marine.

increasing market prices.

interest

yield, and

re¬

$9,000,000 of short-term bank

pay

fair

a

applied to

as

7

safety and income. Another sug¬
gestion is that you look at your
insurance policies.
If you find
one
of the above ten, then buy
some stock in that
company.
If it
is good enough for you to insure
in, it should be good enough for

plus and permit greater dividends.
Increasing dividends should cause

liquidat¬

ing value;

warrants..

Proceeds will be

based

low cost

with

of

the normal

miums will stop the drain

compared

subscribed

for

ment.

(2)

inflation

upon

100 shares per

to

age

hedge

subscribe by Feb. 17

may
more

ceived is below

(1)
diver¬

sification;

its subsidiary, Michigan Gas Stor¬

Co.,

which

ratio

investment

to

This

an

The

crease.

paid

proper

(EST) on Feb. 20, 1950.
Employees of the company and

lor not

me

combines:

subscription warrants will expire
at 3 p.m.

age

to

invest¬

an

ment

good

are

larger cash dividends.

come

suggest

Also, there
companies
such

American,
American
of
Newark,
Firemen's of Newark,
Aetna, National Fire, Continental,
Fidelity-Phenix, Insurance Com¬
pany of North America, Spring¬

combine

headed by Morgan

(607)

New York 6, N. Y.
BArclay 7-8800

8

(608)

Indus¬

Dow-Jones

the

in

crease

Anti-Trust Suits and

Although tne three

trial Average.

court
unani¬
the
govern¬
ment's anti-trust suit against the

judge
expediting
mously
sustained

Investment Values

NSTA

group, only one-half of a " point
decline in the market for the stock

By HOWARD F. VULTEE

the

hat

the

to

attributed

PART II—Recent Anti-Trust Cases

which might be

evident and

was

Vice-President, The Marine Midland Trust Company of New York

adverse

ruling

constituted

group

a

of

structure

company

from basis of hori¬
industry, to allegations of

or

As

The

segment of

a

taken

individual

companies

whole.

such

on

the

as

a

As

ernment

The

notice

about

a

the

to

nine

some

anti-trust suit

an

first attacks

the

with

formed

company or an

maustiy.

Glass,

ing

filed.

Also

suit

before the

year

gov¬

before

years

was

was

decided to accept and did no

man

with

plan

basis.

s e n

t

d sub¬

e

of

divorcement of the Fi¬
operation, but virtually
barred parent company control.
These three anti-trust proceed¬
quired
berglas

all

stantially

entire

an

industry.

As

the number of
such
p a n

ure

relatively

limited,

the

possible.

major com¬
which
companies in an

not

industry.

However,
when
the
.Supreme Court upheld in the
States Steel

United

alone

opoly,

companies where

a

illustrate

this

type

of

on

railroads

nation's

the

leged

foster

to

its
of

manufacturer

Court's

ruling

that

it

road

sell

the

to

the

con¬

the

between

and the railroads and it
asked the
separation of

he manufacture and

Pullman

;uit

lecline

of

the

In

7%

filing of the
an

of

course

21%

for

of several conduct¬

11.8%

jointly against the major in¬
motion picture compa¬

an

the
time

point in the

overall

shown

for

to 19%.

week's

a

the stock lost another

market

immediate

price

in

stock from

common

was

the

to

reflected in

was

the

of

decline

following

table.

tures

was

one

The suit

tegrated
nies.

selected

the

Pictures

Paramount

for

study because it

company

number

of

with

before

was

therefore,

as

entered

called for sepa¬

ration of the motion

ducing division from

picture

theatre

pro¬

a

operator of

an

to

op¬

drawn

into the

position

as

a

goods and

major form of

a

became

increase

net

a

the

erations.
Another

was

the

important
to the war effort. By the time of
the court's decision on April 20,
1943, the stock had advanced con¬
siderably reflecting the company's
participation in war business and
was selling at 33 M>. This amounted

consent

a

thereafter,

Pullman's

transportation

final ruling was reached, however,
Paramount

Nov. 3, 1941

on

manufacturer of heavy

a

judgment which

began

Shortly

and

war

in

three-man court without

United States

and

major target of
the joint suit.
The Lower Court
here found
illegal only certain
trade practices and certain forms
of theatre ownership. Before the
was,

a

jury.

a

was

largest

the

holdings

theatre

as

of

nearly three-year

61%

during

period be¬

tween June

example of the attack

1943

segment of an industry is in

29, 1940 and April 20,
compared to a 9%
in-

as

sleeping

for

ing

car

other

three

groups

Index of

pact

Price
Jun

1P40

29.

1940

'21 to 19

20.

1943

*34 to 33

Apr
May
Oct
Dec

(Anti-tni't suit filed)
(Lower Court decision )„
8, 1944 (Separation ordered).
.2, 1941 (Plan filed) _'_2_

Ohio interests.

made by

An

offer

(Supreme Court approval)

58%

1947

(I.C.C.

1947

-

May 14,
Dec

31,

Dec

31,

Lower

1948

'Fluctuation

pounded

48

1947

Mar 31,

(

for

Court

approval)___

.

.

—^ —

Spring Company. An investment
banking group headed by Glore,
Forgan and Company made the
fourth offer.
Finally on Nov. 14,

convenience.




period

following

the

City

Haven

Bank

available

Stocks

Jan.

16—Laird, Bissell & Meeds, 120
Broadway, New York 5, N. Y.

of its

re¬

booming business and

prospects of cash liquidating div¬

continued

idend,

marketwise

outdistance

to

Industrial

the

Aver¬

Jersey
and

containing

report

fig¬

65 banks in Northern New

ures on

2, Pa.

of

proval

Weissenborn, Inc., 24 Com¬
Street, Newark 2, N. J.

merce

Market

December,

plan in

its

1945, the stock was nearly triple
price level as against

its mid-1940

Outlook

Analysis
Heller & Co.,

trend—Stanley
Pine

—

30
Street, New York 5, N. Y.

the

heard

Oec.

ment

approved the sale

case

18, 1945, but the govern¬

to

appealed

Court.

of

Some

bidders

March 31,

the

unsuccessful

four-to-four

a

As

a

tie vote in the Supreme
to affirm the action

Court is held
the

the

Lower

Court, the sale of
business to the

sleeping-car

railroads

sustained.

was

Commerce

terstate

The

In¬

Commission

its stamp of approval to the
sale on May 15, 1947 and consum¬
mation of the sale took place on
gave

June 30,

The

railroads

and

of

lightweight

the

sale

the

yielded $36 ^million
of the sleeping car
heavy¬

weight equipment to the railroads

produced $40.2 million.
supplied with cash, Pullman
on
a
program of stock
retirement
through tenders and
a

Boston

15

—
Eastman,
Broad Street,

available is

analysis of

an

Business

Machines

Corp.

*

duced

the

special report

100

133.09

109

138.65

114

146.92

120

tion

293

190.98

157

$52 million of the proceeds of the
sale remained.
Late in 1948 the

from 3,229,-

897 at the end of 1946 or a reduc¬

668,166

177.70

H5

166.68

137

254

181.16

149

145

and

about

company

177.30

shares

chases

suspended
stock pur¬
pending the study of the
purchase of control of a group of

Continued

on

page

&

Dumont

Laboratories
I.

du

Pont

Co., 1 Wall Street, New York 5,

37

available

Also

port

is a special re¬
Westinghouse
Electric

on

Corp.—An
and

analysis

of

American
a list of

Foreign Power, and
stocks with

common

71/2%

a

yield of

better.

or

Electric
let

showing

up-to-date

an

com¬

parison between the thirty listed
industrial stocks used in the DowJones
five

Averages

the

and

stocks

used

tation

thirty-

the National

Bureau

in

Bond

and

mon—Transcript

of

Share

Com¬

testimony

of

Arthur

Wiesenberger in the re¬
organization proceedings—Arthur
Wiesenberger & Co., 61 Broadway,
New York 6,

N. Y.

industrial

over-the-counter

Quo¬

both

Averages,

as

Federated

Department Stores—

Circular—Carl

M. Loeb, Rhoades
Co., 61 Broadway, New York 6,

to

&

over

New York.

yield and market performance
an
eleven-year period—Na¬
tional Quotation Bureau, Inc., 46
Front

D.

Street, New York 4, N. Y.
Calls—Booklet—Filer,

&

Pine

30
New York 5, N. Y.
Co.,

Street,

Fuller

B.

randum

—

Progress report

—

Bache & Co., 36 Wall Street, New
York 5,

Thirty
Banks

—

}:)•

' ' '

Co.—Analyt¬

Packing

ical report—Hecker & Co., Liberty
Trust Building, Philadelphia 7, Pa.
%

1 "...

Inc.—Memo¬

Gearhart,

York 5,

N. Y.
■

Co.

Kinnard &
Otis, Inc., 45 Nassau Street, New
N. Y.
—

Garlock

Television

*

'

•

'

*

••

Jones & Laughlin

Seven
Representative
Comparative analysis —

,T

Paine, Webber, Jackson & Curtis,
25
Broad
Street, New York 4,
New. York.

•

•

L

Circular—Reynolds
&
Co.,
120
Broadway/ New York 5, N. Y.
j
P.

R.

Mallory

Co.,

&

Inc.-4

cisco 4, Calif.
*

:

Steel Corp.—

Analysis—Brush, Slocumb & C04
1 Montgomery Street, San Fran¬

number of shares out¬

100

121.63

of

B.

Inc.—Report—Francis

41
a

end of

standing to 2,561,731

Allen

Gulf Oil Corp.

Over-the-Counter Index^-Book-

market purchases. By the
1948, the company had re¬

open

First

The

—

Also available is
on

group

Ind.

portfolio

government

Puts and

business together with the

as

Also

International

Banks—Tabu¬

Corp., 100 Broadway, New York 5,

Schmidt

equipment to the various individ¬

City

New York.

1947.

sale

of

distribution

decision

approving the sale. Justice Jack¬
son, as a former Attorney-General,
had
disqualified himself in the
case.

lation

individual

joined in the appeal. On
1947 the Supreme Court

in

voted

Supreme

the

several

and

railroads

ual

Co.,

New York.

York

New

which

court

three-man

The

of

Analysis

—

&

New York 5. N. Y.

of

57% increase in the Average.

on

Chicago, Rock Island & Pacific

At the time of the Court ap¬

age.

Avg.

prices

delphia

of Dec. 31, 1949—Parker

as

De-

—

Townsend, Crouter &
Bodine, Packard BUilding, Phila¬

Dillon

as a

Standard

&

Circular

—

&

Railroad

shares,

Radiator

Corp.

Enlarged

this

during

common

121.87

indicated,

American

Sanitary

panies of Northern New Jersey—

Pullman

90

event

Stocks—Year-end compa¬

period

All

group.

156

— ~

Bank

rison and analysis of 19 New York

Leading Banks and Trust Com¬

261
—

32%

immediate

•

firms mentioned will be pleased

parties the following literature:

1945, Pullman elected to sell the
business to the original railroad

161 to 159

102 to

281

54%

52%

over

AVg.

interested

was

231

1.5

—

60%

1945

Ind.

send

to

the Standard Steel

209

—11.8

43%

approval)_

18.

D-J

D-J

Pullman

100

20%

——

July 12,

Index of

Stock

Market

It is understood that the

group

embarked
Im¬

Pullman

Recommendations and Literature

of¬

headed by Otis
represented Alle¬
Corporation - Chesapeake

ghany

a

,

buy the sleeping car busi¬

Company

sult

:

Stein, Bramhall & Stein—Treasurer.

Dealer-Broker Investment

total of
Subse¬

facilities or a
$81 million.

One

ness.

Johnson, Blyth & Co.—Secretary.

Waldemar

and $42 mil¬
remaining sleep¬

Well

PULLMAN, INC.

Paul G.

op-

The

than

more

Pacific Northwest Company—Vice-Presi¬
V.;L
■
.;/ ■.*■;.

•

cars

the

all

Waldemar L. Stein

meeting of the Seattle Security Traders Associa¬

Homer J. Bateman,
dent.

on

cars

had

railroads

purchase.

lightweight

lion

operation of

The reaction of the

cars.

market

dock

finally consummated.
The suit against Paramount Pic¬

©n

provisions

urther

a

number of proposals and counter¬

ed

cancellation of

order

company

cars.

of sleeping
railroads.
After
a

proposals to the plan, the sale

sleeping-car

tractual

a

operation

the

to

cars

12,

business.
The
Department of Justice requested
he District Court of Philadelphia

separation order, offered a plan

to

July

until

not

istic control" of the nation's rail¬

monopoly, and in compliance with
a

was

cen¬

charged the company and its af¬
filiates with exercising "monopo-

al¬

was

business

sleeping-car

1940 that the Federal Government

Pullman did not contest the Low>er

it

tury,

in

as

its

before the turn of the

since

pro¬

was

position
sleeping

Case

Although the company had op¬

facilities

car

the

to

also

Pullman

as

recent

a

Homer J. Bateman

Taylor

tion, held at the Washington Athletic Club, Seattle, the following
officers were elected for the ensuing year:
C. Arnold Taylor, Wm. F. Harper & Son & Co.—President.

selling
prices provided for under the plan
amounted to about $39 million for

and

consent

a

on

erated

ceeding
I
selected
the
cases
.against Pullman, Inc. and Para¬
mount Pictures, Inc.
In the for¬
mer, its exclusive position as the
operator of sleeping

ions

than

contended

The

an

To

certain

which

At

the
a group of
except for

equipment

lightweight

basis

Many

decree.

mon¬

position

he

hey might have under a judicial

a

company's dominant
industry.

entire

Arnold

C.

proposed

plan

ale to the railroads
ts

and

better

segment of a company
alleged to be fostered by the

was

Pullman's

managements
that they fared

lave

However,

opoly in

hours.

person¬

of the

between the two dates.

jnly 20%

fered to

senior

operations.

filing

June 29, 1940 market level, while
the Industrial Average advanced

quently,

in

drain

and

al

during
the
reform era of the 1930s, a new
rash of suits broked out. Many of
these
suits
were
against inte¬
grated

acceptable compromise
rather than be¬

•ost

major anti-trust suits were in¬

stituted.

to

the

plan, Pullman's stock was selling
48 or 131%
higher than the

'itigation with its attendant dollar

erably shortened. Thereafter, for
about a decade during the 1920s,
mo

an

defendants

for

consent arrangement,

a

of

date

involved in further extended

come

industry

over

have

by

could be arranged

government's
"big
was consid¬

the

stick"

to

spent

been

uncommon

where

mon¬

a

millions

Countless

accede

that size

case

constitute

not

did

measure

the
government and the defending
:orporations in these actions. It is

to

dominant

No

undoubtedly

panies

were

of the
of anti-trust proceedings is

josts

shifted

drive
Vultee

F.

Howard

illustrate a new deparin compliance with anti-trust

objectives.

was

e s

no

the continuation

manufacturing

the

at

ings also

compa-

i

The consent

sale of the sleeping

business and

car

which

repre-

Oct. 2,

on

vided for the

to others its

royalty
judgment re¬

it would

submitted a
1944 which pro¬

retain, the, company

companies

a

keeping
that it

In

ruling

division

the

elect

could

of:; the

on

Court's

the

At

patents

decision.

the

appeal

filed, the company made available

against

were

,k

ing-car business from the railwa>
manufacturing business. Pull¬

Owens-Corning
Fiberglas Corporation was

they

at

car

Jointly owned

case.

ASSOCIATION

1944

by Owens-Illinois Glass and Corn¬

against the horizontal strncmres
of a

were

Fiberglas

Court

District

TRADERS

the

Philadelphia ordered on May 8,
the separation of the sleep¬

a company.

early anti-trust suits were

attacks

of the decision,

States

United

Details proceedings in
cases against Pullman, Paramount, and Fiberglas cases,
with
effects on stockholders, including market action of their shares.

monopoly in

result

a

SECURITY

SEATTLE

monopoly.

Mr. Vultee cites change in anti-trust suits
zontal

Thursday, February 9, 1950

CHRONICLE

FINANCIAL

&

COMMERCIAL

THE

I

Aetna Standard Engineering Co.

—Analysis

—

Moore,

Leonard

Lynch,
Union
Trust
Pittsburgh 19, Pa.
Allied Laboratories,

available

to

Inc.—Study

dealers—Townsend,

Graff & Co., 15 Broad

York 5, N. Y.

&

Building,

Street, New

Mead

Johnson

•

&

Co.—Memo¬

randum—Ralph E. Samuel & Co.,
115 Broadway, New York 6, N. Y.
Mexican
dum—

Eagle

Zippin &

Oil—Memoran¬

203
Chicago 4,

Company,

South La Salle Street,
111.

Volume

-Number. 4880,

171

New
England
Public Service
Co.—Special survey—Ira Haupi
Co., Ill Broadway, New York
,

6, N. Y.

THE

COMMERCIAL «&

Joins Mann & Gould

*

(Special to The Financial Chronicle)^

SALEM, MASS.

Norandju—Special memorandum

—Greenshields

Mann

&

Gould,

&

Co., 507 Place
d'Armes, Montreal, Que., Canada.

Street.

He

Putnam &
North

American

Co.

randum— Bendix,

Washington

70

was

Harris; Upham Adds

;6Q9)

Joins Hill Richards

v

(Special to The

Financial

Joins Mason Bros.

: : :

Chronicle)

mond H. Dart is with Hill, Rich¬

Brown

ards

Mason Bros.,

Co.

LOS ANGELES,

Upham, 523

He

&

Co.,

CALIF.—Ray¬

South

621

Spring

has

CAL. —Guy
the staff

joined

members

Stock Exchange.

of

the

San

&
All of these bonds having been sold this advertisement
appears as a matter o)

New Issue
Riverside Cement Co.—Analysit
—Lerner & Co., 10 Post Office

record only.

t

■

$25,000,000

Square, Boston 9, Mass.
St.

Joseph

■if.

Light

Power—

&

Circular—Josephthal & Co., 120
Broadway, New York 5, N. Y.
Sears, Roebuck

State of California

Montgomery

vs.

Ward—Analysis—H. Hentz & Co.,
€0

Beaver

Street,

New

New York.
John

,

York
;

„

„

,

2 Va% Veterans' Welfare Bonds

4,

Dated

■

Stetson

B.

Co.—Study—
H. M. Byllesby & Co., Inc., Stock
Exchange Building, Philadelphia
2, Pa.
Ultrasonic

Corporation

ysis—Coffin,

Betz

—

Principal and semi-annual

Sacramento, California;
coupon due

available

is

circular

a

or

Due

interest
at the

(February 1 and August 1)

In ihe

option of the holder at the office of the Fiscal Agent of the State Treasurer in New York City.

August 1, 1950. Coupon bonds in denomination of $1,000 registerable only

We believe these bonds will

on

the

meet

requirements

-

in

opinion,

our

are

eligible

as

security for deposits of public monies in California.

EVENTS

I

These bonds, issued for Veterans' Welfare
purposes,

I

California

Field

secured
is

(Chicago, 111.)

Bond Club of Chicago 39th an¬
nual meeting at the Chicago Club.

Boston

collected, such
the

as

to collect

become due.

The bonds

Feb. 10, 1950

authorized for the

Amount

Bond

Club

time

as

other State

principal and interest

pay

of assisting California
on an

are

revenue

on

war veterans to

amortized purchase plan.

Amount

Due

Price

to

Yield

Amotmt

1952

.75%

$1,200,000

1959

1.25%

1,100,000

1953

.85

1,200,000

I960

1.30

Meeting and Dinner at

F^b. 11, 1950

he added)
Price

Yield

Due

to

to

$1,100,000

Annual

Due

to

Yield

$1,300,000

1965

1.65%

1,300,000

1966

1.70
1.70

1,100,000

(New York

Friday Night

Club

Bond

14th

.95

1,200,000

1961

1.40

1,400,000

1967

1955

1.05

1,300,000

1962

1,50

1,400,000

1968

1.75

1,100,000

City)

1954

1,100,000

the Town Club.

1956

1.10

1,300,000

»1963

1.55

1,400,000

1969

1.75

1,300,000

1964

1.60

1,400,000

1970

1.80

1,400,000

1971

1.80

<

1,200,000

1957

1.15

1,200,000

annual dinner dance at the Hotel

1958

*

1.20

George, Brooklyn.

Feb. 21, 1950 (Philadelphia, Pa.)

The above bonds

are

Investment Traders Association
of

same

required to

purpose

be repaid to the State

must

(Accrued interest
Price

(Milwaukee. Wis.)

Milwaukee

St.

and at the

AMOUNTS, MATURITIES AND YIELDS

annual dinner at the

Parker House.

Business

are

acquire farms and homes, the cost of which

luncheon for out-of-town guests
the Hawthorne Room of the

at

same manner

general obligations of the State of

are

of the General Fund of the State and

(Boston, Mass.)

Copley Plaza Hotel. Preceded by
a

annually, in the

out

in addition to the ordinary revenue of the State as shall be

sum
same

Security Traders Asso¬

26th

in the opinion of counsel

payable in accordance with the Veterans' Bond Act of 1946

by the obligation of the Sthte

the bonds

-

ciation

legal investment in New York and Connecticut for Trust

as

Savings Banksrin Massachusetts for Savings Banks and in California for Trust Funds and for Savings
Banks subject to the
legal limitation upon the amount of the bank's investment. These bonds,

I

Feb. 10, 1950

First,

both principal and interest...

Funds and

COMING

Feb. 9, 1950

as to

opinion of counsel, interest payable by the States upon its bonds h exempt from all -present Federal -and
of California Personal Income Taxes under existing statutes, regulations and court decisions.

.

Investment

February 1, 1952-71, incl.

at the office of the Treasurer of the State of California in.

State

National Research Corp.

In

payable

Anal¬

&

Co.; '123
South Broad
Street, Philadelphia
9, Pa.
Also

February 1, 1950

Philadelphia

dinner

in

offered when,

Messrs. Or rick,

the

as and if issued and received by us and subject to approval of legality by
Dahlquist, Neff & Her rin gt on, Attorneys, San Francisco, California.

Garden Terrace Room of the Ben¬

jamin Franklin Hotel.
Feb.

26-27, 1950
C.)

D.

iBank of America N.T.4S. A.

(Washington,

National Association

The National

City Bank

of Securi¬

ties Dealers, Inc. annual meeting
at the Shoreham Hotel.

Harris Trust and
Union Securities

Savings Bank

Corporation

R. H. Moulton 4 Company h

of

Eastern Pennsylvania Group of
Investment
Bankers
Association
Forum at Hotel Warwick.

California Bank

Heller, Bruce & Co.

Dean Witter & Co.

Seigniory

Club,

Barr Brothers 4 Co.

Quebec.

Kaiser 4 Co.

Coffin 4 Burr

Co.Inc.

A.G.Becker 4 Co.
Incorporated

Haupt 4 Co.

Va.)
tional

of the Na¬

Convention

Security Traders

tion at

the

Associa¬

The National City Bank

McHenry With
White Weld, Chicago
(Special to

CHICAGO,

White,
La

ILL.

-

—

Herbert

Weld
Salle

-

T.

associated

become

Co.,

&

Street.

231
Mr.

McHenry has recently been with

Co.

tional

he

in

charge

E;F.Hutton 4 Company

-

Harris, Hall 4 Company
...

.

Andrewsi Wells, Inc.

•

(Incorporated)

F.S.Smithers 4 Co.
•

Robert

i

Moncure Biddle 4 Co.

Winthrcp & Co.

Memphis

The National Bank of Commerce

Detmer4Co.

A. G. Edwards & Sons

Gement A. Evans 4 Company
Incorporated

,

.'

<of Seattle

Company

Lawson, Levy 4 Williams

Northwestern National Bank

Janney 4 Co.

Bosworth, Sullivan 4 Company, Inc.

Wurts, Dulles 4 Co.

Julien Collins 4

Company

Kebbon, McCormick & Co.

J

Martin, Burns & Corbelt, Inc.

The Weil, Roth 4 Irving Co.

of Minneapolis

1

The Continental National Bank and Trust Company

Field, Richards 4 Co.

of Salt Lake

Wm. E. Pollock 4 Co., Inc.

of Shields

Prior thereto

with, Salomon

Hutzler in Chicago.

•




\

Bros.

&

Ginther 4 Company

Stubbs, Smith 4 Lombardo, Inc..
•

-

H. V. Sattley 4 Co., Inc.

Doll 4 Isphording, Inc.

Hayden, Miller 4 Co.

Maynard H. Murch 4 Co.

Prescott, Hawley, Shepard 4 Co., Inc.

February 3/1959

-

Cruttenden 4 Co.

City

Stone 4 Youngberg

Charlottesville, Va.

Dallas Union Trust Company

Foster 4 Marshall

Peoples National Bank

William D. James Company i

Magnus 4 Company

Miller, Kenower 4 Company

J. A. Hogle & Co.

Sills, Fairman 4 Harris
'

v

Walter, Woody & Heimerdinger

of the institu¬

department.

was

,

-

Incorporated

Courts 4 Co.

Incorporated

.

the Los Angeles office

&

'

The Financial Chronicle)

McHenry. has

South

>

The Ohio Company

Cavalier Hotel.

Herbert

Equitable Securities Corporation

Allyri and Company

Shearson, Hammill 4 Co.

Wheelock 4 Cummins
The Milwaukee

A. C.

The First National Bank

of Cleveland

Annual

J. Barth & Co.

1

Hayden, Stone 4 Co.

•

With

Trust Company of Georgia

of

Sept. 26-30, 1950 (Virginia Beach

Security-First National Bank
of Los Angeles

Incorporated

B J.Van Ingen 4

Ira

C. J. Devine 4 Co.

1

Reynolds & Co.

Montebello

a

Los Angeles

of Canada 34th Annual Meeting at
the

Glore, Fcrgan & Co.

Seattle-First National Bank

William R. Staats Co.

(Canada)

Dealers Association

Investment

The First Boston Corporation

Portland, Oregon

•

5-8, 1950

American Trust Company

The First National Bank

Weeden&Co.

!

March 8, 1950 (Philadelphia, Pa.)

June

Blyth & Co., Inc.'

of New York

Thornton, Mohr 4 Co.

Davis, Skaggs & Co.

Hooker 4 Fay

of

Francisco

Co., 52 Wall Street, New York 5,
New York.

K.

Central Bank Bldg.y

geles Stock Exchange.

Memo¬

—

Luitweiler

OAKLAND,

.

Street, members of the Los An¬

previ¬

was

ously with J. Barth & Co.

Staff

(Special to The Financial Chronicle)

to the staff of Harris,

with West Sixth Street.

formerly

CHRONICLE

LOS ANGELES, CALIF.—
Wyllys R.> Betts has been added

Winthrop C.

—

FINANCIAL

(Special to The Financial Chronicle)

*

Durfee has become associated with
•

-■

Incorporated

10

McDonald

Bank and Insurance Stocks

market

tection

raised

of

a

Securities

the

Senate

the

is

first

undertaken by

financing

major

shareholders.

and

Currency

Banking

Committee

a

*

,

Fidelity

States

United

the

Under

Frear, Bill

share.

per

2 4 0 8 )

(S.

would

which

program,

broaden
the

powers.of

the

The subscription price! was $40

shares owned.

the

of

port

300,000 shares of capital stock were offered to stockholders of record
as of the close of business Jan. 13, 1950, in the ratio of l' additional
share for each 3%

on

7 in sup¬

Feb.

.

Guaranty

and

Exchange

before the

fire or
casualty company since the 1947-1943 period. Then because of the
rapidly rising premium volume in the fire lines, additional capital
was
obtained by a number of institutions through offerings to
This

SEC

by

requiring
corpora¬

,

is

not

In

Public

Utility

which

Act

into

wrote

gress

for

tions

investors

equivalent

systems

panies

the

under

pro¬
com¬

Securities

In the Investment

Exchange Act.

investment

over

$3

the

or

ten in.

300,000

the

shares

million

of this program

part

a

ing

distribution of

the

dividend

stock

10%

a

of

shares

not listed

the

Guaranty Co.

has

of the growth
recent years
1949

$92,004,738

1944

100,621,092

(9 mos.)

1943-

1948-—.

85,554,841

1946

66,853,098

1941

1945

47,797,396

1940

This sharp expansion

i

ing to

over

in terms

text

deals

34,367,287

in premium volume since 1940 amount¬

vestors
Act

insurance lines
fire

with

a

motor vehicle with

are

similar

amount.

The

toward

trend

The past record of

figures

per share

earnings has been favorable.

For

Under¬

Estim.

Adjusted

Net

writing

Acquisition

Under-

Invest¬

Ended

Costs

writing

ment

Taxes

Earnings.

Income

Total

Incurred

$4.95

$1.93

$6.88

$1.90

7.49

2.46

9.95

3.44

13.39

3.47

1947—

5.75

2.20

7.95

2.65

10.60

2.58

1.63

1.74

2.40

4.14

0.14

0.49

4.21

2.19

6.40

2.07

1944—

7.86

7.67

0.19

1.38

9.74

1943

9.23

0.08

9.31

1.56

10.87

5.12

3.14

0.28

3.42

1.70

5.12

1.18

1941

5.03

0.19

5.22

1.55

6.77

1.24

5.53

1940-—__

3.81

0.04

3.85

1.59

5.44

0.46

4.98

sidiary)

and subsequent;

parent

The

1948.

reflect the

nine

company acquired'control

only

company

The above figures are

through

5.30

*

'Consolidated for 1946 (when

,

based upon 1,000,000

months'

results

fire

of

prior thereto.

information

the

about

is avail¬

solicitation

proxies and

of

be accompanied by

must

of

statement

-

facts

the

decide

how

to

insurance sub¬

in¬

The

vote.

made

short-term

by such
trading in

in

persons

their com¬

_

and

can

be expected for the stock of

Guaranty.

'

protections, they are not
these
protections under
law unless their company's

these

assured

the

management

on the increased capi¬
United States Fidelity

•

the

stock

of INDIA, LIMITED

■(Special to'TriE Financial-Chronicle)

to

the

Government

in

Kenya Colony and Uganda
Head

Office:

26,

London,
Branches

In

Colony,

Bishopsgate,
E. C.

India, Burma, Ceylon, Kenya
Kericho, Kenya, and Aden
and

Paid-up
Reserve
The Bank

Capital

£2,000,000

Fundconducts

£2,500,000

description of
banking and exchange business

Trusteeships

DETROIT,

MICH. —Russell

E.

Zoller has been added to the staff
of

Carr & Co., Penobscot Build¬
ing, members of the Detioit Stock

Exchange.

every

and

Sessler Adds Two

-£4,000,000




list
ex¬

to

The

Financial

inson

and

been

John

G.

Harvey

Chronicle)

added

Sessler

Office Square.

to

&

S.
the

Co.,

we

termed

live under what

double

a

might
of

standard

responsibility
and
security holder protection, a situ¬
management

-

10

.

.

cise

.

Go slow and go easy

...

..r.

there

Maybe

.•

other

are

of

Post

on

year

the

legislation,

we

pointed out many of the practices
would be corrected by the

bill.

this

of

those

commend

earnestly

I

reports

to

your

your

—Abraham Lincoln.

life."

me

With

or

Dempsey-Tegeler

(Special lo The Financial Chronicle)

LOS

CAL. —Hans

ANGELES,

Klehmet
Felder

George

II,

a

this

become associated with Dempsey-

Tegeler

do

legislation

Mr.

on

the

business

Mr. Pflug-Felder was Los

pany.

Angelesi

Conrad,

for

manager
Co.

&

Bruce

Mr. Walls was.

and

Co.

Marache, Sims &

Earl I. Gusli n Joins

Hill Richards & Go,

quired by the bill could be easily
ascertained.
The question posed

bill is. not whether such

.the

Vice

and

President

-

to

the

Speaker of the House on. the sub¬

I would like to
of reading the
President's letter into the record

ject of this bill.
the

take

this

at

liberty

point.

Securities

"The

has

the

Congress

the

Securities
in

vestors

-

Exchange

and

amendment

to
of

an

Exchange
extend

certain

Act
to

v.

not

adventure

The principle

&

Co.',
621
Spring

South

Street,

mem¬

the

bers

of

Los

Angeles
Ex¬

change.
C
f

o

r

was

n

First

e c u

rities
Chi¬

of

Co.

1 y

m e r

with
S

Mr.

t i

u s

con-

his

ment

business

I. Custin

Earl

invest¬
in

Chicago.

David Dillman With

in¬

Inland Steel Go.

unregistered

securities the

by

joyed

protections now en¬
investors in securities

registered by their
issuers,with that Commission.
which

"I

are

believe

this, subject
mission

on

that

the

reports

on

made by the Com¬

June 20, 1946 (H. Doc.

No/ 762—79th

Congress),

and on

ILL.—David

CHICAGO,
man

has become manager

Dill-

of pub¬

lic relations for Inland Steel Com¬
pany

will

and

assume

his

new

Mr. Dillman has

duties March 1.

recently been managing editor of
the
Chicago "Journal of Com¬

1950, clearly demonstrate merce,"
and
prior
thereto
for
for the proposed legisla¬
many years handled public rela¬
tion.
The value of the protections
tions for the Investment Bankers
afforded' investors in registered
Jan.

9,

need

securities

has

been

thoroughly Association.

"I

consideration to
which "-has been
recommended
by the Securities
and Exchange Commission.
<

a

.

novel

in

or

un-

regulation.

of extending these

"Fmcerelv

vours.

"HARRY S. TRUMAN."

'

Vinyard Partner in

Central Investment
.

■

•

•

D.

#.

j

.

t

SAN ANTONIO,

hope that the Congress will

change.
S. 2408 represents a long, give. favorable
overdue., correction of this situa¬ the legislation
bill is

Richards

Hill

to

,

The

asso¬

with

ciated

own

recommended

would

which

1934

become

CAL.—Earl X.

has

n

ducted

1950.

Mr. Vice-President:

Commission

t i

u s

cago and

"Feb. 6,
"Dear

ANGELES,

LOS
C

Stock

written

has

President

The
the

public

the

whether

j

(Special to The Financial Chronicle)

without

keeping the accounts and records
from which the information re¬

by

for¬

merly with First California Com¬

number of investors

does

or

7th

Co.,
210
West
Klehmet was

&

Street.

No corporation with $3
more in assets and with

substantial

Pflug-

W.

R. Walls have

Lester

and

in closing, that the

say,

of

million

Klehmet, Pflug-Felder

with

attention.

proved since 1934.
There is no
ation
in
which the degree
of good reason why these protections
should continue to be denied to
responsibility for the welfare of
investors
in
other
companies
investors is made to depend on
which do not list their securities
the
choice
of
management,
on
the Exchanges.
whether or not to list its com¬

Med

some

special
case
requires to make you
happy, but my friend, these I
reckon will give you a good
things that

.

Tzudiker tion.
staff

this

which

a

pany's stock for trading on an ex¬
(Special

BOSTON, MASS.—Jack B. Rob¬
have

Executorships

also undertaken

to
an

-

■Thus
be

Zanzibar

Subscribed Capital:

has decided
trading on

I will comment on them

panies.
later.

Carr & Co. Adds

Bankers

for

change.
There are some excep¬
tions for specially regulated com¬

.

NATIONAL BANK

in 1946 and also

this

for

need

to

as

poration may be, no matter how
many security holders it has, or
how extensive is their need for

Based upon the assumption that the profit margins earned
during the past nine years can be reasonably well maintained and
the 1949 volume of business will also be realized without
allowing for further growth, Geyer & Co. estimates that earnings
talization

report of

able to them.

pany's equity securities.
But no matter how large a cor¬

been

j that

share after taxes

Congress

stockholders,
the
owners
of
the business,
should have the information avail¬

been

tFirst nine months.

; tional shares and the distribution of the 10% stock dividends.

a

the
our

records should be maintained but

a

the
corporation of profits which have

adjusted to
1,400,000 shares outstanding after the sale of the addi-

| averaging around $7.00

1,800

chance to use the

given

law provides for the return to

shares from 1940

have

;

about

that

in

onerous.

trading the management is
doing in the company's equity
securities and, in order to prevent
and discourage members of man¬
agement and large equity security
holders from abusing inside in¬
formation for their own profit, the

3.94

4.44

.•

themselves

get companies affected would not be

what

5.75

1942

'

sub¬
many

defend those proposals.
The investor is informed

4.23

"

rights.

machinery to get reason¬
able proposals before his fellow
investors and an opportunity to

"4.00

3.72

today, if a com¬

proxy

i:8.02

0.11

1945

Magna

the

in which
find

estimate

to

can

clear

to

*9.92

1946

.

.

a

be¬

Federal securities laws,

burden

vestor is

*$4.98

1948

our

Let

a

Earnings

$1.45

position

passage

'

which the investor needs in order

mg

Prepaid

"

Securities Exchange

stands

it

as

*The

Operat-

$3.50

the

in¬

and

the same basis.

on

consents

-Adjusted

Earnings

31

f 1949.

would

2408

able.

The follow¬

Tax Basis

\ Dec.

.

a

'■

greater

Income

S.

companies

the

Current

fire

Federal

basis.

condition of the company

years
and for the first nine months of 1949, as computed by Geyer & Co.,
67 Wall Street, New York, N. Y., are shown below.
Year

com¬

exchange, the investors
the following protections:

operating earnings for the last nine

on

between

an

insurance coverage should be reflected in a continuing increase in
the business of the company.

ing

eliminate

investors

our

registered its stock for trading on

of total volume and

6.3%

general

principal

two

of

pany's management has listed and

important categories of casualty insurance risks,
written by the United States Fidelity and Guaranty Co., and their
importance relative to the total premium volume included are:
automobile liability, 21.8%; workmen's compensation, 18.5%; fidel¬
ity and surety, 13.2%; general liability, 11.2%; and automobile

The

both

Under

For 1948 the

11.0%.

will

standard

We

get rid of that discrimination and

Although the rapid rate of growth in the last few years is
expected to level off, there are goods reasons for believing that a
number of the company's principal lines will continue to expand.

collision,

McDonald's

investors without

and

put

and

and

Mr.

of

reasonable

200% has-tended to reduce the ratio of capital funds to

damage

whose
regis¬

follows:

differently

panies

premiums written.

property

now

are

the

as

investors'

of

2408

In

have

protections

recognized

come

dealt

securities.

listed

these

Charter

S.

not the company

or

has

securities companies, not now fully com¬
regulation has been built up in plying with the standards of this
We
rather piecemeal fashion by mak¬ bill, would be covered by it.
estimate
that
investors
ing additions between 1933 and further
1940.
The
system is, we feel, owning about $19 billion of se¬
curities
will
be
afforded
this
substantially incomplete without
In our report
S. 2408 and—more important—it needed protection.

39,248,351

„

whether

Our system of Federal

43,771,273
—

to

Eat three
day ... Say
your prayers ... Be courteous
to your creditors
.
Keep
your digestion good
.
Exer¬

meals

because of the anomalous state of

The

44,027,305

1942

listed

are

statement

$45,025,449

1947—

as

corporations

of

securities

The net premiums written in
j

in premium volume.
as follows:

have been

regulations

same

submit

and

tered.

to

The need for the additional capital can be explained

these

sense

registered exchanges

on

"Do not worry

square

.

has
recognized that
protections
are
essential,

with

are

and

writ¬

were

Congress

holders whose

statements

required

stock of United States Fidelity
1,400,000 shares from the 1,000,000 shares
heretofore outstanding.
.
.
and

file

to

the outstanding capital

increased

-or
stock¬

companies

protections

same

securities

shareholders and

100,000

300

more

Harry A. McDonald

of increasing

Thus the sale of the 300,000 shares of stock to

and hav-

over

M

those

in

those

to

Company Act of 1940 the Congress
gave the SEC regulatory authority

with

of

.

|V;V/ 'I
i#;lgvJ

the law protec¬

vided for investors in listed

of

,

,

regula¬

the SEC

tewSfft
ft;"

public

gas

assets•

company,

r.

authority over electric i and
utility systems, Con¬

tory

tions

the

the capital of the
company, stockholders as of the close of business Jan. 13, 1950 will
also receive as a stock dividend, one share of United State Fidelity
and Guaranty for each 10 shares owned as of the record date.

;

the
Company

Holding

gave

Con¬

passing

in

1935,

the

for

one

new

a

gress.

offered,

to

or

As

!

I*

by bill.

98.1% had been subscribed to as of Feb. 1. The-remain¬
ing stock—that is shares not subscribed for— has been purchased
by underwriters from United States Fidelity and Guaranty under
the terms of an underwriting agreement and has been offered for
sale at a price of 52%.

According

i

294,364

:

without

Chairman protections to unlisted companies

and

appeared

Commission,

to additional shares of stock..

Emancipator's
Homespun Rule for Living

Estimates 1,800 companies would

other investors.

as

Harry A. McDonald,

United

incomplete

be

would

be covered

States Fidelity and Guaranty Company has just
financing program whereby additional capital was
through the offering of rights to shareholders to subscribe

The

The Great

Frear Bi

on

Holds unlisted securities holders require same pro¬

measure.

E. JOHNSON

Thursday, February 9, 1950

Banking and Currency Committee

regulation

Week—Insurance Stocks

This

completed

Testimony

Chairman of SEC tells Senate
securities

By H.

CHRONICLE

FINANCIAL

&

COMMERCIAL

THE

(610)

TEX.—Eugene

Vinyard, manager of the office

of

Central

of

Texas,
'

Investment

Frost

Company

National

Bank

,

Building,

has

been

admitted

partnership in the firm.

f

to

Volume

171

Number

4880

COMMERCIAL

THE

&

FINANCIAL

dividuals place

The Securities Business—

their
have

BENJAMIN

for any

System

businesses, either large
must pay for new

H. GRISWOLD, III*

the

on

the

on

ductive

"auction markets"

constitute
Democratic

the

on

have

al¬

frank

ex¬

change of ideas, v As a matter of
fact, many seemingly insoluble
problems
our

stock

for

inseparable from such realization,
make
it
possible for our
country to have
an
output
of

in¬

goods

.and
in

services

sound

dividual

and

that

would
of

programs

in¬

protection.

group

dustry

have

It must not be forgotten that real

been

liqui¬

protection

dated

1

s o

by

v

the
t

e,' n

frank

greater

and

the

realize
how

a

v

i

r

o

u

s

that

I

hope that

Americans

we

are

our

economy are today—I am not sure
that we have in the past.

is

recognition

the

of

economic

our

composed

of

that

simple

machine

risk

these

of

a

such

I

would

the

like

to

this

use

keynote and

thought

theme of

discussions this evening.
status
of the
nation's

of

have the

our

reputa¬

and,

believe

the

or

only

rot

so,

in

trade-mark

indugtdy
is just about indispensable for a
successful

our

industry

efforts

to

productive
it

from

devotes

directing
and

uses

its

fears

stock

ex¬

under

strict

than

system,

the

have

free

auction

their

the

markets

they exist today

as

a

vehicle

for

the

surplus
of

Figures
posedly

and

the

investment

a

people

staff

of

life

so

you

public,

buyers and sellers
under rules

hands

tically
And

of

a

of

them

I

and

occur¬

contract

prac¬

negligible.
so

convinced

to

this

real

desire

no

offer to sell

nor a

to

economy.

White, Noble Adds

discuss

withl

Tun Financial Chronicle)

to

GRAND

RAPIDS, MICH. —Al¬

bert H, Coweil has been added to

the

staff

of

bers

of

Stock

White, Noble & Co.,

Trust

the

Building,

Detroit

and

Exchanges.

.

solicitation of an offer to buy any of these Shares.

454,457 Shares

re¬

sources.

achieved.

unsympathetic with progress? On
the contrary, the success and very

The

securities business is one
of the important integral part of existence
.

what

has

efficient

to

proven

economic

be

the

system

most

in

his¬

of

securities^

the

upon

the

problems of the securities
industry are so woven into the

industry toward these.

fabric of the

the boom and bust from

the

tion—and

economy of

therefore

the entire free
a

touch

on

probably

our

ing.

of

problems will
are

now

fac¬

•
.

•

-

,

an

Economy

contribution
anxious

as

(

omy

it

as

initiative
In

and

anyone,
be

can

We

Company is offering these shares for subscription to the holders
Subscription Warrants
issued, and to employees, as more fully set forth in the
Prospectus. The Subscription Warrants expire at 3 P.M. Eastern
Standard Time, February 20, 1950.

of its outstanding Common Stock, to whom

econ¬

believe

we

without stifling
restricting incentives.

order

stimulate

to

further

the

securities

each

with

segment

Subscription Price $34.25

industry to phi¬
us

just

on

the

of

industry pieces into this intricate

more

total income in this country,
of us here to¬

mechanism of the economy of the

night.
has

Modern science apparently
possibilities.
The

limitless

application
economy

of

science

to

the

gives hints of spectacular

developments, but these revolu¬
tionary discoveries cannot be har¬

The several

firms

in

all

price

the

to

industry

task

in.

comes

Unless capital

obtain full

to

genuity of

value

from

the

scientists.

of

the

securities

in¬

Copies of the Prospectus
signed

regulatory
formed

to

bodies
aid

the

have
firms

partially depressed market for
outstanding stocks would not only

MORGAN STANLEY &

tend

a

limit

to

the

but make

forces
more

of

re¬

probable

slowing in general business.
It

is

not

outside

the

realm

the

possibility that realization of these
potentialities,
along
capital commitments
*Rer:carks
ner

of

the

of

Mr.

of

best

public

BIYTH &

interest.

CO., INC. "

PAINE,

WEBBER. JACKSON &

STONE &

fluctuating fortunes of mil¬

din¬

CURTIS

FIRST OF MICHIGAN CORPORATION

ty of life itself make the market

Firms,

MERRILL LYNCH, PIERCE, FENNER & BEANE

WEBSTER SECURITIES CORPORATION

for

the

LEHMAN BROTHERS

Incorporated

GLORE, FORGAN & CO.

KIDDER, PEABODY

CO.

-

WHITE,

WELD &

CO.

lions of people and the uncertain¬

are

at

GOLDMAN, SACHS & CO.

SMITH, BARNEY & CO.

essential.

The

which

Stock

THE FIRST BOSTON CORPORATION

HARRIMAN RIPLEY & CO.

activities for which sound healthy
markets
for seasoned
securities

the

Washington, D. C., Feb. 7, 1950.




the

with

Griswold

Association

in

host
Association
is
prin¬
cipally concerned with brokerage

are

of

CO.

been

in

Your

covery,

be obtained from, only such of the under¬

the securities laws

operation of these separate func¬
tions

a

may

legal! [/ offer these Shares in compliance with
of the respective States.

as may

trade associations and self-

reason

Again,

our

or current offering
the New York Stock Exchange, whichever is greater, plus an
equal to the Stock Exchange commission.

tonight

phases

of

markets are wholesome and
buoy¬
ant oar country will be unable

offer

amount

business—i.e., broker¬
improving age. principal and unlisted trans¬
our
standard of living except by
actions,
and
underwriting—the
means of huge
outlays of capital. different functions require much
} And that is where the securities specialized effort, and for this
nessed

on

investment

here

represented

active

are

of the

may

dealers, and not greater than either the last sale

the basic problems of our industry.
many

Underwriters, including the undersigned,

shares of Common Stock at prices not less than the Subscription
Price per share set forth above, less any concession allowed to

country, with the hope that it will
bring into sharp focus some of
While

Share

securities

expanding economy, to yield

the desire of all

a

how

An

is

to he

discussion among us, I have asked
the leaders of the several phases

losophize

Value)

The

eliminate
our

done

or

Without Par

make

we

to

Company

Common Stock

are

of

•

Securities Business and Expanding

just

are

questions that you

many

the government

j J; "

na¬

world today—that

discussion of

in

the

in¬

dustry is dependent upon progress
—upon a dynamic economy and
as

So I think you will find that

tory.

Consumers Power

But is this approach in any way

selling securities, as well as
buying, an integral part of the
machinery for directing savings
into productive enterprises.
In¬

February 8, IV70.

m

mem¬

Midwest

offer is made only by the Prospectus.

waste

capital than to waste natural

work

to

country

afford

more

very

an

The

na¬

of the
tonight

defending
foolish ven¬

wastage in
Obviously
this

tures.

This announcement is neither

to

to

most
their

to promote a stable, yet

expanding

an

that

representation
industry here
a

you

Michigan

this is the type of thing
like

fi¬

these

changing
the

as

clientele

opinion leaders in

am

competing

dollars

day

Their

communities.

fair practice with

broken

would

we

are

capacity

advisers.

(Special

of

rence

indulgence

of

every

an

where

com¬

is several millions of people,

indicates

and

of

country,

and with their
public in an in¬

financial

with

agency,

the

serve

securities

other

certainly don't
on the head with

beg

the

tion-wide

"staff" at this time of the

evening,

in¬

sound

competing for investor con¬
one big auction market
prices are determined by
buyers and sellers and
by 110

sup¬

of

for

the

in many parts of the world..
Probably
40,000
of. these
em¬
ployees
represent
the
industry

nancial

competing

hundreds
over

and

timate

American

all

are

land.

the

over

munities

firms

of

together with 1500

They

scattered

big corpora¬

Yes, definitely

Industry

located
Together
it is estimated there are 150,000
persons engaged in the industry,

where

I

man.

more

fidence in

do

mil¬

are

than

employees.

millions

statistics

of

erating units,
branches.

stockholders

millions

in¬
In¬

industry is made
than 3,000 small op¬

throughout

population of

more

Securities

of

States

vehicle for

many

Scope

with

have

The

The securities

vestment values, and over 1,000
leading corporations of the United

people.

want to beat you

.such

of

one-

shareholders

more

Free enterprise?

liquid investment

funds

small

combined

<—many

aid

nor

than

industry.

At least six of the

enterprise

beginning

more

entire

represented.

represented.

or

employees.

dustrial management.
Contrary to
the entertaining statements of the

not

is

mirrored

in

own

sponsor—the

is

Exchange, and most of the Re¬
gional Exchanges are here. There
are
thirty financial communities

then

$5,000

Nevada, Wyoming and Delaware.

tions

our

of

American

the

This

for

changes on the Exchange,
comparative prices are the result

of

of

than

of.free

price

enemies

less

less;

or

value

a

annum

practice,
humanity's hopes

are

sepa¬

up

third

fair

of

14,000,000

The American
Telephone and
Telegraph, Company
alone
has
over
900,000 stockholders, more

efficient

very

confidence

self-regulations
and

securi¬

markets'"

essence

a

per

the

corporations, bid

and while all of

best

capital

is largely determined by
the degree of co-ordination that is

■

in

Here

investor

the

$500

the

dustry

operation.

welfare

;

enterprise
state.

for

various

changes—are

of

had

only

Securities Business Function
Our

our

economic

competitive

a

stake

advice

sound

can

The

at

are

the

mean

That

"auction

stockholders.

nearly

People earning less than $5,000

evening. the rich man's nefarious specula¬
tions, but rather to provide a

we

doing
capital but

good will

me,

parts

concept of
importance

overwhelming
today, despite its simplicity, that
as

this

In

own

by

fact:

Exchange

more,

submit

trained in this

in

ventures

economy.

intricate

many

all

interdependent is

are

I

of

tions

parts and

markets

lions

our

that

to

responsibility of direct¬
other
people's
money
into

pendent the various phases of

The

auction

ties—and

awesome

beginning to realize how interde¬

fact

Re¬

even

approach

our

have been

we

this

Washr

Association, the
American!! National Association of Securities
New Dealers, the New York Stock Ex¬
had more change, the New York Curb

stockholders

10%

consideration

evening

ing

fully realized this in the past.

we

has
con¬

Please remember in

point of view because

Griswold, in

B-

am

that

sure

in

conversations

our

are

today—I
not

industry
orthodox,

our

(or do I hear

the country.

our

economy

serious

your

to

come

the

on

of
710
widely
companies, 54%
of
the
stockholders had holdings with a

of the investors' confidence in in¬

the economic problems that beset

the

phases of

past

actionary?)

intei de¬

pendent

in the fields of money

considered

servative

today

not from redis¬
present income or

of

the

been

fully

from

public finance.

In

securities

business

only

output,

maneuvers

sion.
in

proceeds

tribution

of

discus¬

We

to

this

will

of

value

like

have

we

vestment Bankers

owned

Ex¬

Markets," Essence of

would

listed

Stock

rate

secu¬

Stock

go.

representative

4.000,000

Out

lamp posts, for
than illumination.

uses

rate, here I

Fifty

than

Free Enterprise
I

exchanges

of free enterprise.

result

in

own

pro¬

man

rather

support
At any

York

auction

existing

York

free

activities

thrived

essence

of

greatest

New

"Auction

Stresses need for stable and continuous securities

uses.

markets, and holds

ways

directing capital to

nation's

rities, the
change.

banker points out securi¬

ties business devotes its best efforts to

capital is based

and

you,

important,—hoping all the ington to do so.
time, however, that I won't be
On
this occasion the Associa¬
accused
of using statistics as
a
tion of Stock
Exchange Firms is
drunken

companies

for

market for already

wholesome and buoyant,
obtain full value of modern science
are

and invention, prominent investment

market

small,

or

outstanding
securities,—or the level of prices

Partner, Alexander Brown & Sons, Baltimore

country will be unable to

the

believe this point

11

so

product must be at¬

new

to

(611)

only because I

on

may

going markets for
products, so the price that

like

President, Association of Stock Exchange Firms

Asserting unhss capital markets

they

a

tuned

By

when

reasonably close idea of a
price at which
they can
later
either buy or sell. As the market

Important to Efficient
Economic

higher value

a

securities

CHRONICLE

WAILING, LERCUEN & CO.

12

(612)

FINANCIAL

&

COMMERCIAL

THE

CHRONICLE

iaxfield Brown Joins
Shields

on

Over-The-Gaunter

Our

Coasi

Reporter

-v

'

■

Governments

on

By JOHN T. CHIPPENDALE, JR.

,

-•••'

■

K-

Securities Business Essential

r

To National

securities in order to

Federal continues to let out government

keep the market under wraps. Despite any noticeable display of
strength in long Treasuries, the Central Banks sold more than
S26.000.000 of bonds last week.
To be sure, there has been con¬
siderable

Thursday, February 9, 1939

scale buying of the
no inclination

Economy

By CLEMENT A. EVANS*

Chairman, National Association of Securities Dealers, Inc.

higher-income obligations, although

there has been

on

the part of investors to bid prices

Asserting all segments of securities business are collectively
one roof, NASD executive
points out combined

in order to acquire desired obligations. Selling by the mone¬
authorities seems to mean they would not be disturbed if
quotations went moderately lower. However, investors seem to be
willing and able to take the issues that are being offered by Fed¬

housed under

eral, which indicates they believe the longs

securities business and therefore its health and welfare is vital

up

tary

Bank-eligible

bonds

have

in

are

purpose of all is to provide machinery for raising capital.
Upholds over-the-counter market as major integral part of

buying range.

a

better

acting

been

single

the

than

American economy.

to

restricted issues, reportedly due in some measure to decreased

offrings of these securities in the market.
Max field

to be the

seem

E. Brown

sion
"

•'''•■

LOS ANGELES, CALIF.—MaxBrown has

E.

MARCH

&

510 West Sixth Street.

The real "hot

Company,
to

Mr. Brown

added

S.

Dulin

the

to

W. A.

has

firm's

offered
and

attitude

staff.

Lippman, Jr. Is

For

Inc.,

with

639

the

will

Spring

asso¬

be

offered

Francisco

Mr. Lippman

Stock

Co.,
Street,

months.

taken

Exchanges.

used

David
D.

ANGELES,
P.

Fredericks

okicle>

and

asso¬

viously
Pierce,

Hicks

i t h
Fenner

were

Lynch,
&
Beane.
Mr.
Brown had been with the Chicago
office of Shearson, Hammill & Co.
for many

19

a

or

16 months.

to be the

to

not

to be

appear

short

as

same

13

as

are

It is evident

the

maturing

2s.

b^

While

I

taken

other
the

and

coupons

longer obligations

/

Clement A. Evans

of

busi¬

be

emphasized

He is not here,
does not want to

and

considered, merely the repre¬

securities

dealers.

One

firms

separate and individual

are

enterprises.
Our
varies to some
extent, but in the last analysis we
undertakings

or

business

of

ANGELES,

just

&

over

soap
makers,
facturers, or

designers

garment

fight

for the orders coming
industries.

into

the

the

banks appear to have been taking full

will

Co..

Nuys Bldg.

uncertainty, because they
long-term issues offered

be

no

are

advantage

of

in

the

underwriting, distributing and
Because

marketing of securities.

of the opinion there

them

of

foreseeable

public
it

only

and

demand

demanded

was

be¬
the

by

future.

cause

1967/72

public, there developed specialized
segments of the business: but that
was merely for the
greater con¬

Although the 2%s due 1956/59 appear to be the lead¬
ing acquisition .of. the deposit institutions, the 2 14 s of Sept. 15,
being well bought as are the longest partiallyYield buying seems to be becoming more
important to investors, especially the commercial banks.
'
are

exempt obligations.

Traders

u. s.

although in

some

to

assume

instances they

rather

a

are

passive

looking for

to take pii securities. The longer bank issues
getting most of their attention at this time.

L

TREASURY

continue

an

venience of
tual

attitude,

★

Market

stock

★

us

All of

BILLS

under scrutiny

I

markets, in order to combat in a modest way the inflation
psychology, which seems to have some influence upon the trend of
prices.
If there should be unusual price movements ; in
equities on the up side, it is indicated by some there is quite likely
to

BONDS

be

more

direct

or

Wm. R. Staats AddsV
LOS

ANGELES,

CAL.-tBen-

amin F. Sanford has been added
o

the staff of William

2o.,

650

South

R./Staats

Spring /Street,

^embers of the Los Angeles Stock

Aubrey G. Lansvon

-

price

"xchange.

"

(Specie! to The; Financial

LOS

ANGELES,

McVickar,

Jr.,

has

asso¬

He

was

previously with Hexter & Co.

;

& Co.

a

its

Y.'

(Special to The Financial Chronicle)

LOS
mund

ANGELES,
E.

Teletype N. Y. 1-3690




roffman

Hass
&

is

CAL.

With Morton Seidel Co.

with

*

Walston,

I

develop¬
underway once
or

ment

would

and that start and develop¬

be

ment would be
as

genius,

LOS ANGELES, CAL.—Charles

was

as

the

a

of

natural and

growth

of

nor¬

this

past.

staff of Morton

South

or our

great deal about the

American

productive

our fabulous "know-how,"
assembly line and technical

distributor who sells
curities

the

issues

trader

to

parts of

se¬

investors,

who

various

and
together

links

distributors

in

the

over-the-counter market—all

are

and

parcel of the industry,
necessary to its smooth perform¬
In

ance.

pears

this

ap¬

machinery,

but

respects

some

complex

a

each

the

at

Association

i

time

same

representative

of all the parts for the reason that

virtually every one in the invest¬
banking business is directly
or indirectly
engaged in what is
ment

known

over-the-counter trans¬

as

actions.

Stated

in
its
simplest
terms, the over-the-counter mar¬
ket

embraces

securities

all

transactions

made

not

members

who

the

of

also

many

stock

conduct

the-counter

are

in¬

ex1

stock

on

changes; and yet there
a

exchange
large over*

business.

There

are

high grade securities, both stock;
and

bonds,graded in the over-the-

counter

market; most of the buy¬
and. selling of government,

ing

state and

municipal bonds is done

over-the-counter and the

market

vitally essential to the obtain¬
ing of capital for all industry.
The phrase "over-the-counter'*
does

not

by
nf

Mr.
Stock

any

longer

describe the market

functions,
tions

because

are

through
rather

but

because

portray its
transac¬

telegraph and tele¬
Sometimes it is de¬

the

as

this

adequately

longer
arrange#
personal
contact
but

over

scribed

or

most

no

phone lines.
is

"unlisted

not

there

is

market"

wholly
a

accurate

great

deal

Evans before the
Exchange Firms,

Washington, D. C., Feb. 7, 1950.

e>#

business in listed securities trans¬
acted

in

same

token

called

traded

this

market, and by the
there

"unlisted"
on

stock

are

some

securities

exchanges.

so-

still

An¬

other recent coinage if "off boarcT

and

fairly accurate it is not necessar¬
ily accurate.
The

over-the-counter

market

began the minute the first trans¬
action

•Remarks

Seidel & Co., 458

Spring Street.

gether in the stock exchange, the

and while this is illuminating

A. Haskins, has been added to the

—

Goodwin, 550 South

Spring Street.

very

my

rebuilding

We hear

(Special to The Financial Chronicle)

Ed¬

need. Its single

more,

marvel

Telephone WHitehall 3-1200

a

mind that
short time there¬

business in ihe

With Walston, Hoffman
«

15 Broad St, New York 5, n.

within
after

mal

i

INCORPORATE©

ca¬

of legislative favor, but

or

slightest doubt in

CAL. —Noel

Boulevard.

business

public

is to provide the essential
machinery of raising capital.
If,
by some great disaster or broad
political experiment it should hap¬
pen that the investment business
were wiped out, there is not the

ciated with Leo Schoenbrun, 1385
West wood

of

because

not

be

purpose

Chronicle);'

become

it should

that

too,

because it meets

With Leo Schoenbrun
;

have common in¬

stated that the securities

by the money managers. They believe
no effect upon the money markets.

(Special to The Financial Chronicle)

capital
issues, the broker who brings the
buyer and seller of securities to¬

is

think

exists

action

this would have little

we

terests.

stock

NOTES

under
one
furnish capital to

facilitate

or

capital, and

money

CERTIFICATES

banking

underwrites

ac¬

effect,

in
some
the procurement of that

industry

Continued strength in the equity market, it is believed in some
quarters, will mean the authorities will keep the pressure on the

in

are,

roof.

apparently

In

customers.
we

housed

manner

★

our

operation

collectively

opportunity

are

investment

which

as

vThe securities business, of which
all of us are a part, is devoted to

the market

Sutro

disturbed

much

The

house

course, we

business,

mercial

CAL.—Robert

S. Hawkins is with
Van

too

cog

machinery of capital rais¬

compete | market, which I have the privilege
the various | to represent, is one large and im¬
automobile manu¬ portant part of the machine, it is

Of

purposes.

for

were

be

methods.

embrace every

of its component
parts is
I simple
to
understand
and
was
are all in the same business, hav¬
! created to meet a specific need.
ing the same fundamental inter¬
!
While
the
over-the-counter
ests
and mutual objectives and

were

to

ing.

part

over-the-counter

and

these various

activities

ing

get

decline in prices of Treasuries, because they have been making
purchases which have enabled them to increase income. Com¬

(Special to The Financial Ch'-oniclei

LOS

seem

Our

these

easily

houses

hand-mrepresents

are. as is
evident, various
of raising capital or of aid¬
ing its flow to industry and the
securities business is representa*-

the impression
that stock exchanges, underwrit¬

could

Capital

travel

production

and

tive of all

securities

the

their

Investors do not

With Sutro & Co.

a

There

should

counter

1M*% obligation

receding. Also there have
being let out in-order to make
for the higher-income securities.

way

have

business.

ways

was

sure,

type

while prices

been indications short-terms

administra¬

workers.

representative of the over-the-

a

been, reported the metropolitan banks had been scale buyers of the

years.

and

government

production

in the

am

be

City. For the past two weeks these institutions have
$36,000,000 of bonds, due in more than five years. It had

on.

and

sentative of stock exchange mem¬
bers.
Neither am I here only as

long-term bonds will be

no

he

That

expecting different

a

some,

the

securities

"h'and,

his

of

problems

five-year llA% note
the obligation which will be

being advanced by

like

much to

again and again.

that

now

for

tors

ness.

security.
are

healthy con¬
in Washington who are

direct'interest; in the welfare; of;

that

much support for

very

sound and

a

you

the "law-makers

discussing the

18 month matur¬

or

of the opinion it will be

favored guess as

replace

tained in

dition,

when he stated

On

New York

Merrill

w

turally follows, I need hardly acid,
if industry is to be main¬

that

?arly remarks,

a

Although the higher-income eligibles have declined with the
general down-trend in prices, there has been considerable buying
of these issues by the larger deposit banks
particularly those in

/Mr.

Mr.

looking for

15

a machine, erect a
employ
production
without capital.
It na¬
or

the

one

h

pre¬

and

run

buy

nor

workers

underscore

support,

1%% note
The majority of

maturity.

neither

but I

very

CURRENT MARKET TREND

ciated with Shearson. Hammill
Bedel

considerable

possible

can

s.u m-

would

offered in the March refunding.

Robert

Co., 618 South Spring Street.

1

disagreement with the opinion that

Brown,

Hicks, Jr., have become

be

been

You

of

part

no

mary,

to be well in the lead, over any of the other securities
which have been mentioned. There seems to be practically no

-

M.

of

build

have

capital.

for¬

never

that

clear

appears

CAL.—Claude

Wilbur

March

are

of with the

maturities

Shearson, Hammill & Co.

Bedel.

to

seems

issue would

an

are

does

2s due March 15.

Four Join Staff of

LOS

for the

some

There

care

seems

3D.

it is believed the

issues for the March maturities, the opinion is gaining ground
that a longer issue is likely to be offered to the holders of the

ager of the
for Oscar F. Kraft & Co.

(Special to The Financial Ch

to the date when

Since most money market followers

formerly man¬
trading department

J

nearer

the idea that both the March 1 and March 15 maturities will

was

i

sociation

Securities

should

would

factory

As¬

.

that such

ity, whereas others

members of the Los Angeles and
San

market circles is, what is going
refunding? The market is full of *
everyone trying to master-mind,

market followers, for the belief that

the other hand,

these

National

money

March

We

gentlemen,

without

with almost

moment, there

i

Akin-Lambert

South

the

be announced by

guesses are

ciated

the

time draws

among money

LOS ANGELES, CAL.—William

Lippman, Jr.. has become

cushion

the Treasury. Plenty of guesses are;
being made, with reasons being advanced as to why this or thai
issue is likely to be used by the powers that be in next month's;
refunding.

With Akin-Lambert

A.

institutions

abilities.

get,

securities industry. Even as chair¬
man
of
the

topic" in

in

guesses,

as

terms will

(Special to The Financial Chronicle

savings

the

the coming operations.

been

also

helped

Pen¬

a

Dealers, Inc., L
could hardly
There is no doubt about the concern the
monetary authorities have created in the government market over
ad d anything
the impending financing. This has tended to curtail operations irr v of
importance
Treasury issues with more operators assuming a wait-and-see;; to his ve r y

with
Shearson,
Hammill & Co. and prior thereto
was trading
manager for Bogardus, Frost & Banning.
Robert

be

rumors

formerly

was

have

most difficult

position to
follow Mr. Griswold, who has so
ably presented the position of the

REFUNDING TERMS MAIN TOPIC

become asso¬

Shields

with

ciated.

popular issue at this level of prices.

more

It is

Sptember 2

decline in the tap bonds.

(Special to The Financial Chronicle)

Jield

funds

The

was

arranged whereby one-

provided capital for another
man's business, whether it was

man

/!{

Volume

Number 4880

171

COMMERCIAL

THE

fit

ship

for overseas
of ex¬
to provide the grub

out

a

five years, or since The
JBoston Corp. and associates
lnarKeieu
a
$io,uOO,UOO issue of

ploration

or

stake for

a

First Boston Group

voyage

a

Today the market is represented

by several thousand firms having
offices in hundreds of towns ancl
cities

throughout

United

the

States; they employ tens of thou¬
sands of trading or sales repre¬
sentatives and all are engaged in
locating
users

turn

investment

in
operate America's vast, in¬
of such capital and who
industrial

tures dated

Feb. 1,

growth of and
is essential to the maintenance of

&

Co.;

The debentures were

of the under¬
Smith, Bar¬
Harriman Ripley &

Dominion

Gundy

McLeod,
The

S.

U.

currency

are

or,

pay¬

&

Co.,

Inc.,

marked

tions
the

of

the

Province

of

has

Province

of

oversubscribed.

the

lered

however,

stated,

subject to the approval oi
Legislature it is intended to
make such sinking fund available
the

the

payment of the

first

in

the

sink¬

for the retiring deben¬

on

Nov.

which

economy.

will

of-

shares

were

The

ih

three

for

the

of

genera¬

selling

stockholders

be

major stock¬

continue

holders

Co. which has
control

to

the

No

company.

change in management or control
underwriting group headed

An

is involved.

Simultaneously, G. D. Searle &

stock

Co. is offering directly to its em¬

the

G.

of

one

shares

D.

the

of

of

Searle

common

&

foremost

of ethical

United

ployees

Chicago,

Co.,

ized

manufactur¬

at

pharmaceuticals in
States.

priced at $38

THE

of the company

Smith, Barney & Co. offered
public yesterday (Feb. 8j

by
to

the

value

$14,888,311

to

the

family

will

Sells Searle Common

30,

book

at

The

underwriters

Searle &

under

tions.

Smith, Barney Group

ers

1949,

,

Searle

tures cash and securities amount¬

ing

D.

been

bentures.

220,000

is available

There

tne

public offering of securities

G.

of

de¬

new

oy

part of the holdings of present
stockholders ana represented the

that

Quebec,

Province in Canada.
They are subject to redemption
on and after Feb. 1, 1951, at 101%
and thereafter at prices decreas¬

and ing fund

the first

Premier

largest

Inc.; ing to 100.125:%.

financing by the Prov¬

general funds of the

The

Province.

131

(613;

tne

at

the huiuer, in Canadian
The
debentures
are
and unconditional obliga¬

direct

Corp.;

Securities

Young, Weir Inc.

offering

external

debentures

new

in

currency.

Inc.; A. E. Ames & Co.,

Wood,

Its health

system.

$nd welfare are vital to the Amer¬
ican

The

business

which financed the

the American

Co.

The
able

revert to the

for

deoentures.

new

option of

ity. Other members
writing group were
ney

March 1,

wuicii mature

payment ox which will be
with the proceeds of the sale

the

of

deben¬

2Vs%

priced at 100.1157% plus accrued
yield 2.10% to matur¬

plants.

securities

1955.

met

Feb. 1, 1950, and due

interest to

tlemen, the over-the-counter mar¬
ket is a major integral part of the
investment

it>oU,

an

which

banking group

(Canada)

Quebec

in conclusion, gen¬

In brief, and

debentures

publicly offered on Feb. 7 a new
issue
of $15,000,000 Province of

available to known

terconnected

heads

The First Boston Corp.

of capital which

sources

made

be

can

First

| Offers Quebec Issue

gold prospector.

CHRONICLE

in

ince

help

trading, finance

FINANCIAL

&

a

The

26,573

shares

unissued

price

paid by the

stock,

of

author¬

common

equal

to

that

stock

being

underwriters to the

selling stockholders.

share, was heavily

HOLDS

FUTURE

a

but

t(;

GREAT PROMISE

Blyth & Go. Elects
Three New V.-Ps.

»V»"

A Fair and

Regular Dividend
A

„.r.

A fair and

regular dividend

on

American Tele¬

telephone service in the world and provided

phone and Telegraph Company stock
Paul

A.

Conlcy

E.

Jr,

Glassmeyer,

jobs for

big factor in

company

has been a
making possible the good telephone

service the country enjoys

The present

nearly 29

to

invest their

v;r

K.vk.Vt
1

'

'v:

..o'i

■")

year£.

*It has,

and

savings in the business.

benefit

only to stockholders but to everybody who
for the

the
as

a

telephone

company,

not

works

everybody who

uses

,r'1

<

•

»•»

i'

telephone and the prosperity of the country
whole.

It is

not

just

a

v;

check that somebody

.

]

,

"

.

It is this money

that has built and expanded

the facilities for the best

and most economical

gets

in the mail but

a

I.'

;•/

stability

to

millions of people.

.

:■

V'lOrT

-At'fA
'

Vi!

Sheets

C.

,

Charles

R.

W

symbol of confidence and

! '

Ralph

* !'v/i

't:7f

and its suppliers.

The A. T. & T. dividend is thus of

encouraged hundreds of thousands of men
women

people with the telephone

•

1

today.

dividend has been paid — in good

times and bad —for

many, many

:;. „i: •:

!"

'

president of

Blyth,

Blyth & Co., Inc., announces that
its board of directors has elected
Paul

A.

Glass-

Edward

Conley,

Jr., and Ralph C. Sheets
vice presidents of the company.
Mr. Conley has been associated
meyer,

except for absence

the

Mr.

on

leave dur¬

when he served as
the Army Air Corps."

war

in

Major

urX

& Co., Inc., since 1934

with Blyth

ing

•?

Glassmeyer, except for serv¬
the Office of Strategic

with

ice

Services

during

been

with

1936.

Mr.

firm in

Sheets

also

has

war,

since

company

joined the

1936.

three;

All

are

ganization,
Conley as a

with

connected

office

York

New

the

the

the

of

the

or¬

14 Wall Street, Mr.
member of the buy¬

department, Mr. Glassmeyer
syndicate manager and Mr.

ing
as

Sheets

national

as

No

change

by

reason

The

Co.,

of their

major
Inc;,

investment

election.

offices

one

of

the

of

Blyth

&
leading

banking organizations

in the country,
San

sales manager.

in duties is involved

are

Francisco,

in New York,

Chicago,

Boston,

Philadelphia, Los Angeles, Seattle
Portland

and

also

are

cities

(Oregon.)

maintained

in

Offices
17

other

throughout the country.

With Fairman & Co.
(Special

LOS
ence

E.

ciated

to

The

with

Fairman

West Seventh
the Los

He

Financial Chronicle)

ANGELES,
CAL.—Clar¬
Larimer has become asso¬
&

Co.,

210

Street, members of

Angeles Stock Exchange.

formerly with Carter H.
Corbrey & Co.
was




■

-*.-j

v

•

1950

9.

February

Thursday.

COMMERCIAL & FINANCIAL CHRONICLE

THE

(614)

14

'

the Morton Trust Co. and
Guaranty
Trust
Co.,
Mr.

merce,

the

Illinois Brevities
&

Deere
year

sales'

Moline, for

Co.,

totaled $9,076,951, compared
with $8,277,456 for the 1948 year.
Backlog of unfilled orders at the
beginning of the current fiscal
year about 60% of the backlog at
the beginning of the last fiscal
year.
Working capital at Oct. 31,

the

previous year. For
previous fiscal
year
sales
amounted to $309,737,221. Income
after taxes totaled $39,484,242, or
of

any

the

for the
with

$12.42 per common share,
fiscal

1949

compared

year,

transfer

by
from

$29,987,128

in the surplus ac¬
$80,377,393 at Oct. 31,
$89,062,289 at the end of

balance

count

was

1949 and

sjs

8908,910,000

to

for

or

$4.36

.679,000,

$3.92

or

for the

share,

Sunbeam Corp.,

Chicago, for the

ended Dec. 31, 1949 re¬

53 weeks

ported consolidated net sales of
$50,223,156 and a net profit, after
Federal income taxes, of $7,307,296,

with $41,respective¬
for the 52 weeks ended Dec.
1948.
The directors on Feb.
which

compares

per

ly,
25,

formal
Va %
stock dividend, which will be ef¬
fected by the transfer of $5,400,000 from earned surplus account
to
stated
capital
account.
On
Feb. 23, last year, a 25%
stock
distribution was declared, involv¬
ing the transfer of $3,240,000. B. A.
23

take

to

expected

are

action

the declaration of 33

on

said the com¬

Graham, President,

maintain the
present quarterly cash dividend
of 50 cents per share on the in¬
to

intends

pany

alltime high record, according to
Louis B. Neumiller, its Presi¬
the year
$18,834,787,
or

for

Profit

dent.

amounted

to

sales volume, an

of the

7.30%

$5,000,000

increase of more than

modernization

period

year

Herrick

E.

election

the

of

various purpose

in

$13,600,000

bonds, which will probably

$6,000,000 for sewers;

clude

for

000,000

a

in¬
$5,-

New

Edward

York

of

deflation

of

the

Feb. 5.

super-highway;

machines;
$1,000,000 for playgrounds.

$1,600,000 for voting
and

*

*

Bros.

Foote

&

Gear

Machine

Corp., Chicago, for its fiscal year
ended Oct. 31, 1949, reports net

after

all

charges and provisions for
eral income taxes, compared

Fed¬

of

income

a

$611,339

Such net income was

fiscal year.

preferred

equivalent, after
dends,
222.252

with

$716,275 for the previous

net of

divi¬

Co.,

E.

and

Herrick Low1 to Senior Vice-Presi¬

Mr.

dents.

Patten, who has been

Corn Exchange for 51

with

joined

the bank

Place

branch

the Astor
which he was

Corn

first

the

became

of

years

when

with

Bank,

associated,

in

change

the

Mr.

Exchange,

1924.

with

banking

Bank of Com-

National

the

Fol¬

training

An "Odd Lot" Portfolio
& Company, in

F. Hution

E.

Business

Survey," lists

a

the

capital

previous fiscal year.
Dollar
volume for the 1949 fiscal

sales

TRADING

MARKETS

shares to 200,000 shares,
no
par value, of which increase
50,000
shares
were
payable to
stockholders
of record
Jan. 31,
1.950,

the
transfer
of
$375,000
to
capital
from the company's surplus of ap¬
accomplished

was

increased capital stock on
March 1, to stockholders of rec¬
Feb.

ord

1950.

17,

trust

Tel. DEarborn 2-5600

4

Tele. CG 146-7




Series

Chase

$1,500

2V2S

G

$2,000
2,000

2,000

$50

1962__

81

Standard

shares

its

Hudson

will

James

President,

located

at

Maitland,

W.
is

be

Inc.,

Distributors,

headquarters
is

also

a

di¬

and'

Central & Southwest Corp., and

formerly

a

partner of Bon-

had
31,
1949, prior to any public offer¬
ing
of
its
shares,
including
$761,438 in common stocks at
&

of

Co.

The

$1,016,847

market value.

Fund

at

Dec.

Custodian of the

Fund is The First National Bank
of

the

75

1,110

48

67

15

1,050

60

20

1,000

50

148

8

1,184

72

5-3

Telephone

American

Chemical

International Business Machines
-

-

_

20

1,120

32

223

4

892

16

46

20

920

50

40

960

40

35

910

70

990

82.5C

24
_

Cluett, Peabody

■

City of New York.

active

in

__

_

26

55

18

Loew's

Ger¬

balance the

to

He was

gold loan.

a

arranging
League
of
to
put
Austria,

loans

Nations

on their
and helped organ¬

Bulgaria

and

economic feet,

International Set¬

ize the Bank of

1929 at Basel, Switz-^

tlements in

clearing house
of exchange
gold payments."

erland, to act as a

regulation

the

for

markets and

America, organized

The Bank of

international bank¬
ing and financial activities abroad,
opened in New York at 40 Wall
Street on Feb. 6.
As indicated in
these columns Dec. 1, page 2204,
the new corporation
is whollyowned
subsidiary
of
Bank
of
to

in

engage

Sav¬

of San Francisco,
Cal. L. M. Giannini, is President
of both organizations. Russell G.
Smith in charge of international
banking activities for Bank of
America, N. T. and S. A. is Ex¬
ecutive Vice-President of the new

corporation.

Otto T.

and

Rockefeller

New

of

Bank

National

the

of

Vice-Presidents

Kreuser,

York
trip
to six South American countries.
They will call on bankers, gov¬
by air from New

left

Feb.

on

5

seven-week

a

on

indus¬

authorities ancl

ernmental

Bolivia,
Peru, Chile, Argentine, Uruguay
and Brazil in the interest of the
Chase's banking relationships and
also to discuss ways and means of
in Ecuador,

leaders

trial

inter-American

aiding the flow of

-

trade.
.

that

made

is

Announcement

Herbert L. Nicolson has been ap¬

$645.50

$14,846

Yield 4.4%

7.

Feb.

on

of

1,210

30

50

New Jersey___

Oil of

Woolworth

Dow

15 sh.

37

_

National Bank

with

York

75

Wrig'ley

rency

Chase

100

announced

was

company,

Chicago

bright

Stock Exchange

209 S.La Salle Street-Chicago

Fund,

invest¬

Income

1960

E

plan

budget and stabilize the cur¬

man

David

tEstim.

U. S. Savings Bonds—
Series

Dawes

Portfolio

Cost

Amount

be managed by a

to

It will
be managed by Fiduciary Trust
Co.
of
New
York, while dis¬
in

assets

A.FulIer&CoJ

of Midwest

fmutual

first

the

rector of Maine Central RR.

Available

proximately $15,600. The list and
the
amounts
of
securities
are
shown in the accompanying table

Price

Johns-Manville

Hudson

of

Formation

Inc.,

ment fund

based on "odd
of ap¬

investment

an

Recent

Air Reduction

was

Members

on

has
the

newly

Chicago.

"Southwestern Pub. Service Co.

W iiliam

payable

declared

been

who

*Prospectus

cash

dividend of 25 cents per share

with

Iowa Public Service Co.

for

$15,000 "Odd Lot"

by

A

$950,000.

proximately

by

Products Co.

in¬

Exchange, present a balanced

dividend.

stock

50%

a

as

This

tribution

International Cellucotton

from

stock

vestment portfolio,
lots"

100,000

$3.15

share on
221,314 common
outstanding at the end of

shares

in the

increase

an

"Fort¬

the Reparations

Commission which turned out the

ings Association

of $15,000.

Market
and
Business
Survey" E. F. Hutton & Company,
Members of the New York Stock

States and was on

the

to

America National Trust and

their "Fortnightly Market and

balanced portfolio covering an invest¬

nightly

debt

War

World

York

New

Department.

earlier

lowing

the

of

Banking

State

Mackenzie

joined
the bank in
Before joining Corn
Ex¬

He was 62

of age. Mr. Pyterman had
formerly been a Deputy Su¬

First
United

that settled the British

Hungary
re¬

British delega¬

the

member of

tion

years

perintendent

This policy
England's

standard.

economic distress in 1931. He was
a

Vice-President of the
Chase National Bank of New York
in 1948 died at his home in North-

also

and

blamed by some for

as

port, L. I, on Feb. 2.

value

in relation to the
put England back on

was

name

who

policy

a

the

gold

Feb. 1.

Pyterman,

Arthur

T.

tired

on

restore

to

the

American

Pan

the

having become effective

Patten,

A.

ment

East St. Louis, on Jan.

Co.,

approved

to $2.68 per share on the
shares of common stock

outstanding, compared with
per

17

authorized

Gov¬

a

Governor

as

pound

dollar

Ferdinand M. Bis-

the

announces

Henry

Mackenzie

B.

Trust

* Bank

In the Jan. 25 issue of its

Oats

it

make

he embarked

1920

of

was

"National

it

until 1945,
Party put through

to

measure

in

Mr.

been

merly

Low

Exchange

of

company

of

said;

of England

owned

"After his election

recently

Trust
Corn

from 79 to 128 acres

stockholders

as

of his

any

Bank

the

when the Labor

According to reports the

The

years

part the Associ¬

In

privately

was

announced by Mr.
Bissell resigned
as Vice-President of the Chemical
Bank and Trust Co. to assume his
new
duties. As indicated in our
issue of Feb. 2, page 534, the name
of the American Trust had for¬

"of floor area.

City
of Chicago may be in the the
market early next month with

25

after

did the Government's business,

program

the

reporting

longer than

years

"Though

as

also

During this

commenced in 1946.

in

4

ated Press advices also

Adams as Vice-Presi¬

Schwamm.

the fulfillment of the
and

19

Vice-President and Senior
loan Officer of the institution was

sell

1949 marked
expansion

that

out

pointed

It

earnings.

1948

over

has grown

*

$

$36,-

over

000,000 and not have set as

four

capitalization.

creased

by

year's sales

ous

1949

Co.

Tractor

exceeded the previ¬

Feb.

retired

he

the

The election of

promotion
Caterpillar

Elliott V. Bell,

L.Schwamm, President, on

Co,

sales have

from

accounts

Press

on

predecessors.

American Trust Co.
cf New York was made by Harvey

in

standing.

171,00,9 and $5,752,843,

of

Governor of the Bank of England,

the

of

dent

1949, and

the similar 1948 period
share of Keystone stock out¬

in December by Governor

of Graham

earnings combined with its share
of
subsidiaries
earnings totaled
$1.34

address

ernment institution.

against $15,period in 1948,

$1.84 in the last half of

Thread-

of

the

—

Norman,

this, also noted it was at that time

confirmed by
New York State Senate on
7.
Mr. Ljmn was named to

Announcement

per

31, 1948.

London

resigned.

share, compared with $1,782,588, or 95 cents per share, in the
1948 six months' period. Keystone

ended Oct.

year

Associated

York.

of New York as New York
Superintendent
of Banks

Dewey to succeed

Mackenzie

B.

E.

C.

sphinx

Street"

Better

years.

He was made
a Baron in
1944 by King George,
on
the recommendation of Win¬
ston Churchill's Government. The

unanimously

the post
Hrnry A. Patten

627,678 in the same
while
net
profit
after
taxes
amounted to $3,112,411, or $1.66

common

per

Feb.

period, and to 49 cents in the
1943.
quarter.
For the six
months ended Dec. 31, 1949, sales

com¬

per

the

"the

as

that

Lyon
State

78

Montagu

as

the Bank of England.

William A.

of

of

age

needle

%

1949

with $55,-

share, compared

the

and

associated with the

nomination

The

was

$17,534,281,

Vice-President. Prior

a

First National Bank of New

in

totaled

as

to that he was

$1,845,756,
compared with $8,425,591 and $922,350, respectively,
for
the
corresponding
three
m o i>t h s in 1948.
Net was equal
to
98
cents
per
share in the

ended Oct. 31, 1949, against
$945,486,000 for the previous fis¬
cal year, the all-time high sales
record. Net income amounted to

$61,270,000,

joined

single family resi¬

Keystone

year

mon

Commission

Steel & Wire Co.,
Peoria, for the quarter ended Dec.
31, 1949 reported sales of $9,804,253 and net profit after taxes of

amounted
the fiscal

Co.

prior to that he was active in Can¬
adian banking.
Mr. Low has been
with the bank since 1929 when he

present.

Interna¬

the

of

Harvester

he was associated with
Banking Corp. and
Park
Banking Corp. and

change
Asia

Gov¬

sleep at London, on Feb. 4

known

officials stated that there
are 55,000 residential space
heating customers in this city at

i-!

sales

Total
tional

in his
a

i\;

formerly

Norman,

of the Bank of England, died

ernor

pany

1948 fiscal year.

the

Lord

CAPITALIZATIONS

Chicago for accept¬
before July 1, 1950. Com¬

ance

earned

The

REVISED

permission to offer gas heat

dences

the

surplus
account,
thus
making the amount attributable to
the common stock $20 per share.

Bankers

and

ETC.

Light & Coke
applied to the

1

Commerce

to 5,000 more

the

$60,087,240

to
of

Feb.

on

for

common stock ac¬
increased from $30,-

was

100,112

NEW OFFICERS.

The Peoples Gas
Co.

the

1949,

1,

count

BRANCHES

NEW

Union Foreign

Illinois

a
$

$2,448,395,
against $2,672,461 at Oct. 31, 1948.

$27,681,997, or $8.49 per common
share, for the year ended Oct. 31,
1948.
At the close of the 1949
fiscal
year
current assets were
$232,298,278 and current liabilities
amounted to $58,807,582. On Sept.

1929 hav¬
Vice-President.

Cashier, and in

ing been named

CONSOLIDATIONS

to

amounted

1949

1922, later becoming As¬

staff in
sistant

year

ended Oct. 31, 1949 reported
of
$361,678,287, exceeding

those

Pyterman joined the Chase Bank

News About Banks

Is

*Yield

2.90Vr

If

held

to

maturity in

TBased

1960.

on

dividends

paid

in

1949.

an
brokers

the

Cashier in

Assistant

pointed

of
of New

department

loan

Chase National Bank

the

York.

20 years,"
the publication, "there have

"During
states

past

the

gradually evolved investment sys¬
tems with sufficient elasticity to

financial

real

provide

security.

The so-called Vassar and Yale in¬

plans recognize the need

vestment

for

shifting

of

emphasis

bonds to common stocks, and
versa,

economic

as

conditions

seem

to

and

from
vice

market

dictate.

Re¬

cently, the emphasis has been on
common
stocks.
The impressive

growth
panies,
largely

of
or

the

investment

com¬

mutual funds, which are

committed

to

common

provides liquidity, preser¬

which

vation

of

continuity
evidence

and
If further
needed of the

purchasing
of income.
were

power

recognition that common stocks
afford security under present con¬
ditions, we need only point to the
fact
that the
25%
rise i» the

1949 has
largely to the in¬

lis

Jft

stocks, reveals the public accept¬
ance
of this form of investment

The

election

Edward

of

The
New

York

announced

was

dent.

of
a

Mr.

Corporate
director

Inc.

market since June

emy,

been

confined

vard

of

Merchandising
R.

Macy

H.

graduate of Milton Acad¬
Harvard College and Har¬
of Business Admin¬

School

istration,

ings and dividend records are ex¬

Commander U. S. N.

the same."

prospects

War

and

& Co.

A

vestment-type stocks whose earn¬

are

on

G. Blaine, Presi¬
Straus is Coordinator

Feb. 7 by James

stock

cellent and whose future

Kuhn

directors of
Marine Midland Trust Co.

Straus to the board of

II.

he
He

was

is

a

a

Continued

Lieutenant

R. in World
director and
on

parje 33

Volume

171

Number 4880

THE

COMMERCIAL

FINANCIAL

&

CHRONICLE

from

the Treasury.

Of this auth¬

orization $3,500 billion

Supports and Subsidies

been

1

crops.

"Bramian

Potato Broker, Philadelphia, Pa.

estimated

that

Government's investment

in the next

crop

.Let

words,

investment

it

men,

Secre¬

Government's
crop
surpluses

in

would rise to

duce business.

the

"the

$5.3 billion." Gentle¬

only three months ago

was

ognized

as

fuller

nancial

this

association

nitely

messages

to

the

restoration

express

state than any other force at work
in our nation.
I am further con¬

ousness

vinced

I repeat
here, "It is my belief that
if the present governmental policy

but

it

does

defi¬

views together

my

friends

my

outside

d

a n

in

industry.

our

In

this

ad¬

h

a v e

dress

I

that

subsidies

these

foundations
the

that

greatest country

remain

to

a

prise, with

ernment lead¬

and

eminent

poli¬

of

as

created

ever

If

wish

we

resultant

freedom

we
to the infallible laws

must return

well

America

opportunity for all, then

govr

as

and

country of free enter¬

its

and

cies

made

by the hand of God.

criticized gov¬

ers

supports

destroying the very

are

supply and demand.

Our

cestors chose this rugged

an¬

road, but

certain groups

they

of

the other hand, if we wish to fol¬
low the example of other coun¬
tries
who
tampered with these

citizens.

our

I

have

done

this purposely
J.

Wm.

as

McCormick

reminder

a

to them of the

found

laws, and in
ruin, then

serious consequences to our nation
of

for

a

actions and

past

also

as

warning against the continuance

of these policies.

I have titled

address "America's Twin

my

Hazards

should continue sub¬

everything and supports
It will then be only a

all.

lie

*

lessness.

trate

time, and to illus¬

point, it would be

my

propriate to tell

day's work.

the two fleas.

I started opening my

startled by a commun¬
found therein.
It was a

was

ication I

release from Washington that read
like a fairy tale.
I thought I was
back in my first grade at school

embraces
and

all

the story of
This political story

robbed
help the poor.
I found
told,

are

ernment

lions

my

gov¬

offering for sale mil¬
hundredweight bags of

was

of

life^

put. into simple Ameri¬
language in this story.
The

can

fleas

decided

to

down.

we

of

these great emotions recently

they selected

Hood, who,
the rich to

emotion

have been

listening to the teacher tell of the
Robin

ap¬

you

the

adventures

of

too will

we

sprawled in the dust of hope¬

arrived at my office ready for the
mail—I

On

one.

doing crumbled to

I think at this

One morning two weeks ago, I

true

question of time until

—Supports and Subsidies."
,

the

so

we

sidies for

their

it

The

marry

and settle

ceremony performed,

big, inactive dog".
Life was comfortable.
Food, shel¬
ter and heat were provided from
a

a

central control

from

want

source.

and

fear

Freedom
became

a

The

will

ers

that

thinking
I

moment

a

that

I

stunned to

was

officials

our

and

our

dire

people would allow the economic
plight of the United States to
to such

come
►

precarious level.

a

This story would be funny if it
not

were

tragic.

so

In

fact,

it

funny to my three children at
home, who laughed aloud as I told

Avas

that

them

for

one

their

penny

daddy could buy from their gov¬
a hundred pound bag of

ernment

potatoes provided they be shipped
to foreign shores.
Their laughs
like

were

for,

stab through my heart,

a

they laughed, 1 could

as

millions

other

of

children

But

there

thing's to

the

day that this request for
$6.75 billion emanated from Wash¬

ington for price supports, another
communique was released to the
effect that the U.
would donate to

miners

the

to

for

reason

the

un¬

rest¬

nose,

shouting,

''The

then

that

father, had become
ing

my

life

as

whims of those

as a

in

by

the

In my

power.

charity, however, I do not entirely
blame

day

our

leaders for

of

state

mind.

our

We

present
are

partly at fault—you and .1
encouraged,
by
our
vote,

ones

who

those

in

now

power

to

give

something for nothing, which
are

the

now

their

we

finding out is not withih

first

do.

to

power

must

us

take

Government

from

the

people

all that it is called upon to give.
A Force

Working Toward

sympathy for
these miners who, 'I i'eel, have
poor leadership, but I have equal
sympathy for our produce dealers
in

am

the

farmers

storekeepers

who

trying
dispose of their merchandise in

American

with

is

com¬

by giving

away

that

you are trying
naive enough to
this procedure will

Are you

believe

that

become

not

Competitor

a

you

more

pronounced

warehouses bulge to
nearly the $6 billion point, as pre¬
by the Secretary of Agri¬

dastardly

embittered,
thumb

ride to the next dog.

a

Some

people

had

dog

But the

dog did

hold

planned

that

if

on

the

properly, the
have died.

would

never

important fact is that the
die
and so did the
.

.

In
am

gentlemen, you think I
alarmist, I purposely in¬

case,
an

word,

from

the movement to

in
a

this address, word
communique released

Washington, Tuesday of last

week,'

*An
46th

Fresh
New

of

our

address

Annual
Fruit

York

citizens

who

by Mr. McCormick
Convention

&

City,

of

the

todav
at

the

United

Vegetable
Association,
Feb. 2, 1950.




stop

hoax

farmers

themselves.
If they do
quickly take this step, I fear

not

for

welfare of the

the

nation, for
opinion that if the Amer¬
farmer, and American indus¬

it is my

ican

an
additional $2 billion for the
price support fund, Secretary of
Agriculture Charles F. Brannoii

told the Senate

ion,

and
we

Agriculture Com¬

shall

finally

we

in

find

live,

that

we

are

one

we

to blame but ourselves. Let

request

for

increasing

the
Department of
Agriculture could spend 'to "sup¬
port farm prices to $6,750 billion.

Commodity

Credit

Cor¬

poration, which finances the price

ginning of
1949

the

to

the

first

world -has

half

staggering

£1,130 million.

the

sult

1947

attained

total of

As

a

re¬

flooded

been

with

fight

daily

America

the

and

us

gallantly for the
our youth—

knew in

we

America

from

free

crushing

taxes-,

government handouts, and
interference
the America that
—

once

offered

of

Edward

life, liberty and the
happiness to all her

McVickar Dead

Edward S. J.

since

diverted

be

India

to

the

and

from

Middle

East; the consequent acquisition of
not

sterling balances although
immediate

an

could

quick
asset
ultimately
investment with

nevertheless

to

be

an

future possibilities.

great

During the week the high-light
of the

the

external bond

market

was

highly

favorable
reception
given to the new issue of five year
Province of
Quebec 2Vs's.
The

internals were marked up slightly
sympathy with the advance in
the
corporate-arbitrage
rate- to
in

!%%— 12%

the continued

and

has

of

ficial

con¬

berta

large favorable

a

trade.
stant

ing,

balance

In the absence of this

heavy

outpouring of sterl¬
pound on current trade

the

would

account

in

mand

be

in

non-dollar

de¬

strong

Con¬

areas.

sequently sterling
readily acceptable

stand

now

is met

would

be

dollars

as

the current

gold and dollar
It

is

strength of free funds. The "free"
towards

ress

dollar

Oil

golds.

Among

and

reserves.

Stocks rallied

the

hase-metal's

higher
drilling reports. The market sub¬
sequently
reacted
in
sympathy
with the decline in New York with
the

Western

oils

registering

the

largest setback.

Ottawa.

Harold

there

is little

NYSE Governor

question that

edness to India, Egypt, and others
be

McEvoy Named

As

Wcfys ahd means will be broached
whereby Britain's sterling indebt¬

satisfactorily funded. From
point of view a U. S.

British
U.

a

Al¬

should

exceptionally active
on further favorable

the British election is de¬

as

cided

the

of¬

16

highly interesting to note

ington, London and

can

Feb.

auctions

was

being seriously discussed in Wash¬

or

the

strongly in the earlier sessions led
by the industrials and the junior

in

therefore that the subject of Brit¬
ain's wartime indebtedness is now

soon

and

lease

hasten the process.

Quemont

gap

parity with the

dollar

as

by drawing on the British

S./Canadian

loan

would

Robert P.
the

Boylan, Chairman of

York

New

has

announced

Stock

Exchange,

that

Harold

McEvoy,
Douglas

&

elected

W.

Governor to fill the

partner

a

a

of

McEvoy,

Winslow,
has
been
va¬

provide the most acceptable solu¬

in the Board created by the
resignation of Sydney P. Brad-

tion.

shaw.

It

is

whether

such

doubtful, however,
a
proposal would

The only practical alterna¬

tive would be U. S.

U. S./Can¬

or

cancy

Mr.

McEvoy

elected

was

I

McVicker, member

New York

1903,

died

the age of 75

Stock

his

at

after

a

Exchange
home

at

long illness.

to

Stock

Exchange membership in
March, 1944.
He was Chairman
of

the

Nominating Committee in

1948.

•

adian assumption of the Responsi¬

bility of funding the blocked sterl¬
ing" balances by direct negotiation
with

the

various

creditors.

In

such event there would be less
luctance
moral

to

emphasize

the

strong

that exists for a'drastic

case

With

Rockwell-Gould

ELMIRA,

N.

Y.

William

—

Grant has been added to the sales
staff of Rockwell-Gould Co..

159-167

Lake

Inc.,

Street.

largely

for

the

raised this

never

issue. This vast debt

incurred

was

of

upkeep

the

armed forces that saved the credi¬

tor countries from devastating in¬

CANADIAN BONDS

vasion; instead of unrequited im¬
ports from Britain and handsome

Government

sterling balances, India and Egypt

might
and

war

had

Provincial

only
Japan

on

Municipal

Germany.

Relieved
debt

well have
claims

very

unrequited

of

incubus

this

dubious

Britain

could

Corporation

war-

then

dispense with unrequited exports,
more
goods could be diverted to
hard currency areas, and the dol¬
lar shortage

on

would thus be largely
The debilitating drain

British

exchange

CANADIAN STOCKS

reserves

would be

checked, if net reversed,
sterling" convertibility would
then
be virtually assured.
The
and

resultant restoration of confidence
in the pound would also bring to a

A. E. Ames & Co.

halt the

incorporated

flight of capital from the
United Kingdom.

Two
*

the

From

standpoint

of

this

country and Canada the assump¬
tion of Britain's war debts to In¬

Wall Street

New York 5. N. Y.
WORTH

4-2400

NY

I-I045

Pakistan, Egypt, etc., could
likewise bring by no means in¬

dia,

lets

in

would

the
be

Canadian

benefits.
Far

and

opened
goods.

New

out¬

Middle

East

to

In

U.

S.

If.

re¬

scaling-down of this indebtedness;
Britain, in deference to political

considerable
of the

In the final analysis also

would

dollar made slow but steady prog¬

on

overcome.

placidly for that misfor¬

to overtake us—rather let

tune

Canada.

order

sterling that has become a
the market.
Apart from
this country and Canada, Britain

drug

us

children.

amount

the United Kingdom from the be¬
of

restrictions

opportune aid of the Marshall Plan

the

debts, and capital movements from

fash¬

Secretary appeared before

Truman's

"The

any

crushed in the
will have no

abyss of despair,

pursuit

mittee today.

subsidies

racing to the brink of destruction,
propelled by our own greed. When

not wait

follows:

as

"The price support program for
19-50 crops may collapse in 'chaos'
if Congress does not appropriate

the

re¬

try keep seeking government sup¬

corporate
for

November, and I

perpetrated
people must start with the

our

Commonwealth

•

said last

.

Will Price Support Collapse

in

debts incurred

1939, the repayment of such

expediency, has
I

..

those

as

government

now,

Others, deeply
died as they tried to

sterling

on

Congressional
support to permit its implementa¬

what is happen¬

government

this

spot.

since

tion.

Your

sell.

as

see

peat

the

on

of

meet with sufficient

Government

peting

enterprise

way.

Don't you

ing?

are

free

so-called

our

died

the committee to defend President

convinced that

section—the

that

culture?

''The

Socialism

Therefore, I

striking coal
Pennsylvania,

have

Many of the panic-stricken hords,

their

I,

robot liv¬

dictated

I

support.

ports
realized

I

the

free potatoes acquired under price

disillusioned and totally incapaci¬
tated
to
seek a new livelihood,

fleas.

lessness and anxiety of youth.

Government

dicted

old

the

cold

economic system has let us down."

S.

Western

of

commodities

panic,

release

shape of interest

confidence

would raise the pos¬
the lifting of Brit¬

imports from this country and

prove

and ill-con¬

over-generous

sidered

same

to

They raced from the tip of the tail

converti¬

order to offset to large degree the

the

Consternation,
nay
reigned among the fleas.

sterling

U. S. Canadian deficit. As matters

Unable

died.

ing to

ment, and, for the first time, I

when

of

tne

and want to

come,

you

and

and

derstood

time

weary.

and

recovery

that Henry Wal¬
lace, in his pig-killing heyday,
was only a piker compared to the
present day Potomac planners. On
on

longer to support his hungry and
non-productive citizenry, the old
dog wandered into the wilderness

ileas

scorn the policies, actions
procedures of their govern¬

a

grew

see

laugh¬

came

dog

not my

or

sound.

was

impress

They multiplied, amazingly.

old

need

you

here again warning you of

am

life.

For

all

in Maine whether

pers

pennies.
think

you

of my statement
ago,

do is study Secretary Brannan's
predictions and requests, and then
ask any of the hundreds of ship¬

to

abundant

Gentlemen, if

doubt

any

of three months

He

this

will be the United States

one

have

briar

enjoy

down to one—and

narrow

Government."

bag having cost
the people, in taxes via price
supports,
two hundred
and ten

to

I said at that time, and

continues, there will be, as far as
the produce industry is concerned,
only farmers and politicians left
doing business.
If the price sup¬
ports continue, with the resulting
heavy crops, the farmers' custom¬

us,

learned

once

bility.

hundredweight

plunged into streams or
patches.
The fleas quickly

of

of their demands for price

support.

and

never

farmers

economic

nation, warning them of the seri¬

reality. The dog seldom scratched.

potatoes for one penny, the same

the

at

solution of

ish
on

blocked

ish

of

would

for the

fi¬

stumbling-block to Brit¬

our

views

this

the main

Vahlsing and I sent

the

of

dollar-gap

of

renewal

sterling
sibility of

Britain

that Fred

express

the British

of

the

the sterling area's dollar problem
which is generally considered as

of thousands of

necessarily

removal

way

accepting supports or subsidies
from our government, are doing
more
to bring about, the .welfare

are

rec¬

freer state of world

a

millstone

the

pave

being

is

the principal barrier
convertibility of cur¬

The

with the views

am

closing
in

trade.

repeat here

me

tary's

the

sterling indebtedness

rencies and

Declares if farm price supports

degree

and

to

port program."

one

about to say does not

increasing

an

billion to maintain the price sup¬

continues there
big customer for farm products—the U. S.
Government, and only farmers and politicians will be in pro¬

"What I

To

problem of Britain's huge blocked

if the 1950 crop yields were
unusually high, it would take $6.3

any

will be but

He added

that

broker asserts those who today are
accepting Federal supports
or subsidies are
doing more to bring about Socialism than
other force.

18 months.

By WILLIAM J. McKAY

the

in

surpluses would rise to $5.3 billion

large scale "dumping" by government of potatoes,
taxpayers $2.10 per hundred weight, leading potato

to

Canadian Securities

already has

expended in the purchase of

surplus

By WILLIAM J. McCORMICK*

which cost

15

support operations, now has auth¬
ority to borrow only $4,750 billion

America's Twin Hazards—

Referring

(615)

and

addition the

Filly roiijjroMs Slreet
IIokIoii O.

n

THE

(616)

Continued from

COMMERCIAL

first page

13,000,000 in the previous decade.
The birth rate dropped to a low
in 1933 of 16.6 for 1,000, a rate
than

of

that

France.

Most population experts predicted

population

stationary

.a

this

in

country by 1950 or 1960.
Begin¬
ning in 1939, the birth rate took a
sharp jump upward, births in¬
creased from a low of 2,074,000 in
1932 to a high of 3,699,000 in 1947,
deaths remained nearly the same,
increase exclusive

natural

the

of

immigration, rose
annum to ap¬
proximately 2,300,000 per annum
and the census to be taken April 1
will probably show a population
of 151,000,000 or nearly 20,000,001
,cver
that of ten years ago. the
largest absolute increase the coun¬
try has ever had.
the

by

gain

from

300,000

The

in

per

effects

of

large

a

increase

In over¬
crowded countries like India and
population

vary.

China, in most of Western Europe
where the food supply is inade¬

quate, such an increase is detri¬

occurred.
It took about
ten years before the politicians of
the world fully realized what a
change

an

is

great

a

stimulant

to

the

same

Precisely what has taken place in
Europe has occurred in this coun¬
try.
For 50 years, industry has

too

The

The

in

masses

Deflation

the elimination of the party

means

in

country

every

An increase

power.

in

the

supply acts to postpone or
stop deflation, recessions and de¬
pressions.
The answer is fairly
money

that

obvious

will

always

supply

now

the party in power
increase the money
that there is no gold

standard in existence to act
automatic

bar

to

realize

an

of you
profound

many

what

a

fects

has

it

the

effects

and of

had

on

of the

the

our

ef¬

money

management.
I

the

confidence

of

moving—first to the Middle
World

War

II

Coast.

it

has

World

been

War

results show in the gen¬
eral obsolescence of British indus¬
the existence of

poration

I

predict this migration of in¬
dustry will continue and that it is

look:

do

for

occurrence

believe

that

their

rate

of

The

growth will be slower than that of
the rest of the country.

There

They will

be

accumulated

important

an

economic

life

wealth

elemen

in

to

Government

trying

keep

to

its

controls

the

autonomy

branches,

and

control

whether

they
stores; insurance

to

be

successful

200,000,000 within 50 years, the
old Malthusian doctrine might be¬

gin to work, and we would feel
the pressure of population oh our
Our standard of living

resources.

might suffer.

particularly in
and

within

the

over

Cali¬

nation.

migration in history with
increase of nearly 4,000,000

mass

an

people in ten years.
It has now
passed Pennsylvania, not only in
population, but in wealth.
Texas
3had

absolute

greater

a

than
will

come,

next

30

growth

The time

New York State.

probably within the
when both states

years,

will pass New York, in

economic

and

both pop¬

The balance

ulation and wealth.
©f

political

cific,

couple

Middle

Gulf

States.

and

Western

Project an increase of 20,000,000
people, with the highest standard

our

I

believe

wisely

whether

over-production

after the
To fill the wants of these

additional souls will tax the pro¬
facilitie

the

of

s

United

States.

If population growth con¬
tinues, it will solve the problem
of farm surpluses within 15 years.
The
additional
public
require¬
ments—such as schools, hospitals,
highways, transportation facilities
'—-will require all the capital we

accumulate

moderately

or

it will act as
is

a

a

in

the

next

ten

years.

In the light
of today's condi¬
tions, how foolish seem the gloomy
utterances of the early New Deal

who

this
no

was

graphic

that

finished country, with

a

more

proclaimed

new

or

frontiers

economic

—

geo¬

—

no

more

opportunities for advancement or
investment. The truth is that this
is still

a

young country

with great

opportunities lying ahead.

or

The second great basic force af¬

is

government

control of banking, credit and the
money

supply,

not

alone

whether

illustration

attitude

in

this

.country but in every country.
When thd world went off gold
in the early 30 s, a great economic




of

of

it

use

what

most

only

is

the

large

as

an

usual

national

corporations.

important forces
encing

our

that

are

influ¬

I doubt whether businessmen, as
whole, fully realize the powerful
effect of this new factor, but I
advise you to consider this force
always in your business calcula¬

tions and plans.

Continuing Decentralization of
Industry

some

of

There

them

toward the

move

raw

center of distribution.

With

the

material

and

the

This is

oc¬

|

men

present in this

the

seen

tremendous

changes in the life of this nation
wrought by the two World Wars.
Most of you have ssen the change
in the
position of business and
businessmen effected by 16 years
of

the

so-called

New

Deal.

The

honor of

having directed the poli¬
begin¬ cies and management of a great
ning of the 19th century, Western American corporation for 22 years.
Europe became the workshop of Sears is a national business, with
the world.
Raw materials were stores in
every state of the Union
brought from all corners of the but one. It reaches every class of
world, processed in the factories customer in every part of this
of Western Europe and then re¬
country, it deals in every class of
exported
at
a
very
handsome merchandise, except food, and a?
dustrial

profit.

revolution

Manufacturing knowledge

confined

was

the

at

first

to

England,

later to the United States and Ger¬

and the other
Western Europe.

nations

of

With the beginning of this cen¬

tury,
was

manufacturing
extended

to

knowledge

other

countries.

Machine tools and modern equip¬
ment were introduced throughout
the world. India, Japan and China
built up an extensive textile in¬

dustry, followed by South Amer¬
ica.

Then

lowed—

a

other

industries

fol¬

movement accelerated

Every undeveloped

agricultural

economy

with

such buys from thousands of man¬

ufacturers

in

some

industrial economy and is trying
to
manufacture or
process
the

in

line all over
position, I
have had a wonderful opportunity
of viewing the whole industrial
panorama and have had the op¬
this

country.

every

In

my

portunity of formulating a busi¬
ness
philosophy which I believe
is applicable to our present con¬
ditions.

established

and
prosperous,
he
try, to do his utmost for his
employees without their having to
exert pressure on him to get their
proper rights.
He should regard
as one of his objectives the con¬

stant

raising

Any business must make profits,
it ceases to exist, so we will
presuppose that the management
of

every

exercised

successful business has
proper
business judg-

cessful

But the head of every suc¬
business today should try

to be

business statesman and not

a

confine his viewpoint solely to the

making of profits, necessary and
essential as they are.
In this conrfood, clothing nection, if the masses of this coun¬
and shelter for its population.
try really understood the func¬
A close parallel to this occurred tioning of the free
enterprise sysin this country. New England was tern, they would regaird profits as
basic

elements

of

of

the

standard

living of his employees.
ployees have confidence
and

of

If

em¬

in

the

of

justice of
feel that he

sense

their

Germany
fraction

mere

of

resources.

our

.God has given us the most won¬

world. While

derful country in the
I

uncertainties and prob¬

the

see

lie ahead of us, I

that

lems

have

abiding faith in the future of
this country. I cannot understand
how any man of intelligence can
an

fail

to

have

have this

our

faith.

We may

and downs, we can

ups

uncertain times ahead
if we renew our faitjh,
believe in God, courageously tjy
to build up this great country, try
to make it a better country for all
many

of us, but

the people, employers and em¬
ployed, we will see it go to further
heights, and we will be rewarded
materially and spiritually.

Fred D. Blake Forms

;

employer, and
truly interested in their wel¬
fare, that his feeling for them
springs from his heart as well as

Own Firm in Los Ang.
(Special to The Financial Chronicle)

LOS ANGELES, CAL.—Fred D.
Blake has

Street, to engage in the securities
Mr. Blake was formerly

of

quality and quantity
performed and of the

work

of

supervision

Stern, Frank & Meyer.

for

the

amount

the municipal depart¬

manager of

Ivan

in

D. Blake

business.

ment

head, this employee will re¬
spond, and there is a vast differ¬

formed Fred

& Co. with offices at 215 West 6th

is

Hay Joins Staff
Of Bradley Higbie

(Special to The Financial Chronicle)

required

between such employees and those
who feel just the opposite to their

has become asociated with Brad¬

employer.

ley Higbie & Co., Guardian Build¬

Then

which

the

comes
are

community in

located

the

factories,
stores, offices or headquarters of a
business.
Due to the changes in

I

believe it

the

part

of

wisdom lor every prosperous cor¬

DETROIT, MICH.—Ivan C. Hay

ing, members of the Detroit Stock

Mr.

Exchange.

in

Hay

was

with

Andrew C.

and

Wm.

the past

Reid & Co.

C. Roney &

Co.

Nehring & Ricketts Add
(Special

to

The

Financial

Chronicle)

ILL. — Richard
F.
Laycock has been added to the
staff
of
Nehring
&
Ricketts,
ELGIN,

4

South Grove Avenue.

poration to respond to the needs
of

the

community, willingly and

generously.
Last
I

can

comes

say

the stockholder. All

is that if the other three

Alvin A.

Dykes With
du Pont, Homsey Go.

parties above named

are properly
of, the stockholder will
benefit in the long pull.
It was my privilege during the
war to take five different foreign
trips by air for General Arnold,
two of them complete circuits of

taken

care

the globe, altogether 200,000 miles
by air.
J visited each one of the
five
of

continents; and every theatre

war.

On my
was

return from each trip I

filled

dence

or

ment.

country

trustee for his

plete lack of political power by
our tax laws, it is more and more
businessmen, the real foundations difficult for the
wealthy individ¬
of our economy still rest on them
ual to support the charities and
and if they live up to what they
the
welfare
enterrpises
of
the
should do in a free, competitive
community.
A portion of that
system, the country cannot get burden
must shift to the corpora¬
along without them.
tion
I have had the privilege and the

beginning of the in¬

a

in the world ex¬

understood mass
production, and Germany had a
cept

should

and

the world.

over

have

fact remains that despite the com¬

The
third
great
basic
force
operating in business is the con¬
tinuing decentralization of indus¬
try.
Manufacturing will continue
to

Most of the
room

cour¬

employees as well as his stock¬
holder:^
II the business is weII

ence

a

as

The truth is that

to theirs.

other nation

sec

values,

The employee comes next. Every
head of a business should con¬
sider himself

su¬

workmen
know-how,

machines,

our

how

saw

and management, our
were

his

economic life.

are
other forces,
quite important.

Nation Needs Good Business Men

in the future.

first, for

a
customer, and the
eventually decays and

fairness

question that will be answered

the world is trying to balance an

Money Potent Forces

business

of

by World Wars I and II.

Control of Bankings Credit and

fecting

tool

habit forming drug,

many

exponents,

aid from

this

curring all

can

as

management will be used

money

try. It nullifies the gloomy proph¬
ecies of those who predicted a

ductive

or

I

I have mentioned the three most

supply, the food supply

■war.

its business.

years,

pf living the world has ever seen,
into the economic life of the coun¬

great

strong

is apt to come

of

withdraw

soon as we

power

will pass from the East to the Pa¬
Coast

a

every state
is absurd for it

It

of

as

business

large business in
Union.

the

interests

comes

and

own

our

factories

foreign

compared

perior

no

support

any

the

the

I

with

em¬

dies.

great

States.

as

the United

that country.

fornia has experienced the great¬
est

country

a

as

a

a

of

customer

continue

compan¬

There is

30,000 white collar
emplojmes in this city, and not to
decentralize every function into
the regions from where it draws

number of years,

In Britain the end

Tjhis increase is unevenly dis¬
tributed

rich

as

what not.

or

to

the
and

teous and fair treatment, is satis¬
fied in every respect, he will not

its

■Should reach

ies

and

unless he gets good

fac¬

to concentrate

over a

parties

ever

can

25,000,000 people.

over

productivity of American in¬
dustry really won World War II.

I have named them in what

The

highly centralized,
giving a full measure

of

of the

why
(barring war) they should not be

bowl.

normal

The

Any Business

regard as the order of their im¬
portance.

in

ing

stave

em¬

I

management
instead

the

balance

each.

and

sions and I

to

must

management
of every business should preserve

this nation.

of

off incipient recessions or depres¬
can see no reason

a cor¬

of

customer,
community

stockholder

the

of

management

to

four

are

ployee,

and

ing, it will prove to be a continu¬
ing prop to the economy. But I
may
add parenthetically, if we

our

welfare

business—the

national insurance institution, do¬

over

Parties

doubt whether it

esential to

individual

the

continue with their large popula¬

tories,

population of

after

are

business,

a

an

this

present
Administration
in
Washington, but I am firmly con¬

a

or

ployes and the welfare of the com¬
country and its people.
I do not munity in which his busines is
A corporation must make
believe that New England and the located.
Middle Atlantic States will de¬ profits, but it must also be a good
cline in population and wealth. 1 employer and a good citizen.

healthy

a

vinced that they will use their tool
money

While profits

try.

has accelerated this movement.

continued, even at a lower rate
in the decade' we are just enter¬

,economic life of the nation and if

dust

the

has

and the

of

in

not

am

third

since

>

can

so-called

our

West, then to the Southwest, and

change this makes in the economy.
With this decentralization of in¬
I refer all of you to a brilliant
dustry have come new problems of
and instructive article, published
control and management.
Busi¬
in The Empire Trust Co. bulletin
ness, particularly that represented
of Jan. 1, 1950, by Joseph Stagg
by large corporations, is prone to
Lawrence entitled, "The Wave of
make
the
same
administrative
the Future.''
It explains far bet¬
mistakes as our
I

as

other

into

go

tion

increase in

any

the money supply.
1 doubt whether
here

as

part of profits must not

a

rainfall, another third, has ten
rainfall, about the

reinvested

II

will not take deflation.

large

On the other

dividends, but must be rainfall of the Temperate Zone
in the building up of but very little good soil.
That
their business and their country. country now has
7,000,000 to 8,English capital made this mistake 000,000 people; the best authorities

been

to

increase in popula¬

such

to 20 inches of

hand, businessmen must learn that

the Pacific

ter, than

ogy,
tion

of

reinvested capital.

ize it.

Keynes thinking

country like ours with ample
area, ample food supplies, ample
capital and an advanced technol¬

standard of living must come from

moving to the Southwest and

in

;a

plied the agricultural South, West
and Pacific Coast throughout the
greater part of the 19th century.

powerful tool was placed in their
hands, but now they all fully real¬

mental rather than beneficial. But

■

Thursday, February 9, 1950

first manufacturer, and her desirable and not as immoral. The United
States, approximately 3,industries, with those of the Mid* larger part of the tools and equip¬ 000,000 square miles. One-third of
die Atlantic States, largely supr ment needed to
provide a better that area has less than 10 inches

Bar to Recessions

lower

CHRONICLE

bur

Money Control—

even

& 'FINANCIAL

in

with

my

where in

renewed

own

the world

thing like

confi¬

country.

No¬

is there any¬

Mississippi Valley
and Great Lakes region, with over
1,000*000 square miles of good soil,
Alvin A. Dykes
temperate climate and ample rain¬
fall, with ample mineral resources,
BOSTON, MASS. — Alvin A.
inhabited by an intelligent people,
with standards of living and edu¬ Dykes, formerly Manager of the
cation far above that of any other trading department for Whitney
people in the world. Until I made & Elwell, is now associated with
these trips, I never realized how
the trading department of du Pont,
much

desert

of

or

our

the

earth's

Australia has
same

surface

was

Homsey

arid land.

area

as

almost,exactly the* members
the

continental

&

Co.,

of

Boston Stock

the

31

Milk

New

Street,

York

Exchanges.

and

Volume

171

Number 4880

THE

COMMERCIAL

our

Government Lending

of

President, Louisville

Trust

thinking to the
risks.

not

Company,

only

which

Louisville, Ky.

but

Mid-western

banker

of

expansion

scores

loans

direct

guaranties by government agencies. Says it is another foun¬
dation stone in building a socialist state and asserts much

limits

of

cludes

raised

definition

of

one-third

Expansion

simple

and

guaranteed

banking busi¬

panded.

ness/' he said,

now

of

well
of

cisions."
We

can,

We

to

lion.

de¬

making

be

types

course, de¬

clude

and

bank¬

loan

total

foreign

gov¬

industry, transporta¬

that

challenge

the

United

nation's

the world's—

and

—

the

they

half
opens,

leave to
philosophers to de¬

To

me,

it

as

stone

individual

an

to

appears

in

be

another

the

confronted
For

with

to

seems

be

army,"

administration

postponing

that

we

decision which tran¬

a

principle.

It

government-guaranteed
I

will

be

concerns

loans.

I

not

overstating the
that our decision

say

vital

whether
we

am

when I

case

in

determining
from now

not 20 years

or

still

the

risk-takers, and
bankers, for the Ameri¬
people and their economy.

are

.

was

during the depression
principle of government

loans

and

for business and

developed. It started

as an

"emer¬

crisis.

But the develop¬
political habit of visu¬
alizing rone national emergency
after another, magnified by the
extraordinary demands of World
War II and' capped with the in¬
evitable period of postwar read¬
ment of the

justment,

gave

well

loan

tremendous

im¬

loan

and

loan

guaranty

start of the

depression,

then-existing,- government-spon¬
credit agencies was only a

sored

few hundred

million

dollars. To¬

day, the total of direct loans and

guaranteed

*

of

loans

nearly

a

of government

exceeds

$20

credit agen¬
billion.
To be

exact, the total of these loans and
guaranties at the start of last year,
latest

data

for

which

com¬

plete figures are now available,
$20,520,000,000, an increase df

was

address

•An

Second

the

Federal

Reserve

to

take

to $500,000,000 of 90% partici¬
pations or guaranties of loans to
up

Still

Corp. with
capacity of $5

another

bill

would

total

create

business loan insurance

a

cor¬

was

a

its

and

lending

ca¬

limited to $iy2 billion,

was

allowance

for

additional

an

$1,100,000,000 of its loans in liqui¬
dation,

Those
to

of

who

us

were

testify before the sub¬

committee on behalf of banking
pointed out that the I RFC during
the depression and the war had

small

distinct

credit

be

standby,
We

for

and

the

continued

emergency

RFC

only

as

a

organization.

demonstrated the extent to

which the banks
of the credit
ness

usefulness,
providing
large and

were

business,

should

taking

were

care

needs of small busi¬

by pointing out that 88% of

bank

a

then

loans

for

were

less

than

outstanding

$25,000,

fourth of all loans

for less than

"control

the

a

rate

premium of l1/2%, sim¬

ilar to FHA insurance of mortgage
loans.
This bill, sponsored by the

and
were

Small Business
tee

of

the

Advisory Commit¬

Department

of

Com¬

would
also
establish
a
"catch-all," paper-buying agency

merce,

showed

they

other

pating

another

hauling

of

the

legislative
RFC

to

over¬

Thisand

helped
bring
about the best revamping of the

RFC's functions that had been

had

again to

would

have

to

go

before

oppose a

doubled

Con¬

bill which
the

RFC's

loans

to

industries and to
revitalize its lending services for

lending capacity, increasing it to
a
maximum
of
$5 billion, and
granting it power to extend the

small

business.

maturities of its loans

Economic

curb

its

large

The

Message

recommended

President's

to

Congress

liberal

more

RFC

years.

least

beyond ten

Fortunately, we were at
temporarily
successful
in

of

National

This is under

no

offer

circumstances
to

reduced

price

of

declines.

decreased

billion,

borrowers.
of

are

The

guaranteed

or as

and

stressed

that

We

would

years

tend to provide per¬

manent government

for

keep

equity capital
borrowers, and would help
submarginal producers in

business
in
competition
with
strong and self-reliant producers.
It would make it possible for the
owners
of these firms to divert
from the business their own
cap¬

ital

investment,

ment funds

as

leaving govern¬
the sole capital.

In

1948, the Senate Banking and
Currency subcommittee declared
in its report that the RFC should
not be used as a source of perma¬
nent equity capital for

business,

whether large or small.

Yet when

examining the RFC's lending
ord
in
1949,
members
of

loans

are

that

been
loans

much
to

Lustron, and

Largely because of these loans,
one

very

Committee
sponsor

RFC's

able
has

another

lending

member

of

the

indicated he

will

inquiry into the
activities, to de¬

termine why so large a portion of
its loans are of this nature, and to

stimulate its loans to
ness.

The

acutely

small

Committee

aware

which

said

to

serve

useful,

socially

worthwhile purposes, others have
turned out to be a permanent in¬

of

its

loans

tended

to

problems.

purportedly

ease

are

vestment

of

The distinction

Continued

on

to

be

page

27

by Mr. Muir before the
Credit Conference spon¬

by the American Bankers Associa¬

tion, Chicago, 111., Jan. 25,

1950.




or as an

Common Stock

(Par Value $5 per share)

public

capital
in
projects of doubtful value today.
For

that

example,

loans

ment's

no one

made

Price

govern¬

Waterways Corp.
1920's, and still out¬

in the early

standing and unpaid,
questionable nature. I
will doubt

a

will doubt

the

by

Inland

that

a

of

are

think

government agency to

a

home town

a

year or so

not of "social"

a

Copies of the Prospectus

fur¬

.

takes

well

as

may

be obtained from the undersigned

only in
legally offer these securities in
compliance with the securities laws of the respective States.

such States

my

as

the

undersigned

may

ago was

value.

Today the
firm is bankrupt, and the tax¬
payers are
paying for its mis¬
as

ment agency's

$38 per share

no

loan made

for the

govern¬

mistake in making

Smith, Barney & Co.

Blyth & Co., Inc.

The First Boston Corporation

Goldman, Sachs & Co.

the loan to the firm.
But

of

nature,

a

and

vastly more subtle
with even greater,

far reaching consequences
than the country's economic losses
more

Harriman

Ripley & Co.

Incorporated

ment

While I do not for

a

minimize the danger of di¬

rect

government

lieve

we

as

lending,

I

be¬

bankers should direct

Merrill Lynch, Pierce, Fenner & Beane

Stone & Webster Securities

mo¬

February 8,1950

White, Weld & Co.

*

Glore, Forgan & Co.

through direct government loans,
is the debilitating influence on
banking of government loan guar¬

Kidder, Peabody & Co.

Corporation

in¬

local employment

gdSEARLE&C0

!,*'

be

RFC is no longer an
emergency
lending agency, even though some

to

never

busi¬

will

of the fact that the

by private lenders, but I do
insist that many of them are unloans

as

Kaiser-Frazer.

made

economic

in

such

220,000 Shares

be

the

interested

borrowers

Waltham Watch Co.,

and

cannot

rec¬

Banking and Currency Committee

direct

the point that at least some
of the
direct government

gue

a

business,

a

balance

loans

be¬

inventories,

extending the maturity limits of
RFC loans to business beyond ten

be construed as an offering of these securities
for sale,
solicitation of an offer to buy, any of such securities.
The offer is made only by means
of the Prospectus.

buy,

busi¬

business; that loans

volume

lower

ac¬

complished in its 16-year history.
Yet, less than six months ago,

banking

antici¬

particularly

a

testimony

gress

also

are

were

different disguise.

the

We

-

needs

banks had
of

cause

RFC

We

credit

ment loans to

have

RFC.

the

by the

participation

the

by

a

year

that the temporary business
recession last year by no
means
justified an increase in govern¬

against deferred

for small business loans similar to

FNMA.

of

care

We testified

under

a

ness;

$1,000.

loans

that

Congress had limited the
lending powers of the RFC.
We
again showed Congress that the
banks are willing and able to
take

insurance

anties.

sored

the

and

niture-manufacturing firm in

1

the total lending power of the few

the

Committee,

invited

powers.

out

provided by gov¬
ernment agencies.
I will not ar¬

by

score

Lenin,

$5

over

consists

petus and growth to the govern¬
functions.

cies

ize

break down the total

we

loans to

ment's

the

Con¬

gress, we expect legislation to be
introduced which would author¬

guaranties, we learn some in¬
teresting facts.
Of the total out¬
standing,
about
one-fourth,
or

one

At

Dur¬

of

expire.

RFC

able subcommittee of the
Senate
Banking
and
Currency

loan guaranties
should have been made in the first
industry first was
place. Although some may be

gency" idea, intended to be tempo¬
rary, and designed
to help tide
the nation safely through an eco¬
nomic

sight.

loan

loans

the

said

When

can

It

in

to

very

adequate

session

current

figures of government loans and

part

direct

liquidation, and its
allowed

thoroughly examined in 1948 by

with

pointed

Extent of Government Lending

hence the

that

the end

the

transferred to

were

for
was

ten-billion-dollar

pacity

We

element of statism.

have been

scends the practice of banking and
enters the realm of fundamental

believe

The

reenlarge the RFC's

Great

try, and agriculture,

banking

in

power

granting of
credit
and
you
control almost
That is a cardinal
everything."

momentous.

twenty years, ever
Depression en¬
gulfed American business, indus¬
the

banking

hands of the government.
"If you
have seized
the police and the

nearly

since

of

the

we

decision

a

to

me

socialism is the centraliza¬

are

of

Nor is

ing

be

at

development, I

political

tion

banking business

second

RFC

but that the banks

Expected

might

vicious type of government-guar¬
anteed loan to private industry,

foundation

and the ulti¬

Century

Lending

that
some

that

citizen,

itself.
As

Government

of

agencies

demonstrated
More

believed

we

activities

loans made by commercial banks,

cut to

Twentieth

when

after

poration to insure small business

the

mate fate of the

istration.

the

testifying against this proposal to

small

healthy

communities

course

Admin¬

to

biggest banker and guarantor of
credit. Whether or not this is a

and influence the economic life of

determine the

Electrification

loans

brief period

a

Corp.'s assets
charter

new

will

no

building
of a socialist state.
As I recall,
it was Karl Marx's disciple Lenin
who pointed out that one short¬

more,

Rural

govern¬

curtailed. The Smaller War Plants

the

that loan is good or
bad, or what
the chances of its eventual
repay¬
ment
are.
Our decisions affect

is

the

was

government

billion.

cide.

What

of

for

lending

lending

or

nation.

increase

another

17

earlier

war

almost

determining whether this loah

our

to

$1,275,000,000 in the

an

the

a

that

statement

the

of

includes

There

Development

and farmers.

owners

think

of

welfare

RFC

It also implied the

still

agency

all

job

the

the

of

business.

Government, through its
various lending agencies, is today

decision.

daily

addi¬

an

$225,000,000 in the lending capacity of

the

on

States

in banking make

our

to

of

for

ment

small business. We expect another
bill creating a Veterans' Economic

I

fundamental

is

billion

loans

guaranties for domestic

my

$1

credit

together
were
billion.
This in¬

authorization

creation

the

total

It includes only loans

tion, home

that

we

the

outstanding

business and

Banking

beyond

of

loans

any

ernments.

day,
half
a
century later,
has been able to improve

far

ex¬

mercial

sions; but to¬

The decisions

again

books of the nation's 14,000 com¬
banks.
It does not in¬

of

making the
right deci¬

on

It

their

government

taken

amount equal to

an

half

ing consists of

much

loans

estimate

This is

cessful

go

all

increase of

approximately $23 bil¬

over

all

velop a corol¬
lary that suc¬

very

Government

During 1949, government loans
and

a

loan-insuring capacity of the FHA.

Banking Operations

"The

"consists

of

with

an
increase of $2 billion in the
loan guaranty powers of the Pub¬
lic Housing Authority. It includes
an

was

terse.

definition.

year's

,

banking

definition

one

one

dealing

acquiring mortgage paper
through the FNMA.
It includes

time.

that has stood the test of time. His

i

in

also

(617)

lending terms.

decision;

a

in

use

Federal lending agencies.

a

make

about $5

tional

1

down

dealing
principle about
are

During the last session of Con¬
gress, the loan and loan guaranty

loans, and contends acceptance by banks of
government guaranties in making loans divests banking of
its risk-taking functions. Advocates
opposition to expanding

about

consequences

we

a

must

are

small business

no

with

agencies

Fifty years ago, one of the lead¬
ing bankers in this country hand¬

CHRONICLE

real, growing set of facts.

government lending is unsound and of no social value. Says
American banks have demonstrated their facilities to handle

ed

Here

we

we

very

and

FINANCIAL

government guaranty of bank¬

ing

By EARL R. MUIR*

&

»

18

(618)

COMMERCIAL

THE

in

Though maintaining business and credit outlook is

affords
the

Midwest banker finds fiscal policy
prepared to withstand adjustments

credit outlook at the

it

would

this

seem

of the

the
present time

appraise

to

well

to

rarily
with

approach

the

tiie

hand

one

and

.from
.the

was

lender

both

on

the other. Ac¬

shall

as

exists

be

the

first,

banking

ness

or¬

ures

that
to

The
Wm. A. McDonnell

credit

standpoint

Federal

the

action

to

Reserve
ease

the

requirements

managed
United

joint action

by

Federal

Reserve
States

The

ment.

securities

and

increase

the

Treasury

the

between

Depart¬

special

credit

needs of the Federal Government

time, and the efforts

Federal
its

meet

Reserve

Board

responsibilities

maintenance of

a

in

to

the

sound monetary

and credit condition for the entire

The

economy.

ment

the

as

rower

anxious

Govern¬

single

bor¬

the need to

and with

tinually
cheap

Federal

con¬

largest

renew its obligations,
to
have available to

credit.

abundant

and

is
it

If,

however, credit is made cheap and

abundapt for the Federal Govern¬
ment, it necessarily tends to be¬

cheap

come

for

abundant

and

Inventory Problem Adjusted

the

influences the general credit situ¬
ation of the country, is a compro¬

of the

also

other

borrowers, and if such
an
easy credit
situation is con¬
tinued too long, it can easily lead
to inflationary excesses
of- the
most dangerous character.
Credit Developments Last Year

of

and the

will illus¬
the problems faced
year

by those charged with the proper
handling of our fiscal and credit
monetary problems.
In the
latter half of 1948, inflation and

and
its

dangers became

cern

a

major

con¬

of governmental authorities.

Late in that year restrictive

policies, such
requirements,

loomed

as

a

trouble¬

the

of

most

as

increased

credit

soft

goods lines
situation.
At the

latter

months

of

1949.

The

im¬

provement in the general business
situation which had developed by

reserve

taken and their influence became

as

a

below that of
whole

was

1948, the year

one

of prosperity

recession.

business

level

of

1948

when

an

Bankers

Association, Jan.

a

with

level

fair

a

degree of price

tendency

form of

on

of course, to curb the

law

unbridled'

credit.

extension

The ink

of

bank

barely dry on
legislative

was

such statements and the

proposed

programs

ing, when

we

period

justment
scribed

the

prices began to decline

half

unemployment

of

1949.

increased,

that the lending policies of the

banks

did

either the wartime

credit

good, and

result it would

as a

ap¬

pear

that for the first half of this

year

at least, business should

tinue

con¬

at

further

period of
the

a

readjustment

when

shortages and backlogs still exist¬
ing in some of the heavy indus¬
finally

are

will

in

occur

during

resulted

in

bank

deposits.
the

of

causes

The

grew

ou\

by the heavy
of commod¬

demand for all types
ities

during the

It must al¬

war.

be borne in mind that

ways

mercial

banks

their

secondary

are

servient

and

to

the

com¬

credit

and

national

policy established

the next year or so, or is

which

remaining

inflation

scarcities created

of

deficit

war,

threefold, in¬

a

it

received

from

war-cre¬

ated

sub¬
credit

by the Federal

bank

term

credit,

that it is based

to

inflated price

an

on

extent

the

position

vulnerable

tary

made

is

the

of

because

aimed

measures

more

mone¬

making

at

possible.

high of $217 billion was reached
It is doubt¬
ful,'however, if even the most ar¬
dent managed-economy enthusiast
at the end of the year.

would be able to prove any

causal

Fiscal Policy Disturbing

;

,■

The

conditions

money

ulate

demand

created, stim¬

so

for

Cheap

credit

but

pre¬

from functioning the normal
warning signs of danger in the
£01711
of
higher
interest
rates.
vent

Thus, the whole
into

false

a

the

nomic

law

force

of

take quick

itself

and drastic

meas¬

ures, as they did when they dra¬
matically pulled the plug on the

support, of- government
on

Dec.

been

of

24/1947. '' *

securities

«

a

*

of current demand.

tively ' mild,
American

danger

sudden

of

surprises

arbitrary

and

as

being
in

drastic

to

shore

not to risk

faced
the

one

to

out

the

was

business

be

rela¬

fact, that

provided

was

with ample credit at low rates
that

prices

so

not

endangered
by distress merchandise, as had
often occurred in the past.
The
were

service 'that

the

banking

system
is amply

this regard

in

rendered

demonstrated by the fact
Dec.

tween

1948

1,

that be¬
June 30,

and

1949

(the j period when most'of
the readjustment took place) the
total

all

of

loans

commercial
about
lion

banks

insured

all

of

declined

only

34/2%, that-is from $42 bil¬

to

with

way

of

change

in

the

outcry is that there

is not ample credit for small busi¬

for

small

business

has

periodically,

election

an

heard

often

Political

before.

recurring
as

have

We

ness.*
one

year

and it always takes

small

a

way

of

especially

approaches,

the

business

adequate

this

solicitude

access

same

does

to

form

or

fined

by

a

small

been

business

permit

not

it

state

is

con¬

nation

small

of

is

business.

which

$100,000

a

If
we

small business loan

a

low

too

the

of

some

limit

have .set for

and

should

we

raise

the figure to

$200,000, or $500,000
$1,000,000, it would merely
emphasis to the point. Our

or even

add

American

banking system may
have its weaknesses, but it cannot
be said that it is not well

small loans.

equipped

As

matter

a

the system is better
adapted to handle credit to small
fact,

business than it is to take

the

because,

system

our

banks which

make

been previously
the bank units

has
of

as

most

comprising
to

of

care

requirements of big business,

stated,

small

are

have legal

authority

loans.

small

only

Fur¬

familiar with
problems of the smaller banks

thermore,
the

should

anyone

be well

of the fact

aware

that their

greatest difficulty is in
securing an adequate volume of
sound small loans, and most of
activities

their

The latest
mental

to¬

proposal for govern¬

one

the

effect

commercial

that

is

of small business.

that small busi¬
maturities

said

being

is to
bank

long enough to

not

are

the needs

meet

business

that

wrinkle;

new

maturities

small

to

loans

has

It

directed

are

overcoming this handicap.

ward

needs credit with

ness

to 20 years.
At this point
politician gets credit confused
with equity capital, a mistake of¬
ten made by those inexperienced
10

of

the

in banking.

major capital requirement

The

is for risk capi¬
having fixed
maturities with a prior claim upon
assets.
Bank credit is never a

of small business

tal and not for loans

capital and any

substitute for risk

attempt to

ably leads

to

it as such invari¬

use

is

type

favorable

attracting

in

difficulty

capital

of the un¬
penalizing condi¬

because

and

the government
gains in re¬
hazards inherent in

created

tions

wrong

Small business at pres¬

has

ent

the

of

actually helpful to

never

business.

risk

difficulties for all

Credit

concerned.

by

which unfairly taxes
lation

the

to

risk capital
lion to

investment.

In addi-

taxes, there are numerous

other barriers

that either prevent

or
discourage the
capital. Small busi¬
ness
finds itself handicaped by
increased
competition, minimum

the

formation

use

of

risk

-

laws

wage

volved

in

and

the red tape in¬

making out multitudi¬

reports,, acting
attempting to

government
collector,

tax

burden of strikes,
restrictive -labor
practices.

Added

the

this

to

socialism

that

is the shadow of
manifests itself in

the present trend of
the monopolistic

and

government,
power

that

permitted to be used by^ the
labor unions. The present situa-*
tion in the coal industry is a case
is

in

point.

k

.

•

not

Credit Is Good from Borrower's
Standpoint

bank

credit. Just what constitutes small

never

would
To

banks

to

the

and

latest

loans, for the
their
legal

that

reason

overcome

Credit to Small Business

make nothing

versely, practically every business
loan in the portfolios of over 90%

as

The

some

can

lending .limits
larger loans.

nous

$40.5 billion.

business

the

turned

justment

has

in boom periods so

Actually,

of the main reasons that this read¬

advised

close

lines

numerous

had to be readjusted to the levels

—that

v

managed monetary and

sails

econ¬

business, production, obviously,

credit economy the banker is well

who

in

overcome

have

rUnder

wartime

Once wartime scarcities had

omy.

eco¬

manifest;
governmental authorities are then
only1 too prone to become panicky
and

our

the

overcome

of

business

more,

simple

funda¬

was

to

shortages under

of security by
window-dressing,

makes

goods

enough

sense

relentless

It

mentally due to the fact that most
lings of business had produced

is lulled

economy

financial

this
When

ample bank credit.

or

small

of

in the volume of money ano

crease

90%
but

accompany¬

banks were
used by the

the

about

cause

a

definition,
out

that

15,000 banks in this country, the
overwhelming majority, probably

to make

Federal Government in its

adjust¬ policies

the

this regard

in

definitely

and

Whether

not

If this is

reasonable

follows

the postwar

or

expansion and

financing

it

loan

as

commercial

then

of

de¬

business loan.

and

lend¬

there was,a hue and cry to loosen

are

small

a

fair

Read¬

previously

first

cussion/ any loan to business of
$100,000 or less will be considered

the

in

soon

a new high in absurd¬
For tne purpose of this dis¬

curb

to

into

ran

The
stability. The immediate prospect ing inflation.
for the heavy industries continues merely the medium

ployment and individual personal

1950,

ago.

year

demand in most lines
reasonably
satisfactory

Government, With almost full-em¬

24,




at

varia¬

by Mr. McDonnell before

Chicago, 111.

Currently,
is

was a

timing

The

and'the

the 1950 Credit Conference of the Amer¬
ican

the business and credit

as

couraging than it

all-time

a

address

So far

generally. Personal credit
easy
because of govern¬
by the U. S. mental needs. When interest rates
Department of Commerce (sea¬ are low and
business costs are
sonally adjusted, annual rate) av¬
high, there is every incentive to
eraged about $212 billion for the
put as much of a bank's available
first nine months,
close to • the credit to
work as

incomes close to the highest level
in
our
history, business profits
sobering effect upon the
generally good and tax payments
use of governmentally engineered
extraordinarily
high
levels,
credit policies except on rare oc¬ at
Government expenditures (exclu¬
casions.
sive of defense costs and foreign
The business situation changed
rapidly in the latter part of 1948 commitments) continue to grow-;and early months of 1949, because at a disturbing rate.
it then became apparent that many
Such spending by the Govern¬
♦An

natural

a

every

and'

realistically met.

income as,computed

of credit controls last year should

have

There is

loan to small business,

a

reaching

ity.

the part of politicians to attribute

soundly and As

structure,
must be prepared to
early summer gave rise to an withstand a
period of drastic re¬
optimism that neither subsequent
adjustments following a
period
strikes nor work stoppages in the
such as that through which we are
autumn were able to discourage.
now
going.
Furthermore,
the
Thus, while business in many lines banker's

disturbing factor in the
to such an extent that the real current business, picture is the fis¬
cal policy pursued by the Federal
need was to prevent deflation and
in

has

the

were

effective, the underlying forces in
business and industry had changed

business

Obviously

shortages has been-and is
new
steadily being eliminated. Further¬
same
time, a rapid expansion in
more,
to
a
considerable degree
the
rate
of residential building
existing
business
activity
gains
took place and brought that in¬
support from the cold war and in¬
dustry to boom proportions in the
ability to reestablish peace. Short
a

r

tions

the
this

in

been

which

in

created

put into effect relationship between the monetary
with the idea that they would re¬
policies adopted in the late spring
tard an inflationary upsurge. Ac¬
and the business upturn of the
tually, by the time these definite summhr and autumn.
monetary measures had been

a

discharged

in the field of fis¬

policy

ment

for the people

The latter part of 1948

early part of last
some

is

Inflationary?

still sev¬
eral years off, is something that Reserve Board and the Treasury
some inventory problem for busi¬
only the future itself can def¬ Department. The c 0 m m erciai
ness was handled with little diffi¬
banks are always acted upon ano
initely reveal.
As to the basic
culty, however,1 and accumulated
need for housing, expansion in the are not initiators of either infla¬
supplies wereeliminated
more
public utility field and numerous tionary or deflationary policies, a.',
quickly than had been anticipated related
these are commonly understood.
lines, there is definite evi¬
originally. Replacement demands
dence of a potential demand that
Accordingly, ordinary commer¬
for goods and services developed
should carry along for a number
cial bank credit had little to do
at a level closer to that of the
of years.
It must be remembered with the economic readjustment
previous period when war-accu¬
that the large current volume of
that
occurred
during
the
first
mulated shortages, in addition to
business has been continuing now half of 1949.
This downturn in
current demand, had to be over¬
for a number of years; and thai
business was not in any way re¬
come.
By mid-year, the increase the
substantial part of the support lated
to
a
shortage or lack of
in the volume of incoming orders
What had

was

trate

he

cal

overcome.

of

policy

from time to

sound

cannot

litical thinking

tries

prices for bonds in general.

and

Board

developed by
these two Federal agencies, as it

mise

that

principal result of these mon¬ pacity, there will be

which, quantitatively at least,

total bank credit is controlled and

'

and

ernment

requires
keep in mind the extent

one

pro¬

etary measures was to lower rates
for short-term United States Gov¬

from

banking

our

satisfactory V levels. - "II
quickly reversing the meas¬ must be borne in mind, however,
of a few months previous. that with our large productive ca¬

thus

outlook

the

indices of

employment, showed

situation by reducing re¬
during
the
spring and early summer months,

busi¬

e

and

took

serve

borrower.

T h

be¬

money

from

that of the

first

declining

Board

point of view;

dinary

the

pessimism

prices and industrial activity,

hensive

from

second,

maintain

to

conflict

interest.

public

tendency.
Govern¬
mental authorities became appre¬

to discuss this

'subject*

in

that

year

measured by the

a

my

purpose,

duty

a

satisfactorily

general uneasiness concern¬

duction

i t

cordingly,

within

Moreover,

monetary and credit policies, there

rather widespread and there

a

fi¬

000,000 is

their solicitude for small business

ing the heavy inventories carried outlook at_ the beginning of 1950 again the controls of commercial
bank credit.
Now the basic facts
by business.
At the same time is concerned, it is much more en¬

of

that

result

us

Practice of Banks

Is Lending

of

deficit

upon

ignore warning signals.

nations

evidence
of

to

a

shortages "had, tempo¬ monetary dilemma can be resolved
least, been overcome, only when our economic and po¬

last

of

came

bor¬

on

rower

at
the

half

problem from the standpoint

of

war

ample

results

despite the pressures put

Recent

European

fresh

Board's

position to handle financial needs of business and scores gov¬
ernment lending as protecting inefficiency.
attempting

threaten

living.

Thursday, February 9, 1950

economic ailment to the
Government itself, present policies lending practices of banks.
The
are
producing irreconcilable ten¬ inflationary spiral in the immedi¬
sions
which
seriously handicap ate postwar period, it was said,
sound national procedure. Between was due to excessive bank lending.
the
Treasury's desire for cheap Immediately it was suggested that
credit
and
the
Federal Reserve something must be done, in the

following present inflationary period. Denies lending practices
of banks are inflationary, and holds banks supply ample credit
to small business. Cites recent survey showing banks are in

la

of

of

woeful

nancing.

now more

pursued by Federal Government disturbing and contends shortcredit must be

analysis,

standard

experience

President, Association of Reserve City Bankers
President, First National Bank in St. Louis

term bank

final

the

lower

By WILLIAM A. MCDONNELL*

year ago,

CHRONICLE

innumerable economic inequalities
which lead to general unrest and,

The Credit Outlook

encouraging than

FINANCIAL

&

loan

satisfactorily de¬
our economic planners.

*

From the
rower,

standpoint of the bor¬

whether he be engaged in

big business or little business, the
Frpm public statements it would outlook
for
commercial
bank
that the limits of such a credit
during 1950 is good. There
loan
cover
an
extremely wide is
every indication that there will
bracket, ranging anywhere from continue to be available abundant
4

appear

$10,000 to $44,000,000. I am quite bank credit at low interest rates
sure, however, that most impar¬
for all worthy-borrowers. The As¬
tial students of Jhe question would
sociation of Reserve City Bankers,
prices, creates stresses and strains and commodity prices. The times
agree
that when social philoso¬
on
labor relations, and produces call for caution in
Continued on page 35
granting credit phers contend that a loan of $44,ment puts an

upward

pressure on

basic

have

credit

policy

which

far-reaching effects

on

may

bond

Volume

171

Continued

Number 4880

from first

THE

COMMERCIAL

page

&

FINANCIAL

CHRONICLE

(619)

We See It

Federal

happened to the Federal Reserve-Sys¬
period of postwar inflation. The fact that the

Now the

Reserve

nullified

in

and

others

as

a

came on

result

of

these

increased

use

also

find

much

that is familiar

in

this

talk

has

now

such

grown to

discussions

now

have

ceived

In

from

continue
of

many

men

stant

one

is rather likely to

of his enthusiasm about what is

termed

now

an

from

to

states

in

tain

and

or

systems of the

coun¬

States

significant

the

of

prise."

no

longer!

Drobably

We still have not summoned the
courage to tell
truth—i.e., that we have turned our backs

ourselves the
on

American

tradition.

We still

like

to

talk

about

indi¬

vidual initiative and all the
rest, but when the cards are
down the politician flees to
paternalism and, at times, to
semi-socialism to win votes—and wins them!
A Harvard

professor, long a member of the New Deal establishment,
strikingly reflects the change in his reply to an inquiry
by the so-called Douglas Sub-comrnitcee on Monetary,
Credit and Fiscal Policies of the Joint Committee
Economic Report.
Here in

on

the

part is what the Professor has

to say:

can

"No
can

were

over

and

cony

was

:

-

created

than

The

good

We

The British
on

had

for

hope

to

are

oil

The

and

the public.

more

friends

It has such

This is under

policy.
The objective of
independent central bank is scarcely even men¬
.

.

no

to testify to the

industry's

Bee;

Grody Now Willi
Stanley Pelz &

as

long established and are so
justified that they probably

imposing

stand

suits

great deal of attack

a

any

change

will

to

come

Department

are

of

Justice

being

pressed, the re¬
sults of which may affect the in¬
dustry's operations. It is too early
to

up¬

evaluate

has

re¬

taken

those.
similar

The

attacks

in

they

Ben

the

ated

Natural gas

will compete more
extensively with liquid petroleum.
Some oil companies will benefit
.

Benjamin

40

Grody has become associ¬

with

Stanley

Exchange

City,

Pelz

Place,

&

Co, at

York

New

Mr. Grody previously ■ eon-

In

from these gas sales, while at the

ducted

principal

same'time, they will lose fuel oil

above address.

dollar
the

Grody

industry

past in its stride.

areas.

gap.

circumstances

to

his

own

be construed

.

an

business

at

offer

to

buy,

any

as an
offering of these securities for sale, or as an offer to buy, or
of such securities. The offer is made only by means of the Prospectus.

as a

solicitation of

tioned

any more.
That does not mean, however, that
Treasury interests should dominate policy.
I
would not advocate an increased
independence for the
Federal Reserve; but I would advocate
improved co¬

NEW. ISSUE

February 8, 1950

...

.

ordination between the Federal Reserve, the
Treasury,
the Federal Deposit Insurance
Corporation, the inde¬

$15,000,000
,

Province of Quebec

pendent lending agencies (inclusive of ERF), with the
best interests of the whole
economy

haps

important

as

as

the objective. Per¬

(CAN .4 DA)

the relation of the various Gov¬

interests is that of the Federal Reserve Board
and the Federal Reserve banks.
If the various Gov¬
ernment

1V%% Debentures

ernment

agencies and departments involved are fre¬
quently in conflict, they do at least presumably seek
the best interest of the entire
economy.
This is not
necessarily true of the Federal Reserve banks which
to
'

a

substantial

degree

are

under

the

influence

Dated

February 1, 1950

Due February 1, 1955

Price 100; 1157% and accrued interest

of

banks."

What Used to Be

^

Formerly, in times of
forces in
the

peace in any event, natural
private economy were supposed to govern
market.
The Treasury, if it was in need of

the

money

Copies of the Prospectus
underwriters

arc

may

qualified to

be obtained from

any

of the several underwriters only in States in which such
Prospectus may legally be distributed.

act as dealers in securities and in which such

funds,

was supposed to accommodate
itself to that market.
If after World War II the
Treasury made use of devious
easy money strategy, it was not
openly avowed, or if it
was.

it

was

apologetically admitted

and set forth

as

an

exception to the general rule. As after other
devastating
in history, the turmoil has
again involved the bank

Wars

and

monetary thinking of the public—and this time with an
Even before the war began, the depression

added impetus.




a

to me

industry is faced with at¬

Some

j

best

are

restrictions

the

close
on

industry needs friends

pass.;

the sale of American

these

!

So-

the

produced oil in the sterling

Through

its story

performance.

operating abroad.
has fought for the

before

average.

true

was

International conditions
strictions

tell

often and to every¬

why it hasn't got these friends"

companies

will

were

by oil discoveries.
set.

It needs to
more

well

entire history, gauged

our

military

tack

so

maintained

the year. Reserves

assets

that
Vacuum.

in

con¬

cooperation

by the Treasury and other
/imports ! government agencies in its deple¬
unimportant tion allowances. These have been

an

better

Certainly
year

|

declines

a

generally
found

dividends,

where

areas

probably

em¬

social

wages,

monetary organization and no monetary
fail to take into account the Government's

interest in monetary
an

It is quite

these

Employment

picking

policy

con¬

better

and

policies of

and

government

eager

with which to make
their accounts balance, the British
have severely affected the Ameri¬

Rocky Moun¬

factor.

We still pay lip service to "free enter¬

in¬
now

commodity

areas

that

in

were

Turning the Clock Back
But

by

splendid record the wonder

spite

the

fear.

better,

among

3

page

lower volume of production. Some
decreased
drilling - did occur in

California

more

research

one.

lubricating oil prices.

banking system
argued.

or

and threats

nothing

the industry

as

its sound

•

general setting and with this broad background that
was

is

with the government and

control of the

try

That

sell

to

pursues

in high academic and other

light of these circumstances,

principal

Interference by Government at any level
exception rather than the rule. It was in this

the

one

industry will

harassed

ployment,
good
benefits, modest

Industry Outlook in 1950

very

economy.

be

long

as

and
a
fairly Our country
large drop in drilling occurred in ! establishment of freer trade and
Pennsylvania
and
surrounding ! exchange operations and the im¬
states.
The curtailment in Penn- ;
position of restrictions like this
sylvania was tied into the dis- I may be a serious blow to these
parity
between
crude
oil
and
plans.

was

to

control.

and

is

subsidies here and there marred the
picture, the indi¬
vidual was still expected to look after
himself, and
natural forces were,
by and large, left to control the

gas

authorities, it should have nothing

some

Oil

different setting.
In former years, most of us still
clung to the concept
of a really free
economy.
Although high tariffs and
a

market, with

vestigations, inquiries

places.

Continued

be "reasonable independence." Rut

the

on

exceptions.
During 1950 the

ill

"independence" of the Federal Reserve vis-a-vis the
Treasury, although the old demand of "iridependnce"

per

believe

natural

more

products at reasonable prices and

independent Reserve System.

of

we

tinues

lose

exchange
old, okl conflict.
They

an

buy

can

price

two

plain implication of the
recommendations of the Douglas sub-committee.
It is
plainly implied in many of the comments it has re¬

market operations, the system not
merely turned to an increased use of changes in reserve
requirements; it also demanded legislation that would give
it broader powers to
manipulate reserves, including the
power to fix reserve requirements of nonmember banks."

of views the elements of

natural gas reserves are
among the largest held
by any of
the oil companies.
In

in the hands of the Administration
and its wise-acres
in Washington.
Such is the

of credit control,
open

or

the

bei

gas

cause our

nies

System (whatever its freedom from domination by
Treasury) but a Reserve System which is pliable

of its most effective instrument

Those whose memory extends back over two
three decades will at once
recognize in this

not

the

requirements.

."Deprived of the

natural

Socony-Vacuum
stock
through any other of the
larger publicly owned oil compa¬

before, but
independent Reserve

reserve

of

than

Reserve should be tied to the
Treasury as
what is now wanted is not an

the market from the

composition

through

managing the economy of the nation. It is possibly
much contrary to
present popular notions that the

as

Some companies will
than they gain.

more

Socony-Vacuum are
worrying too much
about

you

and the Treasury
instruments in the hands of Government for use

are

lot

a

in

dollar of market

Dealers, both the Reserve System

y

We

fact,

old, old controversy between the Federal

Reserve and the Treasury takes on a
quite different
aspect.
As viewed by the New Dealers and the Fair

reserve
requirements which were in turn largely
by the fact that it was compelled to purchase the

government securities which

will

era

money.

in

creases

placed upon
responsibility for the economic welfare of
Even before Pearl
Harbor, we had entered

of managed economy, and in the forefront of that
movement
was
what has become known
as
managed
an

System felt itself under compulsion to
peg rigidly the government security market made it im¬
possible for the system to take any effective measures to
reduce
inflationary pressures. It was barred from the use
of open market
selling to contract bank reserves. Instead,
the Federal Reserve
System was forced to resort to in¬

banks

lose

the individual.

"This is what
tem in the

customers.

Government the

As

and the New Deal had evolved notions which

19

The First Boston

Corporation
-.

A. E. Ames & Co.
Incorporated

Smith, Barney & Co.
*

Harriman Ripley & Co.
Incorporated

Dominion Securities

Corporation

,

Wood, Gundy & Co.
-

;

McLeod, Young;'Weir
Incorporated

Incorporated

the

20

COMMERCIAL

THE

(620)

FINANCIAL

&

had

Opposition

practices in
about pri¬

monetary

unfortun¬
experience in 1907 when, after
10
years
of
unprecedent-

marily
ate

as a

result of

an

The

i

additional
necessary
ance

of

additional national

progress

notes which

prosper¬

an

into

went

bank

primarily

obligation of the bank issuing
The

them.

such

notes

first.

of

$300,000,000

issued

to

pay

Any

were

with

outstanding at any time, in excess
of $1,200,000,000 not covered 100%
by gold or its equivalent, were to
pay U. S. A. 5% interest per an¬
num.
The 112% notes were ex¬
pected to take care of such fluc¬

which to carry

tuations in the demand for money

The im¬

spin.

mediate

cause

appeared

t o

be the absence
o

sufficient

f

funds

In

on.

words

ing
ties

years,

and

the

due

are

to

crop

moving,

etc.

The 5%

cies, panics, etc. The amount of
5% notes was unlimited; the 5%
being deemed sufficient to afford
protection against the permanent
expansion
of the
currency,
through promise-to-pay money.
However, the opposition party,
while this was being worked out,

the

suc¬

both political

par¬

proceeded

Congress

as

tight
Dur¬

money.

E. S. Pillsbury

ceeding

other

—

to study the problem

with a view
to legislation
that would guard
against a repetition of such a
panic.

the

ity to generate prices that reflect
the

of

furnish

shall

ship

supply and demand relation¬
in terms of the monetary

"redundant,"
it

notes were for emergen¬

FREEVS MANAGED ECONOMY IN RELATIONSHIP TO WAGES

saying

interposed

also

influence

no

period of "false and de¬

a

prosperity

which

inevit¬

this

law

enacted

was

cannot

currency.

entitled

chart

herewith,
that since 1914 wage rates
manufacturing,
agriculture,
etc., have been running wild, with

fully exchanged for gold. This has
resulted in stabilizing the franc
at

brought before such comparisons
could
be
lawfully
made.
The

tendency

low"

to

Britain's

course

such

to

extent,

an

measures

values.

no

goods

Most of

can.

worth

are

services

and

ting,

us

at the

than

round

get¬

are

in¬

wage

follows "another,

demands

crease

we

of

while business,

realizing the risk
involved, marks up its prices and
profit margin proportionately, in¬
cluding extra wide margins for
contingencies.
The overall

result is

had

going

discretion of

tically absent.

Instead,

of

loans
life

inclusive

sort,

every

of

insurance,

annuities,
pen¬
sions, and (mis-named) social se¬
curity, of an ever increasing pro¬
portion of the purchasing power
investments,
fixed

well

building trades,
has 20% of its former purchasing
power in sundry lines, Consum¬
ers'
Price
Index,
for example,

'41%%.

Such

maladjustments,
once
in the system, are juggled
about a little, but are not being
eliminated. They tend, instead, to
from bad to

go
i

worse.

fixed

salaries.

from

the

states

cannot

such word

reduction

of

icy.

be

to

now

Too

the future is not
or

as

be¬

The slogan of

going to be the

the 'Fair Deal' but

who

puts

dollar

a

should be able
where

ing
he

that

means

near

in

person

the

get back

dollar

a

in

power

to

the

in

future

bank
some¬

purchas¬
when

years

draws it out, or when the life

insurance policies he

ing for

paid to

are

is pay¬

now

his benefici¬

aries."
This money problem, in its va¬
rious ramificiations, should lead
all others in the search for

a

rem¬

the

more

of

ever

evident it becomes

Mr. Lawrence

questions that, he is

anyone

referred

to

current

charts

cost

such

of

con¬

as

the

American

sistently,

so

that by

1942, the average rate in manufacturing had

been upped 250%, from 100 to 350,

while in agriculture the aver¬
age had been upped 50%, from 100 to about 150.
This 200%—five times greater advance in some than in other
trades—accounts for the unemployment of 1930-40, during most
of which

decade

from

5

to

10 million were without

work.

While

this job-scarcity has been eliminated currently, it is bound to re¬
appear with the

wage

termination of

maladjustments

The immediate

we

know that

of this unemployment is the impoverish¬

ment of the agriculturist and lower paid third of the population to
where they are unable to buy enough of the product of the higher

paid to provide jobs for
thus face short rations

or

'

Managed
street

while

money,

driving

is

the latter.

A

large

percentage

the

peonage.




of both

low standard of

living.
putting part of the population
a

others

toward

a

status

costs

in

22

of

our

typical cities as 504% of the 1914
figure. There are. doubtless but
few things as far out of line as

construction;
recent

steel

however, the very
settlement, resulted

in

advancing the price of elec¬
trical sheets, for example, over
25%, on a price that was already
over

ment

double the gold measure¬
price; thereby making more

than

not being eliminated but increased.

are

cause

activities, since

war

Appraisal Company's,
show, as of Jan. 1, 1948,

which

construction

a

tion

costs.

what

50% advance
This

is

on

pre-infla-

indicative

of

is

going on. Starting with
5% advances, we are already tak¬
ing 50% jumDS and are likely to
be taking 100% advances, on pre-

easy

inflation prices, at an early date.

approaching

We accept Mr. Lawrence's con¬

on

clusions with reference to

honest

market.

The overall result of this higher

purchasing

greater

and

power

stability of French currency, has
been
to
speed
up
business ia
France

wonderfully.

To

to

try

back to a higher
level after allowing its purchas¬
bring

currency

ing power to depreciate, except as
be effected automatically by

may

the restoration of confidence, is a

public
its

tle

time

more

hanging

in

will

them

air, with a few
supporters aside from "yes" men
leaders

party

as

a

hound dog follows a trail.

promising.

more

T.

be taken.
has

visitor from year to year.

to

provide

the

with "Honest Money" is
in gold on

country

to redeem the currency

demand.

Nothing could be fur¬
reality. We redeemed
in gold, on demand,
between 1914 and 1933, yet it was
during this very period that our
prices became muddled to where
they provided President Roose¬
our

from

currency

velt

a reason (or excuse) for cut¬
ting the gold back of the dollar
41%, and for doing the other
things that have resulted in the

current

much

price

greater

muddle.

The

,

RicartJo
is

to

the

maxim,

prosper,

"If

money

the
must

stable standard

a

not

supply controlled by the
processes of trade, and

by the dictates of

a

govern¬

ment," must be followed if
to generate

supply
in

terms

-

demand

of

has

course,

There

can

did

about

rival

as a

several

French^ free

return,

July,

The

market

gold

was

opened February, 1948.
France

"Conditions
have

this

in

country

greatly

improved; in fact
there has been a surprising come¬
back.

have

I

number
the

or

in

been

times

of

France

have

and

Gold, of
standard.

Certainly,;

prosperous.

of

"The

be in

City

of Paris

appears

good condition

as

as

seen

goes

at

on

streets

brisk

a

con¬

gestion

New

York.
cars

is

much
On the

restriction

gasoline,
has
use

1947

that

trip,

in evidence.

were

no

like

that

so

of

whatsoever

plenty of good-looking merchan¬
dise, and, judging by the number
of shoppers, are all doing a satis¬
factory business. Hotels, restau¬
rants, night clubs, and all places,
of

entertainment,

ord

volume.

are

There

doing

is

no

ing in France; the black market
its prices are gone.
Food is

and

good and plentiful and, therefore,;
only to the

is freely available not

well-to-do, but to the people
erally.
"French

production in all lines!

John Sherman

tive

rebuilding of the devastated

even

on

a

date

materially

the increase.

districts

with

In
the

in

gold market,

debtors.

beginning

I, France and
Britain, and most of the nations
on

the Continent of

in

one

stabilize

or

their

Europe, have,
another, tried to

currencies without

limiting the supply by anchoring
their money to a gold or metal
standard.

100%

The

failure.

■

result

It1 is

has

been

doubtful

if

and

There is

Normandy, and

which

to

looked

take

on

is
ac¬

com¬

quite di~ "
are

now

normal

a

appearance.

"So much for the
physical
dition of France!"

Since World War

form

gen¬

on

it bred Greenbackers and imposed

great hardship

a rec¬

ration¬

still

free

a

on

everybody who

automobile is making good
of it.
The stores now have

an

advanced

re¬

terrible job.

time,
of

few

very

Now there-

lapidated 22 months ago

Sherman's

auto¬

mobiles, resulting in traffic

munities

assistance

The

rate.
with

crowded

are

ing.

a

to

I have

as

it, and there is a gen¬
eral air of well-being.
The re¬
pair and painting of buildings
ever

has

ways

1873, by setting
was

a

never

countryside looking bet¬

more

several years ahead and refinanc¬

This

This

1949.

measurements.

gold

to

We

relationship

standard.

a

no

are

turning

we are

prices that reflect the

and

is dated

report

still other hurdles to

done

quota¬

a

this year the crops will be good.

Some think that all that

be

to

Here is

report by Mr. Ernest

a

Weir, with reference to condi¬

ter

are

of

tions in France where he has been

seen

The Difficulties
There

one

early stages by opening up a
gold market seems much

to

the

follow

as

free

A lit¬

leave

well

as

expediency. To let the
work out the problem in

and

automatic

struction

but incon¬

What¬

New

have, is rapidly vanishing.

and

If

advance

the

Fair Deals may have appeared

defines

to

longer an
policy is pur¬

soundness

our

continued

a

the

financial

be anchored to

as

cent,

a

2/10ths prior to her free gold

of

a

However,

State

it, has been absent from
economy since 1914.

.00287, or nearly
against a low

at

of

3/10ths

votes.

unsound

Honest

wages

upon

party

edy for the nation's economic ills.
money,

Jan. 17, 1950, the franc

now,

quoted

tion from

ther

soon—the 'Honest Deal.'

even

is

in power by
promising whatever is thought to
be
necessary
to
catch
enough

'cannot'

that will make its appearance

"This

pol¬
Republicans want

agree

many

beat

to

to

Sooner

expenses

imperative.

'New Deal'

in

rendered

making
Abraham Lincoln president in its
early years. The difficulty seems

who

spend

of.

doubtful

Party

that it is rotten at its core.

follows:

devaluation

recent

pound from $4.03 to $2.80 dis¬
turbed this advance slightly, but
her

lican

sued, the

1949,

to

dollars,

formidable task

defin¬

as

an

com¬

franc's

parable to that which the Repub¬

later they have to realize that

one

service

a

whose

12,

no

nation

less

or

by

Dec.

comes

money,

'

»

This

companies,

more

are

as

and

as

wages

service

savings

a

dollar that, in the

render the

progres¬

(which can but ultimately
catastrophic) decline in
the purchasing power of the dol¬
lar, thereby robbing depositors of
savings, and investors in bonds,

when

managed

prac¬

have

we

become

there is

under

board,'such

a

price muddle presents
opportunity and a challenge

a

a

to money that

over

sive

Or

an

maintained

price corrections have been

we

services

guess our

more

one

so

best

as

shows,

Since

of
In¬

years

dollar,
which
for
prior to 1914, as this

could be expanded and contracted

stead, we guess at what to pay for

"Democracies

50%, from

"too

up

it

adjusted prices.

to around eight-fold, with
deposits increased in simi¬
proportions. A currency re¬

dundant

Our

many

bank
lar

or

prices.

crease

their way out of trouble.

consistently, about

bring

to

pull down "too high"

price

above the

50%

about

balanced economy, has practically
ceased to be a corrector of mal¬

dated

During the next 28 years, 1914 to 1942,

a

little

slightly less than $3.5

problem in part

advanced

market is

in

in

law;
railways,
street cars," telephone companies,
etc., are especially hard hit by a
depreciating unit of value.
David Lawrence, in an article

100.

a

prime requi-r
site for passing from a substitute,
to real money. France, after many
attempts to peg her currency at
one level after another, with fail¬
ure
after
failure, has recently
opened up a free gold market in
which her currency can be law¬
free gold

shows

altogether. We
have about $28 billion, an in¬

itely

to

that

conclude

we

now

of

incomes

rates

going.

was

this

From

chart

total

a

Public

wage

vs.

Relation¬

where he

see

billion of currency

their

the unit,

gold market that enabled him. to

purchasing power in U. S.
was just about 1% of its
original purchasing power before
the free gold market was opened.
Thereafter, it was about 1 Vz %;
later
still, it increased further.

and

Index of about 67

"Free

Managed Economy in
ship to Wages," given

1913, the country had

December,

of their income from such

This chart shews during 28 years, 1885 to 1913, with gold as

dip such prices

limitless supply of prom¬

a

The

ably ends in ruin and suffering."
When

You

succeeded

have

could

Sherman

without the assistance of the free

quently disregarded, is its capac¬

ise-to-pay

lusive

Uncle Sam lVz% per annum.

an

tail-

awful

to be

were

for

Government

States

against

elasticity
deemed
by authorizing the issu¬

d

ity, the nation

that the

economic

best

important
function
of
the one most fre¬

and

money,

characterized the monetary provi¬
sions
of
the
law
as
"vicious,"
"greenback
inflation,"
"expan¬

floor

Senate

the

is

pro¬

out of

that

by Elihu Root, proposed to get the

and

e

on

Senator •most

of

the

and the honest deal at
their face value. The

of

unit.

sive,"

Committee,

Republican

represented

100%

unlimited money to the people of
United States," Senator Root

limiting supply by anchoring their money to a gold or metal
standard. Advocates legalizing free market for gold.

Current

money

Act

the

Asserting hcnest money has been absent from our economy
since 1914, leading industrialist points out this has resulted in
maladjusted prices and unbalanced economy. Cites difficulties
of Britain and France in attempting to stabilize currencies with¬

.

and

contained

on

"It

United

the

saddle
Reserve

words

time,

that

country

By E. S. PILLSEUKY

the

based

heresy

the

Federal

the

at

visions

President, Century Electric Company

the U. S. A. have come

in

Root

For the

out

the

which,

Monetary Policy

into

gotten

passed

Thursday, February 9, 1950

14

•a

A

CHRONICLE

•t-

*

:|:

Our country's immediate

tary needs

throwing

can

our

con¬

mone¬

be best served by
markets
open
to

lawful trading in gold. This
wouldfr
enable the public to

day to day,

know, from
what the world ap-

Continued

on

page

Volume 171

Number 4880

THE

COMMERCIAL

&

recent years

Government's Challenge




To Private Banking

CHRONICLE

FINANCIAL

have accentuated this

fact. There is to day a fairly large
amount

of

credit

which

better be tied down

mortgage
have
add

agricultural

unsecured

outstanding
loans.

Many

short

used

might

in amortized

farmers

term

loans

to

their farm equipment and
structures.
A
continuing down¬
to

in

turn

make

farm

income

easily

may

these loans embarrassing.

Other

than maintaining sound
policies this year, the mainof banking is its relations

loan

concern

with

the

terest
We

tive

government.

in

Our

in¬

Washington is two fold.

concerned

are

front.

We

the

on

also

legisla¬

have

deep

interest in the government's fiscal
and

monetary policies. We watch

with

concern

ence

of

the

oped in the

open

market

security

We have
in

terested

held

and

government

of

support

that

area

management

prices.

growing differ¬
has devel¬
of Federal debt

opinion

the

this

on

Committee

been

much

recent

in¬

hearings

subject by the joint
Economic

the

on

Re¬

port.
On

hand, Secretary of the

one

Treasury

Snyder, who has ad¬
ministered the debt with remark¬

able

competence

and

that

the

for

market

securities

tinued

should

maintain

to

feels
con¬

He believes it is

support.

essential

skill,

government

receive

low

a

pat¬

tern of interest rates and low

car¬

rying charges on the Federal debt
At present, these costs add about
$5% billion to the government's
budget.

j

An increase of l/2 of 1%

in the average interest rate on the

debt

would

be

additional tax¬

an

payers' burden of nearly $iy2 bil¬
lion

a

year.

Federal Reserve and Credit

Control
On

the

other

Economic
that

serts

thorities
credit

hand,

Federal

have

Reserve

lost

control

ket.

most

as¬
au¬

their

of

through the

neces¬

open

mar¬

According to this viewpoint,
effectiveness

power

is

Joint

report

sity of supporting the
the

the

Committee's

over

the

Banks

holdings

market.

Most

in

guaranteed

a

of

the

proposals to increase

legislative

the Board's

authority

over reserves

based

this

on

The

acquire

can

by selling their govern¬

reserves

nomic

Board's

requirements

reserve

nullified.

ment

of

have been

argument.

of

report

the

Committee

Joint

urges

Eco¬

that

the

Federal Reserve be given full au¬

thority

to

through
It

interest

for

effect,

rates

market

operations.

the

Treasury's

acknowledges

need

in

adjust

open

low

cost

it

urges

financing; but,
that the final

$3,570,000

^

Gulf, Mobile and Ohio Railroad Company

Equipment Trust, Series E
21/8% Equipment Trust Certificates
(Philadelphia Plan)
To

mature

$255,000

on

each February 15, 1951

to

1964, inclusive

To be guaranteed unconditionally as to payment of principal and dividends by endorsement
by Gulf, Mobile and Ohio Railroad Company

Priced

to

yield 1.2 5%

to

2.425%, according to maturity

Issuance and sale
The

of these Certificates are subject to authorization by the Interstate Commerce Commission,
Offering Circular may be obtained in any state in which this announcement is circulated from only
such

of the undersigned and other dealers

February 2, 19M)

as may

lawfully offer these securities in such

state.

,

22

yearly average of 9.46%.

Joins Schwanz & Co.
(Special to The Financial Chronicle)

been

added

Schwanz

&

Mutual Funds

of

Company, Inc., Mer¬

Signifying

..'ATlOftAL
INVESTMENT PROGRAM
Open lnv2$tme?Occount
V
VA

of

on

was

Mutual Funds and Labor. One

Simonson's article in
the February issue of "Commerce
Henry J.

Custodian
First

of

and

Plans."

Trusteed

The second

Mr.

of

(15 pages) entitled "Labor's

Partnership in
prise—A New

Industrial

Enter¬
the

Approach
Union

to

Pension

and

Alexander S. Lip-

torial

writer

Labor

of

the

International

News

Service,
a
news
agency serving the AFL and in¬
dependent labor press.
Floyd L
Carlisle, Inc., will handle the dis¬

used

to

tual

fund

first

spot

of

be

to

The

.PHILADELPHIA 2, PA)
-

.

trust

a

com¬

addition

newest

the

to

70%

will

be

managed

Trust

Co.

of

distribution

New

of

Fiduciary

by

while

York,

shares

its

will

be

by Hudson Distributors, Inc., with

located

headquarters

-Inquire about:

"The vital task of
vestment

Chicago.

in

providing in¬

essential

funds

the

to

growth of American industry is
serious economic

Hudson

the

of

A Series

New

of

York

Stocks, Inc.

challenge which

able

small

the

to

large investor.

well

as

the

of Fidu¬
Co. of New York to
the public in this manner is cer¬

other

material available

dealer,

investment

descriptive

from
or

your

local

tainly a forward step in the de¬
velopment of mutual funds."

from

Officers of Hudson

High W. Lo.\g

a\d

Company

Mr.

INCOKPOHATEO

43

Wall

The

Street, New York 5

directors

the

of

Fund

arfe:

Fund

President—direc¬

Maitland,

tor of Maine Central Railroad and

Wellington Fund
when sales of

ANCEt.ES

Ches¬
Chicago mining
engineer and financier; President
of Consolidated Copper Mines Co.

ter

D.

and

the

Tripp

—

Grip-Nut
Board

facturing

of

Co.;
Titan

Chairman
Metal

of

Manu¬

Director of Victor
Inc. and several

Co.;

"While

obtain
tion

Keystone

the

York

New

law

firm

Cad-

of

walader, Wicker sham & Taft.

Custodian
Funds
Certificates of Participation in

tlieir capital
IN

BONDS
(Series B1-B2-B3-B4)

PREFERRED STOCKS

Inc. and others. Stuart N.

S1-S2-SS-S4)

of Root,

may

be obtained from

Ballantine, Harlan Bush-

Hudson

Fund, Inc.

had

Keystone Company
ol Boston
50

Congress Street

Boston 9,

JMassaclursetts




as¬

sets of $1,016,847 at Dec.

31, 1949,
prior to any public offering of its
shares, including $761,438 in com¬
stocks

mon

Shares

will

value.

market

at

be sold to

the public

nationally through security deal¬
ers,

with Hudson Distributors, Inc.
principal underwriter.

the

Directors of the distributing or¬

ganization include Albert D. Farwell, Ralph A. Bard, Paul A. Just,
Russell

H.

Matthias

and

William

Cooley.

the

on

funds

mutual

Chester D. Tripp is

President of

Fund, Inc.;

Matthias is

a

Russell H.

Director of TV Fund

Director of the
management company, TV Shares;
and Secretary and

Paul

A.

Just

is

Executive

President of TV Shares, and
liam

H.

Vice-

Wil¬

variation

The Fiduciary Trust

Elouise Kennedy

Margaret
as

I

Vice-President

.

'

•

.

DISTRIBUTORS GROUP,

INCORPORATED

63 Wall Street, New York 5,

N. y.

for

the

showed

71.9% of the
buy
Wellington

to

BALANCED

OBTAINED

BY REQUEST TO

remaining

the

and

INVESTMENT FUNDS MAY

YOUR INVESTMENT DEALER OR TO

EATON & HOWARD

found
women
predominated among the
43,000 of its shareholders. Women
according to a classification of
stockholders in the Fund's annual
also

of the in¬

report, constitute 43%
dividual shareholders;

STOCK FUND

FUND

PROSPECTUSES OF THESE TITO MANAGED

Shareholders

Fund

EATON & HOWARD

EATON '& HOW AIM

BE

Majority

Are

Wellington

38%;

men,

19%

INCORPORATED

BOSTON
TWENTY-FIVE YEARS OF INVESTMENT MANAGEMENT

333

24 Federal Street

Montgomery Street

SAN FRANCISCO

BOSTON

made

is

of joint accounts.

up

basis

the

On

these percent¬

of

Wellington Fund has ap¬
proximately
18,500
individual
women shareholders, and upward
of
8,000
more
who own
their
shares jointly with husbands, or
ages,

a

This makes

male relative.

a

Fund, Inc.

shareholders

26,500 women
clear majority.

Prospectus

Institutional Shares,
its letter
its

Affiliated

to¬

Institutional Shares Reports
Limited, in
said of
Shares that

THE

upon request

LORD-ABBETT

INVESTMENT

COMPANIES

shareholders,

to

Insurance

Group

stocks are
demonstrating that,
over
long-term periods, they invariably
prove to
be about the soundest
and
most
profitable of invest¬
ments.
For example, during the
"Blue-chip

insurance

again

from

the

Lord. Abbett & Co.
New York

—

Chicago

—

Atlanta

—

Los Angeles

1942 to

lows of

the Summer of 1947, reasons occa¬

A

Diversified Investment Company

aftermath, insurance stocks lagged be¬
sioned

by the war and its
-rise

market

the

hind

of

high

stock by about
50%.
During the last two and
one-half years they have closed
this market
lag to about
17%.

grade

industrial

However, they show an
tion

market

in

value

apprecia¬

during the

long-term period from the lows
ing The

in

last

and

seven

one-half

period, amounting to 531.2%,

comparison with

tion

of

December, 1949. includ¬

1932 until

an

apprecia¬

for high grade in¬

of 364.7%

dustrial stocks.

Thus the gain in

market

from

stocks

of

has

Co. of New

appointment of

whole."

tabulation

used

value

for

this

seventeen

Cooley is Treasurer and

Director of TV Shares.

pleasure in announcing

the

average

Women

year

Television

Tlie

net

We take

attempt to

no

open-end

little

final

The

that

period

by & Palmer.

H.
Prospectus

Scott-

Member of the New York law firm

as

(So,.ci

Mining

Co., Lehigh Valley Coal Co., Gas
Industries, Inc., Chemical Fund,

(Series K4 -K2)

COMMON STOCKS

Newmont

Corp.; Director of Continental Oil

INVESTMENT FUNDS
investing

of

President

of

assets

shares in
the Fund

mutual fund industry as a

a

Franz Schneider—Executive Vice-

greatest

the dealers informa¬

other

with

hold

of

of

Established 1894 as Investors Syndicate
Minneapolis, Minnesota

growth in
with the net
the company increasing
its

17-year history,

respect to Wellington Fund would

tal

Kane—Member

its

and

Manager

DIVERSIFIED SERVICES

from

queried dealers with the thought
in mind that their findings with

for

K.

Investment

During 1949 Commonwealth ex¬
perienced

funds," Walter L. Morgan, Presi¬
dent of the Fund explained, "we

other

corporations.

Principal Underwriter

INVESTORS

by their clients to

made

we

from

on

Chemical Works,

Richard

BRADFORD, President

K,

H.

Company Sets New Record

amounted to $36,000,000.

Central & Southwest Corp.;
I.OS

CMCCACO

on

1950.

28.

Commonwealth Investment

used

dealers

survey

Bringing the ex¬

management

holders

'

■

*

section of the country were
to determine the origin of

the

as

ciary Trust
ami

1948.

meet," James W. Maitland, Presi-^
Fund shares last year came from
dent, declared.
Hudson Fund, he
savings; 20.8% from sale of other
said; "is dedicated to making pro¬
securities and 7.3% from money
gressive, growth, conscious invest¬
derived from the sale or redemp¬
ment management
by an estab¬
tion of government bonds.
lished banking institution avail¬

perienced
PoK-pertus

up¬

funds

1949,

a

Fund, Inc. is designed to

that

reported

by

rap¬

idly developing mutual fund field,

payable on

the end of

at

survey

funds used

announced in Chicago.

was

or

f

by

managed

pany,

terly dividend of

share, Dec. 31. 1949, com$15.34

has

Fund

Selective

savings.

asked

investment fund

mutual

with

open-end mu¬
1949, accord¬

the

the

a

of Investors
declared a quar¬
eight cents per snare
March 21, 1950, to share¬
record
as
of February
Directors

of

Board

The

by $1,146,-

increasing

$18.22

purchase
Wellington
Fund
shares by their clients last year
were
derived
from
liquid cash
In

Formation of Hudson Fund, Inc.,

Dividend Notice

Dec. 31, 1949, of

12 months. Asset value was

to

every

Fund

INVESTORS

SELECTIVE FUND

Stock

Howard

&

929 in

in

shares

dealers

ward

value

Asset

oared

Wellington Fund

purchase

a

The

1,017,422 to 2,032,583.

a

Eaton

The

of security
dealers by Wellington Fund, Inc.

tribution.

New Mutual

$27.14

been

insurance

Long-term

and

oneThalf

period
years

greater than that of in¬

dustrial stocks by 166.5%, or by a

Prospectus
your

THE

may

be obtained from

local investment dealer,

PARKER

or

CORPORATION

200 BERKELEY ST., BOSTON

16, MASS.

of

from

the major source of funds

as

to

number

1949, an in¬
from the

1948.

Fund had assets,

Accumulated savings were indi¬

ing

The

year.

City

Surveys

sett, Eastern Editor and chief edi¬

investment dealer

the

in

$3,189,671,
Results

article is in booklet

Investment of

your

the

of

of New York.

cated

form

Funds" by Dr.

y prospectus from

is

Fund

Bank

$5,397,360

from

year

Balanced

share contrasted with
$23.65 at the end of the preceding

Magazine," entitled "The Pension
Drive

&

iJROADWAY, NEW YORK 5, N. Y.

the

National

Securities and Research Corp.

CORPORATION

RESEARCH

personal trust work and does
commercial banking.

no

the

$11,623,115.

$13,595,016

date

same

31,

Dec.

on

of

crease

Sirnonson is President of National

request

SECURITIES

NATIONAL

m

and

program

upon

sales approach

a new

624,338

op¬

erating under New York
state
banking
charter
specializes
in

for Mutual Funds are two articles

is

Details

to

said its assets were at $50,-

Fund

Pensions

prospectus

during

the

shares outstanding increased

Howard

&

Eaton

York, established in 1930 and

Mutual Funds and Labor

r

(Based
and

Eaton & Howard Assets Rise

By ROBERT RICH

chants National Building.

An

Poor's

&

Dow-Jones indices.)"

staff

the

to

Standard

on

AURORA, ILL—Lewis D. Peace
has

Thursday, February 9, 1959

CHRONICLE

FINANCIAL

&

COMMERCIAL

THE

(622)

COMMERCIAL

THE

Number 4880

171

Volume

which

Monetary Policy

worse

University

So

Robinson, in stressing" importance of restoring nation to

The

question

of

honest

is not academic but
seriousness.

brought home to

It is

is

merce,

by two facts

of

gravest im¬

port centering
in
Washing¬
rein¬

and

ton

forced

by the

Pre sident's
recerit

nomic

eco¬

budget
to

messages

Thus

and

a

tolerance
fiscal

by

abuses,

no

means

confined
one

engulf

our

country
if

an

aroused

public

demand

in

to

party,

which

quicksands

may

economic

intelligent

remedial

of

opinion

and

does

portents of

disaster.

In

^

The

first

tinued

Federal
of

of

next.

Here

of

to

the

our

tune

of the

some

known

great¬
income
and

outside

years

'They

eighteenth

such

con¬

by

this year and

so

hostilities.

the

teenth

the

are

ever

active

mark

or

between

gaps

outgo

financing

government,

ten billion

est

facts'is

these

deficit

and

failures

to

will
nine¬

The

second

closely tied
the

of

with

obsession

these

that

facts

first.

is

It

is

an

allmighty,
all-knowing, and highly central¬
ized

should

government

ithe affairs of the
people

which

money

people's

change
value,

ought

stable
and

as

by using
be

ments

medium

ex¬

store

instrument of

of

over¬

and economic control

of

Excerpts

Los

3,

from

before

Angeles,
1950.

an

Rotary

Los

address

by
Dr.
International of

Angeles,

Cal.,

Feb.

to

and

which
nation's

a

reflecting its
the require¬

government

economic

by

bloodstream.

con¬

injecting

air

It

like

into

water

or

is

the

arteries.
Our money remained honest

long '
gold.
off

it

as

was

Since

the

when

the

redeemable

1933, when

gold

policy
more

in

'rates

premiums

because

their

on

A

exerted

check reins

private

these

re¬

movement

worth,

dollar

went

we

standard,

as

into

and

1934

checks

power.

(4) This

of less than honest

use

money undermines business and
therefore employment in insidious

to

could

automatic
pressure

lowances
tion

made

are

and

for

ment costs.

for

deprecia¬

inventory

replace¬

It reduces the

margins
of net earnings on
gross, and raises
business "break-even" points be¬

of

prudence.

What the late Paul

-

referred

once

omic
run

by

the

far

in

without

germ

its

ally put

voters

are

they

of

that

the

mitted

a

and

politically

services.

Thus

is
a

like

The

popular

"inflation."
vast

and

with

,

while
a

false

of

the

sense

belief

clamorous

powerful

plan.

These

the

costly

special

of

loans

and

Commodity

purchases

Credit

the

Corporation,

-

interest

at

must

as

result

a

gold

at

the

of

us

Placing the dollar on a firm
gold basis ought not to add to the
hoarding of gold. On the con¬
trary, once good faith has been es¬
tablished
ment

between

and

really

to

for

cases

of

"free

markets"

and

encourage

hoarding of gold. It reduces the
reliability of the .dollar as the
world's basic currency.

Ample .gold
our

been

once

gold

been

the

intended

exist

reserves

in

in

rates

hoarding in either
and

the

ease

productive

metal

flow

make

more

While return to

omic

tion

upon

the gold stand¬

the singly ef¬
restoring econ¬
and
sanity.
Thjs

means

health

of

a

as

of

gross

over-simplifica¬

confused

problems.

and

confusing

What the restoration of

honest money will do is to set the
provide " the
props
Wid

stage,

furnish

the

pointed

very

timely

cues

tional

accompanying

courageous
set

fairs

in

tive

order,

and

drastic
needed

measures

economic

our

IF

(3) The great and growing ma¬
jority of our people who have

Fund

a

stake

in

mulcted.
now

fixed

This

involved

pension

incomes

applies

demands

to

see

and

personal

called for in

and

give

our

to

sense

of initia¬

responsibility

these times of crisis.

SALESMAN with faith in Mutual
Shares, but you feel fenced in, come and

us.

are

the

oJ

a

nation-wide

distribution

of

an

d

Fund

Shares. Every
organization deals
with this one type of
security. And our sales
are
continuing to grow every month.
Our

idea

generated by

approach to

this team

"Be

don

organization specializing in

Mutual

men

our

who contemplate

might be summed

your

own

boss.

up

about

Simply

You have

use

no

as

joining
follows:

our

shingle

need for time-

•

consuming, non-productive fussing with confir¬
mations, clearances, preparation of advertising,
etc.

We take

care

of all

that^-and feed you a
productive ideas. You re¬
ceive the major portion of commissions due 011
business you produce, possibly more than
you

INC.

continual stream of

Open-End Investment Company

would net if you

From the balance
ment of overhead

Prospectus may be obtained from
your authorized dealer or

DISTRIBUTORS, Inc.

sustained costs."

comes our

profit and reimburse¬

charges.

If

you'd like to know more about the opportunities
in-your territory, phone or write Mr. King
Merritt, President, at this office.

Principal Underwriter
135 S. La Salle Street

Chicago 3, Illinois

115-Broadway
New York 6, N. Y.

Financial 6-3223

REctor 2-8356

Teletype: CG1141

Teletype: NYl-3347




KING MERRITT 6- CO., INC.
22 East 40th Street
Telephone

MUrray

New York
Hill

to

af¬

you are a

We're

and

fiscal

labor

' farreaching
which, if they

in

and

for those many addi¬

credit

economy.

paper,
into

discourage rather than
hoarding, it must not

encourage

relied

or

money

Opportunity for Salesmen

difficult

flexible

a

investments.

ard should

be

of

and

cheapen

test

purpose

redeemability,

people the greater

country concluded the speaker

used

growth of public confidence, now,
as
in
the
past,
will
minimize

would be

widely scattered so-called

has

people,

roving

p

govern¬

money

our

have

reserves

our

holders of dollars, once

honest

restored

affirmed'
by
President
helps delay the coming

.Truman,
inter¬

further

possible.

ficacious

of

through¬

pf our present gold
making convertibility im¬

of

-that

of

or

may

devaluation, with

violent repercussions
the
world,—or
in

out

statutory rate fixed
in. 1934, and
recently strongly re¬

instead of yours.

HUDSON

ignorance

most

new

arti¬

ways

application

Announcing the formation

An

a

policies by Federal Reserve auth

tied up

in

in

evidences

priced

are

orities in the interest of the entire

ex¬

periences, like the billions

and

the

is
or

*

credit

services

in

low

placed

govern¬

inadequate

controls

Government

ficially

!

pernicious economic results,
the fantastic proposals for
and

(2)

indebtedness

term

'

of

range

subsidies

undertaken
even

like,

the deluded

demands

in

about,
Professor up to the public interest, ■ that is,
explained in a variety to the interest of all of us who are
all of which increase the taxpayers and consumers! -

this

ment

spend

may

interest groups will somehow add

output of money, or of circulating
media, without any corresponding
step-up in the output of goods
•

security in

result

the
of

comes

of ways,

and

who

15) Futhermore, failure to make
dollars .freely
redeemable
into

gold in

lulled into

gold, the drift away
from its gold
anchorage has per¬

for

course

danger

Governments

of

This

disastrous

follows:

as

ounce

its

wheels and

sig¬ national monetary order.
Only
nals supplied by the
freedom, if foreign governments and
foreign
we
chose, to convert dollars into central banks may demand
gold
gold.
for their dollars at the
statutory
The disastrous consequences of rate of $35,000 a fine ounce. This
thus playing fast and loose with drastic limitation in
convertibility
the people's money may be parti¬ causes
fluctuating premiums on

as

of

"an

as

body econ¬
distrust" may

appropriate

about

frightening dilution
purchasing power.

to

acute infection- of the

its

given

balances

cies within bounds of realism and

present reduced but non-converti¬
ble value of
one-thirtyrfifth of an

was

and

are
missing.
Nothing
operates pedal faster and still faster if he
automatically to keep fiscal poli¬ is To maintain his balance!

Warburg

and

indifference

ratio

public

toward

wholesome

policies

chasing

the

timely and
Continuous

a

establishment
of
a
gold standard now.
If
delay, the ineptness of present

we

in¬

companies'

permit

genuine

applies to life insurance
holders
who
must
pay

terest

23

impairment

and

universal

to

the

It

sales

r

in

paid in money of depreciated pur¬

when

money.

(1)

Brannan
*

Robinson

/human"

stream,

Financing

payments

imposed from above.

.

tinued expansion of
monetary and
credit bases is a pollution of the

the

of

to

dependable

an

all political

manage

in

growth.

Robinson

the

blood

compared

ticipating

balance

budget since 1930.

healthy

a

monetary and credit system, de¬
velops with the whole body, par¬

not

action.

mock¬

faith

gold at the

inflated

warning.
was

on

its

into gold, with its intrin¬

and

sound

re¬

dollar.

rest

balancing of cause of the rise and the greater
budgets, repayment of debts, and rigidity of production costs.
In
borrowing through sale of obliga¬ fact, it puts many businesses in
verted, by strange perversions of.
tions to real investors, rather than the
same
position
as
a
cyclist
reasoning and experiences, into
through monetizing debt.
whose
center
of
essential conditions of progress.-'',,
equilibrium is
Without the gold standard these being raised
by expansion of his
They are rather the

may.be

view

deplorable

sults of bumbling or outright disV
honest
fiscal
policies are .' Con¬

being,' the

a

the

their

sic

turn into cruel

must

purchasing ways. It pads corporate
earnings
which threatened the value statements because
inadequate al¬

convert

accompanied, if not actu¬
ally financed, by mounting public

Congress.
imply
point
of

of

must be

debts.

in

power

dangerous illusion

that

us

These

Leland Rex Robinson

the

sulted

to

not

earning assets are made arbi¬
trarily low, and whose claims are

rate,

governmental

extravagances

expanding com¬
agriculture and industry

among

with telling force

us

There

money

of deadly

one

coinage

are

ery,

money

reserves.

able-to hold the

were
over

governmental and private extravagance.

over

a

all forms of

as

cur¬

purchase or,
part of the

convertible into

defined

gold at defined coinage rate, public would be

able to hold reins

banking

long

were

"honest money," contends it will be check on deficit spending
and mounting debts. Contends,! if all forms of money are made

become

yet,

nation's

into

transmuted

are

through bank

rency

Adjunct Professor of Political Economy, New York

expense

hugh revenue gaps plugged by
issusing government "IOU's"

By LELAND REX ROBINSON*
on

paid for at, the

of

Money

Vice-President, Economists' National Committee

be

to

are

convertible into

CHRONICLE

(623)

The Issue of Honest

Dr.

FINANCIAL

&

16, N. Y.

9-1536

24

COMMERCIAL

THE

(624)

"Nobody in this country
coddled; nobody wants the
National

JOHN BUTTON

Association

American Medical
Earl

M.

Scanlan

Co,, of Denver, Colorado, are starting a
series of advertisements that they are running in their local papers.
They will endeavor to drive home the idea that the small investor,
or the large investor, can now make his investment decisions in
the privacy of his own home. We reproduce the first ad in the
series which they are now beginning.
&

The above ad is about four and

does

it

the

As for

copy

freeborn

in at

come

humble

our

we

The idea of

sound.

and women,

men

the American tradition.

have been going around Asking People If They

observes in the

the peo¬

review

qualify

as

pale of buying

scores

of other services outside of the

selling securities.

or

We've not only made these

FREE offers, but in some instances I feel certain that we have in¬
creased our sales resistance by almost begging for orders.
Now
Scanlan & Co., comes along and says, "Yes, we'll be glad to see

we'll even come to your home, at any hour of the day or
Evening. We'll do it as a favor to you." It is a good idea
it
may take some pounding to get it over, but if this approach were
you,

...

carried out all the way through our sales efforts (making securities
service something special, something on a pedestal, instead of a
constant chase between elusive investor and salesman) the results
should be improved sales volume and, more important, better cus¬
tomer

For

back

the

to

ads

...

like

I

the

naming

of

school

and

teachers,
These

doctors, dentists, lawyers, business men and women,
People Can Best Be Seen in the Evenings.
One very

slight

improvement

A

call

let

Co.

you

Organization
(ITO) Charter, and to U. S. Gov¬
Guarantees

and pleasant

known

announces

service—investment selection at

new

a

school

teachers,

women.

are

Besides,

buying

downtown

difficult, what with parking

more

But

under this

becoming

is

about such things. Merely phone us to

send

you

one

of

our

this

Commerce

of

your

all

from

is

a

well-qualified

information

you may

man

they have $10

or

or

bership
effect

on

that

ITO

your

any

trained

in

is

authorizes

take

to

the

action

certain

of

small, whether

in

domestic

international

ments;

the

charter

$10,000 to invest.

favors

agree¬

tone

general

of

socialism

state

the
as

against private enterprise."
Will you

write

call and have

or

how convenient and

profitable it is

to

show you
use this new

us

Regarding guarantee of invest¬
under Point Four, it was

ments

stated

INVESTMENT SERVICE

HOME

that

"This

program

is

basically unsound and objection¬
capital exporting coun¬

able; the

try

ehrl m. scnniHii& (oiiiphiiy

makes

taxpayers'

improper

tion

Bankers Securities Corp.

Harry

J.

Harry J. Long
Long

will

become

a

PHILADELPHIA, PA.—Albert
M. Greenfield, Chairman of the
Board of Bankers Securities
1315

Walnut

Street,

Corp.,

announced

partner in Schafer. Miller & Co., that at a stockholders meeting,
15 Broad Street, New York City, David
Bortin, was elected to the
members of the

Exchange,

Long

is

on

New

York Stock

February 16th.

manager

of

the

investment department.




Board of Directors.

Mr.

firms

exploration
timber

other

elected.

Directors

were

re¬

Statistics

ownership

on

S.

curities

that

show

of

Government

such

se¬

holdings

by commercial banks on Sept. 30,
1949,
increased
approximately
$4.2

billions

previous

the

over

while decreases were noted
insurance companies and

year

life

for

beginning of

The

any

has

ideas

strange

ering the last 10

of

cussion

cipient

country

may

Opposed

antees;

would fall back

serious

complications

may

on

public
U.

if

the

which

events

place during 1949; details of

S.

offerings

marketable

of

Treasury issues from Janu¬

1947 to February of 1950, and

tabulations

of

receipts

and

ex¬

penditures of the Treasury by fis¬
cal

of the assets of

any

with

years,

actual

its nationals, forcing

covering

ment

records

estimated for 1950-1951.

of

the govern
exporting nation to

the

participate in ownership
tion

in

and

politics

of

budget

that

"the

Marriage and Divorce

that

To Be Discussed

country."
further stated

was

basic

and

or opera¬

territory of an inde¬
nation,
causing
wide¬

finances

It

1939-1949

the

pendent

is

error

guarantees

vestors,

compounded

limited to

are

when

old

new

Economic

if

The New School
search

without

on

assistance.

government

tax¬

as

announces

included

in

meeting

in¬

investors have

Finally, the old investors,

elements

New School

operated under the risks involved

Re¬

for Social

dinner forum

a

"Marriage and Divorce" spon¬
by the New School Associ¬

sored

payers, would be helping to pay
the cost of guarantees of new in¬

ates, at the New School, 66 West
Twelfth
Street, on Thursday,

vestments, possibly even to com
petitors.
Guarantees should be
given by the recipient country
instead of the capital exporting

February 9, 6:30
Speakers
Honorable
of

New

the

To Be Formed in N.Y.
York

February

17th

the

Stock

Exchange
Oppenheimer &
Co.
formed

with

offices

at

New

firm

of

will

be

25

Broad

T.

are

the

Delany,

Domestic Relations

York

City; Dr. O.
professor of
Temple University

English,

psychiatry.

On

forum

Hubert

Justice

.Spurgeon

Oppenheimer & Go.

p.m.

the

at

Court,

countries."

Medical Shcool and author. "Pyschiatry's Contribution to Family
Life";
Honorable
Henry
Clay
Greenberg,
Justice,
Supreme
Court

New

garet

Mead,

York

State; Dr. Mar¬
anthropologist and
curator
of
ethnology,

associate
American

Museum

of

Natural

History; the Rev. John C. Murray,
will
be
Max
E.
Oppenheimer, S. J., professor of theology at
Adrian Ralph Kristeller, member Woodstock
College; Dr. George
of the Exchange, Albert Deuble, Shuster, president of Hunter Col¬
and Hugo Heksch, general part¬ lege;
Richard H. Wels, member
ners;
and
Beatrice
Winston, special committee of the New
York City Bar Association on The
limited
partner.
Mr.
Kristeller
has recently been active as an Improvement of the Divorce Laws
Street,

New York City.

floor
was

&

a

Partners

broker.

Prior

partner in J. B.

and

author,

Man's

"New

Reno."

economist

A.

York—Poor
Wilfred

May,

and

writer,
who is
chairman of the forum committee,

Co.

will

be

moderator.

Storb-Irvine Co.
Storb-Irvine & Co., Inc., is be¬

ing

formed

with

offices

at

527

Fifth Avenue, New York City, to
engage in

Officers

guar¬

international

result

in¬

prices

economic

and

took

to

capital it,cou!d tend towards
socialistic ventures, the recipient
country knowing that foreign in¬

dis¬

which

occurrences

market

cov¬

a

chronology of important finan¬

cial

ary,

over

Hanauer

ment

and

years

to take

individual

ments, and. while participation of
local capital may lessen adverse
possibilities of collaboration with
imported
capital, with govern¬

graph

a

representa¬

capital exporting nation is forced

thereto he

attempt

of

during
this period. Other sections contain

specu¬

re-*

of

fluenced

the

reserves;

prices

tive U. S. Government issues

mineral

of

includes

booklet

market

of

protect itself against making pay¬

vestors
All

with

commensurate

and/or

•Admit

its

money

lative

Schafer, Miller to

of

use

to underwrite
risks; it is not practical to insure
against confiscation or expropria¬

BLOC.. DENVER » MAIN 3211

300 COIO. NATIONAL BANK

the part of

on

marketable U.

could

policies; the charter fails to place
adequate curbs on the operation

statistical

1949

during

imum.

organiza¬

which

interference

mean

selection at home.

investors, large or

expressed

was

"there

inadequate
recognition of free enterprise; the

worry

evening.

and has available

desire. Make

This service is for all

day

Amer¬

The position of the U. S. Mem¬

charter

of the

the

of

The

position of the United
States members will be put forth
at that meeting.

home,

...at ANY HOUR

He

and

hemispheric

a

tion

representatives to

country's

its Fifth Plenary

tendance

and

don't

is

Council

icas.

and

of

emphasized
fiscal
authorities to keep the cost of
Treasury borrowing at a min¬

spread repercussions on the credit,

Inter-Amer¬

Meeting at
Santos, Brazil, April 23, with at¬

and other problems.

idea of Scanlan's

new

men

the

by

Inter-American

States

Council

hold

home.

more

lawyers, business

week

was

Chamber of Commerce which will

visit our offices
busy with their own work—

doctors, dentists,

Four,

representative in the Inter-Amer¬

Many investors cannot take the time to

during business hours. They

this

States

United

ican

possible. Earl M. Scanlan and

as

Point

under

Invest¬

of

Council.

in making the selection of your investment se¬

easy

issue which

longest

the endeavor

no" policy to Mr. Ewing

certainly

Trade

Production,
its

no,

Strong opposition to the Inter¬
national

ican

help

the

erations

technique is impracticable.

The

.o

"no,

a

gentleman

^

United

curities

offering

the

was
of an

maturity of any
public
marketable
Treasury securities since the close
of 1945. The low coupons of the
issues
offered in refunding
op¬

Inter-American Council charges Trade Charter under¬
mines free enterprise, and that Point Four's proposed guarantee

made

X

out,

December

offering

U. S.

ments

Ocw *i¥<mef

points

last

months

all his ideas is the essential

ernment

...in

signalize the end of the
policy of e-xtremely
refunding, the book¬

short-term

ITO and Point Four Guarantees

of

SELECT YOUR SECURITIES

major highlight of the gov¬
bond market during the

sibly

a

broker on the phone and ask him to send a rep¬
they desired to invest $10. An improvement could
have been made by just mentioning "several hundred dollars or
many thousands to invest."

advertising that we have always believed
would pay dividends. But it must be consistent, it must continue
to talk "home folks" but with restraint and sincerity.
This ad is
excellent—I hope that we will hear more from Earl M. Scanlan
& Co. about this campaign as it develops.

fi¬

Government

Treasury's

"the American tradition."

if

This is the kind

part,

our

The

any

resentative

1950 edition of its

S.

past year and one which may pos¬

really "constructive program."

(in our opinion) could be made in the
copy. In the line "This service is for all investors, large or small,
whether they have $10 or $10,000 to invest," why not omit ref¬
erence to such a sum as $10?
Nobody in their right mind would
ever

U.

of

FederaT Reserve banks.

relations.

Getting

fi¬

.

few

past

deficit

to

ernment

seems
to have developed an
Oscar R. Ewing
increasing intransigence among the
Republican leaders,>who are now bent on stubbornly
and blindly resisting every
forward-looking pro¬
posal for domestic progress. They say they want
to end their 'me-too' policy; and
they are replacing
it with the 'no, no, no' policy.
"I am sorry to see them take this course.
The
country needs two strong parties and it is incon¬
ceivable to me that the opposition party can ever
be strong if it consistently refuses to offer
any kind
of constructive program to the American
people."
—Oscar R. Ewing, Federal Security Administrator.

analysis,

advisor, and

an

the

the

witnessed

nancing operations.

there

quotation service, making up in¬
come and state tax reports for clients, besides investment advice
which took years of experience and study before a person could
portfolio

.

1949
return

nancing for the first time in four
years with the largest annual total
of
Treasury
bond
refundings
since the war, C. J. Devine & Co.

had

"During

Could Do Business

With Them. Securities dealers have offered Free reports, statistical

check-ups,

.

Treasury Market

year

Treasury's

Association, to tell him how to

offering a service as a Privilege is certainly putting the shoe on
the right foot. For too long it seems to me the investment dealers

•

The

tunity to provide for old age or
disability.
This is the mainstream
of American liberalism; it is part of

time.

any

opinion, the approach is

Manufacturers,

1949

molly¬
the
or
the
or

ple of this country insist on equal
opportunity — opportunity for em¬
ployment, opportunity for educa¬
tion, opportunity for health, oppor¬

from this campaign. It
would be too favorable.
Although there is always the possibility that one, or a few good
In

of

wants to be
Government,

by their very independence,
by their insistence on the rights of

would be very pleased to know the results
is quite unlikely that at the beginning they

leads, might

C. J. Devine Reviews

"But

half inches double column.

a

over-crowded.

look

not

Thursday, February 9, 1950

his life.

run

However, it still tells the story and, due to a sound layout and type
selection,

CHRONICLE

"No, No, No" Policy

Securities Salesman's Corner
By

FINANCIAL

&

Rutledge
Wilcox.

the securities business.

are

Raymond

Irvine

and

C.

Storb,

Donald

E.

Corn

Exchange Promotes

The Corn

Co.

Exchange Bank Trust
the promotion of

announces

George

W.

Bunce,

C.

Bernard

Lindstrom, York Kildea, John A.
Murphy and Richard L. Salzer to
Assistant Vice-Presidents.

Volume

171

Number 4880

THE

COMMERCIAL

ing

A

Proposed Reduced

You

the

spending

Shock

and

Alarm

of

to the current session of

ft is

because

we

deficit

nearly

of

in

d

a n

dent

deficit

the

tige

of

his

office

Our govern¬

of

the

the

fact

that

red

18

not obvious to him at

of

the

last

20

advertence
not

—

by

re¬

trenchment
had

we

pluses

sur¬

in

fis¬

cal years
and 1948.

under

esti¬

We

then

r e v-

started

deficit

spending again in fiscal year 1949.
Against this background, it is

alarming enough that the

Presi¬

dent would launch us into a third
deficit decade by his admitted in¬

capacity—for
tive

the

postwar

third

year

consecu¬

to

—

hold

ex¬

penditures to the level of revenue.
The President three times in
the

past

23

days,

has

recommended

deliberately

that

Congress re¬
frain from
balancing his budget
for the coming year!
The

ominous part of this
post¬
deficit spending is that we

war

unable to

are

balance the

budget

in time of peace and
greatest pros¬
perity. If we can not balance the

budget now, I ask you, when

can

we?

existing conditions is

proposals
not

If

nullify

mental

are

few

a

are

successful

no

integrity who have
in

not

men

of

hastened

periods of prosperity to liqui¬

date their lean year debts.
From

their

own

there

may

could

sympathize

the deficit

be

which

the

fiscal

ernment

procedure
to

what

was

a

and

of

of

none

many

front

us

self

now.

by

the

would

excessive

hardships

act

as

of

and

peace

question:

prosperity poses
long can we

How

to

to

debt

our

aid.

we

can

duction

a

One
tion

in

defense

to

cession in business is
ent

at

horizon.

or Hear

on

National

I

pros¬

cl^bt already

quarter of
sound

prudent
dent

more than a
trillion dollars.
The
is

debt

*An

obvious

person.

proposes

more

the-

a

course

with

address

by

Yet,

that
the

to

the

tional

every

others

Byrd

1950.




Domestic-Civilian

(inch

can

on

If.

we

the President's

with

addi¬

increase

an

And

source.

erased

of

if

the

by increased
it would
increase
of

individuals,

an

average

be

in

addition

to

a

increase in postage rates and
increase in payroll taxes
the

temporary
that

seen

President

the

over

But

past

name

expedients

emergencies.

re¬

to

almost

of

meet

invari¬

ably it has been this type of leg¬

sound

leading to the socialistic destina¬
tion now
looming ahead. A few

islation

only

that

course

this

be

It

not

It

can

of

that

prosperity since the
1948

end

of

the

overall

an

As

as

we

the
as

four

expended

war

and

times

the

nine

times

spent when I

we

Senate in

to

to

in

we

are

chasing

the

public

through

(correct)

These payments are being made
federal aids, grants, subsidies,

pensions,

other

every

advance,

form

virtually

and
of

government

contribution

and

ex¬

penditure.
Too many of us

regard this del¬
overlooking
part of it is

uge

as
easy money
the facts that a
great

mi¬

a

to

payrolls,

as

the

that the spenders are
having their
field day. And, it is in these
pro¬
that

a

$46y2 billion,

the

Truman budget.
It
is in the domestic
civilian
programs
detailed
in
the
table

grams

are

departments

payments

1933.

give below the Byrd budget

there

these programs this year will total

much

as

came

today

and
agencies
thousand units), and the
President has just announced that

before

year

legislation for

Stand

stand

we

(with

ex¬

much

as

ex¬

and

different programs spreading
out from
among 60 principal fed¬

,

is

up

100

penditure budget totaling $36 bil¬
This

programs—

emergency.

As We

Fed¬

eral

have proposed

lion.

next

the

fiscal

mendations.
I

gate

many—have been repealed but

reincarnated in

expenditures by $9 billion if
enact the Persident's recom¬

we

government

the

ception have been picked

a

increase

will

we

opened

their objectives almost without

should
be
As proof I submit that
months of peace and

18

which

these

not

is the will to do

government

the

eral

is

Congress believe

preserved.

year

say

be done if the President

can

solvent

in

done

It is inaccurate.

the

and

To

us.

be

not

can

done if there

it.

to

open

rage of easy money in the form of
deficit dollars
flowing through ex¬

billions, and that binding strings

panding Federal

are

programs

in

which

are

undermining the will of in¬
dividuals, regimenting the pro

deficit

is

through
that

programs

of

dollars

from

borrowed

attached.

It

these

give-away
plans, ad¬
regimen¬

federal

agriculture and labor,
controlling the practices of busi

ministration, control

ness, curtailing the sovereinty of
states and
reducing the self-de¬

viduals, their private lives, their
agriculture, their labor, their bus¬
iness, their state and local gov¬

termination
in

our

tation

privileges traditional

local government.
no

mistake.

It

color
is

in

the

the

red

in 21
years,

spectrum

of

19

social¬

before

Federal

including the

The

an

the

deficits

vate

nation.

enterprise

system

already had

over

The

is

which

to

ourselves
that

fact

uals

one now

indi¬

are

is

have

by

million

individ¬

receiving

regular

17

now

we

indicated

direct payments from the Federal
Government and government pay¬
ments
to
business are equal to

'

insolvent

extent

gorged

us

than half of corporate

more

its after taxes

insolvency sets in.
Our private
enterprise system cannot survive
in

extended

are

fare.

proposed by the President in this
time of peace and highest
pros¬

perity.

and

ernments, and their general wel¬
is

ism which lies at the end of this
rainbow and the predominating

When debt destroys confidence,

would

enacted

usually-in the

years

duction in Federal expenditures to
balance with revenue is the

Make

43%

in

all

is

certain

National
Board
mate

would

ber

of

people

payments

paid.

are

The

receiving

increases to

prof¬
num¬

regular

25

million

pri¬

Continued

funda-

on

page

28

staff

of

the

Conference

my
esti¬
increase in in¬

an

corporate

would

—

indisputable

the

confirm

that such

taxes
take

that

by

Industrial

dividual,

and

raise

the

Federal, state

*■

payroll
total

and

tax

local

—

Mail your Annual Report to the Investment

Houses
§1951

them

(Estim.)
1-9-50

(exclusive of

Byrd
$36 Billion.

Jan. 9

Revision

(Actual)

and

Budget

Proposal

Country.

Investors
on

your

$11.4

$8.9

$12.2

1.9

2.3

1.9

A

look

to

company.

ddressoyruph Svrvicv

2.7

We

have

graph

a

metal

stencil

Department

for

in

our

Addresso-

investment

every

0.1

1.0

1.0

1.3

banking and brokerage firm in the country;

0.1

0.1

0.1

0.4

arranged

0.6

2.7

2.2

2.2

1.1

1.8

1.2

2.2

1.3

1.9

1.2

1.7

0.1

0.2

0.1

0.2

0.2

0.2

0.2

0.2

1.5

1.2

1.0

1.3

11,0

13.1

11.3

13.5

12.3

10.3

12.5

0.8

1.0

1.0

sources

Natural

&

agricultural

(including CCC)_

resources

(including postal deficit)

Finance,

commerce

&

alphabetically

re¬

Transportation and communica¬
tion

the

information

Pres.'s

$6.9
secur.

of

for

research

Agriculture

industry

Labor

General government
II National Defense

Military Establishment

10.6

4

Activities

supporting- defense
(including stockpiling)

Veterans

6.6

6.9

5.3

IV

6.1

Foreign

4.8

6.0

4.8

4.7

5.2

5.7

5.7

This list is revised daily and
most

Our

$43.3

S33.0

$42.4

**37.5

**37.5

up-to-the-minute

offers

service

and

names.

you

the

available.

charge for addressing envelopes for the1

complete list

$5.00

per

(United States

or

Canada) is

thousand.

addressing completed within 24 hours.

5.6

$34.2

States

by

Cities, and within the Cities by firm

All

0.4

III

V

Interest

on

the Federal debt

"Grand total Expend.

Budget

Revenue
Deficit

before
Na¬

City,

The Foundation

Rjjjp secondary mtges.)

Presi¬

Regular Meeting of the
Conference Board, New York

Thus, it is clearly

The

The foundation for
socialism in
this country has been well
laid by

Expenditures

now

corporation income

require

were

calculations

na¬

including

Education and general

pile up
continuation

Senator

on

re¬

from

Housing & community facilities

we

310th

Jan 26,

24 %
a

re¬

It

interest)
Social welfare, health and

prosperity is sus¬
pended dangerously from the un¬
predictable economics of a Fed¬
eral

the

this

reason

greater than

veterans

precipitated by the dis¬

admittedly

of

business

than $11 billion.

this

on

This

Expenditure Categories—

is

perous, but the

they

govern¬

democracy,

we know
it, cannot exist.
alternative is socialism.

legislation

duction

state

revenue

-Fiscal Year,1:1950

so

The country is

prices

of

it

as

20

(In Billions;:Qf Dollars)

the pres¬

torted ego of a labor czar.

at

need

form

our

without

$36 billion budget for
progress, in tabular form with comparisons

re¬

income

people

to

and

$36 BILLION BUDGET FOR PROGRESS

of

its all-time
peak, and

mental

ment,

pay.

nearly 30%.

of

the

is employment, with the
exception
of those who choose the
idleness
<of strikes

would

mean

productive
capacity of our
private enterprise system, operat-

re¬

No

major

requests

taxes

living stand¬
ards,
individual
security,
civil
rights, and personal privileges, is

And

early

costs.

a

more

which

principal

is

respects,

position where

look forward

volatile

cover

Violence by Spenders

reductions
in
war-related expenditures for for¬
in

with¬

corporation income

on

But,

eign recovery and veterans.

confis¬

25

proposed.

emergencies con¬
The President him¬

are

into

50%

con¬

and

he

Federal

it

solvent?

add

until

expenditure

into

time

new

taxes,
business fol¬

attempted to

pay.
This official embrace of
chronic

in

a

he

economy new taxes could eas¬
a minor business de¬

totals

com¬

written

in

in

the present

deficit

messages

He

million

taxes

ability of the people to

financing

he

them.

proposal.

the

Presidential

$800

lasted

tional taxes

of

some

It

pel the Congress to spend less and
thereby keep the budget in bal¬
ance on a basis of
taxation within

deficit

for

cession.

taxation
to

the

existing tax rates are
drying up the nation's venture
capital, which is the life blood of
the expansion of production re¬
quired to produce more of what

I

When he forecast

only

the

cline

taxation;

irritant

an

Presi¬

ily accelerate

fool-proof system of checks
They believed ex¬
spending
would
be

that

recommends

he says we

our

gov¬

believed

balances.

checked

asked

recession

a

In

cessive

who

men

with

foreign

these

of

experience,

financing in periods

postwar

and

safe¬

our

they

to

the

contrasted

asked for $4 billion

funda¬

have

depression and war, and even in
periods of prewar
emergencies
and

deficit

we

drew

not

but there

have

beginning. In their infinite wis¬
dom, the founding fathers tied all

businessmen—

of families—who have
experienced the necessity of
borrowing in times of adversity,

the

the

as

the

proposals,

would

lowed.

heads

or

of

one

tenets

advice

make

Let us remember,
too,
inflation will be reflected

new

guarded this government from its

main

Adversity and Prosperity

available,

did last year.
this

to

If the President
thought the na¬
could take the taxes to
pay
for his expenditure

admittedly
designed to meet

follow

we

dollars

tion

expenditures.

would

Even

to

up

Taxes

which

even

income

in all government
purchases.

Then, this week, he brought in his
tax

be

and sooner.

the

gress not to cut it to meet revenue.

tinue

There

time when

stake.

were

must

suggests.
Insolvency would
inflate money far more than
that,

The President brought in an ex¬
penditure budget and urged Con¬

from

-

mating
enue.

1947
This

resulted

Harry F. Byrd

—

way

dent

the solvency of the nation
may* be
at

and

can

inflates

billion

revenue

the

By in¬

balance

300

fiscal

in

years.

our

our

balance start gradual reduction
the public debt.

consideration

course

a

close

catory level.

fatalistic.

financing

be

not

sound

by

system,

achieved by reduction in
expendi¬
tures.
It cannot wait until deficit

President

ment has been

under

our

government, and

nothing at this time is
important to democracy and

A

must

in

to

violence

July 1, and then while keeping it

a

of the United- States and the
pres¬

under-estimated

spending.

dollars

in

influence of

dangerously

unjustifiable

in the
world, than for
Congress to balance the federal
budget for the year beginning

Solvency at Stake
The

an

freedom

of

over-indul¬
gence

billion

wreak

life.

more

month.

Congress

stupefied by

are

half

a

Thus

spending at the rate of

a

could

invite

spenders

form of

own

If this nation is not shocked
by
the President's recommendations

But.

would

poses

security and security of
democracy throughout world.
our

under

policy of indefinite deficit spend¬
ing such as the President pro¬

financing is leading to socialism and insolvency, and
balancing of Federal budget as first and vital require¬
of

spenders

demeanors.

and deficit

preservation

requires

that

sure

upon our system and form of
gov¬
be limited to mis¬

Committee, outlines a revised budget reducing
Federal expenditures from $43 to $36 billion, and thus wiping

for

of

exist in

(625)

ernment would

Senate Finance

ment

Solvency
be

may

sponsible

out excessive government

form

can

balanced budget, within our abil¬
ity to finance it, the havoc irre¬

Scoring President Truman's 1950 budget along with his recent
tax proposals,
prominent economy advocate and member of

stresses

Neither

CHRONICLE

balanced budgets.

Senator from Virginia

deficit. Points

FINANCIAL

democratic

a

insolvency.

Federal Budget

out estimated

under

government.

By IION. HARRY F. BYRD*
U. S.

&

^Detailed
of

reserves..

I. Actual.

\'42.2

or

surplus

l'igures

* Ended

may

June

'"Maximum.

not acid
30. 1948.

tTMinimum.

**37.5

fi+8.0
precisely
?Will

to

end

11

totals

June

5.5

due

to

30,

1950.

**

+ 2.0

i

§Begins

July

can

labels at

also supply the
a

list

on

gummed roll

small additional charge.

Herbert D. Seibert & Co., Inc.
Publishers

of "Security Dealers of North

America"

5.1

I

rounding and

We

omission

1,

1950.

25 Park Place

REctor 2-9570

New York 7

THE

(626)

28

COMMERCIAL

Thursday, February 9, 1950

CHRONICLE

FINANCIAL

&

sake
only

immediate advantage for the

Dual Price

Public

Utility Securities

British Coal

on

ELY

Commenting

Southwestern
from

boundary of Kansas south

from
and
are
not fundamental disagreements on multilateralism.
Cites
dual pricing of British coal as induced by need to hold down
domestic industrial costs, while increasing sterling exchange

and west to

Mexico, and includes the regions known
Oklahoma Panhandle,
the Texas Panhandle, the South
area
in Texas and the Pecos Valley, New Mexico — a

the Pecos Valley in New
as

the

Plains

large

as

by

properties

Valley

Pecos

the

line.

a

LONDON, ENG.—From time to fair.
time the harmonious economic

115,000-volt

lations

miles

92%

several
issues

tricity in the 1949 fiscal year.
The company also produces,
purchases and sells natural gas apd provides water service, these
accounting for approximately 5% and 3% of revenues respectively.
Principal activities in the territory served are farming and the

the

for

about 7%
Electric

principal

The

31

The

gas

price to the

any

Output (million kwh)
Electric Revenues (000).__
Customers

551
$7,494
68,084

10

_______

lines nearly

rebuilt

or

87%
106
72

(principally

1942

voltage

plants:

July

1950

18,750 kw

October

1950

18,750

1951

37,500

1952

50,000

.'___

March

February

industries.

capacity

over

when

will represent an

completed

the current capacity.

This rapid growth has

necessitated frequent financing, but the
has maintained a balanced capital structure. Including

company

current
about

bond

as

and

stock

financing, the capital

structure is now

follows:
Millions

Percentage

64%

$58.8

Debt

Common

9.5

10

24.2

Stock

Preferred

26

:

Stock

100%

$92.5
The

company

has

offered

new-money

common

stock

on

a

subscription basis early in each of the past four years, including
1950.
The subscription price is usually sufficiently below the
market price to give the rights real value.
Over-subscriptions are
also

permitting (Southwestern having pioneered in the use of this

underwritten
by a syndicate headed by Dillon, Read & Co., historical bankers
for the company. The offering of a year ago was 210% subscribed
—possibly a record—with 93% taken under pre-emptive rights.
This year stockholders subscribed for 95% under the pre-emptive
rights, and the over-subscriptions had to be allocated on the basis
of 1-for-13, making the total subscription 158%. This method of
equity financing, which gives stockholders a better "break" than
in cases where the rights have little or no value, should build up
considerable good-will for the company in its stockholder rela¬
technique)

and the offering in each

case

has been

tions.
In

the

State

of

Texas/ where Southwestern's principal prop¬
located, there is no state commission to regulate utility
rates, which remain under the judisdiction of the municipalities.
A state law indicates that earnings up to 8% on the rate base
may be considered reasonable.
In the 12 months ended Oct. 31,
1949 net operating income reflected a return on the present esti¬
mated rate base (net plant excluding intangibles, plus construction
work in progress and estimated working capital) of only about
5.5%. Despite the steady increase in share profits on the common
erties

are

stock in recent years, therefore,
able in relation to investment.

earnings still

seem

quite reason¬

^The stock is currently around 33V2, paying $2.20 to yield

6.6%.

Earnings of about $2.80

on

the increased number of shares




ending Aug. 31,1950.

rill, Lync h,
Pierce, F e li¬

since

an

&

ner

in

Beane

Chi-

the

c a

office,

g" o

of

Board

Trade

Build¬

ing.

-

Mr.

MaSOll

Robert Mason

recently

was

Vice-President of Central Repub¬

in¬

lic

Co.

in

their

of

charge

New

He is well known in

York office.

is not due to

the

of

British

ijood subsidies or by

consumer

in the form

of IBA.

higher food prices.

fundamental

Western

being.

time

the

for

Curb 5 & 20 Club

risen

much

more

since 1938 than

but.all over the British imports of food from coun¬
present, however, it tries importing British coal. Be¬

Europe

world;

at
would mean loss of gold to Bel¬ yond doubt, coal is one of Britain's
gium, Switzerland and a few other staple expor ts. " Unless it can be
countries, and she can ill afford to sold abroad at reasonably high
spare
the gold.
Fundamentally prices there is very little hope for
Britain is not in favor of quanti¬ the balancing of Britain's inter¬
It is true, the
tative discrimination, but is afraid national accounts.
the

on

of

their too

her

effect

balance

As for the dual price

sudden normal procedure would be to
of pay¬ raise the domestic price of coal to
the level of the
export price—

of British

its removal at the present
stage
would be most awkward

coal,

which

latter,

incidentally,

varies

from country to country—so
be able to export

as

profitably with¬

out maintaining the unnatural sys¬
politically and economically.
tem of dual prices.
But the result
There can be no doubt that, should
of such a policy would be a very
the difference between
domestic
sharp all-round increase of Brit¬
and export price of coal be elim¬
ish costs, which again would de¬
inated
now
it would affect the

prive Britain of a large part of the
government's chances at the com¬
benefits derived from the devalua¬
ing general election.
If the dif¬
tion of the pound.
So evidently
ference is eliminated through an
the Choice is betwen evils.
increase of the domestic price the
It seems,
therefore, that even
result would be an outcry against
dear
coal
and
against the all- after the general election it will
round increase of the cost of living not be easy for a Socialist Govern¬
through higher cost of industrial ment—or, for that matter, for a
production
and
of
transport. Conservative Government, if such
Should the situation be dealt with should be returned — to comply
through a reduction of the export with the American demand of do¬
price it would mean that the Na¬ ing away with the dual price sys¬
Britain is working at present
tional Coal Board could no longer tem.
claim to be working on a profit¬ with such a narrow safety margin
able

basis,

weaken the

which again would
government's case for

nationalization.

that

she

can

ill afford

to discard

system which appears to facili¬
tate her difficult task to some ex¬

a

though that system is
The Washington
correspondent
of the London
"Times" actually- thoroughly unsound from a theo¬
retical point of view.
In order to
alleged in a recent message that
induce a British Government to
the reason why American opinion
drop
the dual price system it
is in favor of doing away with the
tent,

dual
as a

even

that

guments showing that the loss suf¬

price of British coal is

industry

able to show a

economic

ain

J.

member

of

Hopkins,
the

Exchange for

feel

cease

profit.

policies and the efforts vincingly.

thrust such

American

would

that

policies upon Brit¬
this

attitude

attack
is

on

grossly

ment

Otherwise

in support of the

the

argu¬

American

the demand boils down to urging Brit¬
un¬

ain

to

relinquish

a

much-needea

27

over

regular
Curb

a

York

New

elected

Curb

has

years,

of

President

been

the

Exchange

members' Five
Club,
it was an¬

and

Twenty
Vice-President

of

nounced.

last

group

the

A. O'Brien, be¬

Edward

succeeds

coming

the

Hopkins,

Mr.

year,

Vice-President of
which was formed in

Third

club,

1947.

Kimm & Co.,

Walter E. Kimm of

succeed¬

Vice-President,

elected

been

has

Treasurer,

year's

lgst

ing Mr. Hopkins, while Lawrence
M.
Stern is the new Treasurer.
Stern

as

Mr.

succeeds

Feinstein

Jacob

Secretary for the coming

year.

of the Exchange,

members

Ten

25 years as
during 1950 have
into
the
club,

complete

who

will

curb

members
inducted

been

bringing to 162 the full member¬
The

ship.

Edward

Cahill,

members include
Thomas F.

new

Bowler,

J.

Frost, Lewis S.
R. Lowenfels,
Kaufmann Alsberg &

Ezra

R.

Jr., Bertram

Kerr,

Richard

K.

Vanderhoef

Co., Schuyler Pardee,
&
Robinson.
Robert

Smith,

J.

Raymond A. Bau, Charles M. Finn,
Adriance & Finn, and Carry Onderdonk, L. A. Mathey & Co.

who was elected
the Curb Ex¬

Hopkins,
membership

Mr,
to

on

in May, 1922, less than a
after
the
Exchange had
indoors,
served on the
of Governors of the Curb

change
year

moved
Board
from
a

1937 through

partner

1925

until

1939.

Kohn

of

dissolution

firm's

the

He was

Co. from

&

in 1932.

E. 0.

Phillips Wi

would be necessary to produce ar¬

result the nationalized British

to be fered in one direction would be
Even those offset by at least corresponding
immediate gains.
And it would be
quarters in Britain which are of¬
ten inclined to criticize American very difficult to argue that con¬

coal

Elects New Officers
James

to

both

to

have been forecast for the fiscal year

in the form of

market.

and other instances

British attitude

removal

125,000 kw

generating

vision of Mer¬

in the export price of coal

crease

ments.

This

increase of 50%

Indeed,

un¬

derwriting di¬

would
like
to
be in a the price of British exports, even
position to buy oil wherever it is allowing for the higher export
cheapest, but she has to cut down price of British coal. It is possible
somewhere her dollar expenditure to argue, therefore, that the rise
before
her
gold reserve is ex¬ in the export price of British coal
not the
hausted.
She would like to return is the consequence and
to full multilateralism, not only in cause of the rise in the price of

of
Total

the

Britain

a

high

Einzig

proposed

conception,

1,000 out of 2,717 miles have been con¬

since

cia ted

with

On the other hand, those who
disagreement
conception, but criticize the British Government's
to the immediate situation which policy should bear in mind that
calls lor a departure from that the price of British imports has

lines).
The company is continuing its expansion program, since thus far
there is no sign of a let-up in the growth of demand.
Following
is the schedule
of estimated
completion dates for generating
structed

Paul

Dr.

g oan,

become

a s s o

arti¬

is kept

c a

with the American

the plant is only a

transmission

price

for the disguised subsidy to
British domestic consumers and

character

the

the

substantial part of
few years old. Thus nearly half of the capacity
(110,000 out of 245,000 kw) was installed during 1946-49. Of the
rapidly that

so

C h i

a

known

-

has

pay

multilat¬

e

In all these

Increase

1,031
$15,436
116,571

.

Streets, and
well

ficially low because foreign buyers

limit

to

domestic

the

is

There

a

Robert Ma¬
of La

—

veteran

intra-European
investment banking circles, hav¬
payments clearing.
There is the is usually followed by an increase ing been Chairman of the Public
British opposition to a too drastic in the price of goods exported tc
Service Securities Committee of
by
countries importing
removal of quotas on intra-Euro¬ Britain
the Investment Bankers Associa¬
pean trade.
And, above all, there British coal, it is arguable that the tion for two terms and former
is the British practice of charging high export price is really paid
member of the Executive
Com¬
higher prices for coal for export ultimately by the British taxpayer mittee of the Central State Group

Percent

10/31/49

healthy state of af¬
to argue that

as

It

30-year

a

Salle and Wall

is possible

any

8/31/44

The company has grown

cut

crepancy

t h

rapid
in the postwar period.

12 Months Ended

/

Electric

to

than for the domestic

important utility company
Following is the record:
growth of

the continued

claim

can

fairs.

eral

has enjoyed what was perhaps the most

company

on

son,

existence of such an abnormal dis¬

t

o r

sire

for the 12 months

company

In

nobody

oil.

6.2c per Mcf.

was

back

the British de-

plants, efficiently located at intervals averaging
Natural gas is used for fuel in the principal gen¬

average

Oct.

profit.

for the removal
without falling
political motives. Surely,

chase of dollar

erating plants, most of the gas being purchased from non-affiliated
under contracts with an average of about four years to
ended

a

case

down the pur¬

interests
run.

at

of the dual system

There is

question of

of

for the integrated system is generated by

energy

power

Coal Board would

it is possible to make out

good

very

domestic price

the

work

to

through

extent

f

of revenues.

about 100 miles.

a

of

there the

any case

e r

some

the British ef-

and accounting

being the largest

Phillips Petroleum

to

continue

ch

d

If the gap between the
and
export
prices
is

Lynch in Ghi.

CHICAGO, ILL.

by no

price of coal would de¬

increase

an

then

discus¬

sion.

processing of agricultural products, the production, transport and
processing of oil and natuial gas, and cattle and sheep raising. In
addition, there are many diversified industries and commercial
enterprises, including the mining and refining of potash and the
refining of zinc. In the fiscal year ended Aug. 31, 1949 about 2.1 %
of revenues were derived from sales of electricity to the 25 largest
customers,

u n

lively

thing, it is

prive the National Coal Board of

bridged

are

s u

dual

the

one

certain that the removal of

its profit.
domestic

writ¬

of

there

ing

from elec¬

operating revenues Were derived

of

by

For

means

States

disturbed

the

At

time

west.

and

east

About

issue.

and south, and 120

primary system extends about 300 miles north

United

controversial

except

system

the

become

re¬

highly

some

The electric properties comprise a fully in¬
for Santa Rosa, New Mexico. The

Clovis, New Mexico.

between

Britain

and

•

Population of the area served is estimated at approximately
600,000, with 36 principal communities. Larger communities served
Amarillo, Lubbock, Pampa and Borger, Texas and Roswell and
terconnected

ill

as

with

connected

transmission

the distant future.

required for imports from abroad.

the combined states of Pennsylvania and Rhode
Island.
The primary portion of the system extends about 300
miles north and south, and about 120 miles east and west, and is
section

Un¬

necessity of protecting Britain's gold and dollar reserve,

Company's electric system ex¬

Service

Public

southern

the

ail

restored

are

fortunately Britain is not in a po¬
sition to sacrifice much at present
lor the sake of ultimate gains in

American objections to British practices of dis¬

on

crimination, Dr. Einzig points out that these actions arise

Southwestern Public Service
tends

methods

if

will be well in the long run.

-E

'

that

hope

vague

normal

By PAUL EINZIG

—

By OWEN

the

of

3

Rhoades & Co.,
61
Broadway, New York City,
members of the New York Stock
M.

Carl

Loeb,

Exchange, announce
don

with

Phillips
the

charge

of

is

firm,

its

and

associated
will

be

in

stock
Mr. Phillips

preferred

trading department.
was

that E. Gor¬

now

previously with Shields &

Co.

'

Volume 171

Number 4130

P. G. Evans

THE

Resume Law Practice
Guy

Member
tax

Evans,

of

the

original

an

Excess Profits

Council,

Bureau of Int

1

e r n a

Rev¬

Government
the

attempt

ernment.

into

to

or

normal
times,
or
whether
it
should make its loans
only when
there is a national emergency of

re-

to

All of

return

the

to

tice

Mr.

Evans,

been

impressed

position

of

the
aid

d

Federal

N

wY-o

e

when

through

asks

government

loans,

grants,

and

rh

Public

Accountant

anoma¬

of

ing

power

and

authority of

gov-

k

r

factThJu many borrowers is and
the
act that) credit, agencies

and New Jer¬

—

will

sey,

es¬

Peter

Guy

even

Evans

tablish his of¬

City, where

sistence

Evans

served

on

a

committees,

including the "Bulletin

and

of

pose

procedures.

set

for

up

The

the

pur¬

dresses

with

the

many

ad¬

Council procedures, its

on

policies, and its

New

Evans

York

practiced

City and

taxes

at

New

York

law

Rutgers

Universities.

speaker, he brought his tax
ments and

yers,

He

and

Tax."

the

Personal

His

Evans

Tax

Income

over

a

articles,
hundred, ap¬

member of numerous

a

accounting

and

ganizations.
of

many

other

takeS

lending practice?

Urn

has

or¬

served

important

tax

on

and

committees.

T metits' We'

some

tempted

nm-t

not

to

regard

on

banker,

fect

A

issue of

new

eral

Home

callable
series

Jan.

14s %

Market

$97,000,000 Fed¬

Loan

Banks

consolidated

non-

1950,

maturing Feb. 15, 1951,
priced at par. A countrywide

are

selling group of securities dealers
participated in the offering.
The

•

entire

proceeds

from

the

offering together with $12,500,000
•from

cash

of

resources

Bank, will be used to

$88,500,000

Series

the

refund the

B-1950,

144%

consolidated notes and
$21,000,000
Series D-1950, 114%

consolidated

notes, each maturing

Feb

on

15

1950.

Upon completion of this financ¬
ing and the retirement to be ef¬
fected
eral

Feb.

on

15, next, the Fed¬

Home Loan

outstanding

become

outstanding
500,000

This compares with

obligations

Dec. 31,

on

of

1948,

a

$416,reduc¬

tion of

$244,500,000 during the 13-

month

period.

socialized

ST,

Guth,
'mann

&

The

Financial

LOUIS,
Jr.
are

and

Chronicle)

MO. —Harry
Norbert

with

E.

E.

Holtz-

Herrick

Co., Inc., 418 Locust Street.




27

it with

gov¬

Last

week's meetings of railroad directors were, to say the
disappointing. There had been many rumors that Atchi¬
son, Topeka & Santa Fe common would be split.
This has been
one of the favorites
for quite a long time.
As it is recurring, it
rarely has any particular influence marketwise. A split of the
stock appears logical both on the basis of the high earning power
of the company and on the theory that marketability would be
improved materially. This, in turn, would naturally redound to
the benefit of the stockholders. Eventually the split will presum¬
ably come. The timing is relatively unimportant. Failure of the
directors to act last week was, therefore, of little moment.
The
other two meetings, however, did cause some concern.

least,

Earlier

this

published

month,

its annual

the

RFC

report.

The
report shows that during the past
fiscal year, the RFC increased its
direct and guaranteed
loans
to
business

and

industry,

by

fact is that

and

its

almost half
interesting-

The

than

more

$400,000,000

of this increase resulted from
the
acts of private lenders in
divest¬

ing

themselves

loans
To

of

the

The first, and
of

risk

$3.00

that

they had undertaken.
this escape
from
risk

me,

that these

means

facing

the

lenders

facts

risking

their

risks

today—at the start

decade and
we

a

1930's

were

The

of

as

than

of

refunding operation. Wage rates are no more onerous
they have been for many months past. Actually, most rail¬
have discovered that the 40-hour week for nonoperating
employees instituted on Sept. 1, 1949 is costing very much less
than

roads

depres¬

a

The

of

Rock Island

century—-

decade

were

discontent.

new

a

1950's

than

are

In

less

decision.

In

this

agencies

1950,

before

go

shall

we

government

see

the

of freight rev¬

12.7%

loadings of the
With this back¬

inability of the industry to finance capital improvements
(excluding equipment purchases), particularly through sale of
equities. Erratic dividends are hardly calculated to improve this

and prosperity.

of

year

probably

new

the

in good times

war,

peace

leaves the

really

ground, and considering that the company was able to earn close
to $7.00 a share last year, the decision to reduce the dividend rate
came
as
rather a shock.
Railroad management regularly decries

through

bad, in

the only

supplied in 1948. So far this year coal
system have run some 17.5% below the 1949 level.

industry, home owners, and
farmers grow from a few hundred
million dollars to well over
$20
billion. They have grown

and

continuing
factor.
not available but it appears likely that
as

it

enues

ness,

depression and

This

estimated.

in the coal fields

year's figures are
bituminous coal accounted for less than the

busi¬

to

originally been

Last

twenty years, we have seen
lending and govern¬
loans

had

labor strife

government

ment-guaranteed

cases), and the

as

decision. The

a

decade

a

40's

decade

a

half

new

faced with

are

of

Nearby maturities were mentioned,

certainly just
pressing when the dividend was raised from $3.00 to $4.00 as
they are today. In fact, the maturities appear as less of a problem
now .than they have been for many years due to the general im¬
provement in the railroad bond market, epitomized by the recent

that

lenders.
So

for the reduction.

increased wage rates, claims against the railroad industry

The maturities and the government claims were

They

future

own

were

by the government (presumably the reparations
continuing adverse effects of the coal strike.

enough to realize that they
taking on a greater risk, by
carry.

reasons

as

squarely—not

unloading the credit
they are supposed to

as

of

even
are

on

cently

not

are

actually the most disconcerting, was the action
Railway in cutting the annual rate from $4.00 to
the common. The $4.00 rate had been instituted as re¬
the last quarter of 1948. The management gave a number

Southern

on

situation.

credit

other

The

Congress

meeting that had attracted

considerable interest

that of the directors of St. Louis-San Francisco. (At

to ask for additional loan and
loan

was

as

social

as

ftd

gains.

guaranty authorizations of at least
$6 billion.
We are not in a de¬

welfare

pression.

meeting in 1948 directors had declared a dividend of $1,00 a
share on the common, the first since the company had emerged
from reorganization. This year the meeting: was postponed until
Feb. 2. At that time the preferred dividend for the full year was
declared but no action was taken on any common stock distribu¬

The

e?fJy bac0me the woe5? i°anS are to bo
the taxpayers
then

state

off' by
otf hi

paid
paid

loans^ueh/"f p£eferable that the
ought to be made direct]v
loans

fov.er"men' toif borrowers
place
they

in
in

f
e
the first

anty.

—

with

guar¬

The fact that

loan

may

a

guaranteed

eventually turn

out

to

H°an d°CS not offsot the
tlle
losses to

fact' that
act

public

arc

w!th~a» ^ "0t by ^vate
government

lenders
lendeis

there

are

the bad loans. It is
only
sense, of course, to say

on

common

goveinment loans

at all—either

to

to

private

be

directly by

made

govern-

by Private lenders with
R to 4 government guar¬
Both types of loans

to!

antv
anty.
ciahzed credit.

are

so-

have

it

a,i borrower
whether
a

gets

his

bank's

loan

earnings'

modestly aided by that loan.
leal

issue

goes

accepting

far

deeper.

government

ThI
By

guarantv

to! a- ,ba,n4rs divest 0U1 selves of
risk-taking—our
the

fundamental

^unction m an enterprise
the
time,

At

same

government
government
too

ng

by

we

4 society, through the lendagencies of government

as-

tShUrithe Credit risks of business,
business and
banking have
then

taken
to

a

long step down the road

socialism.

road lies

At

the

end

nationalization.

that

of

We

can

b^Tnte'mre If governmentwel1 as
uy dEfaUlt as takes
intent.
oy

the

risks of enterprise, then who
can
argue that it should not have a
seat on the board of
directors?
is not

a

we

question of to what
accept

government

if

We

aSepl

taking

in

function

them,
the

and,
road

credit?

be

which

sustains

If

without

to

cannot

be

borrower

a

made

by

any

amounted to

adjustments.

is

the

faces at

his

desk

day

and

ing

out.

that

government

be

as

absent, it
by

the

we

risk-tak¬

it

A m,

that

eric

health

So

of

it

is

it

If

is

the

the

evade

doctors

the risks of soil,

government guaranty,
t i

Grange
of

e s

because

it

cultural

but the Na¬

opposes

the

the

guar-

Brannan

knows

Plan

the

enterprise

price agri¬
would pay to

bureaucracy in exchange for those
guaranties.
We

in
We

accepting
but
of

banking
can

cannot

try to

dilute

evade
it

on

the

guaranty,
greater risk

eventually being displaced from

government

to

be

government, is

the

risk-taking

agency fcr business and industrial
credit.
We cannot

really

dilute

by

government

take

we

placed
make

by the
our

very

we

guaranties of

accept.

We must

decision.

We must make the
right one,
now.

Macdonald

labor conditions in the
meeting is apparently scheduled

and

G.

tural products,
purchasing farm
supplies, or furnishing farm busi¬
ness
services, and to make loans
to

collateral

trust

Freehlina,

Newcomb,

debentures,

dated

Feb. 1, 1950, and due Feb. 1, 1953,
of Central Bank for Cooperatives,
a

government

under the

operating

agency

supervision of the Farm

Credit

Administration, which is
general direction ai d
supervision of the Secretary of
Agriculture.
The
net
proceeds
under

will

the

be

used

nancing
The

its

by the Bank

lending

debentures

were

not guaranteed

I.

B.

and

of

service

owned and

engaging

the

govern¬

Bank

loans

York

make
York

his

ac¬

Ex¬

Reginald

in

partner

&

of

March

on

will

Stock
1st

will

Freehling,

Co.,. 120

South

Salle Street, Chicago, 111.

headquarters

La

He will

in

New

City.

Gillen & Co.
Gillen

to

Admit

to

way,

the

New

has

admitted

marketing

elig¬

as

agricul¬

York

an

has

Stock

Edwin

partnership

Wallace

farmers,

&

Company, 120 Broad¬
New York City, members of

is to

associations,

controlled by

in

and

a

Meyerhoff

priced at 100

by the

ible cooperative

Schaumber

New

membership

Rives,

become

to

function

the

change

Meyerhoff

Company Partner

Herbert

quire

in fi¬

ment.

make

&

operations)

and accrued interest. They are not
redeemable before maturity and

The

the district banks for coopera¬

tives.

fiscal
agent, on Jan. 10 publicly of¬
fered an issue of $30,000,000 1%%

are
re¬

Banking is
decision. Successful banking con¬
sists of making the right decisions.
make it

The

Debentures Offered

integrity of

market.
Some
of these risks
may be diluted by

a n

industry.

Bank for Cooperatives

are

weather, and^the

tional

entirely due to the chaotic

coal

$30,600,010 Central

benevolent

the art and science
they practice..
The farmers
know
that
they
never

in schedule the company had
quarterly. Last year earnings

a n

trend which they know

a

threat to

of $0.75

only $1.64 before adjustments, and $1.36 a share after
There is little question in the minds of railroad ana¬

deferred

bituminous

be restored, but not

may

rale

can¬

Either

absent.,

unctions

paying at the

for Feb. 24.

of

is

government.

can

was

of

purveyors

was

lysts but that the company will reduce dividends below the earlier
$3.00 annual rate. At best it is hoped that a $2.00 rate will be
established. It would not come as much of a surprise if action

us

day

shall

credit?

know

or

of

home

How

nationalized.

present

each

back

or

Practitioners
medicine

risk to

decision—as

bankers,

not

the

the

decision

it

earned.

taxpayers.

worth

including

one,

Prob¬

Prior to this announced change
been

justification is there at all for the
continuance
of
chartered bank¬

Banking, not

which

a

the

loan

That

visible future.

the

February meeting. The announced objective was to schedule pay¬
ments so that they would all come within the calendar year in

to

without

November meeting)

guaranty of government, then the
is not

over

The last time dividends

Chesapeake & Ohio.

(at the

cannot

decision

a

the nation's economic life and

ing.

of

turning points

are

road, but the turn

loan

a

stockholders

were considered
decided that payment dates
would be changed and that the- next action would be taken at the

go

make it.

bank

railroad

for

ably the most important meeting this month is that of the directors

nationalized

toward

made

store

down

default,

There

that

on

by

u0% guaranty, then
why not 90%
or even
100%? If it is 100%,

what'

a payment was not precluded—it was merely
that action had been deferred. There appears to be a

Possibility of

good possibility that within a fairly short time a dividend (either
$0.50 or $1.00) will be declared.
It seems hardly likely that any further dividend surprises are

risk.
It

tion.

announced

due

economy fighting
accenting to be a

endo,s|
participation inbus"

guaranty,

We

to the
willingness of pri¬
lenders to accept government
guaranty, to cast aside the risk-

or
are

not at war.

are

national

vate

make

in gov-

guaranty is not whether

We

no

their Janu¬

ary

emergency.
What justification is there for this
further sapping of the
vitality of
private credit?
To what extent is

in

„Jbe r.eal issue involved
eminent

intended

Barrett

too

losses.

f^Pe°ple realizeThere there
that must
any economy.
inevitably be social losses
Wei

degree

Two With Barrett Herrick
to

(627)

we

squarely.

ef¬

is risk
isrisk in

guaranty of loans,

fSpecial

the

with!
in

They are
risks, which

subsidized

Banks will have

that date consoli¬
dated obligations in the amount of
on

$172,000,000.

can"
Tho

notes,

A-1951,
was
offered
on
31, through Everett Smith,

fiscal agent. The notes, dated
Feb.

15,

sup-

and

T?Ty W°Uld be bettor off
out these loans.

enterprise ought not

on

govern-

own

the

too

are

guarant^ as a ciutch to
stanrtCOnn0?>!C l0ans that
stand
their
feet

borrower,

on

as wel> as

our borrowers,

?

ften

hat

FHLB NoSgs

fall

or

legal,

professional

Evans

perma¬

J*®
suPP°sed to
risks—risks which in
judgment stand

nm
our

published

total

Either

sion.

nent

business¬

peared in leading periodicals and
magazines..
As

standard,

a

senti¬

best-selling

"For

which

and

co-authored

Hal per in

Guide

and

understanding to law¬

accountants

men.

in
on

As

CHRONICLE

accept it or
we reject
it, and the issue is one.
which must be faced

are

increase

.

the

lectured

Columbia,

bor-

on loans,
bank earnings
be
for
rll4StifiCati0n can there
guarantv
* a
guaranty as nce on government
r,

often

progress.

Prior to his
appointment to

Council,

thf credTin-

submarginal

anTV- redUCG losse*

administering corporation

excess
profits tax refund claims
filed under the Relief Section
722
of the Internal Revenue
Code.

During his tenure
Council, Evans made

a

government

Commit¬

tee," which formulated and estab¬
lished the early rules and
prin¬
ciples
governing
the
Council's
was

of

have been

-

to

guaranty to satisfy

specialize in

number of important

Council

look

Street, New York

Federal and State Tax
Matters.
As one of the
original fifteen
members comprising the
Council
in July,
1.946, when it commenced

methods

to

will

he

operations,

bankers

some

educated

fice at 46 Cedar

by sharing

business, and at

time

same

the

business

slJhp
f°,ne of the greatest obfn^ in seeking to limit the bank¬
ing fn that.has confronted
lend¬

Bars and Cer¬

tified

with

of

risk

paper,
thft the g°vernment [^mortgage dollars.
a
billion
out of

ought to get

a

the New York
n

war.

have from time to time

us

law.

member

a

or

lous

prac¬

of

equity capital
dying businesses in

pump

small

has
signed
private

FINANCIAL

Lending

drawn is whether the RFC should

depression

enue,

• &

Continued from page 17

Resigns

From Tax Council to

Peter

COMMERCIAL

in

individual

William

T.

the

been

Exchange,
R.

31st.

Mr,

doing business

floor

Kirk

broker.

retired

partnership in the firm
ary

Wallace

firm.

on

from

Janu¬

28

COMMERCIAL

THE

(628)

Continued

from

25

-page

ment's

Proposed Reduced

when

in

70

ready
worst

sumer

extended to an
There remain
only 320,000 Britons with incomes
of $2,800 to $5,600.
If

If

stifle

to

the

there

three

are

more

I

pending in Congress at this
moment which,
if enacted, will

grams

I

socialism

of

first of these clincher

Tiie

pro¬

ginia

is for more socialized hous¬

grams

program has
and. exclusive of

the

pro¬

new

it stands

the

posals,

passed

already

ing

program as
is estimated to cost $20

billion.

is

The second clincher program

socialized medicine which, within
10 years,

will cost $20 billion an¬

is

gram

crowning

and

third

the

pro¬

Plan.

The

Brannon

accurate thing Mr.

most

this

Brannan
is

that

he cannot

estimate the cost.

The

American

Farm

said

has

that

about

to

milk alone

$2 billion and both of

great farm organizations—the

American
National

it.

Farm

Grange—are

to

opposed

politicians

this,

Despite

the

and

Bureau

are

exerting their most powerful ef¬
highly socialistic

fort to force this

plan upon farmers and consumers
as

Evil

While

and

federal programs

initiative

individual

»

private enterprise will be the

as well start with
who must withdraw

may

the

busi¬
from

of some of the
subsidies, nonessential fed¬

withdraw from
lucrative federal pay¬
which are not required as
must

of the

ments

government con¬
is socialism,

and

against price decline
that would precipitate depression.
insurance

business

of

choose to call it wel¬
collectivism or give it

whether you

able-bodied veter¬
overpowering force
behind our
ans must withdraw from politicalsome other meaningless
name.
capitulation to socialism, if that
There is no retreat from social¬ pap programs having no connec¬
is to be our fate, evil loves com¬
tion with the bonaHide obligation
ism once it is
state,

fare

interest

relation¬

banking

Chase's

the

and

ships and also to discuss ways

in

of aiding the

means

of

flow of inter-

American trade.

20

Continued from page

money

easy

some

of

regimentation

Government

individuals
trol

been

A Monetary

Policy
For the

which

job

the

unselfishness on

some

Farmers

Constitutional Processes

insolvency resulting from

stifle

which

hire, whom to fire,

to promote.

whom

Companions

deficit financed

government from

to whom to

as

of

arm

of

has

Nicolson

L.

Argentina,

Uruguay and Brazil in the

praises our dollar at, in terms of
gold—the most dependable com¬

quotations would

Such

modity.

inspire confidence without dis¬
rupting current operations, and
could but, in due course, lead to

Opposition

stand one other observa¬
tion, even though it is slightly off
tainly

beam.

the

,

A

is

There

Tariff Policy
a

with

The

result

point in connection

our

tariff policy to which a
measurements
in
party formulating a policy in op¬
federal
terms of a gold standard of value.
position to that of the party in
eral contracts, and their advocacy
Thirty-five years of experience
of
useless
expansion of federal shows that, under current mone¬ power should give consideration.
President
Coolidge
told
the
activities to their localities.
tary practices, no bottom for our
Canadians to disregard our views
States and localities must with¬
dollar's purchasing power is like¬
in formulating their tariff policy;
draw from federal aid which has ly to be found.
to, instead, make their tariff to
been
increased from little over
We would expect slight or no
build up their own industries. He
$1 ¥i billion in 1947 to nearly $3V2
immediate disturbance in the pur¬
said we would take a chance on
billion proposed by the President
chasing power of the dollar, as a
profiting through their success.
for the year beginning in July.
result of making it lawful to buy

to ex¬
the
Wash¬
ington into the daily transactions
of virtually every man's private
business, dictating to employers
strong

left

seven-week

Chile,

Peru,

livia,

make this na¬

the

federal bureau

the

Building.

Herbert

vast majority of this
nation on a personal basis.
For example,
in this meeting,

the FEPC would establish
costly powerful and in¬

tend

have

Bank,

by air on a

They will call on bankers,

tries.

appointed an Assistant^ Cashier
the brokers loan department
the Chase National Bank.

part of the

of personal privi¬

the

trip to six South American coun¬

Chronicle)

future will re¬

quire

another

quisitorial

items

to

done

be

to

nessmen

national

is for

year

tion sound for the

has

we

leges,

$42 V2
budget for the

President's

accomplish

To

powers.

As to invasion

and

to labor leaders.

sop

fiscal

National

New York

Nicolson Appointed

sacrosanct.

as

to po¬

respect

John B.

than $27 V2

more

T.

of

F.
is now affiliated with governmental authorities and in¬
Joyce & Co., Huntington dustrial leaders in Ecuador, Bo¬

Reusche
Bank

Otto

Vice-Presidents

.

COLUMBUS, OHIO—Robert

commitments or
carried
over
from prior years.
Relatively fewpeople regard all these programs
as sacrosanct; but millions of peo¬
ple regard one or more of these
programs
(those affecting them)

Committee
of
Advisers, would invade the
states'
prerogatives with respect
to the franchise and invade local
lice

(Special to The Financial

this

America

Rockefeller and

David

Kreuser,

'

Trip

on

To South

obligations

other

of

prerogatives with

our

the

of

coming

the President and his

estimates

Bureau

its application

would cost
the

plan

law

Chase Men

re¬

Chase

tied to long-term

all time, along
with my public advocacy of poll
tax repeal by state action, demon¬
strates that I speak without bias
cn
this
subject.
Following this
preface, I assert that the Civil
Rights program, as proposed by

nually.
The

or

was instrumental in the
of the
tightest anti-

I

lynching

world.

and all
economy cannot

that

true

billion

enactment

Part of this vast public hous¬

ing.

act

is

Federal

the

is the first and vital

quirement for the preservation ot
our own security and the security
of
democracy
throughout
the

conceived

which

Federal In¬

the

termediate Credit Banks was made

go

With John B. Joyce Co.

from

through

billion expenditure

attitude persuaded
by racial intolerance. I think also
the fact that as Governor of Vir¬

retreat.

no

It

have

public

which there is

from

think

want to

not

balancing

Thus,

afford.

record will clearly show that
never been guilty
of any

my

irrevocably commit us to a state

Southerner but I

a

am

do

long as we can

so

Budget

we

soundly

these

nation.

federal pro¬

we

of

debentures

of

Jan. 17 by M. G. Newcomb, New
England and I believe
York fiscal agent for the banks.
keep this
The financing consisted of $41,country
financially
sound
the
495.000 1.30% consolidated deben¬
door \yill not be closed to recov¬
tures dated Feb. 1, 1950, due Nov.
ery of
the freedoms of private
1,1950. The issue was placed at par.
enterprise in democracy.
The proceeds, together with $10,We must keep constantly before
620,000 cash in treasury, were used
us
the fact that the last hope of
to
retire $52,115,000 debentures
freedom
loving
people
in
the
maturing Feb. 1.
As at the close
world hangs upon maintaining the
of business Feb. 1, 1950, the total
integrity of American money. The
amount of debentures outstanding
key to our fiscal solvency is bal¬
amounts to $448,935,000.
anced budgets in time of peace
void of emergencies.

that

must search every
federal program and policy and
throw out all of those which were
beginning

not

know

offering of an issue

A successful

universally

the way of

Follow-Through

The

follow

To

FIG Banks Place Debs.

into socialism.

us

Civil-Rights program

the so-called

justified in
which in its entirety would be the
stuffing ourselves with gratuities
greatest mass invasion of states'
from a paternal central govern¬
rights, local prerogatives and the
ment until we bankrupt the great¬
privilege of individual self-deter¬
est nation in all history.
mination ever perpetrated on this
If socialism is what we want

lish socialism, we are

I

would

who

spenders

sponsible

invited
pressurized maneuvers for

the

to

understood.

in the

budget

the

which may be

manner

fiscal year,
break the
Strangle-hold of chronic deficit
financing, and snatch the nation
from
the
clutches of the irre¬

dormant, your attention is

like what we see in Eng¬

we

pro¬

devotion

continuous

and

objectives, and the constant dis¬
semination of facts presented in a

coming

think these threats are

you

long-term

a

balance

would

Prerogatives

degree.

alarming

on

of
sound
prosperity and
constructive achievement, but it
gram

State, Local and Personal

income group has

nation

this

prices,

on

and

it is not all that is required to put

employment practices.

and

the middle

that the liquidation of

Congress

unnecessary new ones.

no

This is not all that I desire

commodity allocation, con¬
credit, bank requirements

wages,

is

situation

British

the

of

81st

the

of

the

But

liquidated.

been

low

controls such as
requested at the beginning

those

$16,800 after taxes. The so-called
well-to-do
in England have al¬

within

policies and programs and to al¬

not enough gov¬

government

of

that great country there are
Britons with net incomes of

In all

only

by their constituents tc
existing federal

couraged

in
business
also the continuing threat

there is

ac¬

that members of Congress be en¬

meddling

ernment

requires

plan

The

jective.

sound loans

retrench

As if this were

fiting from federal payments and
expanding federalized programs
should take a look at England.

be

with great detail
would achieve this immediate ob¬

books.

bene¬

can

now

submitted

have

they are expenditures and must
be regarded as such on the federal

British Mirror

the

Those who think they are

start on

a

with
neither
harm nor great inconvenience to
anyone involved, and the plan I

for capital in¬

reason

no

thajt

retrenchment

complished

vestments. If they are

included.

are

has

it

employees

local

recipients

Look

A

and

state

the govern¬

of

programs

federal

Federal Budget
and other

all

and

Thursday, February 9, 1950

CHRONICLE

study of the whole federal fiscal
situation

A

FINANCIAL

&

Young

and

to

return

a

sell

and

would be
feet

gold;
however,
there
definite stabilizing efr

a

confidence

as

was

although the principal
be the fact that with

built up,

gain would
the dollar

quoted hourly in gold, no admin¬
istration
could afford to adopt

defin¬

practices that continued to

with

any

do
than

we

Canada

with

business

that

been

has

more

half-dozen na¬
give them

other

tions, except where we
the stuff free.
the

Of

60

in the

nations

80

to

half, and
produce many things that
will be needed
by all as living
standards
advance
u n d e r
the
produce

few

world,
none

unit of value,
the nation
owes
them for war- and, in consequence, the whole
progress
civilization is making.
ily because the state usurps not
The evil companions of this un¬
economy.
Nothing
herein pro¬
connected sacrifices.
q
Furthermore,
most
nations are
bridled deficit ogre are: (1) con¬ only the machinery of agriculture,
Government
employees
must posed would interfere with build¬ small and the average size seems
mineral and industrial production
fiscatory taxation; (2) government
ing the purchasing power of the to be
but also the sources of wealth and withdraw from non essential pub¬
getting smaller as the big
competition with private enter¬
dollar up to whatever height was
lic jobs and we must see to it that
ones are carved up, so that inter*
prise and business;
(3) federal capital which would be required
deemed most practical, by limit¬
they are not refilled.
national trade
can
but increase
usurpation of state and local pre¬ by private enterprise to recapture
ing the money supply.
its vitality.
And the government itself must
enormously as it is given freedom
rogatives; (4) government inva¬
We
realize that many of our
entrenched, primar¬

I

pany.

sion

of

privileges;

private

disregard

(5)

Continuous deficits and

public debt in

company

sidekicks

are

growing
with these
virtually

with socialism

synonymous

ours

which have made
government of laws and

a

Government

Competition

tion with the fact that along

of the

have

averted

sault

on

and

more

tion

such

the

to

The

which

development

projects

so-called

those

that

and

business
Lustron

of

huge

tremendous

loans"

and

results

such

as

of
this type of expenditure, and have
been influential in having a whole
section

list

set

them.

up

in

They

capital

the

budget

claim

they

to
are

capital investments in the form of
loans.

The

business

for

government is not in

profit and




The

therefore

unnecessary

as¬

are

sound,

to

country

guarantee

nent solvency,

I

do

Key Is

Solvency

believe the

not

people

Despite the fact that

ing

rapidly
the

believe

in

their

to

in the

of

socialism.

we are mov¬

toward

this

American

end,

people,

I
as

the past, will

danger,

and

awaken
that when

they do they will smite down all
government programs and actions
which can lead only to socialism.
This will take
this late
cannot
am

a

lot of doing at

date, and I realize that it
done suddenly.
But I

be

convinced

by my own careful

of which

under a deficit fi¬
Federal Government, and

majority

while

children

to be, and that to cry
is dreadful. Neverthe¬
less, the further we go down the
road we are traveling, the faster

have

been

shall

we

go,

and

the

dent it will be that a

evitable,

We

overlooked that

coming fiscal year a whole

nanced

and that many are
successful than they ever

more

unless

our

evi¬

more

crash is in¬
course

is

changed.

capable.

generation will have reached

new

its

perma¬

our

and to provide the

true democratic progress

than

before,

ever

grow¬

are

the

tackle
out

our

job

price

of straightening
muddle at the

To
so

change this philosophy, now

deeply

some

rooted,

individual

may

sacrifice

require
during

period of readjustment, and it
certainly
will require complete
the

at

time.

the

The

immediate

We

tariffs to build
industries—develop

less

supply

chance

not

a

of

the

result of

fix
a

printing

the

scratch

press

b$ck,

my

a

least;

you

will

will

scratch

other

nations

I

yours."
have

We

things

but we cannot sell
them much unless they, in turn,
have something to sell.
If they
not

have;

built

to

our

the

for

best

the basis that if

the

limit¬

take

will

we

We

offer
on

natural

your

profiting through your
want trade because

011

success.

sell

others

their

up

they

resources,

Those who have followed
analysis to this point can cer¬

money.
our

as

and

resources,

own

up your

your

we

and

do

they

own

will have

other

that

whether

outlined

have

reciprocal

agreements. It would be far
better to say to all nations, "Make

re¬

right direction.
nation is in

tie

trade

have

quirement is to get headed in

men

short-sighted policy
up trade with indi¬

a

vidual nations through

1913, but not in the same manner.
pattern will have to be
tailored to fit current conditions

government are bound to influ¬
ence the philosophy of all of us.

young

is

try to

do

The exact

up

to

point where the Republicans were
forced to abandon the effort in

have been
growing old. Two decades of Fed¬
eral handouts by a paternalistic
ing

it

look,

we

recommending that we

Such being the out¬

function.

to

citizens are more prosperous

expected
calamity

required to
financially

the things

this

this country is

welfare.

the United States want

always

Kaiser.

make

spenders

an

These
make

But it cannot be

competi¬

government
as

in

law

coal strike would

the general

more

with

private enterprise in the name
of housing, banking, development
of natural resources, etc.

a

by-product of
tendencies when

this

invocation of the

case

with

higher and higher taxes goes

the

experienced

just

of

socialistic

prompt

already discussed con¬
fiscatory taxes as such, but they
should be considered in conjunc¬

competition

from

withdraw

A New Generation

have

We

fore-taste

.

We have

valley

fre¬

not of men.

our

from

goes

quent disregard for our constitu¬
tional processes

processes.

natural

socialism

with

And

and

constitutional

of

itely undermine its

natural
things

nations
or

will

not.

help

want,
"Help

you,"

applies to nations ho less than 10
individuals;
furthermore,
it
is
good religion as well as common
sense.

Volume 171

Continued

Number 4880

jrom

THE

COMMERCIAL

2

page

bright

&

outlook,

long-term.

The
its

to

stock,

common

by, the lollowing table;

3949_

Paid

$258.63
182.72

3947

148.56

3946

129.27

3945

95.55

3944

95.24

3943_

75.48

1942__

75.50

3941

131.14

3940

132.94

1939

134.67

1938

58.58

1937___

119.78

1936

118.04

1935

85.34

1934

56.94

1933

There have been few times in in-

75.29

1930

79.87
122.56

192-8

99.96

long

the policy of. Chris¬

as

tiana Securities is to distribute to
its

in the form of dividends from its

investments,

less

taxes (which

expenses

those

excessive, Bureau of Labor

prices are 151.5%
whereas
newsprint is

1926,

142.8% of 1926.
Production costs, which mount¬

invest

in

able

and

experienced

should

Wood costs

year.

this

ease

decline

HAROLD

LONG

A.

The

modern¬

ization

programs
largely
com¬
pleted in the industry should in¬
crease the
efficiency and tend to
lower production costs in the in¬

dustry, which is operating at full
capacity.
The

company

recommend

we

ter Hutchinson

less

normal

31, 1949 at

sheet

$21,000,000; Dur¬

over

ing 1949:
Cash in:
Power Co.

&

this

With

$5,000,000

means

effective

an

a most disappointing experi0f|cmce in 4the past thirty years.
Hollowed

«

.

Christiana

exchange
over-t

not

listed

active

number

idly and

the end

at

the end

become

of

thf,

.S5.

(1£0£

was!

The

132 al;so

of

have

you

in

like

in

j Unlike the postwar period of the
i

to

first great

itself in

I

several

ducted

manner, as was

Tins

Forum

being

benefit

of

vestors

w

been

would

Herbert

not

with

requirement.

There

recognized

money:

for

ton

solidated

than

fdr

extension

of
nearby
has
been
re¬
The Baltimore &

^maturities

cently effected.
Ohio

Railway

con¬

of

the

A

change of ownership and
are
rumored.

recapitalization

a

These would appear to greatly en'hance the value of the common

idends.

the

pave

The

compelling

for several

Paper

Co.,

will

Newsprint,
j an(j paper, is

as

a

it

be

JOHN

several, but

(particularly

vestor with nominal

is, by all means, my favorite
curity.
ours was

If you

of

in

the

in¬

capital) who

supplies
short.

for

In

of

age

dim

are

the

of

increased

countries

many

addition

Canadian

to

the

and

short¬

American

dollars which exist in these

coun¬

Any one who has had long ex¬

investment knows
investing

is

not

simple even under conditions and
circumstances much less confusing
than

face

us

now.

.

It

is

of

cost

the

also

true

creating

essentials

deterrent.

that
new

are

Only

the

capital

capacity, if
is a

available,

one new

mill has

been built in North America since
1938.

This

cost

is

estimated

at

Today it

about

That best meet his investment

pacity, almost double prewar cost.
The newsprint makers have a

is difficut for an indi¬
vidual to, first, select investments




re-

$80 000 per ton of daily ca¬

list

of

u s

i-

and

the

pos¬

of

a

common

the

This

face

of

was

two

itself

in

Western
same

but

(2)

the

of

the

New

accomplished in
obstacles:

now

common

Maryland.

obstacles
its

(1)

a

mar¬

the preferred stock.

the

as

It

presents
stock

faces

of

the

did Nickle Plate,

prospects

Il¬

on

times

at

our

about

buying

books for three

four weeks before stock appears

in

Bailey & Davidson

SAN

this

111

E.

mitted

of

Edison,
like a

looks

years,

into

a

'averages

and

for

it hit a low of 25 twice.
one and rightfully

1st:

pep

on

Many

ture and

sell the

are

equally

2nd:

3rd:

put in

Working

the

San

Bailey

Street,

Francisco

Lynch, Pierce, Fenner &

Wm. E. Pollock Adds

Honig and Lsssoy
Wm.

E. Pollock & Co., Inc., 20
Street, New York City, an¬

Pine

that

nounce

Honig has be¬

bond department, and
Harry W. Lussey has joined their
staff as analyst.

Joins Reinholdt Firm
'Special to The

Financial

Chronicle)

ST. LOUIS. MO.—John R. Gard¬

has

ner

become

Reinholdt &

associated

Gardner,

with.

400 Locust

Street, members of the New York
and Midwest Stock

so,

product

is

Exchanges. He
formerly with the St. Louis

was

Union

Trust Co.

With Hogan, Price

dis¬

'Special to The Financial Chronicle)

BEVERLY

same.

a

Jack

associated with them in the

corporate

others manufac¬
011

of

—

ad¬

Beane.

us

question, "Why
Commonwealth

the

Consider

tributed.

been

merly with Wm. R. Staats Co. and
Merrill

decline in

Some

this

has

Stock Exchange.
Mr. Morton who
joined the firm in 1949 was for¬

(1937-1947)

Edison holders

bound to raise the

Morton

partnership in
Davidson, 15 Sansome

&

members

custom¬

top of the heap.
Edison sold as
high as 36 % in 1946 and since that
year

CALIF.

to

some

our

realize these people are on the

to

FRANCISCO,

Robert

their

Commonwealth Edison

was

working order by the mar¬
utility business, Samuel

Gayner is
Price & Co.,

Beverly Drive. He
associated

CALIF.—

HILLS,

R.

was

118

South

previously

William

with

with

now

Van

De

Carr.

vel of the

Insuli.

It

was

his

planning

ideas that the output of

should

always

sumption.
more

and

be

and
electricity

ahead

of

His foresight becomes
more
consequential as

time passes.
4th:

The

Now With Marache Sims
LOS

con¬

management of Com¬

ANGELES, CALIF.—Alex.

G. Anderson is

Sims

&

now

with Marache

South Spring
Street, members of the Los An¬
geles Stock Exchange.
He was

monwealth Edison today is, in my

formerly

opinion, the tops in this

Co.,

458

& Reed.

and that

means

country

with

Waddell

Herrick,

the world. Edison

officers and directors several years

commenced working and con¬
their substations to the
When a railroad stock in these newest process of producing more
times breaks through the highest electricity with a ton of coal and
levels it has sold at since 1331 in these improvements are still under
bright.

much:

very

and usually in odd lots.'

Hogan,

large accumulation

a

are

Walter

generally declining railroad

ket, and

orders
or

but

years,

franchise—

has advanced from around 30

110.

like

have retailed for

we

four

Edison"?

York, Chicago and St. Louis Rail¬
to

stock

great relief to look over the

all

gain,

Within

for

production.

as¬

past two years

way

have another local

we

we

shares out with the public, interest
is mostly on the buying side. This,

extraordinary no competition.
This is also true
possibilities.
of many utility companies.

stock

ex¬

linois. Bell Telephone Co., common
stock.
With
only some 19,000

come

come

we

or¬

ern
Maryland
Railway offers

Messing

likely

-

market averages.

on

When

to

stock of West¬

situation

"buy management.

chart

these

an

interested

the

on

essential

during

capital

common

passing

situation

our

in

purchases

their

ers,

great potential

the

c o m

fact with

O'Rourke

P.

a

sibility

arrears

the

John

it. is

in

similar

have

in the

a

are

J.

In

Edison will

their utility service.

customers to

po¬

risk

ness

A

which

areas

have

r e

mended to

market

dinary b

Arthur

pand

since

E 9 3 2

the

a

sition
sume

Not

once

we

you

in

are

of

world

few

Edison

Co. stock.

How¬

if

ever,

wood, water and power necessary

are

widow,

a

safely skip this article.

Con-

demand

Common¬

company.

one

Co.

and

shares

wealth

than

whose primary in¬
in securities is income, you

terest
can

happen to be
or

havfe

we

sold thousands

of

distinct from pulp
commodity in bal-

supply

1, 1 93 2,
since that

date

is likely
capital ex¬

more

started

Oct.

is

1950

Herzfeld 6c Stern, New York City

will, in my opinion, fare better if
he does not buy stocks—he should

complex

Edison

northeastern Illinois grows, Com¬

se¬

and

shares

tries, there

successful

Commonwealth

Co., Chicago, 111.

By A. J. MESSING

is really serious about his money

perience with

attend

you

important issue to

very

monwealth

Commonwealth Edison Co. stock

sell

ply in the rest of the world. The

person

suggest

annual

P. O'ROURKE

J. P. O'Rourke &

1834-

by

North America. It is in short sup¬

probable

large capital gain.

normal depreciation
charges.
It is logical to expect in
1950 the payment of 50% of earn¬
ings. The market today is lSU-

Abitibi

and

for

by

trustee,

has

stock

common

appeal

of

years

real

rolls

for div¬

way

company's fine

sup¬

prospects

Now, there are innumerable
.stocks which qualify as invest¬
deal in

A

consider.

great part of

owns a

the first preferred issue, and some
of the second preferred and com¬

This business of

for

condition,

has

vest.

and

An

bond

1949.

responsible

standard

Paper

j

invest, speculate, anced

My business is

I

5th:

up

In only

459.000

outlook

of

cerned with those who want to in¬

and

the

year

6.30 per share

one

j Power & Paper Co.,

There is

three things one can

gamble.

charge

International

"best" stock that could

are

clear

to

5.79 per share

Rep¬

Committee

Supply.

All

per

Harris

E.

.

that

failure

the preferred.

$5.18 per share

price, with ter¬
ritory differentials, based on the
triumvirate average price of $100

AOne.

There

I

may

of

with
its subsidies,
Northern 111.
within the past two dec¬
ades has it failed to show a profit Public
Service, Western United
Gas & Electric, 111. Northern Util¬
on
the common stock.
Prospects
of increased
importation of ore ities, Sterling Hydraulic Co., Chi¬
into the port of Baltimore should cago District Electric Generating
one

721.000

1

governmental allocation,

no

mills

I

meet every

Select

ply.

,

ied investment

venture a

House of

and

no
price gouging, and no
hardship because of lack of

naturally, have
many and var¬
•objectives,

producers

States

Newsprint

in¬

ho

United

ii

conference

between

resentatives

indirectly,
at
least, for the

•the

its
on

con-

a far different
evident from the

the

of

outcome

the

reasons.

the industry

war,

j

different

ments

1

1/1

paid

__l_—

covered

like best?
If strength
and
Harold A. Long
doctor what he j operating eias
his
best j ficiency today are the reverse of
would, of course, the position fifteen, years ago.

it

are

please
one

1.342.000

$15,768,000

penditures

I

f

•or

2,411,000

1

that

posi¬

Toronto

do

of

arrears

6,750.000

preferred-

dividends

Because

an en-

stocks best but
o r

spite

2,400,000

$1.50

physical

a

to

what

to

Nickle

ducted

recommend

he

in

$1,885,000

dividends-.

industry

viable

be treated for.
I

Retirement

Earnings

bad]v

;

know

is

prior preferred..

expenditures.-.

retirements

1948...

tion. Financial

first

Bond

better

Dayton, Ohio

treatment,

The management
Charles Y. Free¬

1954.

or

Chairman

is

relation

with

advance

recent

very

1949 ( estimated >

the thirties, is

do

Retirement

Capital

C"ana-

now

to ask

$17,900,000

1947

|

stock

7,800,000

Total

nrndnrerc

HERBERT E. HARRIS

What

it

stock,

conservative

stock, and

dividends.^.

Preferred dividends paid

a

ru-

organized

you were

pre¬

'

vnff.

;

would

after

and

Cash Out:

tion"

z a

rap-1 dian).

1949

ferred

retained
taxes

reor_

'number

The

1934.

oi

from

meetings, con¬
by Chairman Freeman. No
Western Maryland is a strate¬ hurrying to get it, over with, any
stockholder has plenty of time to
gic and
valuable property.
Its
earnings record is excellent, in put questions direct to the skipper.

Earnings

Christiana

with only

compared

the'

year.

of

i

g a n

' The

stock has increased

common

3,528

in

has

by

year

holders

of

an>'I

market.

charges,

Common

by

torn-; cjraslic

on

out it is traded

h e-counter

market for this stock
more

Co.

Securities

is

stock

rnon

5,100,000

Common

;Bankrupt**

about 4.7'*.
....

Capital used for the construc¬
tion of newsprint production has

the

tax

de¬

Co., Chicago, Ili.

38%, i

at

and

Total

invest¬

its

rate

surtax

be

mon.

Kam

depreciation

earnings

all

which

amount

expenses.

and

in 1953

preferred stock, and has
a dividend on the sec¬

preferred

level.
balance

position
(expected about March 15) should
show working capital as of Dec.

Cash

approximately 15% of the div¬

ments.

this

expected to

are

Summer.

From saie small

management.

taxes

from

on

Plate.

The

Manager Canadian Dept., McMas-

received

accumu¬

share

per

man, President Edward J. Doyle,
Vice-Presidents
Messrs.
Gale,
much Evers, Jr., Reace, Bailey, Lambert,
more
than a chart accident.
It Gressens, Williamson and Creutz
probably is the beginning of a with Treasurer J. H. Wardis, are
major upward move.
As I write a hard-hitting and alert group and
this, Western Maryland common is we feel they will not be lacking as
selling at 17V2.
In spite of the newer theories and ideas come to
obstacles above mentioned, a price Ihe fore.
If some cf my readers
of 50 within a year or two would have any
score on
this subject,
ond

the

and

position.

tiana has to pay (under the pres¬
ent laws) are the normal and sur¬

idends

$136.50

29

paid

never

1949

Federal income taxes which Chris¬

an

of

the first

steadily from .1945, leveled off

pletion

on

dividend, and has

a

lations

in

Retained

based

paid

ed

company), the only

is

aver¬

wholesale

age

of

expec¬

hoop-la, not to buy stocks but to

and

represents the entire

net income of

a

fair price to the publishers.
who think the price is

a

To

of sat¬

virtually all opportunity, not will-o-the-wisp
the income Which it receives
profits; in short, results instead of

of

and

assurance

tations; reasonable capital growth

stockholders

own

base

provides

isfactory income, not great

quick" gambles;

So

over-produc¬

(629)

you
use
to
participate
in the
achieve through his own efforts.
57.00
We live not only in a complex profit period we envision is Abi- geratly enhance the earning power Corp., Edison Marquette Co., and
tibi Power & Paper Co.
It is a of this road.
50.00 world but in a complex economy
Earnings of $8.66 Chicago & 111. Midland Railway
50.00 ! c iicl eternal vigilance is indeed th£ major producer, the second larg¬
per share were reported on
the Co., sells electricity to Chicago
est in the world. It has excellent
and practically all the cities and
76.50 i price of econmic security.
In the
common stock for 1948, and about
towns in northeastern Illinois. Gas
management under the direction $5 is expected for 1949. A
56*00'hght of such conditions therefore,
quick
107.00'1 suggest to those who want cap- of Douglas Ambridge. Its mills are settlement of the coal strike could is also distributed in many towns
Whichever
88.00
protection,
not
"get
rich in fine physical and competitive bring 1950 earnings up to the 1948 in this area.
way

49.94

1929

!

indica¬

no

68.00

49.66

1932
1931

to

mediocrity.

vestment history when economic
S258.60 welfare lias required such unre182J0 mitting management and the abil148.60 hy to properly interpret develop-.v
129.30 merits, as now.
Although I know1
95.55 °I no "best" stock for the astute
95.25'and prudent investor, I do know
75.70' there are several good manage74.10iments in the investing company
132.65! field that will keep his money in134.50, vested in many "best"' stocks, re136.60.Ilieving him of the worry and work
57.50'that selection and able supervision
119.80'requires and will produce far bet118.10; ter results than he could hope to

Earned

1948

ably
as

The

or

and

near

is

CHRONICLE

price of $100 per
satisfactory oper¬
ating profit for the manufacturer,

ton

j assure results above

A Common Share

Year

tion.

cjuirements and, second, to
supervise his investments so

indicated

as

both

There

tion of unbalance

Security I Like Best

cally the entire income applicable

FINANCIAL

Perry T. Blaine Adds

ago

j 'Special to The Financial Chronicle)

verting

spite of the fact that it has never way and expected to be concluded

ASHTABULA1,
T.

Blaine

is

now

OHIO —Robert
associated

with.

Perry T. Blaine & Co., 221 Center
Street.

1

30

Speaks After lite Turn of the Year

Business and Finance

in

maintained

public expenditures which are continuously being
a large part of their competitors cost of

unseen

MORE BUSINESS FORECASTS

Thursday, February 9, 1950

CHRONICLE

FINANCIAL

&

COMMERCIAL

THE

(630)

spite

of

for credit.

lower

interest

rates

better

by

of banks have

made to absorb

We

able to accommodate in this issue

are

another

of opinions

group

outlook

for

addition

tne

current

year.

which

those

to

issues of Jan. 19, Jan. 26

on

the business
These are in

in

appeared

our

and Feb. 2—Editor.

demand

doing business. Moreover regulatory and rate-making
practices and procedures, that have been rendered obso¬
lete
by modern transportation conditions, remain to

increasing with the smaller turnover and better training

is

tions

Indianapolis and Louisville

Chicago,

President,

Railroad

corporations.

time

last

shackled

year,

even

placed

and

in

a

EDWIN J. ANDERSON
President, Goebel Brewing Co.

status of reasonable competi¬

in

making important

that

particularly in effectuating good control of ex¬

impossible,

the capital

result

burden upon generating
required for business ex¬
pansion and development. Had these
two
contingencies befallen, serious
economic repercussions would have
it

After

became

apparent

cient
much

manifested

wage

the

decline

in

more

late

that

represented

and

and more plans
capital additions
to industrial and

betterments

commercial
a

moderate

enterprises

readjustment of prices and inventories cor¬
in

unbalances

rected

were

ger
made effective. Meanwhile

each

which

heavily dependent.

in

strains

relieved

that

large

is planning on a goal of
million cars, the steel in¬
expects to approximate its
tonnage figures of 1949, and the de¬

in

1949

was

satisfactory

even

ent

high rate of population increase

i

'

dustry

mand for housing

.

advancing operating efficiency and

high national income for 1950.
To be sure, there are clouds

permit the rail¬
ways to believe that they will share in the general pros¬
perity which is expected to continue through 1950; and

Bank & Trust Co.

shocks.

The

primary determinant of economic conditions is
the availability of capital for the continued growth and
improvement of the means of production.
The great
depression of the '30s followed shutting off access to

in

conditions

Business

territory

mid-south

the

that urban centers of
highest percentage
of regular beer drinkers.
Furthermore, the urban cen¬
ters where industry' is located are heavily populated by
Recent

con¬

when corporate earning power
withered under the deflationary forces of the period.
Further increases in taxes beyond the rates which now

crop,

lent.

Industry in this territory con¬

burden the economy of

capacity.

capital which

occurred

the country would again dry up
sources of capital so effectively as eventually to produce
a
major depression. It was for such a reason that the
proposals to divert a greater proportion of the national
income through taxation were viewed with alarm and a
corresponding feeling of- relief followed after this dan¬
ger was averted.

Repeal;

modification of the Taft-Hartley

serious

or

law would have produced many labor problems and
turbances

in

addition

to those which

were

actually

Memories of the depression decade of the '30s

are

ex¬

still

vivid that every current economic or political devel¬

to recognize symptoms or
might foreshadow a prolonged recession in
business.
Price trends were anxiously observed since
these were interwoven with the liquidation that entailed*

opment is carefully scanned
causes

that

and characterized deflation and depression.

Some feared

that the downward movement of prices which began to

free

enterprise system of economic organization
business rivalry also lowers prices but price declines
following the normal working of competitive markets
a

builds business volume.

The price declines of 1949 were

of the latter character and not of the

deflationary type
destroys business.
The war-produced demands
for goods to fill the continuing economic vacuum which
that conflict caused prolonged the sellers' market through
1948.
The great public advantage of the private enter¬
prise system is competition; the driving force of all eco¬
nomic progress. Competition requires a buyers', and not
which

a

sellers' market.

The re-entry of competition into busi¬
in 1949 entailed a transition which was effectively

ness

accomplished.

At first

the

change-over

was

anxiously

regarded by some who mistakenly considered it to be a
harbinger of depression when buyers had to be actively
solicited and their favor sought once more on the basis
of relative price and

siderations.
status
one

of

It

con¬

realized that it is but the normal

business

American

another for

not to

quality and other commercial

was soon

for

sellers

to

strive

privilege of supplying buyers and
have buyers compete for the privilege of obtain¬

ing goods.
The

and

the

of

account

on

year

opens

traffic.

There has been

a

long-continuing erosion of it by sub¬

sidized' agencies' of transport;'temporarily stopped by
war but the railroads
are
becoming increasingly alert

level

as

another plus factor when

1950, production should remain at a
least during the first
months.
The automobile, steel,

one

levels.

near

or

V.

are
all
capacity

industries

a

Alexander

continue, pro¬

sales

concern.

in

It is anticipated

1950

with

available for purchase.
for

high level. Many

considering the outlook lor

smaller

been

breweries have

caught

rise in the cost of materials and labor on the
and inelastic

selling prices

on

The

the other.

of those who were not able to step up

many

a

that they will
supply of

larger

the

Within

forced to

were

industry,

a

go

trend that

Many breweries have completed
*

continue
products

There will be continued defharid I

longer term credit to meet the expansion program of

considerably

out

of business.

has

been

rapidly,

developing since 1948, our first real postwar year, will
undoubtedly be more pronounced yet in 1950; that trend
is onfe toward more intensive and extensive competition.or

will

soon

complete

large-scale expansion activities, and the pressure of
maintaining at least a break-even point on these capital1
investments will necessitate an increase of advertising, •

and

selling

winning

activities.
This, plus the fact that
more intent than ever before on

allied

companies

many

are

larger share of the market, leads to the con¬
clusion that the brewing field in 1950 will be more com¬
a

petitive than at

Mortgage loans will,continue,
at a high level in view of the excellent building pros¬
pects during the coming year.; The Treasury Department
will continue to be the major factor in the new money
market in order to take care of the refunding opera¬
the

the

deprives the industry of many companies that are.
valuable as factors in stability and community goodwill:

completed

have

companies

increase

spendable

That

their expansion
programs as well as their financial plans. Any further
increases in the price level will see a renewed demand
for bank loans to carry the increased receivables and
inventories as a result of larger salesJ As a consequence,
it is difficult to foresee any material change in. interest
rates during the immediate future.
Consumers; credit
loans continue to rise, but they are not causing any
to

and

steady flow of raw materials, available

The demand for credit continues at a

undue

in

and

only answer to the problem created was increased vol¬

labor, and finished products into the plants.
industrial

a

hand

ume

These conditions will undoubtedly

vided there is

J.

For

too.

backs,

between

six

at

prices

Unfortunately, that relationship has certain draw¬

1950.

high level at

1950

goods

income, there have been marked rises, yet

price and income relationship must be regarded

And this

spite of the coal and steel strikes.
As far as it is able to predict for

building*

market

above

price rise of malt beverages in general has been rela¬
tively small when compared with other commodities.

in

entering

the

that

groups.

consumers'

most

In

consumer

peaks for the postwar period.
Industrial
production during the

and

appear

And the conclusion may be
drawn that beer consumption in 1950 will remain stable
at the 1949 level or increase slightly.

plentiful

past year remained at a high

therefore

would

It

factors lavor these

new

any

time since before the last

war.

public utility industry.

tions, the projected deficit in this fiscal year, and inter¬
national complications.
There is

a

strong need for balanced fiscal operations

by the Treasury Department, a reduction in the
excise

Federal

taxes, and the elimination of double taxation on

dividends to individual holders.
the advisability
reducing the high cost of government, overlapping of
governmental bureaus, and the need to realign the execu¬
tive department. An outright reduction of expenditures
will allow fiscal operations to be in balance without the
inflationary prospects of deficit operations.
Business
would
certainly be helped, not hindered,
by these
changes in fiscal policies and taxation during 1950.
Finally, free enterprise and the capitalistic system de¬
mand a high level of industrial production and good
and

The Hoover Commission has pointed out
of

to maintain our system.

wages

superiority of the railroads for long distance inland mass
transportation is sometimes obscured by the heavy but

deposits remain




more

of

beer.

supplies of oil.

to protect themselves against greater inroads and recover
of-that which has been lost. The basic economic

some

pational groups high among the heaviest consumers

Bank deposits
and loans at the local banks were at

world

shown

have

semi-skilled workers who represent occu¬

the skilled and

high level of

a

seed, the short cotton crop,
deterioration of the oil prices

corporate profits

with widespread belief in the
probability that industrial and commercial activity will
be well sustained * Purchasing power of individuals and
of corporations is high; even in relation to the current
level of prices. It appears therefore that basic conditions
will assure the production of adequate potential rail
new

operate at

inferior

with

the

to

Conditions in the cotton
seed oil industry were hampered by

might forecast such consequences.

appear a year ago

In

tinues

dis¬

perienced; with equivalent further curtailment of natural
production and income.

so

were

high level throughout 1949.

a

surveys

10,000 inhabitants or more have the

Crop conditions
affected by the boll weevil damage to the. cotton
but livestock, forage, and grain crops were excel¬

tinued at

have

spending from savings and future earnings.
Also,
there is always the danger that rising prices may weaken
real purchasing power.
But $170 billion of savings in
bonds, bank accounts, property and stocks represent s i+'ficient buying power to cushion any foreseeable economic
been

V. J. ALEXANDER
President, Union Planters National

Edwin J. Anderson

on

horizon, such as the fact that many consumers

the

succeeding years, too.

it is hoped over many

should continue on

Moreover, the pres¬

etsablishes itself as another factor in

satisfactory general business conditions

though

peacetime peaks.

six

about

railway earning power to dangerously low

■

to the factors just outlined, the

measure

of business

level

below recent

now

The automobile

industry

otherwise could have weakened the economic structure.
Due

gill:

upon

are

1949 level.

The combination of

.

spending,

businesses

many

the

levels.

J

1

bil¬

several

owned have produced suffi¬
operating economies to shield the railways from
of the impact of the pos-war period inflation of
rates and material prices that otherwise would

have reduced

As / confidence

1943.

regained,

itself
was

first

whicn

by

government

which

of diesels previously

power

tions, business began to recover from

will

as

past year. This has had a vitalizing effect upon railroad
service and together with the fleet of 10,000,000 horse¬

that

exceed that' of

may

year

distinct possibility

a

which

.in

High wages will continue to lend

pally by more than 3.000,000 additional horsepower of
into service during the

Congress would not take adverse ac¬
tion on these important public ques¬

income

there is

year

a

strong support to inflationary tiends,

diesel locomotives that have gone

occurred.

expressed

lions of dollars.

equipment, but princi¬

improvement of their plant and

be

previous

any

aided by the continuing

they have been greatly

will

1950

national

The 1949 record is proof positive of this, espe¬
cially when the cost equivalent of extraordinary weather
and strike conditions are considered.
In achieving this
penses.

profits taxes

of individual income,

loss

Meanwhile the railroads have been

in the opinion

by leading economists that despite possible strikes, pro¬
duction cutbacks in some industries,
and subsequent

anemia cured.

their financial

considerable merit

is

There

equality. When this is done their pre-eminent place
transportation will be immediately reestablished and

tive

progress,

reestablish the
excess
of wartime, years and
thereby impose a haish,' if not an

haps

public'action that will relate transpor¬

railway regulation to current condi¬
immediately in sight, there are reassuring
that the railroads will be
gradually un¬

not

indications

Co.

1949 was viewed with serious
apprehension. It was generally feared that the incoming
Congress would repeal, or seriously modify, the TaftHartley Act and increase the national tax burden; per¬
this

At

payments, and large dividend disbursements by

income

agencies and give them undeserved ad¬

tation subsidies and

BARRIGER

W.

of

view

vantages.
While rational

JOHN

employees.
It is expected that bank deposits
a high level during the coming year in
the present volume of industrial production,

new

will remain at

handicap the railroads. These no longer protect the pub¬
lic but have become an umbrella to shield competitive
transportation

expenses

kept in line and the efficiency of banking staffs is

been

of

Operating

Banking faces the New Year with confidence.
under

the

war

Bank

at a high level and are only slightly
time peak.
Bank earnings have bee*

C. A. REUTEL
President, South East National Bank of Chicago
,

Although

a

large Federal cash deficit in time of pros¬

perity increases the ultimate prospect of renewed infla¬
tion, a general price rise in 1950 appears unlikely.
Business

spending will probably shrink by at least as
public spending expands. Unless weather is
bad for crops farm prices will probably decline, further.
much

as

Exports
ductive
tion

for

The

appear likely to be slightly lower.
With pro¬
capacity high the prospect is for keen competi¬
a

large volume of business.

wholesale

price

index

of

the

Statistics will probably change less in

since the

Bureau

of

Labor

1950 than in any

may possibly show
likely to be slightly more
than canceled in t!he second half. Although the volume
of production will change more than prices, it, too, will
be stabler than in 1949.
The average of. the Federal
Reserve Board index of industrial production for 1950
will probably not be very different from the 175 aver¬
age for the year just closing.
The national income, too,
will be comparatively stable. I share what seems to be
year

war.

Any strength it

in the first half of the year is

Volume 171

the

Number 4880

THE

prevailing view that the first half
slightly better than the second.

be

In

general the effort of last

seems

creased

is likely to

year

Orleans

certain

for

such

than

year

last.

This

seems

the

orders.

products

of

over-age

should
in

be

of

still

use

great

very

that

stock

market

the

decline

should

be

continue

mild.
far

In

into

the

sibly

an

reversed.

Even

without

this

development steel
production this year
may slightly exceed last, for much
of the
tonnage lost during last fall's strikes should be
made up this
year.
I am here
making the risky as¬
sumption that this year's
production will not be long
hampered by a critical shortage of coal.
Private debt, though

sound

.

'

.

7777':77'-

,

EDWARD

G.

...

.7'-:-:77'

■

7'"'

.

77'.

every

of

indication the manufacture of
should continue at a
high rate in the year

automobiles
1950.

The

demand

for

for

cars,

buyers coming into the market
still

to be far from

replacement

for the first

and

time,

by

seems

turers

which

are

continued

our

high

customers

As

the

dent

world's

largest

components,

of

at

adversely during the last

New

high

records

In

•7

production
set

were

during the

various manufacturers has
result the supply

G. Budd, Jr.

resumption of
the staggering

changes by the
advantageous. As

most

able to maintain steady

was

production, and we were able to keep
ating most efficiently.

our

plants

oper¬

It has been suggested that the
industry return to the
show"'
basis in planning the automobile
year.
Should this occur, with most
of the new model presen¬
.

"auto

tations being made at auto show
time,-then it will mean
that the automobile supply
industry's annual production
would be
necessarily crowded into 8 or 9 months, the
remaining 3 or 4 months being given over to the
to

over

change¬

the

models.

new

This

the orderly place, at which
to

operate

would

be

rate of

So

The

effect

that

mean

able

production but not

our

detrimental

also

recently
That is, the change

disarranged.

would affect the rate of
volume:

would

have been

we

on

far

as

new

designs

seems

basic is

likely to

there is

one

our

our

total

"unitized"

and

be

to

country.

come to

a

"frameless"

Only

developments

are

body

construction.

This,
in

of

this

one

far,
builders. There

will

not

a

more

only

distribution, but will involve

motional

skill

are

as

for

once

new

more

we

home

use.

are

concerned

chiefly about

business, especially domestic. There
amount

of

financed

but

ago,

business

export

by

to be

appear

sources

to be

seems

in

prospect, mainly
allotments.
The total in

E.C.A.

large

as

it

as

favorably with

compares

our

did

two

appraisal

as

there is little

a

direct relation

volume, of course, but is also seriously affected by
price competition for the smaller number of orders

high

come

volume.

overall

is

16%

for

roughtly

Manufacturers

railway passenger

and- abroad

counts

cars

and

the

for

shares outstanding which makes possible the
"per share"
showing.
The total dollars added to Surplus appear

substantial,

but

it

must

be

considered

that

volume

the

large
required a

handled in the last ten years has
great expansion in personnel and office facilities, which
is now a major problem to mould and shrink
into an
organization of more normal size.
We are set up to
handle
face

large volume—if

a

inevitable

an

markdowns and in final gross margins.
Merchants realize turnover and

inventory

ments must be

of

80%

is

been

not

we

now

deal.

invested

we

ing

curtail too much

numerous

to realistic aggressiveness and to development
sqles in outlying territories.
Merchants will get only

the business for which they plan.
The road ahead is clearer for

A

total

reach 325 for the year.
and 156 in 1947.. '

16

of 310

and

cars

the

fixed

factor.
tion

There is

in

a

consumer

cars

have

of required flexible
adjustments and keener study of
what is waste and what is motion. There will be a better
utilization of space wherever it can be
done, rather than
reliance upon capital for expansion.
The real trick is

to

get

greater

productivity

of

out

and

space

personnel in view of trends towards higher

personnel

job

Profits and

compared
be

will

be

keener

a

dividends should

with

1949.

comparable with

than

one

not

in

the

of

The

past.

appreciably change

first

The

out

costs.

half

the

of

as

will

year

an

further

any

investment.
Instalment

buying is at

a high level and bids fair'to
There ought to be a revision of creditmaking techniques and a realization that there is some

become higher.

limitations to

what

much the stores

be

can

can

done

in

this

field and how

carry.

The result for 1950 should be
satisfactory.

Merchants

are
generally up on their problems.
For this reason
retailing gave a good account of itself during the post¬
war
readjustment period and took the bumps rather
smoothly.
Perhaps the most refreshing sign and the
biggest factor against losing volume and profits is the

"know-how" that has been acquired in this field.

RALPH S. DAMON

President, Trans World Airline

Although final returns for the year 1949 are not yet
all in, it is clear that the
industry as a whole will show a
profit for the first time since the war. We in the

assets,

but

contributed

was

total

built
will

our

will

earnings

continue

will

that

further

be

and

im¬

proved in 1950.

According
the

trunk

profit

to

present indications,
airlines will report a net

of

approximately $22,000,000
in 1949. Although this is
by no means

earnings have
being held

a

large return

on

total assets of $500,-

000,000, it is encouraging when

are

with

pared

com¬

the losses

of

1945,

com¬

1947

tion in operating costs
accomplished
by careful and economical manage¬

our

needs.

ment,
of

Vice-Chairman, City Stores Company

Retailers

look

the

on

to

whole

somewhat

1950.

5%.

expected to be at

are

lower

Since unit sales

prices,

it

will not

be easy to match 1949 dollar
volume.

on

travel,

third
as

an

equipment.
increase of
pas¬

a

factor was a marked increase in foreign
result of the continued improvement in the

international situation under the influence of the Mar¬
shall Plan, and because the speed, comfort and economy
of the airplane have made it possible for thousands to
travel

homefurnishings

men's
for

and

so

women's

furnishings and

budget

merchandise
sold in basement stores.
The factors

generally
hashed

have

out

generally

in

been

economy

pretty

various

well

newspapers

journals.

that

dominating factors should bring

an

to

upward

It is sufficient to

trend

in

consumer

say

in¬

that savings and liquid ability
still with consumers and

buy is

merchandise which conquers the
price-conscious feeling
of the selective customer still finds a" market.
The essential difference in retail
circles is that in the

abroad

who

could

not

previously do

so.

During

more passengers entered and left the United
States by air than by ship for the first time in
history.

Provided that the

industry is able to depend upon a
policy from Congress and the Civil
Aeronautics Board, the year 1950 should be a better
year
stable

for

affecting the

and

delivered

was

installation

fiscal 1949

a slight gain
long as private
residence building keeps at or near
present paffe and lively demand for

Cohn

the

efficient

record.

The

Most retailers look for

probably

more

senger traffic over 1948.
Domestic air passenger miles
for 1949 are estimated at about 6.5
billion, the highest

in

de¬

and

approximately 12% in domestic

optimistically

will rise about

by

together with

new

Another factor

Ralph S. Damon

They expect
little appreciable change in sales
volume, although there
is a minority
group which believes there will be slight
variation downward.
The majority feeling is that units
,

!'!;

major factors were largely
responsible for the improved earn¬
ings in 1949. One was a sharp reduc¬

SAUL COHN
*

1948.

Three

earnings will provide suffi¬

working capita! for

of

during 1949 to:
Central of Brazil; New York Central; Western
Pacific;
Pennsylvania Railroad; Board of Transportation of the
City of New York; Seaboard Air Line; Southern Rail¬
way; Missouri Pacific; Norfolk and Western; Delaware,

trend

cient

freight

and

industry

have high hopes that this

a

Saul




the

of

employment and reduction of agricultural income.
Profits will depend materially upon expense control.
There has been the
beginning of a sense of industrial
engineering in store operation; a better understanding-

one

This compares with 197 in 1948
been

half

chance that there may be some varia¬
income because of increase in un¬

must

we

We look forward to the

use.

come;

Passenger

first

bringing new problems, or old ones in
different form, and trust that our
organization will be
able to meet these problems in a creditable
manner,
and that our undistributed
as

just closing Budd's output of railroad cars
the largest in the 15-year history of that division
Dec.

the

Buying power will come out of substantial liquid
savings in cash or government bonds; increase of con¬
sumer debt;
the veterans' insurance refunds; the rela¬
tively quiet peacefulness of labor relations and general
production outlook and backlog of the
automobile, steel
and housing
industries, all of which insure a high level
of employment.
As to the second half, there is possi¬
bility of a gradually declining food index as a favorable
year.

and

year

In the year

through

commit¬

difficult to get, volume will

more

respond
of

types of apparatus

The undistributed

in

available for current

all-stainless

the; manufacture of all-stainless steeli motor
trailer bodies, and agricultural equipment.

business.

in¬

keenly handled and controlled; that

more

while business will be

lowering in volume because of lack

of personnel to handle the
in which

leading railroads here

balance

pro¬

department
stores instead of elsewhere.
Since the price structure is
more
stabilized, a better job can be done in markup,

earnings "per share," but in this discussion too
weight has been given to the small number of

certain

production

ever-increasing

get that proportion of disposable
which should be spent in independent

Considerable discussion has taken place as to
dividend policy of this Corporation because of the

and

Automobile

an

to

receivables, but inventory should not require

products in¬

our

again in a position of a declining volume plus
competition for the orders that are available,

fair

Merchants, generally, also feel'that 1950
competitive year and that competition
be with other stores and other methods

year ago.

be

well

purchasers for

are

advantages which cannot be
eventually the idea will probably be
adopted generally.
:

of the

of

a

will

sharply, except for shipbuilding use, and in 1947
orders in large volume were booked for ex¬

domestic

con¬

domestic manufacturer has adopted
although it is being considered by other

overlooked

livered

buying

maintained

The courage and optimism neces¬
now more in
evidence than it

unsatisfactory first six months
of 1949 and should be better.
Dividends in many indus¬
tries may be higher in view of reduction in
capital out¬
lays.
The fiscal problems will involve an increase in

as

question whether anything
head during the year.
Today

origin, is creating increased interest

so

Was

of

be

1948

a

new

or

European

steel

rate

not

was

of

31

to create business is

sary

present steady

development of great importance under
consideration by the industry as a whole and that is
the

Budd's

the

could

the part of merchants.

employment is obvious.

cerned, there

it

that

years

postwar years would be very lean ones.
temporary lull in late 1945 and early 1946

a

creased

little

year.

beefi

industry

those

of furnishing capital
refiners, and industrial

oil

argued

was

in

field

our

producers,

1940-1945,

years

about oversold markets

the

demand from

the
Edward

sales

as
in
the
years
since the
production following the
war,
shutdowns necessary for model

a

President,

(631)

available.

1949

the

It

goods

After

to

domestic
of

the

keen

quarter.

and

and

The outlook in respect to profits has

minimum, except for the

been

of

cars

Corporation

early 1949. This is only a guess,
tangible data to serve as a guide. v

steel strike which did
effect the out¬

put

...

a

a

Board

of

satisfactory year in 1949.
Interruptions to planned production
were

the

points in

power

and that

years

people's ability to
buy cars.

We had

to

prospect does not

the industry, our own
prosperity is
inevitably dependent upon the

the

saturation

projects

suppliers to
most of the the
principal factors in

of

all talked of and heard much

and

a

and

has

men

of

During World War II, especially the

of

indepen¬

railroad*

production

Foster Wheeler

severe

automobile

by

that

II. S. BROWN

We

for

Reception

expected

Chairman

and

manufacturer

body

is

'

are

production

It

port

many months ahead.

modern,
air-conditioned
qualified for main-line or branch-line

RDC-type will furnish an increasing proportion of the
output of the company's Red Lion plant, devoted prin¬
cipally to the manufacture of railway passenger cars.

and

satisfied, and the

plans of all the automobile
manufac¬
for

fabrication.

good.

capital

present

comfortable,

which is

processors.

President, The Budd Company
From

orders

cars.

first of these RDC-1 cars is presently touring
country in a series of demonstration runs for the
principal United States railroads. Ten more are in course

goods

BUDD, JR.

present

year

The

we
'

At

the

the

undertakings.

77

During

all-

operation in all types of services except those requiring
deluxe sleeping-car facilities.

growing rapidly in some sectors,
is not yet
high by past standards, and commercial
banks
are in
position to extend, at moderate rates of
interest,
funds for
'

economical,

vehicle

and

year

its books.

on

474

rail diesel car, RDC-1.
This self-pro¬
pelled passenger car makes available for the first time

and

financing, the decline in busi¬
spending for equipment might be halted and
pos¬

ness

for

revolutionary

fact, should

lead to substantial
equity

cars

order.

on

orders

anticipate the situation created by this declining
backlog, the company developed, built and introduced
in September of 1949 to the
railways of the country the

high, any decline in car output
All signs point to some reduction

strength

cars

with

year

passenger

194

are

the

To

spending for equipment, but, here too, the
equipment now in use that is over-age is so

great

entered

received for 30

were

so

moderate.

business

amount

in

cars

steel

there

approximate the record for 1949. If it does
so, it seems
fairly clear that construction in the first-half will be at
a higher rate
than in the first-half last
year. Automobile
output may not equal the 1949
record, but, with the
number

It

stainless

quite

greatest

with national income

Pacific; Fort Worth and Denver City;
Burlington & Quincy; the Wabash; Interna¬
Northern; Texas & Pacific; and Western

Railway of Alabama.
During 1949, the Budd Co., in common with other
railway-car builders, has faced a declining backlog of

as textiles,
shoes and foods.
single factor in the general
confidence for the
early future is the expectation that
.the total of private and
public construction will in 1950

Probably

_

& Texas

Chicago,

mizes the incentive that
prevailed in 1946-48 to increase
has been so well maintained that
the production of non-durable
goods as a whole may be

this

CHRONICLE

tional-Great

them.v Consumption

higher

FINANCIAL

Western; Florida East Coast; Louisville
Nashville; Atlanta and West Point; Cincinnati, New

and

unlikely of repetition this year, while the in¬
ability of industry to fill orders promptly mini¬

slightly

&

Lackawanna &

/

to reduce inventories

year

COMMERCIAL

air

regulatory
travel

than

1949

and

should

lead

to

continued

improvement of airline finances.
It

first

is generally agreed that the airline troubles of the
three

postwar

years

resulted

primarily from two

factors—the chaotic competitive situation created
through
indiscriminate certification of additional carriers and the
almost
totally
unregulated
operations
of
so-called

"irregular" carriers, and from the unrealistic fares and
mail rates established by the wartime Board on the basis
of abnormal load factors.

The

international air travel

-

7

picture especially is

en-

'

first

half

of

1949

there

was

a

more

sombre

-

feeling

on

Continued

on

page

32

Continued

from

page

31

Thursday, February 9, 1950

CHRONICLE

FINANCIAL

&

COMMERCIAL

THE

(632)

32

Perhaps it is as well for the machine tool industry

R, L. FITZGERALD

West¬

couraging for 1950. With the continued recovery of
Europe, the reduced costs of tourism resulting from
currency devaluations, and the impetus of the Holy Year
in Rome, it is expected that travel to Europe will be sub¬
stantially higher in 1950.

ern

Special Holy Year tours and

organized pilgrimages

to

of interest will further stimulate
abroad by Americans. For instance, lWA,tne.oniy

other shrines and points
travel

certificated

airline

States

United

to serve Rome,

na

number of low-cost Holy Year tours, S0J^
of which provide all-expense trips of two weeks tor
under $650.

arranged

a

.

shipping companies will share in this
the European economy will benefit
from it. In the last three years the scheduled airlines of
the United States and of other countries have opened
new markets for travel and goods, have set high stand¬
ards of service and operation which has encouraged the
All airlines and

increased travel and

generally and generated new potentials
transportation. And competition—regulated, or¬

of air travel

use

air

of

competition—has been responsible for this devel¬
opment of international air transportation.
This policy of competition is the policy of our govern¬
ment.
It was laid down by President Truman when he
approved in 1945, the basic pattern for trans-Atlantic
air operations by three United States flag carriers to
the British Isles, Europe, Africa and Asia.^ Regulated m
an orderly fashion by the Civil Aeronautics Board and
by the industry itself, through the^ International Air
Transport Association, this competition has stimulated
traffic on all airlines and has kept standards of responsibiltiy, safety, schedule frequency, on-time operation and
passenger comfort and service high at the lowest air
derly

fares in history.

responsibility to its obligation to serve
adequately the routes for which it was certificated under
the President's decision. TWA has been planning all dur¬
ing 1949 to accommodate Holy Year travel to Rome
throughout 1950. Part of this preparation has been the
purchase of 20 new Constellations at a cost of $20,000,000.
We will begin receiving delivery on these this spring
and will put the new Constellations into trans-Atlantic
service beginning in April. By this summer TWA transAtlantic schedules will be the most frequent in our his¬
tory, including four to five flights daily to Rome. All in
all, we will have more than 51,000 seats to offer the
traveling public to Rome throughout 1950.
In line with this

Early in 1949 the Civil Aeronautics Board issued a
statesmanlike document which indicated a thorough un¬
derstanding of the

industry's basic problems and

enunci¬

them. Some of the Board's
recent actions have indicated an inconsistency with these
policies. However, we are hopeful that these will be
corrected and that the Bohrd and the government will
continue the sound program which resulted in a healthy
industry in 1949 and on which the future stability of the
policies for dealing with

ated

industry depends.

Lincoln, Neb.

has been
completed, and to us it is more than necessary to review
the past year in order to know what is ahead for business
in 1950.
We will speak principally Tor the banking busi¬
ness, which should be the leadership
in every community for every busi¬
is written

in that community,

ness

after the year 1949

and you can

will find
here

Commerce

a

we

sponsibility

depositors

our

In its January

1, 1950 issue, liBoot and

There are

a

"If the

character of general

1950 is not marked by

will be

no

It

1949.

The

men

our

all at work.
and

we

per

the

communities and

damage, but I don't believe our senators, congressmen

political leaders will do too much experimenting

when the present rules and regula¬

are

serving the people well.




dollars

a

they would

than

more

year

if

be

up-to-date machine tools were doing the work.
the return of highly

With

competitive conditions, in¬

dustry is showing increasing interest in the cost-saving

possibilities of new design machine tools. The need for
cost-savings and production economies, which sooner or
later should

and
with

translated into orders for new

be

machine

major factor in the industry's picture
Those machine tool companies whose product

tools, will

be

a

engineering know-how meet these needs enter 1950)
substantial orders on the books and encouraging

prospects.
America

standard

machines.
lot of

hardly hope to maintain a rising postwar
living with production based on prewar
If America is to go forward, it will take a

can

of

highly productive, up-to-the-minute new machine

tools.

CROI.L HUNTER

expect that air carriers of the United States, in both

I

domestic

and foreign operations,

in 1950 than in
sengers more

will do

business

more

previous year—carrying more pas¬
miles, having heavier hauls of cargo, and
any

taking in greater revenues.
I think
that figures in all
items

will

those

exceed

which

year

sufficiently

of

these

1949,

a

previous

broke

itself

records.
In

:

may

their

■

'

,yV.

and

"Whether the shoe industry can

the

the

reach

a

higher objec¬

physical volume and dollar sales than in

tive both for

preceding two years may well depend entirely upon
efforts of the industry and of its most progressive
There are new paths to be marked out in

energiz¬

industry through¬

by

the

industry,

it must

since. Because
health of the industrial economy in the 1930s,

industry during the war years and
to

keep her produc¬

to date. Then the
lack of industrial preparedness prior
to Pearl Harbor contributed further
tive

equipment

up

pyramiding of
wartime requirements for machine
tools.
Nevertheless,
the
industry
managed to organize wartime pro¬
to

the eleventh-hour

duction in its own and

sub-contract

plants so as to reach a

1942 output
$1,340,000,000, over seven times
prewar peak volume.
As a re¬
sult, «the extreme war-period pro¬
of

the

duction

machine

of

anticipated

a

Frederick V. Geier

tools

in

effect

number of years' future

of machines.

The redistribution of several hun¬

machines

has

these

war

surplus

materially lessened the number

of new

dred

thousand of

postwar design machines that would otherwise have been
built new to meet the expansion and replacement de¬

During this period in the
United States capital investment in plant and equipment
has been running at record levels yet, largely for the
reason
indicated, the proportion of funds invested in
new type machine tools has been below normal.
mand of the past

four years.

the

surface

transportation, as
or

decreases of

coach service, or

or

line

growth should continue in 1950

and for
Croil Hunter

This

number

a

growth

of years to come,

airline

domestic

in

travel is the result of many factors.
have made it possible for the economyminded to enjoy air travel within the limits of their
budgets. Substantial fare reductions have been provided
through coach service, commutation books, the familyplan, round-trip reductions.
One of the outstanding
trends has been toward the growing acceptance of coach
;

;
The airlines,

on

various types of

to Alaska, transcontinental^',

runs,

and in local heavy density

diverse

these

out by Northwest Airlines

This has been tried

service.

conditions

traffic.

has

Its acceptance under
the public

demonstrated

need and support.

Air service will be

in

than

1950

faster,

more

attractive to

there

will be

more

persons

in

greater use of

1949,

for

more

luxurious types of aircraft, like the

a

Martin 202s and the Stratocruisers which Northwest Air¬

Any appraisal of the 1950 outlook for machine tools
on an understanding of the position of

America failed

over

inter-city motor bus travel. This air¬

its domestic and overseas routes.

Improved navigation aids will make air travel more
dependable, with fewer cancellations and delays.

should be based

of the poor

of

reflected in increases

occur

thereby
leather and shoe markets.

business

railroad Pullman

degree of normalcy in foreign trade would tend
store the freer flow of hides and skins to the
States

year

passenger

sitions

in supply

to re¬
United
contribute to increased stability in

every

previous year. This has been true
despite the shifting competitive po¬

be aided somewhat in

production of certain standard types

greatful that that is not in the thinking

tions

excesses

any

coming year by the possible improvement

prosperity for
educated to the

people in the Middle West.
Political tinkering wiht the economy does considerable

reconomy

that U. S. production costs are at least half

means

billion

capita level of demand.

Strikes and idleness destroy our economy

ou

that

"Manufacturers' operations may

communities in the Middle West are

with

This

and

mestic air trunk lines have increased

the

of the

and

of prewar type, embodying ideas
prevailing more than 10 years ago.

are

mechanisms

a

been in¬

95% of the machine tools in

over

of

the bankers we want to urge
the experiments and help get them into the

are very

today

use

maladjustments which could lead to prolonged curtail¬
ment in the rate of activity needed to meet the stable

trouble about future

and women in our farming

result

stalled and as a

business developments in
or startling change, both

during the past year have prevented the appearance

and women doing this research work we

industrial

paratively few of the postwar machines have

of recent history,
with the exception of 1948, the do¬

farmers' hands for use.

in

unusual

not believed

is

wish to say thanks and to
use

done, and in cost savings.
They are generally conceded
to average at least one-third more output.
Yet com¬

important to cause a substantial adjustment in produc¬
tion existed at the end of 1949. Caution and restraint

to keep everyone
prosperous.
1950 to us looks like a good prosperous year
because we have a lot of livestock and grain in the
hands of the farmers.
We have several fine agricultural
colleges in the Middle West that are doing the research
necessary to increase production at less expense and to
control the pests that destroy our agricultural products.

them to

Many of the postwar machines and tooling methods show

production and the consumption of shoes can reason¬
ably be expected to approximate the volume gained in

things that need to be done in order

men

years
from V-J Day the machine tool
designed and brought out many new models
more productive than the prewar types.

lines is flying on

officers
lot of good; fine schools in each
in the larger centers that can be

oif

are

startling increases in productivjey, in precision of work

President, The Cincinnati Milling Machine Co.

Dunn

machines

productive

two

considerably

newer,

this nation if we can keep the bankers

To these

Within

builders had

the

used.
There

Shoe Recorder"

published a comprehensive study of recent trends in
shoe production and consumption, concluding with the*
following comment on the outlook for the coming year,:

FREDERICK V. GEIER

bank in the nation to educate

of them.

age or

prewar

President, Northwest Airlines, Inc.

and

their clerks in order to make

community as well as

America's
design.

of

percentage

them.

as

Byron

that the American economy is
conditions at home

now

export markets, it is unfortunate that so high a

in

for 1950.

must be
regarded as a long-term program, supplemented by
much individual effort along the lines of better styling,
more
effective promotion and more efficient selling.
Methods of production in many factories are likewise
being subjected, to critical scrutiny and re-examination
to determine the possible effects that improved produc¬
tion procedures might have on the shoe cost structure.
But in many respects, salesmanship and selling are re¬
garded as the weakest links in the chain of merchandis¬
ing. Every possible effort will be made to strengthen
industry recognizes that this project

But the

growth is to be
be the product of
conscious and determined effort because the operation
of normal economic forces cannot produce an end result
in 1950 substantially different from the record of 1949."

place in the.bank as well as in the
community; and I would like to urge
every

varied

importance of footwear and the need for more
and extensive shoe wardrobes.

the

well as the people
in the community, and everyone of
us is educating ourselves to take our
stockholders

make consumers more aware of

lic relations program to

but

back to highly competitive

once more

and

to be little present prospect

recorded

good community. To
National Bank of
feel keenly our re¬

to

opinion, there
of any marked change
in this pattern of stability in shoe trade operations during
1950.
The industry, both at the manufacturing and re¬
tail levels, is exceedingly active in promoting its prod¬
ucts to. consumers and distributors.
The National Shoe
Institute, organized a little more than a year ago and
jointly sponsored by the national associations of manu¬
facturers. and retailers, is carrying on an extensive pub¬
According to the best informed industry

appears

ing the merchandising impact of the
out consumer markets.
If any real

the

at

witnessed

elevating the status and prestige of footwear, in

they are active in promoting business
for themselves and their neighbors,
us

which

elements.

pretty well judge the community by
the leadership that is taken by the
men
and women in the banks.
If

you

1946,

with the easing of foreign
trade barriers.
Signs of hope in that connection made
themselves manifest in the last quarter of 1949: a greater

BYRON DUNN

article

accomplished,

the all time peak in
peacetime operations of the shoe industry; sales and
production have followed a remarkably stable and uni¬
form pattern.
.1946 was the great year of postwar in¬
ventory (replenishment and production in that twelve
months
period passed 525 million pairs.
The total
dropped to 468 million pairs in .1947, followed by 462
million in 1948 and approximately the same in 1949,
with the final U. S. Census Bureau figures not yet avail¬
able. The most interesting trend during this period has
been a rather noticeable decline in production and sales
of conventional types Of all leather women's shoes and
a
corresponding increase in the newer casual types.
Since

conditions which

President, National Bank of Commerce,
This

Shoe Recorder"

that

has been

the redistribution of war surplus machine tools
Editor "Boot and

In predicting more air travel in 1950,1

realize that in

transportation index—total inter-city
travel—has been declining. Yet, so far as airline busi¬

recent

ness

years

one

is concerned, the effect of this decline in

travel has been

more

than

offset

inter-citv

by increasing advan¬

tages offered by the air carriers.
Most of the comments I have made about domestic air

traffic apply also to international air
national travel

travel.

This inter¬

will be stimulated by the many persons

going to Europe to observe Holy Year. It will be pro¬
moted also by new overseas services, like the overnight
flights to Honolulu through the Pacific northwest gate¬
of

way

Seattle, Tacoma and Portland inaugurated by
Airlines; by the continued development of

Northwest

Alaska; and by

many

improvements which are evident
China.

in the Orient despite the instability in

So far as the Far East is concerned, Northwest Air¬
lines, with its short-cut route, is in a strategic position
to benefit by the growing though unspectacular im¬

provement in

some

parts of that

area.

In addition to anticipated growth of passenger travel
in 1950, I expect that the industry will also develop its
air cargo business to a large degree. It is only recently

the

that

scheduled airlines

have

had

enough planes to

attempt to expand air freight to the fullest extent.
_

The year 1949 saw great strides being made in this

field,
this

and

1950

should

show

the

cumulative

effect of

groundwork and of the establishment of new and

improved air cargo facilities.

Volume 171

Continued

Number 4880

from

THE

COMMERCIAL

5

page

The State of Trade and
increase

and

in

FINANCIAL

CHRONICLE

mated

at 127,656 units
compared with the
141,036 (revised) units.

of

ment

&

unemployment

is

previous week's total

The

Chrysler strike accounted for 33,000 units of
duction, the report stated.

Industry

caused

The total output for the current week

by Ynany people

and

cars

21,789 trucks built in

United

the

and

Pointing out that a sizable increase in unemployment is to be
expected between December and January because of seasonal
developments, Secretary of Commerce Sawyer added, that it was
noteworthy that industrial employment did not, appear to be mate¬
rially affected. A year ago industrial layoffs were an important

States

The week's total
compares with 102,981
U. S. and Canada in the like 1949
week.

in

the

rise

in

BUSINESS

unemployment.

145

and

farm

DECLINE

FOURTH

not breaking

are

They

of prewar

doors

of

mills

and

same

it has been in

as

days when the steelmaking rate

in the

was

previous postwar

90's.

In

tools,

the

the

It

pan.

strip steel the demand is

reflects

market—motor cars,

ity observes.

the

growth

durable

consumer

rolling capacity

in

U.

S.

The increase will be

Steel's

Eastern

seaboard

over

mill

two million

plans

are

an¬

With

prospective.

Inquiries for generating equipment are up sharply.
Backlogs of manufacturers of food processing equipment were fall¬
ing fast last fall but the picture changed in December and
picked
bit

with
Cash

from

245.25

wheat

mill

Crop
in

last month.

more

and

Stocks of

months.

exceeding
The

than

But

The

all

in

slump

this

week

in

the

national

steelmaking

rate

nothing compared to what will happen to steel production

is

next

if the

miners do not go back to the pits. Even this week's
be revised downward.
Only the fact that steel com¬

may

panies had better than
prevented

coal stocks going into this labor
cutback some weeks ago.
However,

average

sharp
"The Iron Age"
declares, they
point themselves and if there is
the miners

last

a

they will

are
no

fast

American

that

and

Steel

operating

the

Iron

of

rate

of steel

Institute

of

the steel-making capacity for the
91.5% of theoretical capacity for the

This

is

decline

a

of

1.6

'

a

points

announced

from

last

week's

rate

1,281,210

light and

power

6,062,095,000

electrical

energy

lack

This figure

year

demand

noted

of

surface

moisture
some

prices

export demand.

represents

a

new

all-time

high record

in

the

bales,

output reported for the corresponding period two
years ago.

636.415

Railroads.

This

freight for the week ended Jan. 28, 1950,
according to the Association of American

revenue

cars,

preceding week this

an

increase of 17,465
cars, or 2.8% above the

year.

represented,
the
the

however,- a decrease of 42,887 cars,
corresponding week in 1949, and 89,930 cars,
similar period

in

or
or

6.3%

12.4%

1948.

AUTO OUTPUT IN LATEST WEEK CUT BY
DUE TO CHRYSLER STRIKE

188,000,000

new

record,
bushels.

continued

by

displayed
to

largest

firmness

high

on

ground

for

the

33,000 UNITS

in the United States and Canada is esti¬




s«me

was

last

by active

the

hesitancy at times due

developments,

the

to

of

The

season.

Offerings
delivery.

Bank

$600,000

the

week

ended
a

Jan.

19

were

week earlier.

up

Aggre¬

in
cotton
textile
prices remained
reported scarce for first and second quarter

to

WHOLESALE

SPURRED

BY

weather

President,
it

was

»;«

r

Vice-

director

a

of

the

effective

Oct.

1, 1950,
following a

announced

of

directors

held
on
Jan. 30. He will succeed Alvan B.

Hathaway, who has been Presi¬
dent for the past 30
years and who
Sept.

with

ance

to

rectors

30,

the

Mr.

tinue

1950,

in

bank's

Hathaway

serve

as

will

con¬

director.

a

announced

accord¬

retirement

that

Di¬

other

ex¬

ecutives of the trust company will
continue in their present capaci¬
ties.

Mr.

Macomber

has

and

been

the

affect

retail

buying

Wednesday of last week.

on

ad¬

Dollar

Bradstreet, Inc., states in its

current

summary

of

trade.

response to house-furnishings promotions forestalled
noticeable decline
following the severe cold in the North¬

unusually mild weather in many other

years and
director for 10 years. Formerly,

a

he

associated

was

tional

City

with

Bank

of

the

New

Na¬

York,

the Federal Reserve Bank of New

York

and

the

National

Shawmut

Total

,5vi

retail

dollar

day

of last week
year ago.

was

volume

for

estimated

the

period

be

to

from

2

ended
to

on

6%

Wednes¬

below

Regional estimates varied from the levels of

a

that
year

by the following percentages.
and

Midwest

—3

to

—7;

Coast —4 to —8: New England —1
Southwest 0 to —4.

to

Northwest

Pacific

and

+3; East —1 to —5 and

by

Ostrom

For

no

the

change

was

four weeks

registered

ended

from

the

like

trade

in

New

set in the

York

the

past

comparable week

week
a

year

held

close

President

National

to Jan. 28,
In the pre¬
the Similar

by 6%.

quested

that
for

his

comprehensive coverage of business and industrial statistics
latest week, previous week, latest
month, previous
etc.. comparisons for determining the week-to-week trends

tion for the

coming

with¬

elec¬

and had

submitted

his resignation as Se¬
Vice-President in charge of

nior
the

trust

department.

director

as

tion

of

was
on
an

15,

tional

His

place

filled by the elec¬

was

Lucius

F.

Robinson, Jr.,
originally elected a di¬
March

3, 1944, and be¬
honorary director on
1949, at the time of the
with

Bank.

the

First

Hazen's

Mr.

Na¬

request

due to his desire to lessen his

was

responsibilities
loss of

his

incident

to

the

eyesight; he, however,

consented to serve

honorary

an

as

director, and has also been desig¬

by

the

directors

Counselor.

The

ganization

meeting

clay

Board

Robinson,

President

in

its

Mr.

or¬

Bar¬

Vice-

Senior

as

charge of

Department.

Trust

as

at

elected

the

Trust

Robinson,

a

partner of the law firm of Robin¬

Robinson and Cole, has been

son,

associated with that firm since his

The
of

Connecticut

New

Savings Bank

Haven, Conn.,

the death

English,

Vice-President

a

of

Current

since

1933.

years

Atwater

Business

Vice-President
the

Union

Co.

of

Jan.

30.

Mr.

Day,

a

29
and

Director

of

Haven

Trust

Conn.,

when

Haven,

on

He

and
New

&

New

he retired

mer

for

Day,

member of the staff,

a

Jan. 1, 1949, died on

was

said

72

years

the

New

of the

"Indications

announces

Jan. 29, of Harold K.

on

year,

to

&

be

year,

"Register" of Jan. 30

referring

of

that

for

name

nomination

showing the

'

Bank

Maynard T. Hazen, a director of
^he bank since Oct. 2, 1940, had re¬

Osborne

department

week of 1949.
For the four weeks ended Jan.
28, 1950, a decrease
of 9% was reported from the like week of
last year. For the year
to date volume decreased

by

made

to

ago.

According to the Federal Reserve Board's index,
sales in New York
City for the weekly period
1950, showed no change from the like period last year.
ceding week no change was likewise registered under
store

of conditions,
Activity."

been

Trust Co. of Hartford, Conn.,

week

Jan.

28, 1950, sales reflected
a decrease of
8% from the corresponding period a
year ago, but
for the year to date show a decline of
5%
Retail

has

Enders,

Hartford

..

*

graduation from Yale Law School.

Department store sales on a country-wide basis, as taken
from the Federal Reserve Board's index for the week
ended Jan.
28, 1950, advanced 2% from the like period of last
year.
In the
week

'
o

Announcement;

nated

areas.

a

bank's

secretary for the past 15

July
to

popularity.

most

from

granted

Macomber,

and

meeting

lor

and

1949.

York

was

Cambridge
Trust
Co.
of
Cainbridge, Mass., has been elected

consolidation
continued

figuring heavily in their

of

>:•.

A.

President

came

BY UNSEASONAL

TRADE

Television sets, refrigerators and other
large appliances were
in considerable demand with
promotions

a

New

>:t

rector

favorable

west

of

$700,000

George

who

the country was
fractionally below last week's level
slightly under the level for the comparable period a year ago,

more

&

Sl,-

Jan. 13.

on

drawn
in

BUYING

Unseasonal

a

from

ital stock of the Pennsylvania Ex¬

change

undertone

—

13

the

by
the
New
York
State Banking Department of the
certificate of increase of the cap¬

the

from the goods market.

cotton

were

WEATHER

&

of

800,000 to $2,000,000. The stock is
in shares of $10 each.

was

buying for mill and export account and

RETAIL TRADE ADVERSELY AFFECTED

Dun

Jan.

capital stock of the Trade Bank

un¬

market

10

strong.

volume

Banking

on

increase

Trust Co. of New York

*

NOTE—On another page of this issue the reader will
find the

According to "Ward's Automotive Reports" for the past week,

motor vehicle production

figure

rising

Washington

entries

the volume

2.8% HIGHER THAN WEEK AGO

was

the

for the season to date were reported at 2,784,000
compared with 4.307,000 bales entered to the same date

as

preceding

It was 90,433.000 kwh.
higher than the figure reported for the
previous week; 283,619,000 kwh., or 4.9% above the total
output
for the week ended Feb. 5,
1949, and 649,734,000 kwh. in excess

Loadings of

estimated at

were

entries

gate

State

of

Vice-President
1

ago.

South

industry's history.

CARLO ADINGS

be

slightly to 152.000 bales, from 145,000 bales

distributed

by the electric
industry for the week ended Feb. 4 was estimated
kwh., according to the Edison Electric Institute.

certificate

letires

brisk

spot markets last week totalled 260,500 bales,
only slightly less than the 263,600 reported the week previous, and
considerably above the 228,000 bales in the corresponding week

ago

ELECTRIC OUTPUT RECOVERS TO
ESTABLISH A NEW
ALL-TIME HIGH RECORD
of

to

market

favorable reports

of

year, at

amount

said

prices

spot

over

Sales in

a

York

Bank of Boston.

further

A

tons.

the

plan.

comparable

cotton

and

beginning Feb. 6,

rate

below

cor¬

according to the Bureau of Agricul¬

week

was
94%, a revised figure based on the industry's increased capacity on Jan. 1, and
production amounted to 1,791,900 tons; a year ago it stood at
100.1% and 1,845,400 tons and
for the average week in 1940, highest
prewar

It

with

continued

was

versely in the period ended

operating rate is equivalent to 1,744,200 net
tons of steel ingots and castings for the
entire industry com¬
pared to 1,774,700 net tons one week ago.
A month ago the

below

active

a

companies having 93%
entire industry will be

This week's

totaled

year's

Although there

this

93.1%.

of the

the

on

approaching the danger

assurance

quick return of
begin banking blast furnaces to protect

soon

This

with

EASTER
The

at

Jan. 31, com¬

261.72

in all positions as of Jan.

corn

last

week

them.

The

showed

domestic

Loan

I

with

and

on

,

quite

was

2,830,000,000 bushels,

orders."

1

24,

year.

Economics.

But steel demand for the oil and
gas industries
it was a lew months ago.
Bridge and public

all, the heavy equipment picture can best be
described as an executive ol a
big industrial equipment firm put
it, "We'll be happy to start work right now on
anything anybody

of

Jan.

on

tural

stimulated

stronger

1950.

The index closed at 246.95

about

is

week

COMMODITY PRICE INDEX TOUCHES

firme.y aided b.y fairly persistent

off, along with most other

building construction are keeping structural steel fabrication at
a fairly good
level, and promise to do so for at least another five

trouble

Brad-

&

and
southwestern winter wheat
areas
with
deterioration actually indicated in some sections. Cash corn
were somewhat

certainty

rate

index, compiled by Dun

elevator interests.

reports

plant construction.

week

price

season.

Chemical plant construction is still

New

Approval

SLIGHTLY

western

consumer

goods production still booming and with most
observers predicting a good first
half, a few capital goods pros¬
pects are getting a little brighter but much of them are still

a

POINTS

Shipping demand continued light.

nounced.

up

INDEX

cent higher

responding date of last

goods

being installed by

are

food
one

in almost two months.

a long-term trend is verified
by announce¬
past two weeks that more than a million tons of

major steel companies.
when

flash

a

similar

the

continuing to move in a narrow range, the daily whole¬
commodity price index, compiled by Dun & Bradstreet, Inc.,
edged slightly upward the past week to reach the highest level

refrigerators, washers, etc., this trade author¬

additional sheet and strip
tons

than

and

The

Department approved

sale

That it is

ments within the

two

the

of

more

in

1949

HIGHEST LEVEL IN ALMOST TWO MONTHS

paring

and

comparable weeks of

While

with automatic indexing, transfer and handling devices
—all designed to lower labor costs.
sheet

PRICE

DAILY WHOLESALE

on

many

In

the

last week to stand at $5.79 on
31, only 1.5% under the comparable 1949 figure of $5.88.
Except for Nov. 29, when it also registered $5.79, the current level
of the index is the highest since
Sept. 13, when it stood at $5.85.
The index represents the sum total of the
price per pound of
31 foods in general use.

capital
improving existing facilities—on costcuting machinery and equipment, the magazine states. Materials
handling equipment sales are rising. So are machinery sales, with
emphasis on automatic welding machines and fast new machine
goods line the drive is

in

Jan.

Age," national metalworking weekly,
in its current summary of the steel trade.
The racket is coming
from the men who make consumer
goods.

Com¬

Retailers, Inc.

>!'

:,'i

FOOD

wholesale

member of the Executive
mittee of Affiliated

MODERATELY

1939.

street, Inc., edged

ware¬

houses to get steel but they
certainly are knocking with a heavy
hand according to "The Iron

The pattern is not he

units produced in the

noticeably below the 318 failures

were

And Bankers

cars

HIGHER

CONSECUTIVE

The

down the

EASE

which occurred

1948.

WEEK DUE TO COAL STRIKE

Buyers

97

WHOLESALE
FOR

5,293

Canada.

»i<

FAILURES

week

employment.

STEEL OUTPUT TO

and

News About Banks

of 98,434

week, according to Dun &
Bradstreet, Inc.
Although casualties declined from the postwar
peak established in the previous week, they continued above the

parts of the country, the bureau added, also cut down con¬

struction

and

33

Continued from page 14

pro¬

Commercial and industrial failures declined to 199 in the week
ended Feb. 2 from 232 in the
preceding

According to the Census Bureau unemployment rose to a
postwar high of 4,480,000 persons in mid-January. The 991,000
increase over the mid-December, it said, appeared "to be due
pri¬
marily to curtailment in seasonal industries."
Bad weather in
many

2,140 trucks built in

lost

made up

was

dropping out of the labor force.

factor

(633)

late Wilbur

F.

was

of age.
Haven
the

Day,

a

son

for¬

President of the New Haven

Bank

(N. B. A.).

34

Continued

from

4

page

ment to make this a
When

my mind, is not so
sales manager's report as

That,

The Supervision

and
Follow-Up of Salesmen

he learns from (I they
present to fortify way,

from something

or

material

you

the

your case.

that

supervision

the

tory,

only be
the supervis¬
ing sales executive has enough
know-how to actually meet field
conditions with the salesman, talk
his language, and not give him a
lot
of
hoorah about things he
sales

the

In

a

have been doing a swell
selling at a 200% rate,
while in a buyer's market, if you
are
still doing a good pob and
selling at a 100% rate, it may not
be good enough to sustain you,
and sustain your family.
So I realize that the salesman
and the sales executive have
a
you may

of

job

ex¬

with a

made,

I

call

every

and I would

tiiat

be

if

it is my

because

questions,

belief

a

does

man

that,

succeeding call he makes will
better call. It has to get him

each
a

selling somebody some¬

to

closer

try to get our salesmen

IBM that if

order,

an

his sales

of

all

taught

has

Watson

companies, so he learns,
or later, something of their

sooner

problems which his products can
We feed the salesman con¬

solve.

with

tinually

promotional infor¬

that he can

mation

as

use

sell¬

a

ing tool in making these contacts,
and in sustaining interest in the

us

does not look

in

know

he should lose it with
supervisor. They should

under

So, therefore, it is necessary to

in selling, par¬
time like this.
I

up-to-date,

keep

ticularly
believe

at

a

that

have

who

men

en¬

selling during the past nine

tered

little experience
market that we are
time—a buyer's
market.
They have enjoyed the
fruits of a seller's market, and it
had

have

years

in the type of

and

his

as

of a separate

management,

sales

than

han¬

or

sales territory.
When 1
salesman, here in New York

territory

be¬

and 42nd Streets,

that,

the

had

and

City

tween 32nd
to

entity

a

a

was

his own little

little business of your own,

a

dling

mind was my little king¬
was my territory, and I

my

It

dom.

business, and
accordingly.

looked upon it as my

tried to manage it

at the present

in

upon

that is more

together, each sharing
the responsibility and the experi¬
ence gained in the loss.

salesman

average

business, and I
of nothing in this country,
our free enterprise system,

territory

down

go

The

salesmen.

that is

that

believe

I

what all

do, in whatever area

of us should

accounts
develop
operation the spirit of be¬
coming
self-starters,
and
the
many of us know, that it is good
habit of supervising ourselves.
for his pocketbook, but I, per¬
In
our
company,
we do
this
sonally, do not think that it is matter of supervising and train¬
good for his future stability.
ing men to supervise themselves
If selling is to be learned the
through a few simple forms. One
we

in

questionable whether a seller's
is good for a salesman's
career.
Of course, I
know, and

salesman
a

must

face

realistic way.

he

conditions in

It is the only way

really learn the profession.

and whatever
We have to

cover,

we

is

market

cover.

our

that we use is what

the forms

of

choose to call a

we

daily call re¬

smugly complacent, and have done

port, and on that daily call report
each salesman analyzes what he
did that day. Printed on the front
of that call report are four simple

little

questions.

can

during

Also,

if

anything

years,

guide,

aid,

to

in

salesmen

counsel

and

nine

these

sales managers have become

some

doing

a

Salesmen's Reports

well-rounded job.
sider

We should con¬
is, and
sales manager is.

what

what

a

We don't want the man

salesman

a

lot

a

do

We

of Sales Manager

as
a

a

has made.

to

man

sales

upon

salesman

a

write

who develops sales, and

manager

develops
men

narrative

look

Work

like

I

as

You

men.

a

can

he

develop

You

know,

when
there

struck,
companies that

pared
tives

it.

for
were

selling in

a

were

Even

not

the

buyer's

were

many

quite

unpre¬

their

execu¬

prepared

to

do

use

as

a

"What did you

"What
"What

was
aie

job

so

that

medium of self-

talk about"?

the reaction"?

you

going to do about

it"?
-

not

in

sent

They

in
the

sistance

him

help

the job

do

help him check up the

to

our

office. stress

home

is

on

what

call

we

a

pros¬

In many
companies and

only, so that the local office
can
help the man in their salesmen know what calls
analyzing his operations, in assist¬ they have made.
But few com¬
ing. him where he needs assist¬ panies and few salesmen analyze,
ance, and bearing down where lie to find out the ones they are not
has to bear clown, on getting the calling on.
So the report that we
of

most

cases

the

manager

job

done.

who

other

the

doiiig

the

hand,

man

do

a

other

get and the one that proves par-,
ticularly valuable to us is what

good job on self-

we call a prospecting activity re¬
it as a spur, to port. This tells us by every sales¬
better job each week.
In man and by every territory, the
words, to better his best. individual prospects in that terri¬
is, the producing salesman's tory and the number of times they

is

That

a

uses

called

were

That

each month.

on

sound

lil^e a very
Setting Up a "Bogey"
elaborate report.
Take my word
Going hand in hand with these for it, it is a very simple report.
two operational reports,
or
two It takes very little time for us to
self-supervision,

of

the

to

That

isn't

On

card.

record

a

may

have complete that report each month,
but it gives the salesman the best
of
quickly
telling,
at' a
requirements for the salesman basis
do a job.
gfance, where he may be running

tools

is,

we

it

have

something

we

outlined

is

bogey.

a

that we pay

If he sees a lot' of
It into trouble.
the wide-open spaces opposite a cus¬

It isn't something that tomer's name, indicating that he
has not been making calls, it may
he has got to do it, but
indicate that he will have some
we do set up a
bogey, of a certain
number
of
prospect
calls
and trouble, or perhaps someone will
customer
calls
that
he
should get there ahead of him and make

man
we

on.

say

make

day—and that differs,

each

with the different
types of business that we have.
For our Typewriter Division we
the

by

way,

a

of standards, and

All

is

That

sale.

watch

situation-

a

we

continually.
of these

discussed

reports that I have
ones

are

that

we

find,

properly used by a sales¬
Division, man, will enable him to do a job
of self-supervision and, as I said,
another, and for our Accounting
Machine Group, we have another, not all of these reports are sent to
but we do set forth the goal that the home office.
They are used
have
for

one

our

series

Time

if

Clock

should

salesman

a

attain

he

is

when

trying

be

going

do

to

to only

this

job of selling.

feel that it is
rather necessary to train a sales¬
man
to have the right attitude
towards his territory, to have the
Therefore,

to

and also to

used at the local office pecting activity report.

are

level

Attitude
we

Then, in addition to the reports
mentioned, we have a fore¬

I.have

at

the

office

local

for

the

of local branch-manager
supervision and for the matter of
self-supervision by the man, him¬

purpose

self.

The only call reports we get at
forecasts, the business he expects the home office are for our men
right attitude towards his opera¬ to close
during the next 90 days. who are returning at less than
tion and always to feel that his
This is another incentive to self- 50% of their quota.
We get these
prospect is only his prospect when
supervision, because we find that reports because we feel that we
he is sitting across a desk talking
some
salesmen consistently close have an obligation to the sales¬
to him. and putting across ideas.
man
to give him every bit of as¬
only 20% of what they forecast.
When he is not doing that, then
The salesman who is supervis¬ sistance we can to help him be¬
the
prospect is
someone
else's
come a success.
We feel we have
ing himself and finds that he is
prospect.
a very definite investment in each
consistently closing only 20% of
We also try to get our sales¬
what he has forecast, must realize salesman, and unless we find out
men
to consider their territories
that he
must
always have five quickly whether he is doing a job,
as
their own little business,
as
times as much
business forecast whether he is making the progress
their kingdoms, because we feel
as
he has quota, because if he is that we hope to have him make,
that it can be a gold mine or a
only getting 20% he has to fore¬ analyze his reports, and find out
poorhouse, depending""upon the
perhaps the weaknesses that may
cast five times as much.
way they look at that territory.
exist.
We see to
it that he is
There are some salesmen who
It has been said that the great¬
given assistance to become a pro¬
est things in the world have been close 50% of what they forecast.
ducing salesman, because we feel
done by those who systematized That type of salesman has to have
that, lor each salesman we have
their work, by those who organize double his quota forecast, and it's
to drop, we must train two to re¬
their time.
In our company, we a funny thing how you can analyze
place him.
We feel that our job
records of men and find, over a
say, "Plan your work and work
is a lot easier when we salvage
your plan", and so in addition to period of many, many months, and
men, rather than to let them go
this
daily call report we have a period of years in some cases,
by the boards.
Our job is one of
what we call a weekly working that their percentage runs pretty
salvaging.
. v •. v--'
plan, and that plan we feel differs consistent.
You know, in this matter of sell¬
somewhat from any of the weekly
This may where, in one case, a
working plans that are shown in man is over optimistic and an¬ ing, and in this matter of operat¬
most of today's sales books. Most other case where a man is pessi¬ ing, we feel that, under the con¬
ditions of a seller's market, where
of the others show a plan of mak¬
mistic, or it may be where a man
orders were easy to get, unless we
ing calls by days, a listing of is playing safe.
However, there is
keep our salesmen trained and un¬
names
by days.
a
pattern that is established, and
less you keep yourselves trained
The front part
of our report I think a salesman can see the in
selling during a buyer's market
covers
that particular phase of pattern for himself, as to how he's
—a competitive market—you will
the operation, but in addition to to operate in order to assure his
not be salesmen tomorrow.
that we have the front half of doing the amount of business that
the' report
divided so that we he thinks, or his management
Danger of Becoming
enter

the

and

over

additional
above

cast report,

On

the

in which the salesman

made, thinks, he should do, in order for
that were him to make progress in the com¬

calls

those

pany.

planned.
reverse

side

of

the

everything

else,

we

try

salesmen, sitting
report we have what I like to
look upon as the weekly balance down with these reports, and with
supervisor,
They sit down
sheet that a salesman writes, of his
his

week

and

review

their

re¬

In that report, he
accomplishments, ports with their supervisors. This
In summarizing is important, particularly during
accomplishments, he writes the early stages of a salesman's

operations.

summarizes
and.

encourage our

each

"Diplomatic
Salesmen

can

Beggars"

very

quickly, if

they don't keep on their toes,

Above

to

his

his

his failures.

teriorate

de¬

diplomatic beggars,
what many salesmen

into

and

that

do.

They

is

don't keep abreast of
have to think about

the times, you

this

matter

of

self-supervision.

Many years ago I heard
son

Mr, Wat¬

say:

"A

minute

has

no

negative

made, training, so that the supervisor
qualitise. It can be made to yield
may evaluate the salesman's ope¬
something,
not
nothing.
Every
ration and have the salesman eval¬
to make and we made it, did we the number of demonstrations he
minute the clock ticks off yields
uate his own operation.
This is
have something
specific to talk made, the number of demonstra¬
something beneficial or something
he
plans to make during done; to help the salesman while detrimental,"
about? Did we have a definite ob¬ tions
he is getting started in a new ter¬
jective?
Did we reach that ob¬ the coming week, the number of
There is a lot of sense to that.
he
plans to present ritory, or on a new job, so that he
jective?
Did we come to some proposals
will not run into the pitfalls that The only thing a salesman has to
conclusions?
What are we going during the coming week. It also
he might stumble upon if he were sell is his time—his time before
to
do
about those conclusions?
shows, by major phases of activi¬
"When

are

In other

buyer's market, and 1 And, have




it

a

four

helping to
erly,
and

market

enough of

supervision, and so we ask these
questions:

only by working with them,

supervise them prop¬
teaching
them
selfsupervision. In this buyer's mar¬
ket era, I believe it is the time to
review, put into effect, and sell
ourselves, as salesmen, by return¬
ing to some of the founidamental
principles of selling — by using
every possible sales tool.

can

But we do want

history.

a

work.

to write a

report of every call he
We do not want him to

him to. do

who

man

him

want

not

to spend

doing detail

time

of

or

company

but I also believe
main difficulty with

case,

that it is the

salesman is to lose

a

that

in

Usually, all that we do with the
salesmen, on the firing line, is to
assist them on different jobs. Mr.

referred

attitude.

those

We

supervises himself.
performance standards with the
and the first one I actual results.
Another thing we lay a lot of
to, the call report, are

tribution, the names and respon¬
of the top executives in

sibilities

Prospecting Activities

can

calls

That report

supervision

going to be satisfied, oper¬
ating at a 100% rate as against
what they earned at the 200%

office.

he
of

that way he

principal industries in
their
territories, the companies
within
those
industries,
their
method of manufacture and dis¬

to know the

his product, and
talking about, and, on self-super¬
sustaining
interest of
his
rate.
vision, he will take advice from
prospect in the things he is talk¬
But more important, I think, is
that type of man.
ing about.
Our belief is that if
In our business, my chief, Mr.
whether those men will remain in
we
focus a salesman's
attention
Thomas
J.
Watson, has always the business and also whether you, on a
piece of literature, or a pic¬
preached the gospel of operating as a salesman, would do better in ture, or something definite, we
on the firing line with
the sales¬ some other business. If you have feel that that old Chinese proverb
men.
In our business the sales the right product, if you have sell¬
is pretty good, that a picture is
executives
are
always on their ing ability, and you are able to worth a thousand words.
If you
toes, and always up-to-date, not apply yourself properly and will can get something in front of a
only with marketing conditions, follow one of the fundamental prospect to hold his attention, and
but competitive selling conditions
principles of selling, which is — then
send
home
your
selling
more calls, more demonstrations—
in the field, because it is a defi¬
points, I think a good deal of your
nite rule of our business that we then you will make more sales.
selling job is done.
do not try to direct the sales or¬
I firmly believe that the law of
Training Salesmen in Right
ganization from soft swivel chairs averages takes care of a salesman,
in the home

total

made, to see whether he is doing
a well-rounded job of selling.
In

On

We also

that

so

number

must
analyze each sales¬
against the business closed man's operations and success, and
and against the demonstrations he then give him the necessary as¬

his

made

thing.

are

who

salesman for any

a

as

analyze it by asking myself thosd

problem, a problem in human re¬
lations as
to whether salesmen

of eyes, the sales ex¬
knows what he is

clearer pair
ecutive

to change your
seller's market

have

thinking.

what he is talking

He can always see,

about.

you

may

you

ecutive, himself, has never done.
You know, even the raw recruit
can see through
the sales execu¬
tive who deals in theory, or who
does not know

sales executives,

as

salesman have to
realize that in a buyer's market
because

taught, I contend, if

do—things

and

salesmen

prospects and customers.
Self-supervision
can

should

be

to

gives his terri¬
and the service that he gives

gives himself, and

If I were to go out

organization, whether that
organization
had a call report
form
to be tilled out or not, I
would make out a call report on

four

important thing
awake to the conditions, as
it is an

I think

man

salesman's report, of self-

a

tomorrow

their business.

that,

a

a

is

grouping,

each
check

other

in

faced

to

supervision.

order to meet con¬

suddenly

they

ditions

important, even than

More
is

it

had to find out, in the hard
what it takes, what were
necessary
changes that had

be made in

to

Self-Supervision

much

closed issue?
back?

going to go

we

are

1950

Thursday, February 0,

FINANCIAL CHRONICLE

&

COMMERCIAL

THE

(634)

you

going back"?

words, if we had a call

we

made an appoint¬

the total number of calls he
the amount of business

he closed,

ty, the total number of

calls under

not

given sufficient help.

a

prospect—His earnings in

most

Volume

cases

171

Number 4880

depend

with

his

should
time

so

lias

he

the

of

amount

available

devote

to

to

tive help that

he

duct

help.

52

Sundays in the year, and
deduct only half a day for Satur¬
days, and deduct the holidays, of
minimum

days,

do

then

vacation

have

you

working days,
days.
This is

of

101

11

non-

264 net working
about 22 days-, a

or

each

make

day,

and

of

amount

making

each

expects

month

to

make

that basis.

on

to make substantial

of

pages

earnings then

should think about how you

you

have

used

those

22

spend

that
a

into

hours

the

with

time;

days

divided

the

felt

most

should

be

order

to

in

profitable

people

who

time

buy—

can

thing.
tend,

will

of

thinking,

enable

I

con¬

salesman

a

to

took

not

in

with

other,

as

would

go

I

turn

ask

and

opposite

far as selling
to each one in

how

handled

have

selected

organization

our

diametrically

were

each

and I

answer,

salesmen

who

filled

things that I

on

had

they

that

would

specific

type

of

The Credit Outlook

up.

In that way,

I built

selling

up a

repertoire that helped

consid¬

me

erably in doing a job and devel¬
oping my selling ability. There
too few

are

if

the

to

way

want

you

jobs,

and

the

having

ing kit to
keep

way

Make

him

realize

something

live, red-

a

talk about,

that

that

can

interest.
have

needs

he

you

and

wants; above everything else.
have

to

look

frontiers
look

continually.for

in

for

selling.

new

We

we

and

new

have
and

to

new

market

can

our

must

be

also

we

blessed with

We

prospects

places where
wares,

We

glorious discontent.

a

we

that

tha\

will find

we

cize
will
ter

today.

supervision

this

I

that

say

salesman's

a

a

man

who

may

sound

think

about

amount

•Immediately

after

the

I

war,

were

going to have to sell differently.
Frankly, 1 felt that there was one
thing which

would

we

have

never

real

it

you

will find that

you

the

salesmen.

It

think

go

about

working the terri¬

supervising

and

tory

who

men

Let's

this matter of

re¬

ourselves

because

said,

Quillen

his

in

Robert

as

newspaper

column, a short while ago "Ra¬
tionalizing is the tactful, modern
of describing the act of fool¬
so let's be practical.

way

ing yourself,"

More

■

calls,

plus

More

Sales

ahead

progressive

I

the

rest

sales

of

that

contend

the

crest

ket, but

you

of

cannot only

the

or

can

a

wave

buyer's

actually

of

a

mar¬

create

waves

So, I would ask all salesmen to
.

disregard

buyer's

or

market

being a
sellers market.
We,

any
a

salesmen's

as

mediocre

a

will

make

know
and

to

take

you can

salesman

the

of

if

he

sufficient number of

a

calls, and tell enough prospects
what his product will do, he will
do

pretty

a

Take

the

world

best

and

find

amount
I

calls

that

of

of

making
better

him
and

we

are

on

coverage,
more

selling.
his
you

double

the

do

a

will

who

manage

You

know,

but

if

he

executive

of

across,

sales

comes

his,

markets.

who are selling,
who supervise or

in

salesmen,
sales

my

work

best
is

to

work, and work your
plan.
In doing so, remember that
a
prospect is only your prospect

the

in

of

two-thirds

credit,

which

the

loan

confirmation

is

lines.

(2) Total loans of the banks

sponding to the survey
908,000,000 or 30% of

re¬

$18,-

were

their

to

than

more

foregoing

take

re¬

line

of

care

the

commitments

if

(3) With few exceptions, the re¬
porting banks had experienced a
slight decline in borrowings from
Dec. 31, to Sept. 30. This was in
due

to

seasonal

factors^ but

generally attributed to fac¬
tors arising out of the
business
cycle, including reduction of in¬
ventories

pletion

and

of

retained

receivables,

construction

earnings

com¬

programs,

lower

and

tween

5% and 9% of outstanding
loans, and in, some cases higher.
(5) The replies show that the
banks generally have aggressive

organized programs for
desirable loans and

out

ously endeavoring to develop their
individuals

and small business concerns.

From

that

the

there

either

above

is

large

or

it

is

obvious

evidence

no

small

that

business

extraneous

conversation.

Keep your eye on the ball and in
mind constantly, the fact

your

that

a

is

sales

talk

should

be

tarded

expansion

or

curred

been

where failures have

in

small

basic

problem

most

cases

equity

has

re¬

businesses, the
this regard in
been inadequate

in

has

capital.

The

that

reason

the number of small business fail¬
ures

Prospect,"

of

openings of
is

and "Thanks for the order."

actions,
thing.

With Delafield & Delafield

Dangers In

new

small

due

than

more

to

any

tax

policies

other single

Government

Lending

It must also be remembered that

Delafield

&

Delafield,

Wall

it is

New York City, members

that

only

shall

live and

of the New York
announce

and asks him to

them.

has

14

Stock

Exchange,

that W. Macy Chamberbecome

associated

with

grov.

leaves.

keep alive
business
into

come

necessity,

tha

by

Fed¬

venturer

existence, then
must

we

control

b>
system of licensing the ere
new business units. Whei

some

take

we

that

step

have

we

tically reached the

cartel

prac¬

systen

a

basic premise of our system

shall fail.

the
If

efficient

business

that.the inefficient

the Government

un¬

dertakes to protect the inefficient
from failure, it spells doom for our

present

high

standard

of

living.

Malcolm

of the social state.

relieve the individual of the
to

save

have

and

provided

by

of

nee

ever

libei

more

This

is

a

minimum of his
some

This

ever.

with

is

a

complete

National

Association

Dealers

elected

Gerald

were

J.

elected

secretary.

Mr.

change

Gould,

Peters,

Boettcher

who

Donald

&

was

F.

stood

committee.

full

it is

the

preliminary step toward

cialism.

pie

finance

to

members

L.

H.

Burton

&

past

without

federal

W.

ever

business

was

If

grow.

the

there

any

one

an

thing

will

dollars, it is to take ;
business enterprise, if h<
offered reasonable hope of an

risk
is

in

adequate reward, but the risk ele¬
must

be

fair

a

in which the cards

one

and

one

no

stacked

are

against him.
There is

trend

phase to this
socialized credi

toward

like to mention.

Lake

John

Pueblo.
Colo.;
Refsnes, Refsnes,
Co., Phoenix.

J. Sullivan,
Sullivan &

worth,
was

of

L.

City;
and

Ely,

head

of Bos-

Co.,

Denver,

recently named for chairman

the

board

NASD.

The

February

of

26th

the

meeting
Washington.

of

governors

election

will

and

27th

the

of

be

the

held

during

governors

at

against

the

socialized

extensici

credit

New S. F. Exch. Member

>

firmly convinced that the bes
these

Edward

Salt

final

one

which I would
am

Burton.

Co.,

Hutchinson, Hutchinson &

Beck &

d

his

H.

Co.,
Inc.,
Joseph E.

favor

live

American

average

with

is

when

a

district

are
Harry W. MidBoettcher & Co.; Robert
Mitton; Malcolm F. Roberts;

Robert

aid,

the

L.

were

da ugh,

am

America)

given

of

Karl

Other members of the

business, both small and large
have always come forth in th

able climate in which to

and

committee

so¬

Investment funds in

amount

elected

firs

Co.,

re¬

Brown,

Mayer, J. A. Hogle & Co.,

Actually,

P.

Peters, Writer & ChrisInc., vice-chairman, and

from the sound basis of what con
stitutes ownership of privati
property as we formerly under
it.

of

elected

has

Albert

what

none

Peters

Peters,
tensen,

equity fund.

own

cases

the

officers

ai

opportunity to purchase with the
—in

P.

Roberts, Sidlo, Simons,
Roberts & Co., chairman.
Other

th,

given

Gerald

Malcolm F.

housing legislatioi

our

wherein the borrower is

Roberts

Securities

difference

loans.

government

in

the

F.

DENVER, COLO.—District No. 3

Increasingly, the tendency is ti

devices

SAN

The

FRANCISCO,

election

of

Scott

CALIF.—
H.

Stewart,

Jr., to regular membership in the

beyond their present limits is the

San

Francisco

preservation and

was

announced

improvement

oi

our

system of correspondent bank¬
ing. When the country bank can

to and get assistance

go

from

its

city correspondent with its loar
problems—especially those whicl
beyond its legal lending limi

are

—there is

need for the govern¬

no

Stock

Exchange

by
Ronald
E.
President of the Ex¬

Kaehler,
change.

Mr.

Stewart,

partner

in

firm

Stone

of

the

a

general

Stock

Exchange
Youngberg, has

&

been in the securities business for
more

than

years

military service.

18

P. Gross,

ard
ner

in

Stone

merly was
member.

except for 5
Mr. Rich¬

years

also
&

the

general part¬

a

Youngberg,
firm's

for¬

Exchange

show

that the vast majority oi
city banks in the corresponden'
banking business are cooperating
in

this

matter

with

spondents.

If

which

are

not

should

be

it

straight

sound

to

a

deaf

seeking
the

any

ear

election to

to

the

of

the

governmental

thereby

lending agency and
weakening the founda¬

tions

free

of

American
In

enterprise

banking

of

that

driving-

are

arms

CHICAGO, ILL.—The Board of
Governors

Exchange

partner

a

Midwest Exch. Members

they

realize

loan, they
into

corre¬

exist

doing,

so

made

bank

a

their

there

they turn

in

and

the

system.

the

has

Midwest

Stock

announced

the

membership of the fol¬

lowing:

Reginald
Kenower

MacArthur,

&

Co.,

Detroit,

Miller,
Mich.;

Arthur P. Nauman, Nauman, McFawn & Co., Detroit, Mich.; Em¬
met

F.

Connelly,

American

Se¬

curities

Corp., New York, New
Clarence J. Schulenburg,
DeKalb, 111.; Harold P. Goodbody,
York;

conclusion, what I have sair1
be summarized as fol¬

to you may

Goodbody & Co., New York, New

lows:

York;

The credit outlook in the imme¬

diate future, both from the stand¬
point of commercial banks, as well
as

Street,

to

ation of

and other restrictive governmental

Mr.

is

all

aid

which
of

is currently greater than the

number

businesses,

Morning,

it

to

oc¬

short,
the distance between two points—

to" him about the job




eral

country

all

if

diseased

or

are

business

lin

he is doing
help him analyze

we

desk

you are
sitting across the
talking to him. However, in
making plans for calls and on fol¬
low-up calls, and in getting across
your thoughts in connection with
selling, I suggest that you elimi¬

Elects New Officers

in¬

lending agencies as far as
waiting for prospective
borrowers to come to them.
An- the worthy borrower is concerned
increasing number of banks in Surveys conducted by the Associ¬
of
Reserve
communities of all sizes are vigor¬ ation
City Bankers
to

is

subject.

un¬

mental

not

loan business

un¬

that

NASD District No. 3

merely

Furthermore, it is obvious
if

when

nate

plant,

a

when

to

talks

for

as

of

their
loans
as
being repaid
through refundings by placement
with insurance companies or pub¬
lic financing.
Estimates ran be¬

small

But

growim

safeguard

are

budget.

prodi¬
an

Shedding the weak ant.
inefficient in business is as norma,

vey do report a substantial amount

seeking

on

economy.

ment

well

is based

spending and

oijder tc

the ineffi¬

anism.
The
elimination
of
efficient marginal business is
avoidable in a healthy

vogue

substantially greater than

unused

another

destroy the incentive which is thi
mainspring of our economic mech.

neighbor¬

of

maintain

other artificial props, we

or

in any way handicapped by a lack
of available bank credit.
Where

the

through lack of ex¬
perience, or through fear or poor
preparation, be unable to get his
story

that

of

total

on

be

salesman may,

this

all

your

spur¬

better

all

and making

money

show

amounts
excess

figures

"Good

produced.

always

to

the

think

he

we

records.

in

double
I

business

think, if

of

he will

ring ourselves

job

job

salesman

make

number of
will

good

upon

you men

suggestion

is

as

salesmen, should look

plan

That

of

and

change

selling.
soundest principle I
go by, and I 'say that

loans

The

and

of

upon

selling.

you

of

market

policies,

emphasis

proper

the fundamentals

ride

of

through their aggressive

sales. I don't

of

billion.

of

through transfer to government
lending agencies.
On the other
hand, banks responding to the sur¬

moved

ever

principle

credit, after deducting
currently running, is in
$11

borrow¬

lines

have

more

that

confirmed

that

exceptions, reporting banks have
experienced
no
loss
of
loans

strations, equal
will

under

com¬

that in almost every field, in good
times
or
bad,
some
companies

think

we

insured

They report

(4)
Responses to the specificquestion indicate that with several

matter

a

support salesmen in the field, you

demon¬

more

all

of

of historical fact

It is

and to you men

More Calls Equal

total

prices.
Salesmen Create Demand

Now, do

peat it:

of

banks.

taxing the efficient in

preserve

cient through subsidy, social credh

These

the

of

more

markets

going to

deposits

mercial

rationalize,

stressed

am

the

part

as

I

36%

deposits of all banks and 48%

and, above everything else, don't

to change, and that is what I have

here.

hold

going to adopt the policy

malformed

reflecting ample lending capacity

within their individual territories.

of selling. We

has members).

banks

we are

the

which

ported deposits of $56,887,000,000,

be

way

155

in

banks

if

but

of selling of your own, and
salemen can do the same thing,

new

Association

big

told that when the boys come
back from the service there would
a

of tne

defini¬

That

trite

which

federal

gal

en¬

bright economic

a

vigorously, to constantly shed it.

our¬

salesman

a

35

difficult, however, to be

outlook

155

these

give

can

sells.

all

the

duce

seller's

was

(72%

numbered

viduals.

fixed mathe¬

a

responding

credit is

never

through

relationship to the

banks

kind

a territory
consistently pro¬
outstanding records of

who

his

matical

(1) The figures are as of Sept.
30, 1949, with a comparison of the
figures as of Dec. 31, 1948. The

but

with

of business done.

nation and are doing so.

through the motions in

and

propositions, the frequency
which he, exposes himself to
orders, because calls and inter¬

connected.

are

This survey confirms the fact that
the banks are in a position to take
care of the financial needs of the

availed of, and any other foresee¬
able needs of business and indi¬

eliminates

the pack

views have almost

we

tion

with

that the total amount of available

is the

It has been said that

depends chiefly upon the
frequency with which he presents
success

banks

help,

selves—the kind that will pay

should

constructively criti¬
our
operations, so that we
improve them, and do a bet¬
job tomorrow than we did

by

its members

of

hood

it it really is thought-provoking.

keep
you

prospect's

a

Our

good, interest¬

a

out and

go

and

to

are

only

keep it hot is having
hot story,

it.

make

salesmen,

as

hot,

to

extended

re¬

survey

volume is to. individuals and firms
which do not have regular lines

about them and ask for their

is

selling

whichever

credit

a

that, and

perhaps we
did wrong, tell someone

contend that you can make

medium,

Association, has

completed

ourselves

dividends.

or

Bankers

Amer¬

expose

only

things

self-supervision
job, and you know,
selling is com¬
parable to turning on a faucet. I
hot, cold,

ican

cently

the

of

who do

men

will

we

this

of

of

Commission

the amounts available to

of

matter

Policy

ers

the necessary
to do a proper
use

If

that

came

is

balanced
with the cooperation of the Credit

situation, what answer they
would have given to the question

know

kind

in selling I
night with several

failed on during the
listed the questions that I

I

could

how

and

month

prospects to whom you can tell a
story that is going to mean some¬
This

(635)

thusiastic about

which

notebook

a

that I

went.

should make your total large
enough to make it interesting, and

failing in sell¬

am

in every

notes

to

you

"Here I need some,
there
are
some

When L-sfarted out
came

the

If you want

execu¬

,

•

are

analyze, then,
that you

money

enough

their

ing."

two

to

what he

are

to

go

think
places where I

he

expects

who

I

day. I

get

there

tives and say,

month that every salesman should
divide into the actual amount that
to

think

not

salesmen

have 12, in most States,

we

a

CHRONICLE

It

in that

get

can

attitude

and

FINANCIAL

Continued from page 18

will, many times, change his
on-selling, overnight, I

way

selling, because it's
rather an important thing. If you
will think about it, we have 365
days in the year and if your de¬

which

&

every

analyze

himself

COMMERCIAL

what he does j it, he will find that the construc¬
salesman tive suggestions and the construc¬

upon

time,

THE

from

rowers,

that

is

of

all

good.

worthy

Alert

should be able to find

a

bor¬

bankers
sufficient

Woodward

With
LOS

King Merritt Co.

seph J. Donovan

tain

filiated

ment.

Borrowers

who

Inc.,

Gardiner,

& Co., Toledo,

ANGELES,

volume of sound credits to main¬

reasonably satisfactory earn¬
ings on their stockholders' invest¬

C.

Foster Bros. Young
Ohio.

with

CALIF.—Jo¬

has

become

af¬

King Merritt & Co.,

Chamber

of

Commerce

deserve

bank credit will be able to obtain

j Building.

He

it in volume ample for their needs , C. E. Abbett
and at attractive rates of interest. ; Co., Inc.

was

formerly with

& Co. and Slayton &

30

(636)

COMMERCIAL

THE

Continued from page 6

mention. A fourth set of causes of

tensive

be labeled "rigidi¬
ties." The "rigidities" are the lac-

Dangers of the Propped-Up
Economic Stability

not

mote

may

administered prices of
some
key industries, (3) parity
prices for agricultural products,
and

(4)

cushion

lute

level

hostilities.
the

out fully

after the end of
Production
methods,

years

many

timing

interrelated

of

proc¬

heard

and the pricing of old and
products, are all given a vio¬

esses,
new

side,

and
adaptation are
diverted, or piled into
backlogs of deferred demand by
wartime
controls
and
require¬
growth

Several

ments.
must be

consumed, after

all

before

are

modern

the

I

whether

we

of

much, for example,
have yet completed

centry.

The

increased,

have

been

meantime, by about 100%.
The
average real income per capital,
therefore, has probably doubled
in

and

in

particularly

That

that

means

second

well.

we

show

bunch

to

a

to¬

mind

and

stream,

ward at this rate.

of

tures

that

ever,

fifty

the

years

evenly

terprises,

of

affected

gain in real income
the

the

sketchy

period,

appears

from that

capita of
allowances

per

with

population,

for

a year.

nomic
ways,

in

activity.

over

of

but

be

course,

3%.

period

a

real

of

growth

national

that

income

actually d e c 1 i n i n g
largely because of unemployment,

productivity

rise.

to

Then

came

A

unprece¬

gain both in productive ca¬
pacity and output during the war
(a substantial
and

war

part

cf which

purposes,

of

We

ume

remember

can

conceal

wide

j

a

that

result

to

also

of

or

of

instability
aggre¬

a

large vol¬

durables.

of

Overall

havior,
the

changes

These

dull

growth

and

I would

shy

plan

for

regular

themselves

are

of

irregular

history of

industrial economy.
be

beguiled by

The

depend

as

on

modern

success

|

We must not

results

factors

of

economic

j sets of influences
instability

I have defined it will

of

our

efforts




in

our

which/although

maintaining" the incen¬
on

other

in
ac¬

of

market

we

to

are

j

which
economy

they

may

to

enterprise. But

limited extent there

a

lap

it has to be if

forces;

are

pos¬

sibilities for

influencing the tim¬
ing of new investment projects.
Such possibilities are clear enough

the'case

in

of

Governmental

political

pressure

of

one

projects

largely

(which

groups

anxious to

ways

is

begin

off

al¬

are

their

regardless

now,

in¬

holding

of

pet
pre¬

market conditions

vestment

the

which

by

economy,

propriate

means

monetary

policies.

We

need

temptations of

inflation

buyers'

that

well

producers; they
steady incentive for the
development
and
use
of
costmean

as

a

innovations.
this

of

it

often

is

by

behavior,

"l'ollow-the-

a

pansion

were

being

listing

instability. The
these

of

of

causes

instability
or

by

monetary

fiscal policy, or some

"device."

The situa¬

too complex, the

too

many

resultant

varying

forces,

in

to

time, to yield to

of

We

the

plate

one

means

also

must

difficult

more

of

contem¬

and

pe¬

buyers'
is
in

a

going

there

they become important.

It is

a

tough assignment.
So

far

the

as

.

pro¬

by war are concerried, the
only real solution is the abolition
human

If

war.

error

or

or

the

aggressive designs of others make
that impossible, the best we can

cause
and

do

show

is

from

up eventually as effects upon in-

to

try

past

is

to

learn

something

experience.

likely

to

There

so

the present

ago,

as

many

industrial

ex¬

completed,

gloomy predictions of
large declines in plant and equip¬
ment expenditures.
But with the
were

fairly

return

general

markets

of

buyers'

during

bring,

Another

for

the

i

war

;

first time in nearly a century, ex¬

fluencing

the

purposes.

capital

tion

i.e.,

for cost-cutting
The decline in private

expenditures

during the
inventories,
is

excluding

year,

estimated to

of

cent.

private

have

been

Hill

only

The latest projec¬

capital

an

in¬

of

means

of

new

must be

we

care¬

to exaggerate its
import¬
More than 90% of all the

manufacturing investment sched¬
uled

for

1950

(again

McGraw-Hill
financed

that

internal

sources,

from depreciation allow¬

is,

and

ances

citing the
is to be

findings)

from

retained

profits, and is
consequently somewhat impervi¬
conditions

to

ous

market.

There

in

do

the

money

remain,

how¬
important sectors where the

ever,

availability

of

credit

influ¬

can

the timing of projected new
investment. This is true particu¬

ence

larly of the utilities and of
dential
credit

construction.

A

resi¬

flexible

policy can certainly exert
influence in the right direc¬

Consulner
the

expendi¬

1950, which the McGrawpeople have just published,

indicates that about two-thirds of

behavior,
is

aggregate,

most

elusive

causes

of

There

taken

in

perhaps

of

the

the

principal

instability I have listed.
however,

are,

proaches

two

which

open

ap¬

should

be

used to the fullest practicable ex¬
tent.
One is to provide informa¬

tion,

the

as

System's

are

of

fickleness

in

well

Reserve
consumer

Advance
inten¬

consumer

after

even

may

of

doing.

now

knowledge
tions,

Federal

surveys

behavior

allowing

for

spending,
business prepare

consumer

help

for, and So avoid,

the shocks of

sudden

shifts

marked

or

sumption.

The

other

Congressional

ment

the

of

regulate

terms

con¬

re-enact¬

System's

the

in

approach

involves

of

consumer

I

make

either

of

these

give

a

full

lems

arising from changes in
it

lated

but

is

both

of

the

to

will
prob¬

should

through

effect

that

approaches

solution

sumption;
And

claims

no

the

con¬

help.

accumu¬

small

many

con¬

tributions, all in the right direc¬
tion, that the causes of instability
be

contained.

There

are

As

the

for

which

1

only

various

rigidities
perhaps the

mentioned,

general

better

prescription

understanding

implications,

is
a
their

of

businessmen,
bankers, agricultural and labor
leaders, and also among Govern¬
among

officials.

ment

thorough job
alyzing

A

much

more

be done

can

these rigidities,

in

an¬

then

and

in
widening public information
concerning them.
It
has
been
well
said,1 I think, that
"one
lesson

to

records

of

the

in

be

from

drawn

the

economic development
United States in the 20th

century, with

its peaks Of extra¬
achievements
and
its

ordinary

valleys of depression, is that in a
modern industrial system, diver¬
sion
of the fruits
of advancing
productivity to restricted groups
brings
them
only
short-lived
benefits, and curtails the gains
accruing to the economy at large.

During
much

the

of

fifty

past

too

years

gains has gone, at
times,
to
strategically
our

various

placed

groups

ducers,

or

primary !pro-

of

manufacturers,

dis¬

or;

One
prime method of transmitting the
wage

or

of

consumers

industrial

in

costs—has

real

applied

dynamic economy

a

business

in

share

undue

as

This does not refer Only

efforts

to

of

the

take

an

benefits

of

to

productivity in profits.
Organized labor has frequently
attempted to get all the benefits
for its membership—to the prob¬
increased

able detriment of the demand

its services.

drop in plant and equip¬

neighborhood
Without

the

of

large

13

per

rise

in

cent.
cost-

saving investment, stimulated by

not

generally
broadly as-vthe

as

necessities of

require."

to

with

commensurate'

always been adopted
nor

progress

large—prompt; price

at

reduction

declines

earners)

overall

expenditures will be in the

no

panaceas.

manufacturing investment during
the coming year will be of the
cost-saving variety; and that the
ment

to

power

credit.

benefits

in

manufacturing industries for mod¬

ernization,

the

be

ful not
ance.

equipment

undertaken

in

over

may

spacing

investment, but

tributors,

was

direct

more

1949, a substan¬
tial volume of installations of new

tures for

|

dislocations

duced

of

at

on

A year or

now

as

continue.

good example of what 1 have

mind

6 to 7 per

disturbance,

a

markets

particular

of

tend

steady stream
adaptations, so long as

destrian approach of dealing with
causes

well

may

itself, in

invest¬

And

characterized

type,

of

more

Buy¬

competition

mean

plans

of

causes

the

may

sellers'

among sellers and

leader"

of

some

the

we

as

time.

to

postwar

up

of ap¬
fiscal

avoid

control

course,

even

en¬

modest per¬

a

so

as

markets

and
to

even

markets from time
ers'

will

spacing out of new in¬
in the private sector of

courage a

Of

will

It may also be possible to foster

time.

line

to

control.

no

J vestment or consumption, seem to
in at-. i me important enough for special

re¬

get the maximum har¬

vest from creative

saving

strength and influence from time

consumption

influences

the

of

investment must be left in the

new

tion is

together.
are

mas¬

new investment.
The pri¬
guidance of innovation and

mary

of

of

provide the best focussing points
for drawing these many divergent
There

tives of economic
progress, and

the

that investment and

pe¬

averages.

achievement

stability

any

our

that

sults of

.

in the

in

spacing

space

be¬

dozens,

for

evening out the ir¬
of investment, and

rates

decline

tion.

reason

from any

away

might indeed

we

drastic

a

availability of credit

some

which

development

It is for this

economy.

for

private capital expenditures.

con¬

stimulus

real

in

for

repug¬

incentives

the

the

buyers' markets,
be

for

use

only

to

other single

which

investment

interactions

Simi¬

policies,

merely

measures,

spending and saving

like

patterns,

fiscal

instability will indicate, I hope,
why I do not believe that we can

families—fami¬

enjoying

kinds

instability.

in taxation
of depression,
may
instability.

have

mere

consuming habits

consumer

the

of

increases

cure

to

force

as

obvious

century
in
which
the
United ! doubt hundreds, of other factors.
States made economic gains prob¬
But it seems fairly well agreed
riod

no

political ideals; they

our

provide

not

are

national situation. All I have done

of

veys

late.

tions.
The severe depression of
the thirties occurred during a half

any

have

mentioned, not
tried to describe, certain causes
o'f instability. It is not an exhaus¬
tive list: for example, I have left
out foreign trade and the inter¬

two.

million

force,

secondary

a

Instability
I

than these

of changes in the

40

as

Combatting the Causes of

of consumer spending and
j finances are designed to illumin-

fluctua¬

ably exceeding those of

preparation

we

is

as

cause

independent

an

is

the Federal Reserve System's sur-

covering long periods of

averages

time

are

real income since the

must

our

lies used

was

of course),

resumption of more nearly
normal expansion in productivity
war.

third

gate spending,

a

and average

the

of

grows out

dented

used for

nant

ter

war

planning and direct

These

ment

clear

seem

more

oscillations

nations

continued

an

such

instability—not pri¬

improper

centuate

vestment, and of unhappy combi¬

population
although

as

credit policies,

or

causes

periods

alternating periods of plenty and
scarcity of private and public in¬

with

head of

per

and

have had

we

small

1929-39 were

retrogression,

adjustments,

oi

persistent deficit spending
periods of high activity, or

in

fully consistent with stability. On

have exceeded,

may

The ten years

trols.

have

this is merely the effect of correc¬
tive

as

sharp

irreducible
as a
by¬

an

the other hand it does

reached, and

detailed

petual

such

oscillation

of

which

of

scale

however,

war,

basic

product of continuous growth; but

rate

large

or

frankly

should

I

unwise

rather

larly,

al¬

the next fifteen years, al¬
though the average fall owing to a
decline during
the
First World
War, there was a period during
annual

upon our economy.

Except under conditions of

which may accentuate other more

eco¬

must

damaging

Every appraisal

fingers,

toward

marily

ap¬
un-

activity,

overall

There

have

of

state

facilitating a rapid
expansion or contraction of credit
may also be a cumulative influ¬

investment, should lead

minimum

Dur¬

ing

the

war

1

get votes at the next election.

resulting in

en¬

out

actually experi¬
business

finally,

admit that

repercussions resulting

fluctuations

to

statistics of the
to
have
been

slightly less than 2%

stretch

investment

in

and in the

century the

the

will

evenness

time. During the first

years

of another

vailing" economic conditions), and
of avoiding investment for parti¬
san political
purposes—that is, to

And,

the cost struc¬

various

differing periods of time.
It
pears
inevitable that such

the past
distributed

of

not

were

over

fifteen

gains

haps the nearly paralyzing, effects

with crossed

Moreover, the

upon

the

it

also

can

ence

It should not be forgotten, how¬

greater postwar

a

repercussions.

in

resources.

the

to

per¬

economic prospects must be made

tendency often

same

helping

in

the

But

enced.

resulting impact of any new in¬
vestment
upon
the
spending

to go for¬

are

tendency

The

natural

tained at all levels of the produc¬

if

techniques,

In¬

governmental
con¬
struction
of
public
buildings,
roads, and the development of

labor, farmers and city
strong incen¬

process

projects for the

new

and

investment.

used

disorganizing,

than

rates

uneven

new

the

of

be

inflation

of

decided

Clearly, incentives must be main¬
tive

the

study

may

sion of capacity, or for the utiliza¬

dwellers, have had

work

the

careful

which

avoid

appears

to

have

years,

hope the eventu¬
be, it is not too

economy

the

of

vestment

that manage¬

and

We

psychology.
the past four

seen, over

and

business

of

re¬

may

expan¬

tivity.

work

influence

the

it

once

for

methods

and

However

the

gether.

and

fluctuation,

I refer particularly

underway.

early

war

new

heavy

planning,

vestment; the problem

tion

to

a

other¬

an

we

last

of

require

bust,"

expansion of plant, for war pur¬
poses, and for postwar foreign aid
has been due to increased produc¬
ment

into

creation

This will
taxation, detailed

evitable

effects

tives

introduce

may

the

and

an¬

the

Government's

positive contribution of business
"hesitation," of fear of the "in¬

part of the great volume
of goods and services recently at
our disposal for consumption, for

means

insta¬

of

causes

force

consumer

first,

the

of

deficit

the

is

of

instability,
times be

with

that,

And

wise innocent

at

may

related

arises from

stantial

That

of

cause

which

one

closely

sub¬

a

half

iiist

prices.

which

cumulative

to

A

been the reward of increased pro¬

ductivity..

the

are

instability.

set

economy

about,

1949.

has

That

brought

adjustments

bility, for which I have no good
label, comprises the factors in our

low the distortions of World War
that

and

added

fifth

A

readjustment among relative
prices that must necessarily fol¬

population of
in
the

costs

means

II, despite the healthy corrections

country

become

costs

As

costs.

necessary

That could mean wider
in output, and em¬
ployment, corresponding (in re¬
verse) to the reduced flexibility

a

the

important ele¬

an

fluctuations

phase" with each other.

doubt very

is

impeded.

fitted

be

can

rigid,

in,

moving parts of

economy

back "into

a

now engage

we

in

ment

reckon

to

well, is that each of these

as

four factors

least,war of

at

years,

the other

But

have

we

as

when de¬

economy,

threatened.

which

with

or

these

of

some

"props" to the

half

years.

of

flation

stifled,

have

recently of the use¬

lent wrench

of

We

taxation.

of

much

economy.

in

fifty

the relatively high abso¬

fulness

by the shift to a war
The regular processes

reason¬

a

the

(2)

which

introduced

is

the

these

the

ality of

cannot work themselves

four¬

or

down

controls.

the dimensions

three-

a

hold

to

in

was

elaborate

requires sudden

the volume of
goods and services produced in
the United States during this past
expansion

distort

important during

than it

importance: (1) the one-way flex¬
ibility of most industrial wages,

till

It is estimated that there

has been at least

fold

more

war

aggregate,
moderate

re¬

great. Consequently, it will prove
other

the
the

in

might,

public

on

for rebuilding and recon¬
struction
is
likely
to
be very

money.

distortions

just words, let me refer briefly
record of
the past fifty

years.

drain

same

sources

much

a

wavelike movements of

a

A host of

the

to

the

reason,

For the

wars.

stable
economy.
Four of
these rigidities are of particular

peacetime to

a

of total output.

and enlarge
these

the two world

followed

which

ably

sition

principal

that

demonstrate

transitions

greatly

the compo¬

normal fluctuations.
To

of

which

of Instability

wartime economy

seriously diminish incentives, and
those
elements
of
instability
which may aggravate

tion
war

number of added rigid¬
ities within the economic system

and extreme shifts in

will be those
economy which may

our

desire for individual

our

cannnot

switchover from

threat to this growth
trends in

now

physical damage to the
of the United States it¬
probably
look forward to a repeti¬
the relatively easy post¬

For that reason, we

self.

certainly a principal cause of eco¬
nomic
instability
is
war.
The

have characterized our free enter¬

The

We

swings.

associated cyclical
have, partly as a

the

aggerate

Perhaps the foremost cause and

problems, and the ingenuity ex¬
perimentation, and increasing
technical
skills which normally
economy.

in

and

result of

Causes

The

permit some combination of pro¬
gressively higher wages, increased
leisure, and adequate profits, all
at generally high levels of em¬
ployment
and accompanied
by
price movements which assure the
great
mass
of consumers
that
monetary gains will mean real
gains in purchasing power.
The
generating source of this growth
should spring from the applica¬
tion of capital to our production

prise

adjustments associated
growth of the economy,
that way prolong or ex¬

with the

security,

development, with a gradual in¬
crease
in productivity that will

interrupt the

which delay or

tors

economy.

our

sustainable

a

can

necessary

tacking the causes of instability in

stability, then, I
growth and

economic

By

Thursday, February 9, 1950

economy

instability

mean

CHRONICLE

FINANCIAL

&

An

outworn

for

"parity"

concepts and related Government
support programs have tended to
1
■.....

Prof.

By
1. i

I

T

Frederick
i-oi

+

m

M

ow

C.

of Colt

Mills

ni'l/

i

it

V

Volume

171

Number 4880

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

(637)
prevent consumers from getting
the benefit of technological

investment

agriculture,

One specific

paragraph
an

'

rigidity deserves

a

two, since jt is right
at the moment. That

or

lap

our

the national income.

Federal,

state

taxation

of

are

have

Such

serious

the short

In the short

to shut

it has

run

a

the

I

of

and

to

is

also

the

tion

run

of

sides.

Carried

large

a

could

result

growth
are

on

begin
next

in

and

and

productivity.
You
slippery road when you
balancing the budget with

year's increase in productiv¬

ity.

of

cause

think

to

the

psycho¬

listed

I

as

do

of these,

a

not

nomic

precipitating

psychological factor—have a part
in accentuating every one of the
instability.
For
prescription to of¬

no

fer, other than

flood of informa¬

a

statistical

and

qualitative,
concerning the underlying devel¬
opments taking place in
omy at any time.
The

Choice

our econ¬

Before

Us

concluding, I want to draw

what

general implications I can
concerning economic stability.
I
have concentrated my attention on
the purely domestic aspects of the

problem
of
stability.
But,
of
it is impossible to discuss

course,

stability in the domestic
if

as

the

national

economy
tortured inter¬

present
situation

did

not

exist.

Apart from international political
developments, the promotion of
•economic

quire
and

an

stability

seems

increase in

our

to

re¬

imports,

enlarged flow of capital
exports, other than government
gifts and grants.
an

Both present difficult domestic
problems. The impact of a growth
in imports is likely- to bear heav¬
ily on a few industries, which may
rightly object to bearing the en¬
tire

burden

of

correcting

our

in¬

ternational position.
to

We will have
virtuous ideals with

combine

some

hardhearted,

visions

in

rection

of

our

at

our

difficult

home,

customs ad¬

Capital export will

wards to capital
tial

and cor¬
complexities

needless

ministration.

and

labor,
dweller; an

while

a^e

and

the

certain

a

the potentialities of this

various

as

one

of

causes

re¬

another

or

particular

we

ways

insta¬

of

them

importance.

we

are

we

to

a

the

of

succeed,

great

people will

our

processes

and the

increased

productivity
than they now have. That is
why
I said at the
beginning of my talk
that my subject is close to the
of

purpose

Institute

of

you

constructive

education.
create

an

of the American

Banking.

half century
a

For

full

a

have carried

adventure in

You

have

awareness

on

adult

tried

among

to

your

members

of the meaning of the
they do, and of its impor¬
tance in a functioning, free econ¬
work

You have tried

omy.

and

to

sustain realization

of

nurture

the

re¬

sponsibilities, individual and col¬
lective.

which

the

are

necessary

companions of the rights we cher¬
and the privileges we
enjoy.
In a
society in which effective

ish

is exercised by the people,

power

the educational process has a tre¬
mendous task, if that power is. not
to be abused or

terprises
ward
are

us

with

not

what

as

to

usurped.

renewed

could

Such

must

yours

lose

en¬

for¬

go

vigor, if

we

through ignorance

never

be

taken

from

by

more

factors

position
than

the

of

Theodore Bercfeli Dead
Duzer

senior partner of Berdell

Berdell,
Brothers,

his home at the age of 61.

firm, died at

were

the

tures,

which
into

market

enforced

for

it

curred,

but

the

an

the

suit

and

>

the

(Anti-trust
(

they

The

oc¬

be

to

in-

3.

1948

(Supreme

25,

1949

(Consent

May
Feb

77,.

j

4

suit

Court

.

filed

pact

decisiont

Court

Paramount

judgment j

,

-

*24 to 22

LI-?-::

.

Adjusted tor 2-for-1 split in
"■Fluctuation over immediate
4.

District

Court

and

distribution

of

Inci.

-

157

701 to 742

209.86

455 to 419

181.09

handed

171.10

.

on

"reasonable

a

and

all

patents

of

the
to

companies was
companies were al¬
continue their normal

operations.
j

indicated— prices

it

years.

three

However,

ling directorates

event

royalty
which

acquire in the next five

lowed

1946.

following

on

made and the

123

.

down

change in the corporate make¬

up

135

436

22V

con¬

Under the decree,

No

106

7.8

a

23, 1949.

may

100',

5.8

.

by

judgment

basis''

Ind.

141.84

v.

settled

was

Fiberglas is re¬
quired to license to any applicant
200 royalty-free
patents, 60 pat¬

Avg.

133.88

125 to 101

suit

Owens-Corning

in^

period

at

sent

D-J

Avg.

100 rr
-19.0

*37 to 39

decision)

D-J

Stock

*6'2 to 5'4

>

Court

June

ents

Index of

5'4

Lower

the

without restrictions,

company:

Im-

1938
1946

in

answer

manufactue

develop¬

as

continued

Price

1938

District

two

Index of

12.

States

denying the Government charges
that
they had monopolized the

Pic¬

more

Market

30.

was

until

Toledo, Ohio, charging conspiracy
dominate the development of
the fiber glass
industry. On Nov.
1, 1948, the three companies filed

recently entered a
calling for its sep¬

the

j Paramount

Jun

not

to

by the basic ecodisadvantage j nomic factors behind the industry,

July 20.

formation

was

United

a

PARAMOUNT PICTURES, INC.

Jun

prod¬

to

in

Paramount

reflected
in

ments

of} fluenced

anti-trust

filters, textile

glass fiber products. The answer
companies, the
stated that since October, 1946, all
initial impact of the
filing of the
suit and the subsequent decisions Fiberglas patents for production
of such products had been made
was as might be
expected based
available for licensing at reason¬
on past
history. From the follow¬
able royalties to
other concerns
ing table it may be seen that the
aration

liquidating divi¬

this

ma-

£

air

as

materials and fire resistant

Pictures, Inc.

of

case

consent decree

dend became the
major considera¬
tion in the market
place.

stockholder's point

are

ucts.

reasonably high.

been

Paramount

rather

company

in

rata

pio

building

Qtl

made in
1938,
Sept. 10, 1947,
that an anti-trust complaint was
filed
against the group in the

In

fundamental

principal

product

the

glass
in
Fiberglas insula-

four

^

production

of

Although full disclosure to the
Department of Justice of the plan

market-

but thereafter the
company's par¬
in the war effort and
the prospect of a

outcome

of

on
the
transaction
to
detriment of the stockholder.

ticipation

the

portion

less

litigation
proceeding.
filing of the suit had a sharp
impact on the market of the stock,

in

A

through

i£l

sold for cash, which

Average

The

the

lard

period of low prices, the company
might have realized considerably

the

view

I

♦

distributed

when prices
Had a
sale

influencing the

the

not

was

proportionate

advance

affected

was

economic

,

Wde

interlock -

in the three

.

PaillCS

rounded.

....

,

com,

piOxllblted

,.

and

tlMl

~

,

„.

,

.

^

,le

...

filed

on

0Vf11nm(kT
July 20.

Paramount

grated

and

1938

the

major

producing and

ctear-cut

inte-

days.
Before

exhibiting

A

consent

the

1940

decree

five

not

was

into

entered

maior

comDanies

final

The

had

on

war

of

year

stock

attendance

S

1946.

reflected
t

stocks.

was

no

iwhich Probably reflected the

ef-

nro,-

lvlv!}n? comPany ]le ^'^lc

Paramount's

this

prosperity—

mid-1938

'

As
of

jointly-owned

a

the

two

subsidiary

glass companies, there

j naturally is

no

public market at

!

im- I the patents will

selj their interest

of the shares,

although

no

require¬

ment to do so was contained in

consent

in-

com-

To the Owens-Illinois Glass
Co.

J1 Pe
t

Y
withheld
one company

of: the market movement of these

dm- ; two glass stocks leads to the
The | clusiin that the anti_trust

con-

i?°£nceding against the companies
Para-!i
S IIittIe etfect on the market
mount.Pictures'
stock intS nri^n^nUlhtn' respective stocks. On
creased sevenfold. The
subsequent 1
couman^
day that the suit was filed the
decline
attributable mainly
1^949 loSchedl^ed 101 t^mid j stocks in
recorded a moderate
to industry factors,
12.

1946.

the

market

to

the

judgment.

plan. In addition to the and the Corning Glass
divislon of ,he company into two jindivual companies, the Works, as
Fiberglas
,^c\y companies, the plan required .'operation represents only a por' ^
investor eject which sip- Lion of their business. Examination

to

mole In mcS 2 i aen
From

There

sent action. A few days later, how1 ever, substantial selling developed,

so-

and even greater records
established in the first post-

were

company.

' vestor disappointment in the
picture mdus-!n1-,
J*
T.

The

their stock "except
limited purposes."

was

[mediate market movement that j in Fiberglas. The loss of control,
join*'niight be attributable to the con-j^owevei, may prompt disposition

nronounred

movie

record levels

even

a

\ho motion
the mntiSL

raisinff

pered

in Ung

'■block-booking."
war

voting

for very

decision

three

smaller companies refused to
in the decree which banned

The

from

time for the stock of the
domestic Owens-Corning Fibergdas Corp. It
ftheatre operations from the exist-Us too early to determine whether

~

bv

companies, Owens-Illinois
Corning Glass were barred

ancj

<.8% within two

final

a

the

caused

decision

shares to decline

against

| parent

.

,

companies. Upon the filing of the i reached,
however,
Paramount
original suit, the Paramount. Pic-i terminated its
part in the suit by
tures' stock suffered a downward
entry into a consent judgment on
adjustment of 19% in three days Feb. 25. 1949. The
plan provided
of trading.
for
separation
of the

June

for

common

Tnf

<

was

including the

their market

vance

problems
raised
television •
by
rather than to anv court decision'!
an, court decision, ;

^ tke other integrated motion
P'c9jre companies, only the Radio.

may

De

frorn

seen

prices.

the

pro-

had

for
the
two
adAs

following

table,

the market
prices for the
Keith-Orpheum Corp. entered mto j stocks
took
divergent directions
Distnet Court found
!a c°nse.nt
to separate! during the 21-month period from
illegal certain : production and exhibition of
trade practices and certain forms
mo-.}the filing of the suit to the date of
tion pictures. On July 25, 1949, the consent decree. The
of
joint ownership of theatres. I the District
stock of
Court, reached a dethe Owens-Illinois Glass Co. de¬
While producing companies were
Vision with regard to the remainclined 27.6% from Sept, 10,
not
required
to
divorce
1947,
them-ling defendants of'the suit. Under
the date of the filing of the suit.
selves from their theatre
inter-i the
decision, Loew's, Inc., Twen-.|
to June
ests, they were given two years in itieth
Century-Fox Film Corp. and|concent judgment
which to dispose of their
The stock of
joint Warner Brothers
Pictures,
the Cornine Glass Works
interests \vith each other and with
showed
must separate their theatre
andja net advance of 6.3% from 23%
independent exhibitors if their
j producing operations
to 25 between the two
inteiest was less than 95% or the
dates, al¬
Owens-Corning Fiberglas Corp.
though a low of 18 was reached in
minority interest was more than
Joint ownership of a sole
pro- 1948.
5%. The decision with respect to
During the same period the
ducer 0f-a product is aiso looked Dow-Jones
theatres was not as severe as had
Industrial
Average
been anticipated and the Para- jupon with disfavor bv the Govern- had a net decline of 5.4%.
Ob¬
ment.
A case in point is in the
mount shares moved
viously, factors other than the

JtTn rt'fi946nf NtW Yt°'k

-judgment

j

23* i^'The date"of°the

Inc..!

|

up

matter
was

ot

mace

down

Van

By

common

to

32-Is, to a level
higher than its mid-

56%

wise

which

by foreign aggression.

Theodore

liom

high of 69.

a

1948 Pullman

stock

trv

better understand¬

ing of economic
sources

eco¬

other way.

no

great numbers of
have to have

achieve

can

stability in

If

rose

suit,
was

not

he

•

his

the

to

forms.

chase of stock outstanding.
For¬
tunately the sale of the sleepingcar
business occurred at a time

business,

car

stock

i

am

devoted

development

! fibrous

the
stockholders;
but
applied
mostly to the open market pur¬

action,

fpnf
iect

afraid

am

| been
\ a lid

the pieces that resulted

in

business

between the two dates. Like
pre¬
vious targets of anti-trust

I

nomic

of

declined

called

the

of

price of 48 to

This prescription may seem com¬
plex and extremely difficult; but

New York investment




de¬

choice,

variety of

a

still substan¬

risks

from
econ¬

re¬

tariffs,

and hindrances of

•continue

cautious

from

difficulty in making a
profit of holding a job. To fulfill

bility

sleeping

common

•

re

the

was

that

was
,

to

from

sleeping

1940 price, against a net
of 45% in the Industrial

in

of

assumes

the

the end
stock

econ¬

received

which implies

gree

of

Pullman,
a

the

up

an

improvements

value

management

core

In

asks

farmer and city

of

causes

choice,

p(oint

growth in pro¬
ductivity permits. It is an economy
which

the

of

would

of

the

or
depression.
But op¬
fear, and the speculative
urge—all of which comprise the

tion,

social

with

timism.

these I have

and

the rate

connection

OwensCorningf

Glass Works to
acquire all the as¬
sets of both
companies which had

,

interest

During the period from the fil¬
ing of the plan in 1944 to the final

(with concern, but without panic),
and fitting into place those eco¬

prompting, is likely
in

to

,

able

properties.

sale

and downs in its stride

ups

which

disposition

in

free political in¬

tried

struggle in

lead

with

liabilities

standard

our

other

must

inflation

other

The

have

lated

tax

catas¬

that

only

our

; was formed jointly by thd
Illinois Glass
Co.
and

separation

Final utilization of the
the determination of

From the

in

within
a

acquisition

no

con¬

eventual

an

breakdown

without

any

outside

take

I

instability,

that

some

the

are

influences

of

but

awaits

the

which

omy

Finally, there
logical

cash

emphasizes increased
productivity, accepting some re¬

undermining

a

I

omy

be¬

of

seeds

not

a

But

carry

these remarks, is that of

budget

destruction

the

for

of time.

would

living, but

one

destroys incentives thropghout the
whole community. To follow that
incentives-

it

stitutions.

itself, that the budget is too

point,

period

jeopardize

Britain, where it is being
recognized by the Labor Govern¬
both

keep us
high level of produc¬

employment

trophic

•Great

road

That may well
a

view,

itself

respect we
might well
from
the
experience
of

some

have

we

breakdown; and probably

this

on

of

fundamental choice. We

a

and

my

merely that of deficits and
surpluses, but also one of size.

yond

footing,

sure

inflation.

devitalizing the econ¬
The problem of the budget

high

maintenance

stability at home. To do

with

going at

danger of

ment

the

world

plump lor a propped up econ¬
omy, with a perpetual bias toward

is not

learn

is

toward

can

been

longer

make

can

siderable

There

In

we

to make

lead

made.

omy.

think, that the greatest contribu¬

that,

demands

price adjustments have

certain

are

economy, it is still true,

recovery
economic

for public expenditures to sustain
the economy before essential cost
and

own

tion

tendency

the economy, and

expectations

these international dif¬

as

to be for the healthful
progress of
our

made.

was

about

developments abroad

off necessary adjustments

within
to

and

run

permanent solution.

ficulties may be, however, and as
as the repercussions of

a
tendency can
effects, both in
in the long run.

ill

defects of

important

expenditures, with deficits
increasingly threatening to be¬

have

a

Great

bias in

exception.

serious

firms;

rayon

37

8

page

Investment Values

car

present temporary policies
government foreign aid— re¬

vide

objective.
The means
of attaining it.
however, is sub¬
ject to the danger of an upward

surpluses

and

an
approach, and the knowl¬
edge that it cannot, of itself, pro¬

this

and

also

such

the

rule

from

Anti-Trust Suits and

as

our

of

maintenance of stability
high levels of production and
employment.
We cannot dissent

the

some

will

political

we

economic)
further extension

gardless of the

at

come

doubt

accept, for
(as well

of

objective of com¬
pensating fiscal policy has always

from

piece, if we
grapple
with
the

No

to

by

reasons,

time of

declared

been

to

strategic

high production and employment.
The

piece

problem.

one

project,

a

are

such

But I expect we can make

pi ogress,

notwithstanding this fact we
experiencing a large deficit

in the Federal
budget at

for

continue

taxes,

about

national

our

stacles.

Including

local

absorbs

now

quarter
and

and

rewards

treaties, and the development of a
capital exporting mentality,
all
present
nearly
intractable
ob¬

is the rigidity introduced into the
economic system by high tax rates
and trie heavy drain of taxation
on

abroad

great, and
risky in¬
vestment, when successful, are so
greatly reduced by taxes. Guar¬
antees, tax incentives, commercial
the

prog¬

in

ress

Continued

three
to

on
a

on

practices; but

5,8%

m a

An appeal

Supreme Court
3, 1948 handed

May
ruling. The

upheld the ban
try

days.

the

High

certain

gave

an

trict

Court

to

a

In

1933 the

Fiberglas
THE

Corp.

anti-trust

suit

entered

into

the

picture.

FIBERGLAS

COMPANIES

Court

Ovens-

Illlnois

Glass

Industrial

incon¬

Glass

Works

Average

directed the
make

fiber industry.

Owens-Corning

indus¬

clusive opinion regarding theatre

ownership and

lgiass

Dis¬

further

study.
Apparent market disap¬
pointment over the jack
of
a

Sept. 10,

1947

June 23,

1949"(Consent judgment)
Percent change

(Anti-trust

[EDITOR'S NOTE:
ments in which we

suit

The

filed)

Corning

72 y2

23 3/4

52 V2

25 y4

-27.67c

foregoing is the

+ 6.37c

Dow-Jones

176.24
166.99

.

—5.47c

second of three install¬

are presenting
Mr. Vultee's article. The
concluding
installment will appear in the "Chronicle"
of Feb. 16.]

38

Continued from
have to

Tomorrow's

see

tell

to

And

market.

the

you

don't
every stock go off
a storm is here.

These two will be

Markets

More next

Walter

Whyte
[The

Whyte.

'expressed

in

this

article do not necessarily at any
time coincide with those of the

By WALTER WHYTE=

55

enough.

Thursday.

views

They are presented as

Chronicle.

Last week I said the market

those

of the author only.]

talking. This week I'm
from my desk—in Flor¬

ida—where I

wearing

H. Adams has resigned as
#

#

t'fi

There's

market

the

If

above.

of

under

mentioned

I

conditions

gets too bored
lagging projected
ticker tape crawling
across
the top of the board, all one

looking at

has

one

a

step

right

screened

door

is

do

to

to

the

through

there's the beach.

and

Admin¬

That

Connecticut

?*

"*—7

post he

held

1,
the

tive,

mostly

are

neighbors

oc¬

if

I don't know
voluntary informants
any more about it than
equivalents
in
New
They talk the same

know

their

of the Guardi

Credit

a n

Mr.

control of
Guardian Credit,

in

business

the
with

en¬

concern

a

consumer
six offices

finance
the

in

But to

recall

week

signs
some

I

last

suggested that what

were present pointed to
sort of decline.
In the

past few days you saw a little
of this decline.
I don't think
it's

enough. I wish I could be
specific and say so far and no
further.
I could say it but
just between ourselves I'd be
guessing. All I can say, based
on the past few days' action,
is that if the two stocks you

Bessemer and
Mead, break their stops the
market'll go lower.
Not be¬
cause these are any harbing¬

hold,

Cooper

Mordecai Gressitt Is

With Geo. Shriver Co.
BALTIMORE, MD.
B. Gressitt

G.

with

George

Inc.,

Mercantile

Mordecai

—

associated

has become

Co.,

&

Shriver

Building

Trust

Mr. Gressitt was formerly a

Reese.

Mr.

Exchange

The New

Exchange

York Stock

following firm

has announced the

changes:
Transfer of the Exchange mem¬

of

bership

the

Arthur

late

will be considered dn Feb. 16.
Proddow will continue as a

in Bache & Co.

ner

de Saint-Phalle &

Owen H.

Co.

on

Gassaway of Thomson

Executed

on

Exchanges

Schwabacher & Co.
York Stock Exchange

(Associate)
San Francisco Stock Exchange
Chicago Board of Trade
Curb Exchange.

New York 5, N. Y.

14 Wall Street

Teletype NY 1-928

CQi tlandt 7-4150
Private
San

Wires

to

Principal

Francisco—Srmta

Offices

(Special to The Financial

Chronicle)

CALIF.—

ANGELES,

LOS

Fresno—Sania Rosa




of

Albert E.

Court, 650 South Grand Ave¬
He

with

previously

was

Floyd A. Allen & Co.

SPECIAL PUT OFFERINGS
Per 100 Shares

Amer. Tel & Tel.

@ 149

6 mosJ $225.00

Plymouth Oil..@ 42% Mar. 11 287.50
Southern Rwy... ® 34
Apr. 8 187.50
Illinois Central.. @ 37% Mar. 27 262.50
Wheeling Steel.. @ 45% July 26 287.50
Western Union.. @21% Apr. 3
137.50
AHis-Chahners
@ 32% May 8 187.50
..

@ 26% Apr. 24 250.00

Continental Oil.. @ 57% Apr. 22

250.00

Southern Pacific. @ 54

July 25 475.00

Schenley Inds... @ 33

May 8 212.50

Subject to prior /sale or

price change

ITHOMAS, HAAB & BOTTS
Members

Put

&

Calls Brokers

&

Broadway, New York 4, Tel BO 9-8470

the first place,

In

effects

what

and

new

developments

business

This

activity.

is

not

a

the public debt

large and is still rising. If we
could not or would not
balance

is

budget during the fiscal years
when busi¬

the

1948-1949 and 1949-50,

activity was at

ness

when

rates

tax

a

high level,
high

were

and

during the
remained in force, the ques¬

exicse
war

imposed

taxes

justly raissd whether

budget will ever be balanced

again. Second, the volume of the
floating debt is large and the
huge

demand obliga¬
in the form of

of

amount

tions outstanding
Series E, F, and

G Bonds further
complicates the debt management

problem. The latter will play a
particularly important role in the
credit
policies of the monetary
1951, 1952, and

when

volume

December,

these

securities

19.5%,

the

1921, i.e., a drop of ments
and
changes
and,
even
the decline after World though it may vary from time to

War II amounted to less than 4%.

of

cost

living

inci¬

index

in

that

us

inflation is

period of

every

accomnlished bv hiah monev rates

^

LA.

declining prices of high grade

and

Under such circumstances,

bonds.

bonds is well

investor in

the

vised to sell his

continue to

will

future

me

be

This means, above all, that

great.

periods

of

business

declining

activity and increasing unemploy¬

teaches

history

government on business activity

in

Rates

Money

different forms,

assume

it is fair to state that the influence

fund
prices.

Economic

and

time

of

ad¬

bonds before the

inflationary movement gains mo¬
mentum.
When the inflationary

government

the

ment,

will

not

u„rlriof

9jcsitate to unbalance the budget,
to increase the public debt, and
to

spend large sums of money in
to

order

prevent

a

serious

government securi¬
by
institutional
investors
than
commercial 0 banks,

long-term

ties
other

it

will

be

necessary

ernment not

for the gov¬

only to control prices
regulate production

rates did not witness any

but

also

material increase. They remained

and

marketings

money

pol¬

Hence, the investment

regards bonds that proved
to be successful in past periods
would have caused losses if it had
icy

as

been

•

to

Hence, a decline
prices followed by whole¬
of farm

sale foreclosures
ties is

not

a

A

of

study

thing of the past and will

will

and

nent

perma¬

broadened

be

to

equity market is a good barometer j of very vital problems which art
of the trend of business activity.! bound
to affect the economy of

this

However,

again

II.

War

country in general and the
'money market in particular. So

seemed not:the
after World

prices of 354 far,
(1937 — 100) has

Average
shares

no
as

solution to these problems
yet to befound.
We en¬

in May, 1946, tered the broad field of social se¬
stood at 134. They de¬ curity, notably privately adminis¬
clined to 101 in February, 1948. tered pensions, without first ascer¬
During the same period, however, taining its costs and implications.
when prices of equities were de¬ It is, however, of a permanent na¬
creasing, business activity in the ture and is bound to exercise con¬
United States reached a very high
reached

their peak

when they

ning

begin¬

On the other hand,

the

with

middle

of

prices of equities began to rise
reached
end
fact

of

new

a

the

that

a

peak

year,

in

number

toward

on

economic

Fourth, the role of government

and

the in housing

spite of the
of

influence

siderable

1949, developments in the future.

powerful

a

of

may

be considered

as

permanent function irrespective

political changes that may take

pressing

thus

further

in

fluctuations

grade

prices
including

bonds

ments will

on

hiTi

of

govern¬

in the future, no

occur

is

material change in money rates

likely to take place.
The

cold
are

for

chances

not

permanent
of

the

in the foreseeable future

war

This does not pre¬

good.

of

establishment

the

clude

a

settlement

realistic

some

working arrangements with those
countries whose ideologies differ
from

Yet, a return to con¬
permitting drastic reduc¬
our military expenditures
and
complete cessation
of our
economic
aid
and shipments of
armaments to foreign countries is
ours.

ditions

tions in

not

not

This, of
is bound to have an effect
only on Federal expenditures

but

also

likely to take place.

course,

bound

the

on

taxes

which

are

remain high.

to

Hit

Twice

Bondholder

The holder of bonds under con¬
ditions

been

hit

at

twice—by

present
h'gh

the

of

cost
to

exist

they

as

recur.

Third, social security is

plans

manual workers will
supply of funds seek¬

outlet in bonds and mort¬

an

gages,

proper¬

the

to have been the case

ing

pension

of

of

Third,

matures.

yields of high grade bonds. Hence,
it may be concluded that, while

has

after

and

during

adopted

in farm

increase the

and

Second/maintenance of the pur¬
chasing power of the farm popula-

large

a

spreading

embracing

de¬

pression.

period is nearing its peak andj^on> whether through price supbond prices are low, the time is P°rt,
direct subsidies, or other
methods is here to stay.
It has
then ripe to acquire fixed incomebeen recognized that the changed
bearing securities.
However, af¬
world
economic
situation
has
ter
World
War
II, despite the
brought basic changes into the
sharp i n c r e a s e in commodity
marketing of American farm prod¬
prices and the serious spiral be¬
ucts.
In order to prevent farm
tween wages and prices, and not¬
withstanding the hugh liquidation commodity prices from reflecting
the forces of demand and supply,
of

living which is not likely
decrease materially, and by the

continued low money rates
are

the

is

which

not

likely to rise materially in
future. The cost of production

high and still growing.

Above
industries it has be¬
come
rigid, and the only way of
reducing
production
costs
is
through an increase in the effi¬
ciency and productivity of labor
and machinery. This obviously is
a slow process.
A material reducrtion in the cost of living there¬
fore
is
not
likely; hence, the
bondholder cannot expect the pur¬
chasing power of the dollar to in¬
crease
materially in the foresee¬
able future.
Second, the cost of
government is high and will con^tinue high. This in turn precludes
any material
reduction in taxes
all, in

many

levied

on

tions.

individuals and corpora¬

the

Third,

public

debt

is

It has been large and is still increasing. The
deflationary forces made their ap¬ place in the future.
stated even by conservative' leg¬ present policy of the monetary au¬
pearance and earnings of corpora¬
thorities, which considers the startions were lower.
It is, therefore, islators that every child in the
evident that the investment
of

a

trust

common

company

stocks,

who

officer country is entitled to good housing

bought

anticipating that

increased business activity accom¬

Dealers Assn., Inc.

50

fluctuation is bound to be limited.

1953,

level.

•

few years.

authorities during

in

industrial

Barbara

Monterey'—Oak^n''—c~--am en to

cost

World War II.

Albert Van Court Adds

Oliver Corp

Members
New

York

these

of

some

are

movement of embrace more and more people.
from partnership in G. H. Walker prices of equities leads to the con- The spreading quest for economic
elusion that, as a general rule, the security has raised a large number
& Co. Jan. 31.

•

Coast

What

fluctuate more

have during the past
However, the range of

they

the

deflation

of the

than

tion may be

New Developments

I[passing phase. It will continue
June, 1920, to 174.3
^'irrespective of political develop-

retired

Matthews

H.

Robert

Securities

New

Jan. 31.

McKinnon, died Jan. 23.

&

nue.

Pacific Coast

move¬

the index

low.

Jacqueline de Saint-Phalle re¬
tired from partnership in Andre

Van

Orders

Jr.,
Mr.
part¬

Broderick to Robert Proddow,

Harry R. Srole is with

Pacific

F.

-

but because they act with

ers,

the

than the index of wholesale

Weekly Firm Changes
that

the

reached

Yet

to the beneficiary of a trust

get back to the mar¬

You'll

ket.

and

activity

securities in general..

The

dentally is of greater importance

#

❖

I.

which went be-

level

War

The

of Connecticut.

New York Stock

their wives.

business
ment of

inflation—an

Adams

quently harried by ladies I
❖

of

216.5

H.

Clarence

of

are

period

a

Whereas

ac¬

ing

gaged

the

work¬

quired

or

assume

by

serious

a

World

way,

but wear sport clothes
beach trunks and are fre¬

every

past and political trends with the view
major of determining how they influence

which in turn is suc¬
by a period of deflation.

yond

Manager

part¬
ner in Gressitt & Reese, which has
been dissolved following the death

York.

followed

the

after will they have on the attitude and
policies of investment officers?
that ensued was only minor in |
First
and
foremost,
mention
character, particularly if judged must be made of the influence
by Ganges in the cost of living. which government exercises on

frequent.

my

that

us

is

of

increase in prices

cupying the chairs alongside
me in the customers
room I
now

Experience

witnessed

I refer to

my

to

adoption of wrong policies. A of the past, but also give careful
examples
will
prove
this consideration to present economic

However, after World War II we

John L.

sources

The

Lewis.

in

are

rates may

interest

cited

be

can

eral

State

vs.

evaluation.

examples

dent and Gen¬

Adams has

Taft-Hartley

Other

place and those which der, therefore, to place trust inthe making, is likely to vestments on a sound basis, one
wrong conclusions and to has to study not only the lessons

ceeded

Presi¬

ford.

on

which defy

have taken

war

be¬

to

come

nomic

inflation,

law

effec¬

became

and

A study

experience alone, however, where past experience and pergreat eco- formance are of little practical
and political changes that value at the present time.
In or-

teaches

1931,

July
when

ascertain

to

without considering the

few

since

which I don't.

it to President Truman's stand

endeavors

point.

lias

Corp. of Hart-

past few days there's
been a little slipping here and
there. Some sources attribute

ficulties.

the

-

Securities Act,
a

is, if you care for the beach,

In the

many

lead

istrator of the

advantage

one

watching
the

Corp.

HARTFORD, CONN.—Clarence

still silent.

only the past that

unstable; the pefraught as well with
uncertainties and many dif¬

riod ahead is

analyze present trends.

But the market is

of trunks.

But it is not
has been highly

of past

Guardian Credit

pair

a

un¬

expenditures by
the government will continue to
be iarge and that taxes, both in¬
dividual and corporate, are bound
to remain high. They indicate also
quite clearly that depressions of
the magnitude
witnessed in the
higher equity prices, would have early 30's are not likely to recur
in the foreseeable future.
|sustained losses/ Apparently the
The credit policies of the mone¬
equity market no longer reflects
the outlook for business activity tary authorities as well are not
and prospective profits of corpora¬ likely
to undergo any material
tions, and is guided less by ece- changes in the foreseeable future.
™mic than psychological forces, It is, of course, quite possible that

Investing Policy Under
Today's Economic Status

Experience of the past is valu¬
and helpful to the student

G. H. Adams Heads

and

clearly

that

mistakably

who

look at the

can

translux while

tioned—indicate

.

able

wasn't
away

page

you

—Walter

Says —

first

Thursday, February 9, 1950

CHRONICLE

FINANCIAL

&

COMMERCIAL

THE

(638)

panied by

a

sharp increase in net

profits after taxes would lead to

facilities
nomic

irrespective of the

status

of

the

eco¬

family

to

and

the

others

above

that

stone

the

of

market

as

an

in, the

stability

which it belongs.
Ail

bility

of

bond

government
important

general

the

corner¬

economic'

country,

is

developments—

likely to undergo a change.

could

may

be

men¬

therefore take it for

not;
One

granted

Volume

that in

171

Number

the foreseeable future

Federal

Government

willing to offer
coupon

a

for

be

2 V2 %

a

prices

of equities

wholesale

and

broaden, as they will,
long-range outlook for money

in

BRITAIN

Index of Prices

Wholesale

is

Index

100

—.

83
76

1940

63
68

140

81

Attitude

Do

.

the

1943

98

153

devel¬

1945

116

155

1946

129

161

1947

131

17-3

118

202

Trust

Officer?

a

the

on

part of trust com¬
toward bonds, or shall it

panies

continue

to

trustees
of

1942

above-described

opments warrant
tude

not
pre¬

be

to

the

function

consider

only

of

safety

principal without regard to the
and the purchasing power

return

of the currency?If the trustee
takes into account the fact that the
return on bonds is bound to re¬
main
of

low

time

if

and

for

he

may

is

realistic

the conclusion
in the

crease

the

dollar

place,

is

the

even

that

period

lower,

go

and

reaches

material in¬

a

purchasing power of
not
likely to take

first

question

1948

___

that

he

will

January

of

the

question

cannot

be

generally, for it will
depend to a large extent upon the
position of the individual benefi¬
ciary.
Bank

Shares

far

question,
safety of re¬

where

turn

and,

as

tenance

possible, main¬
principal
are
con¬

of

sidered

of

as

shares

of

as

great

importance,

well

managed
banks
suggest themselves as a substitute
for

certain

a

This

percentage of bonds.

opinion is based

the

on

fol¬

lowing reasoning:
(1)

The

banks,
steady.
in

good

general

a

For

great

a

in

and

and

as

the

many

are

years,

times,

the

rates have

while

sider banks

by

rule,

bad

present dividend

paid,

paid

been

cannot

con¬

one

for

outlook

growth industry,

a

their earnings on
is fair.
If business ac¬

the whole

tivity is at

a

will

loans.

make

hand,

high level, the banks
If, on the other

business

activity

turns

against

A great many bank shares
selling today substantially be¬

low

book

value.
of

resources

the

As

the

capital

banks increase—

and

they have already increased
considerably during' the past ten
years—it may be expected that
banks

some

dividends
clare

will

while

stock

increase
others

their

de¬

may

dividends.

In

any

event, the holder of shares of well
managed

banks

is

of

assured

a

steady income, with price fluctua¬
tions

not

likely to be

80
74

that

the

while

above

68

60

the

80

119

1944

wide.

very

clined

from

100

Thus,

an

price

There

Great

of

are,

why

sharp

do

decline
of

power

in

prices

the

individuals and

on

in
the

purchasing
pound.
First, the

the

high taxes

specific

reflect

not

distributed

dividends

arq

'

a

great deterrent to the purchase of
Second, the coming into

equities.

of

power

the

ment

and

some

of

not

socialistic

the

the

well

augur

govern-

nationalization

basic

industries

for

the

Great

Britain

of

not

of

create

the.

rigid

.

market.

The

also

return

sidies

at

British

to

cost

the

Many

be

to

seems

high

satisfactory.

quality

bank

selling to yield 4

are

To

more.

types
also

per

extent,

insurance

of
be<

some

considered

,

shares
cent

stocks

in

or

certain
may

the

same

In

France,

equities
the

The

In

Impact

of

France

pensated

be

noted,

tion

is

widespread,

inflation.

always

certain

It

a

is

be
are

hedge against infla¬

that at

times and under

conditions the investor

the trustee does better
by

bonds

hedge

should

rather

than

equities.

particularly illustrated

following

the

decline

power of the

seen

from

the

in

the

franc,

as

following

August

table

which

in

the

compares




109

_

October

114
_

already

was

pointed out, equity and commodity
directions.

However, in the

of the United

equities

Paris

Prices

Price
Itfdex

Price Index

1,366

1,712

1,632

Retail

1949:

July

in

crease

if.

material

a

in¬

thus

at

compensated

in

dividends
,

was Paitly

and

Aug.__
Sept.—
__

While

1,122

1,854

1,168
1,148
1,110

1,918

1,958
2,000

index

of

has

1,715
1,752
1,826

1,884
wholesale

low money rates
tinued

quite
this

points out

(1) There is

perfect hedge against inflation,

particularly in the field of

securi-

economic and political
conditions, including types and
on

fates of corporate taxes prevailing
the country.

(3)

Theie is

no

easy way to protect an estate from
"fLi/A
the
erosion
of
the
purchasing
power of the currency and, if an

-4-lVrf-v

/a4-

ni

versus

11'nnncm rv

increase

an

in

and the

dilemma

investment

cons

elusion

which

officer

in¬

confronts
of

trust

a

analysis of the pros

an

will lead him to the

that

recent

con-

economic

and

political developments have even
further increased the desirability

clus^n L bound to be reached if
the
following

factors
into consideration:

taken

are

the

utility

made

grade

great

depression of the early 30's is not
likely to recur. If the government
large

hesitate

to

operate

with

deficits

during the fiscal
years 1948-49, and 1949-50, when
business activity, employment, and
national income were at a high
it

much

larger

may

be

expected

deficits

will

be

that
in¬

prices rose from 100 in 1938 to curred once business
activity turns
2,000 in October, 1949, the index downward and
unemployment in¬
of French stocks was at
1,110 in creases. Under such conditions the

October, 1949, substantially below government

will

most

for

the

neither

commodities

Administration
lower

prices

higher

nor

for

money

The Administration and the

Congress

are

policy

preventing

of

clines

committed

to

a

business

sharp de¬
activity and a

increase

in

in

unemploy¬

ment.

The economic and political de¬
velopments warrant the adoption
of the following policies by trust

investment

(1)

officers:

Less

reliance

bonds.

on

the

beneficiary is prim¬
arily
interested
in
safety
and
stability of income, a shift of a
percentage
shares

(2)

of

bonds

to

seems

into

bank

advisable.

be

A larger percentage of well

selected

equities

interest

both

opera¬

of

and

a

smaller

seem

to be to

the

beneficiaries,

man.

regular

on

holding

available

of

of

life

tenant

companies

and

remainder¬

high
equities

utility

which

public

suitable

are

for

investments.

The

fixed

such as
and equip¬

assets,

buildings, machinery,
by corporations, have
much

which

higher value than that at
they are carried on the

books.
be

Earnings

based

which

where

costs,

the

shown

book

This, too, ought to have

favorable
of

effect

some

the

on

corporations.
rise

manent

modities

in

should

lead

a

earnings
The

prices

per¬

of

com¬

to

profits in terms of dollars

These

higher
as

it

not

be

also

are

factors
must

prewar

period.

taken together,
impressive.
However

should

there

which

corporations

overlooked

up

the

that

trust

officer

First, taxes on
high and nobody

are

tell whether they may not be
increased.
High taxes have an

should

'Second,

net

on

earnings.

the

strongly-organized
in a position to
demand and obtain higher wages
as
well as pensions, thus further
reducing the earning power oi
corporations. Third, there is also
a possibility of increased
competi¬
labor unions

are

tion

from

and

establishments.

governmental

not be

purchasing
and

the

have reduced
to

buy

the

the

individuals

on

ability of

many

equities.

however, the
vantages seem to outweigh
disadvantages particularly if
takes

into

account

the

fact

ad¬

the
one

trust

companies have good staffs
study not only individual in¬
dustries and companies but also
economic
and
political
trends.
Moreover, the economic informa¬
to

that
the

greater

certainly1 ever

is

currently

trust

and

before.

officer

more

available
is

reliable

Hence

following

the

on

policy

a

of

and

in¬

number of

wiped

in

occurred

as

countries

is

actually

out.

(5)

In

view

of

of labor

power

to base

the

and

increased

their

ability

their wage demand

on

the

employer's ability to
view

pay, and in
other economic and poli¬

of

tical changes, the new inventions,
the new buying habits of the

and

public,

selectivity

much

perhaps the

The

becomes

importance

greater

in the past.

case

performance

of

than

of

industry

an

or

of

no

indication of what it may do in
future.

the

corporation in the past is

a

(6) The investment policy should
be

based

the

on

great

that

careful

a

mass

prejudices

on

bound

tuation

analysis of

economic

data

today and less¬

or

past
per¬
It is quite evident that

formance.

widely-held
are

of

available

are

and

to

on

traded

equities

fluctuate, but fluc¬

should

be

less

of

con¬

sideration than the intrinsic value
of

a

from

security, the income derived
it, and the prospects of the

future.

(7)

In

changing

a

world

the

attitude of the fiduciary must also

undergo

a

dynamic

and

of

change;
not

must
It

particularly

away,

legal

it

static.

restrictions

be

must

where

exist,

from

concept that preservation

principal is the beginning and

the end of the

fiduciary's duty.

that

to

tion

dollar

received

conservation

pure

the old.

balance,

In

of the

the

of

power

ol' drastic inflation
a

no

Disadvantages
On

conserve

vesting exclusively in high grade
bonds, the beneficiary in a period

break

Advantages Outweigh

assets.

merely to

return

principal.

agencies

Finally,

bettei*

principal, irrespective

can

effect

been

The function of the trustee

(4)
the

has

equities have
than bonds or

fixed-income

unfavorable

some

consider:

adverse

inflation

pronounced,

com¬

factors,

quite

are

no

stood

was

with the

pared

real
hedge
particularly in
equities, although

of

the

quite

should

from two to three times

than

value.

thereon

reproduction

on

are

higher

is

inflation

field

the

of

ment owned
a

There

against

many

the

to

volume

operating

trust

banking, credit, social security,
etc., give assurance that the major

not

con¬

living. It is
a
change in
is not likely to take

respect

place,

forced

of

dissolution

high income taxes

Government intervention in
and

and by the

high cost of
evident that

other

considerable

a

(8)

The above discussion

the

on

adversely affected in two
namely, by the permanent

the

better off by relying

are

The

public

.

level,
the

(7)

G011ar>

no

been

percentage of bonds

income.

some

the following lessons:

effect

an

policies of trust com¬
The holder of bonds has

panies.

of

JP..

did
__

danger

overextended

capital gains than

on

case

States the holder of

obtained

have

to

are

investment

(3)

176

as

the

by

brackets

Moreover,

bound

re¬

The capital gains tax is at
present 25% so that many indi¬
viduals
in
the
higher
income

176

116

__

of the dollar, and thus

has

loans

(6)

178
•

November

At least the drastic
brokers'

on

purchasing

tors.

177

111

_

to

in

effect

the

on

today

from

bound

of

Wholesale

of Stock

1948

is

Margin requirements have
large extent dissociated bank

a

selling

178

pronounced

rates,

power

during the past eight

eliminated

changes
that have taken place in the field

FRANCE

Oct.

This

179

105

_ —

September

a

money

Where

duction

180

99
_

business

(1938 = 100)

or

holding

105

_

—

July

(1)

in¬

many
as a

however, that equities

and

was

Index

vestors turn to equities

not

for

grade bonds and
equities

expected.

in

periods of rising prices and

against

hand,
better

than

than

182

June

:

table:

Inflation

particularly when the fear of in¬
flation

other
much

a

seasoned

106

of investing a larger percentage of
England, but even in
This conthey only partially com- trust funds in equities.

case

may

•

the

hedge against inflation

purchasing

category.

on

011

stocks, and

April
May

and

Experiences

proved

common

183

the

taxpayer.
French

averaging about 6.5%

184

a

substantial

stocks today

on

discrepancy in the income de¬

are

supply, commodity
come
at the expense of security
large extent con¬
still remains unsolved.
trolled and prices of certain com¬
Despite the difficulties described
modities were kept low by sub¬
to

were

The return

104

intact

of demand and

bank shares

on

186

The interesting part about the
attempt Js made to increase the
divergent movement of stock and
income or to achieve an enhance¬
commodity prices in Great Brit¬
ment
of principal, the risks are
ain is that, while
prices of shares
automatically increased,
The old
were not restricted and
fluctuated
problem of preserving the corpus
freely in accordance with the law

prices

may

105

at-

an

mosphere favorable to the equity
v

though earnings

(5)
to

Whether equities can
a Partial hedge against mbaHflation will depend to a large ex-

and

maintenance

does

main¬

security trading and
narrow
the swings
in
equity prices, although con¬
siderable swing in bound to be

_

had

United States during
decade-and-a-half have

last

material

high,

176

did|^esstock- offe.r

Finally, the serious

be

years.

cor-1?115 current income for the decl.no

porations and the increased taxes
on

will

prices at times moved in opposite

176.

course,

equity

Britain

index

dur¬

case

This implies that the

dividends
even

wider

191

108

_

__

February

rose to 131", the
highest annual price for the pe¬
riod 1937 to 1949, it compensated
i
only partly for the lost purchas¬
ing power of the pound sterling \

wholesale

tained

the

was

March

.!

share price index

the

is

ing 1946-48.

credit

January

his

increased in that year to

during

knowledge
guessing.

on

Economic and political develop¬

rates.

well

1949:

who bought
equities in 1937, and sold them in
1941, not only failed to preserve

since

108
110

1948

purchasing power but, more¬
lost 32 per cent of the prin¬
cipal.
Even in 1947, when the

it

rived from high

140

,

68.

to

investments

less

35

ments in the

favors

the

123

121

wholesale 1947

trustee

or

capital

1945 through 1948. Cap¬
expenditures
are
declining,

representative

121

104

company,

(3)

86

_______

1946

table

1941, the index of
prices of 96 industrial shares de¬
individual

Large

the years

ital

can rest more on

facts and

ways;

made by corporations

were

is

114

'1943

in

140

increasing the equity of the stock¬

(4)

101

price index increased from 100 in
to

stronger financial posi¬
they were before the
war.
A large percentage of the
net earnings during the
past few
years has been plowed back, thus
than

decline.

91

1941

221

of

perusal

at present

are

much

a

and

the

Corporations

(2)
in

89

&94Q

211

consumers-

demand.

tion

today

em¬

91

»1939

218

ployment and maintain

present

100

76

__..

1945
A

controls

(2)
are

Wholesale

'1942

104

November

consequent

government obli¬

100)

=

100

210

-98

_

public-

projects,

dividends than

STATES

1938

■«

of

major

quite possible thai
many corporations may disburse
a
larger percentage of earnings in

following table:

1937

210

flood

other

including housing, to provide

hence

203
208
213

100

_

_

—

then

more

seen

Price

99

September
October

confronts

hold

hedge

be

may

Index

99
—

the public debt and the banks will

gations.

as

Index of Prices

ance-of-payments problem which

rise in

a

inflation

'

creases,

expect

equities

(354 shares)

July
August

and

(3)

States

UNITED

holder.

may

United

from the

downward and unemployment in¬
one

the

also did not prove a suitable

213

veritable

a

works

States

of Industrial Shares

99

May

reasons

dividends

as

In

United

204

111

_

——

(639)

holder.
The

over,

As regards the second

particularly

ties.

203

109

_

107

April

1937

answered

mone¬

mortgages,
life insurance policies, and annui¬

118

_

_

March

be reduced and what assets should

part

such

121

_

__

February

shows

The first

claims,

(1937

ask himself is, by what
per¬
centage should the bond portfolio

replace the sold bonds?

se¬

1949:

June

indefinite

an

and

-

of

cases

as

150

107

change in atti¬

by

those

that in

strictly

147

lower and

The

start

therefore,

,

of bonds and other

126

1941

rather for

one-

power.

tary

95

higher rates than
vailing at present.

equities

than

more

purchasing
of
France,

proves

com¬

Thus,

inflation the holder of equi¬
ties is better off than the holder

93

1939

of

CHRONICLE

vere

100

1938

for

What

clearly

Price

(96 shares)

when

lower.

holder

little

a

example

of Industrial Shares

1948

were

the

half of his

(1937 =100

1937

France

salvaged

GREAT

1944

rates

for

average

through November, 1949:

yields of

continue to

FINANCIAL

modity prices

less sets

or

other

high grade obligations. Moreover,
if pension plans administered
by
private
trustees
and
fiduciaries
the

the

&

prices in Great Britain from 1937

obligations

more

all

THE' COMMERCIAL

the

not

than

more

in turn

pattern

will

long-term

on

this

and

4880

much
than

investments

Joins Merrill Lynch Staff
LOS
liam
staff

ANGELES, CALIF.—Wil¬

D.

of

Fenner
Street.
Shields

Kennedy
Merrill

& Beane,
He

was

& Co.

has joined the

Lynch,

Pierce,

523 West Sixth,

formerly

with

(640)

40

THE

COMMERCIAL

The

Indications of Current

week

Latest

Indicated steel

Feb. 12

Equivalent tc—
Steel ingots and castings

(net tons*

1,744,200

that date,

on

BUILDING

Kerosene

(bbls.)

Residual fuel oil

at

PERMIT

AREAS

U.

THE

Ago

of

OF

4.955.950

4.962.300

4,995.500

5,492,500

28

5,513,000

5,626,000

5,558,000

28

lb,obo,OUO

17.988,000

19,051,000

28
28
28

2,686,000

17,531,000
2,588,000

7,302,000

7.482,000

7,591,000

7,582,000

3,266.000

8,444,000

8,941,000

INC.—Month

28

124,270,000

*'122,204,000

113,497,000

114,970,000

18,449,000

*'19.046,000

20,838,000

21,744,000

66,337,000

*'69,214,000

77,801,000

63,142,006

57.036,000

58,585,000

61,675,000

63,333,000

239,553
170,553

65,078

*83,286

69,305

7.357

_

—

6,755

7,421

UNITED

8,389,000

$479,411

*399,178
*196,076

$612,758

—

_______—

*$678,540

368,289

179,391

construction

nonresidential

New

Yea*

Month

S.

LABOR—Month

OF

Previous

VALUA¬

(000b, omitted):

building

f5,470,000

Jan. 28

AMERICAN

OF

DEPT.

November

28

(bbls.) at

Revenue freight loaded

S.

—U.

1,845,400

2.663,000

2,476,000

Additions,
BUSINESS

alterations,

INDEX

1(h)—As

I9S5-1K49

CITIES

LARGE

IN

of

—

MODERATE

FOR

15:

lice.

168.6

171.4

'

197.3

200.8

205.0-

and

169.2

169.2

170.2

167.5

items

RAILROADS:

foods

§636,415

5618,950

§495,634

679,302

§558,104

§480,233

601,270

bakery

products

Dairy

241.3

229.1

223.2

Meats

5577,196

Jan. 28
Jan. 28

,—

December

of

INCOME! FAMILIES

All

Cereals

(number of cars*

etc

INCORPORATIONS, NEW IN T1IE
STATES—DUN & BRADS GREET,

CONSUMER PRICE

All

ASSOCIATION

URBAN

Jan. 28
Jan. 28

at

Gas, oil, and distillate fuel oil (bbls.)

IN

New residential

of 42
gallons each)
Jan.
Crude runs to stills—daily average (bbls.)
Jan.
Gasoline output (bbls.)
Jan.
Kerosene output tbbls.)
Jan.
Gas, oil, and distillate fuel oil output (bbls.)
_Jan.
Residual fuel oil output (bbls.)
Jan.
Stocks at refineries, at bulk terminals, in transit and in pipe lines1—
Finished and unfinished gasoline (bbls.) at
Jan.

•

CONSTRUCTION

TION

1,791,900

of that date:

Latest

100.1

94.0

either for the

are as

Ago

(bbls.

average

of quotations,

cases

Year

Ago

All

AMERICAN PETROLEUM INSTITUTE:
Crude oil and condensate output- — daily

in

or,

are

Month

Month

93.1

1,744,700

production and other figures for the

cover

Dates shown in first column

month available.

month ended

Week

91.5

Feb. 12

(percent of capacity)

or

Previous

Week

STEEL 'INSTITUTE:

operations

following statistical tabulations
or

Thursday, February 9, 1950

CHRONICLE

FINANCIAL

latest week

Business Activity
AMERICAN IRON AND

&

(number of cars)

freight received from connections

ENGINEERING

CONSTRUCTION

ENGINEERING

—

NEWS-

Feb.

$160,683,000

,

Private construction

Feb.

90,540,000

and

.54

^

Feb.

53,404.000

268,919,000

61,413,000

47.481,000

33,712.000

52,837.000

56,043,000

19,692,000

216,032,000

5,370,000

Bituminous

7,260,000

6.385,000

10,480,000

726,000

732.000

408,000

653,000

Jan. 28

;

7.500.000

Jan. 28

(tons.)

coke

18,700

*19,200

25,300

STORE

TEM— 1985-39

SALES

RESERVE

INDEX—TIDESAL

173.0

186.3

200.4

139.7

—

139.1

'.—-

—'

190.0

145.5

-

—

137.8-,

■

95.3

97.0

146.6

•—

—

...

119.5

122.0
'

97.2

v.*.-

191.3
138.4

185.4

185.4

198.6

155.5

154.9

154.0

23,341.000

23,338.000

23,751,000

20.241,000

20,314,000

20,776,000

9,206.000

9.442,000

8,544.000

419

429

383

$56.20
69-31
53.02

*$54.53

$55,10

•57.00

59.40

•52.02

50.51

150,600

SYS¬
Jan. 28

AVERAGE=1«M>

184.4

178.9

191.6

:

—

Housefurnishings

230

223

218

197

— ——

2—.

Miscellaneous

______

COMMERCE):

(DEPT. OF

SPINNING

COTTON

DEPARTMENT

electricity

Other fuels
Ice

and lignite (tons)
anthracite (tonsi

Beehive

and

Gas

■

Jan.28

coal

205.8

139.7

122.2

refrigerators

Fuel, electricity and

(U. S. BUREAU OF MINES):

Pennsylvania

265.3

185.8

—

192.3

178.8

—

"—

Clothing

202.0

136.7

Sugar and sweets

148.290.000

479,000

_

COAL OUTPUT

$209,703,000

70,143,000

Feb.

municipal

163,002.000

$323,398,000

22.662,000

Feb.

construction

State

Federal

$216,406,000

-—

and oils

Fats

Total U. S. construction

199.2

217.3

292.5

vegetables

Beverages

RECORD:
.

Public

and

186.4
207.8

198.2

products

Fruits

CIVIL

186.2
178.0

r Revenue

Spinning spindles in place on Dec. 31——Spinning spindles active on Dec. 31
—Active spindle hours iOOO's omitted) Dcc...__
Active spindle hrs. per spindle in place Dec.

EDISON ELECTRIC INSTITUTE:
Electric output

(in 000 kwh.)

Feb.

4

6,062,095

Feb.

„

2

5,695,372

5.778,476

161

5,971,662

145

199

FACTORY EARNINGS

ESTIMATE —t.

AVERAGE

FAILURES

(COMMERCIAL

AND

3VDUSTRLUL) —DUN

STREET, INC.

.

&

LABOR—Month

BRAD-

.

All

manufacturing

Durable

Pig

iron

3.337c

3.720c

(per lb.)

Jan. 31

gross

(per

Scrap steel

3.337c

Jan. 31

$46.05

$46.05

$45.8$

$46.82

Jan. 31

$27.08

$24.75

$26.25

$40.42

torn

(per gross

ton)

(E.

&

M. J.

QUOTATIONS)

Domestic

refinery

Export .refinery
Straits tin
Lead

(New

Lead

(St.

Zinc

Feb.

York)

Louisi

at

18.200c

13.200c

13.200c

Hours—
All

manufacturing

1

18.425c

18.425c

18.425c

1

74.250c

75.000c

77.500c

Feb.

i

12.000c

12.000c

12.000c

21.500c

1

11.800c

11,800c

11.800c

9.750c

S.750c

9.750c

Nondurable

17.500c

Feb.

7

103.79

103.76

104.57

101.41

Feb.

7

116.41

116.41

116.41

113.12

Feb.

7

121.46

121.46

121.67

118.80

Aa

Feb.

7

119.82

119.82

120.02

116.80

A

Feb.

7

111.02

116.02

115.82

112,19

Baa

Feb.

7

103.7 0

108.88

108.70

105.17

Government

Railroad

Bor.ds

Feb.

111.62

111.62

111.81

117.40

117.20

117.20

U.

S.

YIELD

Government

120.43

120.43

120.43

117.20

7

Feb.

7

A

Feb.

7

2.83

2.83

2.83
2,57

2.71

2.66

2.65

2.81

2.85

2.85

2.86

3.44

Feb.

7

3.24

3.23

3.24

Railroad Group
Public Utilities Group—
Industrials Group

Feb.

7

3.06

3.08

3.07

7

2.78

2.79

2.79

2.99

I_Feb.

7

2.63

2.63

2.63

2.79

7

355.8

356.2

350.5

377.7

Jan. 28

178.S9.5

189.449

147,044

167.930

Orders

received

Unfilled orders

111.463

Jan. 28

OIL,

PAINT

AND

at

92

92

53

88

337,785

371,395

359,271

DRUG

REPORTER

PRICE

INDEX

—

122.1

122.3

124.9

producers' own use tsnott

Orders

DEALERS

AND

SPECIALISTS

Odd-lot sales by dealers
Number

of

Number

Dollar

ON

EXCHANGE

THE

N.

Y.

As of December

Jan. 21

Customers'

Dollar

value

other

833.639

1,266,307

629,727

$46,609,715

825,535,429

$22,795,512

of

Short

282

421

130

29.087

42,113

26,139

18,057

.Jan. 21

804.312

1,227,242

757,493

4,703

5,711

752,790

467,991

Jan.21

529,546.513

$42,177,839

827,090,706

$18,745,225

Jan.21

261.610

417,850

301,540

126,840

Jan.21

261,610

417,850

30l"S40

289,140

413,170

174.590

SERIES—V.

S.

DEPT.

OF

Jan. 31

_

__

**""""

_

~

Grains

^

150.7

155.5

153.2

Banks

other

than

(25)

farm

~~

JlOy

a

products—.

*




6.00
4.67

3.37

^.18

—

(200•

i.tT

(F.

M. ,1.

&

Electrolytic,

QUOTATIONS) —

13.200c
13.420c

18.425c

12.000c

12.000c

11.800c

domestic refinery..
refinery

11.800c

—<3.2500

2: «£?

64D0J)

64-^

*400750

79.030c

103.000c

_______

Louis

London

og'innc

-3.430c

21.500c

21.J00c

Exchange—

York

New

b b-

January:

export

St.

-.4-

6,36

b 23

'

for month ox

Average

(per

nn

ounce)_._.

(pence per

ouncet —...

—

—

70070c

Nominal

fcadmS

s'S

min.

(per ounce U.

JJf-OOO
571.000

ooo

IrS'Soo
4?

*71'®SJJ

30.420c

*nn

nSS

2™ niS

(§§)——
S. pricei
Quicksilver (per flask of 76 pounds i
UAntimony (per pound), (E. & M. J.)
Antimony (per pound., bulk, Laredo.—,-Antimony (per pound), in cases, Laredo—
Antimony (per pound., Chinese Spot
York, 99ft

New

Gold

nnnr.

fo

S2S
TNe'fYS°StraitS...____

~"

I

.pei

^'Snn?
3^00c

7iv

?r'$ooc
39 000c

39.000c

Nomina^

Nomina

..■■•*.06000

pound.

.■"""I'--:--—::

YORK

Dec

^0 5000

20 500c

40S

JSSS

sSS

I

160.4

161.6

Total

191.2

187.2

206.8

Credit extended to

154.5

154.5

162.3

Cash

215.5

~

154.7

208.1

208.2

204.7

145.1

145.1

145.1

152.7

—Jan. 31

137.4

137.4

137.4

145.7

137.2

130.4

130.3

—Jan. 31

169.3

*169.3

169.5

175.5

Jan. 31

190.1

190.3

190.3

201.9

..Jan. 31

115.8

115.8

115.5

—

As

of

carrying margin accounts—
of customers' net debit balances—
firms

160.3

—Jan.31

EXCHANGE

STOCK

(000's omitted):

31

Member

197.8

on

customers

hand and

balances—
shares—
bonds——
Stock price index, 12-31-24=100
———
Member borrowings on U. S. Govt, issues—
Member borrowings on other collateral-—
Market

value

free credit

value of listed

Market

of

listed

<551440

.a..1nR

®

52 218
'

in banks in U. S

of customers'

Total

■

5877,351
b0,623

351963

KOfiiifi

222*222

76,291,958
128,463 516

dnS'lX

587310

73.174.833
132,444.956

67,048,278
131,306,126

*115 2M

$170 896

67 048 278

124.0

,

—

±

ingor

plus,

ing<"

160.7

Jan. 31

~~

foods_._

~~

lighting materials
Metals and metal products
Building, materials

venr^q*?'etn fSSie'

6.84

>oO
4.54

—

—

yield

METAL PRICES

159.3
169.9

-Jan. 31

and

products

allied

6.08
<.36

OF

______

<24y

Jan. 31

Fuel and

and

6.50
7.10

5.35
4.55

YIELD

________—___

(15)

Average

NEW
150.6

153.9

—Jan. 31

~

Meats

to?9«

a

—Jan.31

—

Chemicals

151.1

Jan.31

Livestock

commodities

$28,223,780

L \BOR—

*

me

Railroads

Aluminum. 99ft
.

"i.

Farm products

$27,543,493

Jan.21

~~

NEW

AVERAGE

(125)

213,620

:

PRICES

146,422

126JB40

Jan.21

by dealers-

All commodities

Textile

473,702

15,448
1,211.794

1926—-100:

All

'

10,906
793,406

~~

Other sales

.

18,197

—Jan. 21

Round-lot purchases by dealersNumber of shares

.Foods

26,269

140

shares—Total sales

sales

WHOLESALE

42,534

29.369

—Jan. 21

;

30,312

54,322

DEPT.

526,635

334.501,271

—Jan. 21

sales

25,392

55,795

$27,599,995

-

19,356

20,764

—Jan.21

-

Round-lot sales
Number

40,999

28,169

Jan.21

Jan. 21

Number of shares—Customers' total sales
Customers' short sales

^

STOCKS—Month of Jan.;

200 COMMON

Industrials

Silver,

sales

42,241
34,953

sale

iCOO's omitted).—

31

WEIGHTED

MOODY'S

(customers' purchases)—

Jan. 21

other

for

—

Silver and Sterling

Odd-lot purchases by dealers (customers' sales)—
Number of orders—Customers' total sales
Customers'

month,

of

end

Silver

Customers' short sales

77,194

28.582

28,568

26,723

orders,

Common.

STOCK

_

57,150

sale

MONEY IX CIRCULATION—TREASURY

COMMISSION:

shares

—

for

Common? Clort

orders

of

3

ODD-

value

tonsi

tons)

tonsy

C°Electro^tic^
Feb.

EXCHANGE—SECURITIES

49.439
25.250
24,189

OF

cancellation,

less

booked,

ishort

141.1

3926-36

STOCK TRANSACTIONS FOR THE ODD-LOT ACCOUNT OF

(DEPT.

———

304,146

AVERAGE=100

LOT

204.8.52

208.433

Jan. 28

Feb. 28

;

(tons)

CASTINGS

(short tons)

For

Insurance

(tons)

(tons)

Percentage of activity

532.000

181,483

Feb.

NATIONAL FAPERBOARD ASSOCIATION:
Production

793,000

Month of November:

—

For sale

ffutilities
INDEX

.

;

---

3.23

Feb.

COMMODITY

of

3.05

Baa

MOODY'S

273,390

263,517

3.00

2.58

2.66'

co; porate

253.516

622,000

j

(short tons)

2.40

2.17

2,22

Mouth

—

IRON

COMMERCE)

Unfilled
Feb.

2.58

Average

1.286

(DEPT.
November:

Shipments
,

DAILY AVERAGES:

Bonds

1.457

PRODUCTS

(in pounds)

MALLEABLE

113.31

7

COMMERCE)

OF

(Short

MOODY'S BOND

*1.454

*1.327

CLEANERS—STAND¬
CLEANER MANU¬

WROUGHT

Shipments

108.88

7

Feb.

Utilities Group
Industrials Group

7

Feb.

Group

Public

$1,376

*$1,391

(VACUUM

SIZE

ARD

goods

Factory sales (number of units.)

Aaa

S.

-—

39.3

FACTURERS ASSN.)—Month of December;

MAGNESIUM

Average corporate

U.

$1.412 479
—1.339

— —

...

__—

VACUUM

HOUSEHOLD

21.300c

1

MOODY'S BOND PRICES DAILY AVERAGES:
,

goods

40.0
40.8

•39.2

103.000c

Feb.

at

Durable

23.425c

Feb,

at
at

(East St. Louis)

—

goods

*39.2

*39.2

i

39.B
40.1
39.6

—:

Durable good-,

23.200c

Feb.

at

1

Feb.

at

(New York)

_____

Hourly earnings—
All manufacturing

:

Electrolytic copper—

—

—

goods

Nondurable

METAL PRICES

.— — -

goods

Nondurable
j 3.83 7c

steel

OF

DEPT.

S.

December:

of

Earnings—

IRON AGE COMPOSITE PRICES:
Finished

HOURS—WEEKLY

AND

bai?els °f foreign crude

runs.

(The weighted finished steel composite

130.1

was

revised for the

the 7 yeMS 1997 "> 1940 tocluslve snd

$132,063
542,203

ss£^r,» »{?«»•

$

250

f65'07®

■

a

'

'

591

Volume 171

Number 4880

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

(6411

41

Continued from page 21
as

charter of economic national¬

a

ism.

Government's Challenge
To Private
not

be

loaned

out

by

the

banks

mendations

•which maintain them.

Member

and

other

Bank

effort

an

between member and non-member
banks reserves.
First of all, it
should
be
pointed out that no
method

of

determining

has yet been suggested

tem.

reserves

that could

creates equity with respect to to¬
required reserves, the form
and place in which
they may be

quired.

further

do

right

not

to

of

Great

stress

identical

for

members,

and

that

all

non-

reserves

should be kept in the Federal Re¬
serve.

However, this would

loss

a

the

by correspondent banks of

reserve

banks.

deposits

These

lion.

Most

of

other

non-member

balances total

serve

mean

of

equity

identical

reserves

and

are

mem¬

take

the

S2

this

billion

member

ceivable

be

may result from

for

urged

the

of

the

as

fact

proposal
It

is

from

incon¬

proposal
credit

a

re¬

would

deposits

banks.

that

members

could
control

measure, if the reserves the Board

prescribes
outside
I

can

will

allowed

are

the

to

remain

System.

assure

to

testify

ABA

against

which may come before

measures

Congress to increase Federal Re¬
serve

authority

bank

member

over

broaden

and

reserves,

it

to

include

fixing the reserve
re¬
quirements of non-members. The

Association

has

opposed

recom¬

state

The

setting the stage for

broader

even

issue

than

and

is

the

American
to

the

the

in

Chartered

discover

visions

agriculture.

people,

of

a

one

com¬

of

that

to

credit

is

state.

It

would

be

error for either bankers
the public to conceive of them

necessary

control.

It

banker

desirable

or

can i

is

to

control

banking

to

us

oi

were

to

chartered

our

belief

banking

and

in

the

important of
21.

It

planning

the requirements of good in¬
A

domestic policies which

lead

to

balance-of-

difficulties

difficulties

and,
it

occur,

government

composition

once

is

free

regulations

of

the

its

import trade
to engage in various discrim¬

and

inatory practices. The Organiza¬
tion, on the other hand, is allowec
neither to object nor to point out
that

change

a

in

that

country's

policies would
internationally
solvent,

it

make

thereby
removing the need for the use of
import quotas, etc. In the words
of Mr. Walter

best interests of the nation.

es¬

adopt import quotas, to control

by

no

for

Nash, who

was

un¬

til

Continued

jrom

recently Finance Minister and
Deputy Prime Minister of New

4

page

Zealand, and who is one of the
principal authors of the Havana

Charter;

ITO

to

set

the

United

up

States

not

was

desired

that

at

time

lury by Great Britain's statesman
and

philosopher, Lord Morley:
"A
principle, if it be sound,

practical

a

should

proposition.
We
have dropped
until such a time as

thereupon

this

project

the

condition

that

of

of

national

world

the

tempers

and

would

allow

genuine international eco¬
nomic cooperation to come to life.

represents

one

pediences.

To

the sake of

of

the

larger

abandon

that

some

No

such

wise

course

is

It

nearer.

is better to

wait, and to defer the realization

alas,

was,

credible ground than that

Ihe

Any Compromise Resorted To

no more

pursued by the American negotia¬
tors.
It became apparent
early in

of

cate

secure

—

can

realize

fully, than to defraud the
future by truncating
them, if trun¬

the ITO Conferences that the U. S.

establishing an ITO — any ITO
and that they were
willing to go
to great lengths of compromise in

we

them

delegates had set their hearts

on

ideas until

our

in

them

we
must, in order to
partial triumph for them
immediate present.
It is

a

the

better

to

bear

the

burden

of

im-

full

and

the

hand and

one

avoiding

tions

of

pur¬

devel¬

employment
the

other,

on

desirability

quantitative

the

on

arises

restric¬

the

domestic

policies will take precedence."2
Trade
As

for

the

less

desirability

opment
of

ex¬

seeming expedi¬
hour, is to sacrifice
greater good for the less, on
of

ency

the

the

conflict

a

suing policies of economic

To World Reconstruction
of

"when

between

The Havana Charter—Obstacle

Barriers

if

intent,

there

were

the

ITO

6—a

other

the

of

of

within

Charter to

mies

its

Articles

need

tion

directive

regard,

in

functions

of

this

the

the

Charter, to

inflationary
in

means

a

ac¬

provisions of this

pressure from

is that

to

under-

safeguard their

this

guage

Charter's

Members to take

against

flationary
What

broad

"have

to

exercise

possible

a

to the

as

de¬

or

abroad."

simpler lan¬

member

ment is free to surround

govern¬

its

coun¬

a universally acceptable
to follow from very close quarters

both the Geneva and Havana Con¬

and

world

ferences

of

1947-48

first

hand

the

may

call it

so

which

led

document
vana

to

the

recounted

the

to

see

at

adoption of the

known

now

Charter.

ter's

and

progress—if one
—
of negotiations
as

Elsewhere

the
I

Ha¬

have

story of the Char¬

progressive

deterioration

-

What is the sense,
and what is the
morality, of post¬
poning the wider utility to the
narrower?
Nothing is so sure to

impoverish
conduct

of

acter of

elevation."

Unfortunately
limits

and

lowing

so

essay

the

On

from

the

Compromise

last quarter of the

famous

written
19th

l"Fortune" magazine,
September,

in

Cen-

the
concept of
compromise
was
not

amongst

our

considerably

nature
ment

as

to put their sig¬

eventually
which

American

truly be

is

aims

under

the
and

docu¬

of

which

mi-

described,

a

negation

in my

•

can
•

opinion,1

it

from

what

goes

on

It is well to

economy.

in

cies of economic "insulation" have

considerably aggravated the
nomic
and

the

depression

substantially

of

the

relations

eco¬

contributed

during

to

eco¬

that

dis¬

tressing decade.
Thus

for

the

In

the

late

a

conversa¬

1947,

Dr.

of

Australia, another of
principal authors of the Char¬

the

ter,

told

that

me

he

considered

time

in

words,

to

with the Fund.
under

the

parallel

balance

action

in

there

On

country in

a

is

the

persistent

of -payments

-

mat

seen

Charter

obligation.

a

obtain

can

We have

ITO

difficulties

degree of freedom of

terms of restrictive

discriminatory

commercial

and

poli¬

cies

which is
not
available for
countries whose international sol¬

has been better preserved.

vency

Considering how
have

countries

many

governments

concerned

that

more

preserving

with

are

their

freedom of action in terms of
tional
economic

planning

na¬

than

preserving their country's
international solvency, there can
be

ITO.

they will

preserve

under

When

chapters,

read

we

these

two

with

doubt in my mind but that

no

their

freedom

do

we

of

proposals

for

the risk of falling into bad stand¬

maintaining national
prosperity
employment
amongst
in¬
creasingly abundant international

ing with the International Mone¬
tary Fund. Thus, the ITO, if es¬
tablished, will undoubtedly spell

find?

however,

what

Constructive

and

trade?

the

or

of

ways

of

promoting

backfard

context

of

an

economy?

the

within

areas

action

the

to

the

of

ITO

the

even

at

International

expanding

By

no

Multilateral

means.

find in these two chapters
abundant
sources
of
excep

tions

doom

the

Monetary Fund.

There

we

"rules"

which

pro¬

out

is

the

trade

no

Charter

and

Trade

reference

that

to

through¬

multilateral

ommission

I

con¬

hibit quantitative restrictions and

sider to be

discriminatory

practices.
Article
21, paragraph 4 represents the in¬

features

of

ment.

happen to

vasion

policy
provisions of the Charter by the
socialistic
preoccupations
with

the

national

resolution in favor of multilateral
trade might not be appended to the

of

the

commercial

planning for employment
development and constitutes

and

the

ultimate

negation

tire purpose of

Under
ment

the

countries)
to

Charter

achieve

of

the

en¬

govern¬

other

(as do

member

obligation
designed
to

maintain

full

and

productive employment and large
and

steadily

within

its

measures

cal,

growing

and

social

political,

economic

institutions

of

the

and

United

States

the government hasn't
got
the power to take any such action.
This was well recognized when
the

so-called

duced

hotly

Murray Bill, intro¬
Congress in 1945 and

in

debated,

turned

was

favor

of The

194G.

The

,

down

Employment Act

former

would

have

cept

just

is

as

kind

imposed1

Havana
ized

this

it

The
not

was

by

the

latter real¬

within

the

of the U. S. government to

power

live

it

obligation

upon

Charter.

that

of

ac¬

such

to

up

without

an
obligation
changes in our

major

political,
economic
institutions.

and

social

United

Congress

States

will

join

be

Murray
start

seized

ITO.

with

a

Bill

that

and

would

we

moving
with
increasing
in the direction of state

speed

controls
The

the

version of the once-discarded

new

over

economic

our

climate

would

then

life.

become

out

an

that

the

successful

the

adoption
of

assist

an

is given
precedence over
international order and economic

vency.

2«?eprrt *by NT ,Jca!a,l\d Dek^tion
1he Conference held at
Havana, Cuba,

shown

"unwritten
standard

any

system

nomic
of

was

the

rules"

and

that

every

policies

maintenance

international

country's
This

by

domestic

the

trade

it

it

core

of

could

must

be

sol¬

of

was

the

gold

easily

be

under

of international

never

agree

statement

to

com¬

Ill

Within
this

the

Socialism

short

compass

of

I

paper

cannot, of course,
discuss the many other
provisions
of

the

Charter

though

they

than

shall

which,

are,

important
less

are

basic

those
even

already mentioned. I
gloss over the unfor¬
investment provisions of

tunate
the

Charter

have

partly

received

because

wide

partly because they
damental

than

After all
obtain
fair

if

and

less fun¬

are

those

mentioned.

private capital doesn't

sufficient

treatment

tries it

they

airing

assurances

in

foreign

simply won't

of

coun¬

abroad.

move

The defense
against wrong provi¬
sions is easy and the effect
may

readily

be a change
visions themselves.
This
of

is

those

not

kind

of

the

in

establish

economic

entrench

the

pro¬

however,

case,

provisions of

which

the

Char¬

the

wrong

system,

which

socialistic

planning at
expense of expanding world
trade, and which places private
the

trade in

an

precarious
Charter

increasingly
position.

should

lishment of
it

such

be

by

the estab¬

world economy be¬
represents the negation

an

legitimate
tices

Havana

rejected

a

It

economy.

code of law

a

weak and

The

everybody who wishes

most

which

amounts

which accepts as
all

illegal

prac¬

from

time to
time in actual life. For the United
States there is, in
occur

addition,

cial

reason

in

not to become

of

ber

ITO.

the

the

fact

This

that

a spe¬

a

mem¬

reason

membership

Organization

would

lies

in

practi-1

cally destroy for this country the
possibility of pursuing beyond the
ITO

eco¬

equilibrium. The Articles
Agreement of the International

in

general

anticipated that the

Entrenching

that

the

so

of

a

mending multilateralism.

to

forgotten

functioning of multilaterial
requires

it

unqualified

of

nowadays

whether

Conference would

cause

all-too-easily

considered

was

in

Havana

however, given up with¬
attempt at realization be¬

an

cause

enterprise.
is

that

provements in that direction. That

increasingly harsh for free private
It

it

circles

docu¬

know

idea was,

ter

It is safe to forecast that should
the

uncandid

Havana Charter, thereby
opening
the door for possible future im¬

institu¬

(Article 3) Now it is im¬
portant to note that under the

existing

certain

demand

tions."

social

this

Conference

appropriate to its politi¬

economic

of the most candid

one

closing phase of the

territory through

own

I

an

action

and

the

States

assumes

"take

of

"true" ITO.

a

of the United

governments

which

from Nov. 21, 1947, to March 24. 1948;
Department e>f External Affairs Publica-

of

being the two main pillars of the

government
first

use

resources,
in other
lose its good standing

employment and development
provisions of that document as

ning

ng. 5s,

a

in Geneva in
of

summer

Coombs

its

iwn

of

course

tion I had with him
the

official document, socialistic
plan¬

on

countries,

full employment and

important place in the Char¬

ter.

'thirties

breakup of international

nomic

to

the

improve

certain it is to be¬

more

contrary;

Conferences,

to

ineligible for further

the

delegation

seek

Fund's

in

economic development acquired
very

the

the

passed,

those of state socialistic
on

must

runs

diffi¬

relief from

longer it fails to regain bal¬

come

no

ITO

which

balance-of-payments position;

the

re¬

member, however, that such poli¬

negotiators

they overstepped these limits

1949;

"How the U. S. Lost the ITO Conferences."




of

present

and concluded by quoting the fol¬
passage

epoch, to deprive
nobleness, and char¬

an

insulate

the

Fund

obtain

but

of

American

chapters

its

the

can

drafting

econo¬

try with trade barriers in order to

triviality.

of

the

of

Permitted

find in another Article

we

on

required the United States to

shade of doubt

—Article

the

in

practicableness, than to stifle con¬
viction and to pare away
principle
until it becomes mere hollowness

reaching

from

are

as

agreement

commercial

having

course

priority of national—and

a

Article

inevitably

non-member

opportunity

an

have

now

domestic

lies

Charter

world

payments

a

demonstrate

both

kind

would

country is free under the Charter

the

in

growth

to pursue

whole would pay is
far too great.
In this challenge to

banking

by

ternational economic relations.

a

as

sig¬

which

the

we

ITO

pro¬

the

nationalistic—economic

practical remedy for
inequities. The price that
as

the

of

sure,

Department; however, lead¬

All

lishes

credit

regard

State

of

eco¬

policy
original objective of the

the

was

estab¬

these

belief that

my

seriously

principles

these provisions is buried in para¬

a

or

employment and
development. To be

international

graph 4

over

serious

and

define

which

if

many

of which

The first and most

tightly vested

proposals
such
as
affecting bank credit are
another step in the direction of a

in

live

to

day when the

a

Legislative

reserve

rules

tablished.

these

reserves

the

promote its

its

basic

is

Fund

ance

full

of

balance-of-payments

culties

known, the Havana

the

several

world

convinced

am

Government.

a

trade

amongst

themselves

public does not want to

socialized

world

nificance

We,

are

welfare

I for

of

ol

The Charter is a very long and
intricate document: by the process
of careful study, however, one can

central agency of the Federal

a

oj

revival

to

of the Charter would

wel¬

economy.

the

forward

control

instead

a

con¬

lifeblood

enterprise

economy.

Charter,

world trade, contri¬
making such a revival
difficult indeed.
Instead of

butes

promoting

together with the vast majority of
the

Havana

well

ership

the

multilateral

banking industry. This

credit

proposal
that the

you

continue

an

this

mitted

explaining

their

Banking Industry

industry,

vital,

re¬

adding the following third count.

credit-cre¬

public welfare.

ness,

This

these

for that double indictment

see

is

nomic

—which I would like at this
point
to transform into a
triple one by

oanking provides credit for busi¬

look

non-members,
that

the

is

that

appearance

of greater

in

to

member
into

the

an

of

of

the

As

Free

vs.

disintegration.

is

fare of the

$2 bil¬

some

banks which hold them
ber banks.
While the

mains

There

correspondent

the

of

re¬

to

Charter

proceed

now

ciple

with

I
suggested that the Ha¬
Charter jeopardized free
pri¬

reasons

Monetary Fund accept this prin¬
albeit
only implicitly. A

of

Charter deals not with matters of
commercial policy alone but also

enterprise as well as Amer¬
ica's position in the world.
I shall

sys¬

right-of-way

requirements

Concern Our Full Employment

long history

beginning

operating

the world economy.

vate

Involved

cern

and

want

the

marks

very

Welfare

is

rpembers

dual

the

vana

charter.

expense

placed by the
Joint Economic Committee on
the
point
that
reserves
should
be

the

divested

regulate

usually

inequity at the
creating another one.

supervi¬

ating functions of the banks they

The

one

At

series

a

over

it

Enterprise

Members and non-members

alike

proposals that have
been advanced
up to now
cure

to

in

Havana

nor

state

see

and

The

re¬

probably be only
of steps to
centralize
banking con¬
of

governments

the specific types of de¬
posits against which they are re¬
or

blow

that

II

would

first

trol.

tal

kept,

It

the

been devised that

ever

to

banking

serious

a

is

of the civilized world.

quirements of all banks would be

bring about equity for all banks.
No plan has

Congress in

want

written

ever

sion placed in jeopardy.
Central¬
ized
control
of the reserve re¬

inequities exist

document

before

Neither members

chartered

Much has been said in
to prove that great

these

as

of

non-members

Reserves

insulation"—the

title of distinc¬

one

that

is probably the first
international
of economic nationalism

such

cent years.

Non-Member

of

charter

Banking

sessions

Indeed,

tion

the

goal of

lateral trade.

restoring multi¬

Our hands would be

Continued

on

page

42

42

(642)

THE

Continued

from

COMMERCIAL

41

page

that

the

voting
bad

The Havana Charter—Obstacle

FINANCIAL

&

"one

country

procedure

effects

Their

vote"

one

will

have

mentioned

is

argument

the

above.

based

three considerations:

CHRONICLE

one,

upon

a

promises which they accepted; but
have

we

tied,

neither

could

we

tory

practices

tries

by

adopted

coun¬

difficulties

economic

or

power away.

alternative

an

approach

reconstruction

developments to justify their ac¬

of

the

United States would

ex¬

mally

possess;
secondly, all the
countries other than the United

the

to

world

have

ercise always an influence greater
than the one vote it would for¬

many

up

have

Stales

trade.

conflicting interests,
anticipate that they would,

This I have attempted to do in an

and to

solvency

article published in the current—

all

degree of eco¬
Under the

February 1950—issue of "Fortune"

United States is to take

Havana Charter we are obliged to

problem here, let me merely state

actual

that

adherents of the Charter consider

tions,

could

nor

kind because of
of

and

nomic

in

retaliate

we

our

high

our

own

the

apply

Most-Favored-Nation

as

dim

Without going into this

magazine.

development.

member of

a

the

ITO

of

the

them,

that

the

possibility of developing

one

vote"

who

program.

by their policies discriminate

The

such

any

of

the

and

of the

voting

bad

sumes

advocates

fear

faith

the

on

an

unduly

view

probabilities:

United States would not have the

members in good

to all

up"

unrealistic

and

standing of the ITO, even to those

treatment

"gang

of

the

finally,

"one

country

procedure
the

on

as¬

part

of

other countries in accepting com¬

Havana

and it
must be always kept in mind that
import quotas are discriminatory
by their very nature and that to
speak of a non-discriminatory ad¬

Charter declare themselves undis¬

mitments under the

turbed by

1he

ministration of such import quotas

the "one

is simply

procedure

against the United States,

world

the United States like every other

approach"

economy

by

other

with

small

a

who

are

Our

like

of

a

ITO

that

us.

the

the

United

It

remains

is

negotiations.

This

mises in advance of
Adherents

bar¬

of the

a

Charter

negli¬

was

and not at all at variance
with the minority position we had
the

on

of

which

councils

Charter
scured

drew

the

This is perhaps ob¬

up.

by the fact -that our dele¬

gates were far too prone to recede
their

from

ballot.

positions

the

rationalize

to

deny

earlier

unhappy

and
com¬

bad

Aircraft
Jan.

23

Maintenance

International, Inc., N. Y.

$300,000 .12-year 5%
debentures due Jan. 1, 1962, and 75,000 shares of com¬
mon
stock (par 25c) offered in units of $1,000 deben¬
tures and 250 shares of common stock at $1,000 per unit.
(letter

of

notification)

largely
Is

interests at variance
all at one in their
practically com¬
plete freedom in the use of quan¬

which

but

many

they

desire

are

have

to

titative trade restrictions and dis¬

criminatory
also at

one

practices.

They

are
in their wish not to be

Proceeds for purchase of

No underwriter.

equipment and for working capital.
Street, New York City.

inventory and
Office—51 East

42nd
•

Alaska-Pacific

Jan. 27

Consolidated

reactions when they use
of

struments

accepts
the principle of
eliminating import quotas but sees
it

to

that

80,000 shares of common
under

a

trict

in

Alaska

15

and

for

to

object.

defenders

great

a

the

on

of

part

Charter

the

of

"miracle" of

heard

have

I

references

many

the

to

agreement that took

place

among

these

tries.

But

looking

to go

Expected

closely

one

Office—609

capital.

Cladmetals

to

Co.,

Carnegie,

50-odd
at

coun¬

it

more

help wonder¬

cannot

These

tries

agree

right

right

in

upon

to

do

which

would

cause

10,000 shares of common
Un¬
McKee & Co., Pittsburgh, Pa.
Price—

at market.

filed

2,000,000

be

as

these coun¬
the end? On
they please,

only two
deprived

among

of

be¬

nancially

h

jected

(par $1).
Busi¬

Underwriter—Kidder, Peabody & Co., New York.

Proceeds—To be used for economic develop¬

ment of Israel.

Ashland
Jan.

13

stock

filed

(no

par

by

economic

Broadway Angels,

the-wisp of

ulous

two

one

should

Charter

time

in

the

Statement effective Dec. 9.

of

(par
1%

$25)

shares

per

Electric System

and

fruit.

Inc.,

New York City

J.

Mining Co.,

Salt Lake City,

(letter of notification) 262,600 shares of common

to

No underwriter.
Pro¬
develop mining properties.
Office—Utah Oil
Bureau

19

par)

Affairs,

16

Corp.,

1,000 shares of common
share, to be offered to em¬
Proceeds for cash reserve.

Washington,

(letter of notification)

redeemable

we

need

lateral world trade. If
ITO
the

shall

we

a

positive

free-enterprise multi¬

for

have

we

join the

thrown

away

possibility of developing such

policy.

a

INDICATES

ADDITIONS
ISSUE

Corp., Silver Spring, Md.
notification) 10,000 shares of 6% cumu¬
stock (par $10) and 5,000 shares of class
A common stock (par $10).
Price — For preferred, $10
per share, and for common, $15 per share, with the pur¬
chase of two shares of preferred giving the purchaser
the

share of common. Underwriter—
additional small loan receiv¬
Office—8427 Georgia Ave., Silver Spring, Md.

right to buy

None.

ables.

Colorado

•

26

Jan.

one

Proceeds—To

buy

Campers, Inc.
35,000 shares of common
No underwriter. Proceeds to buy
Office—1515 Tremont Place Denver, Colo.
Skyline Photo

(letter of notification)

equipment.
•

Jan.
tion

Colorvision, Inc.
30 (letter of notification) conditional preorganizasubscription agreements by Harold V. Lee, Edward

G. Borgens
common

and Herbert J. Reinohl, to buy 60,000 shares
stock (par $5).
No underwriter.
Office—

•

San Diego, Calif.

Commodity

Jan.

25

stock

D.

Investors,

Inc., Seattle, Wash.
95,000 shares of common

(letter of notification)

at $1

per

No underwriter.

share.

Proceeds to be

deposited with local members of the Chicago Board of
Trade and other exchanges for buying and selling com¬
modities.
Consolidated

•

Engineering Corp.

(letter of notification) 50 shares of common stock

(par $1) to be sold at $5 per share to Harold J. Boucher,
Altadena, Calif.

capital.

Proceeds lor working

No underwriter.

Office—620 N. Lake Avenue, Pasadena 4, Calif.
Power

Co., Jackson,

Mich.
(no par) to

Jan. 13 filed 454,457 shares of common stock

Inc.

per

No underwriter.

Calon
Jan.

at $17

enough;

policy

with

Finance

Coastal

Consumers

National

(letter of notification)

(no

ployees.

stock

of

compromising

reject the ITO Charter

Jan. 27 (letter of

Bldg., Salt Lake City, Utah.
(The)

desire to

our

SINCE PREVIOUS

Jan. 27

ceeds

•

be offered

the

stockholders of record

common

one

share for each

Jan. 31

shares held, and

10

per

•

Michigan

Gas

Storage

Co.

Rights

expire

will

non-

cumulative

share, to be sold through Leonard H.

Camp B Mining Co.

Jan.

23

stock

(letter of notification) 35,000 shares of

to

be

Proceeds to

sold at par
be used to

($1

per

drill

a

share).
mine.

CO

common

No underwriter.

Address—Box

i\e<l

392,

York

Wickenburg, Ariz.
Canam

ap

Mining Corp.,

Vancouver, B. C.

Ltd.,
(2/15)

BROKERS

Aug. 29 filed 1,000,000 shares of no par value common

New York

Boston

Philadelphia

Pittsburgh

San Francisco

Private IVires to all




offices

Chicago

Cleveland

itock. Price—800,000
:ents per

shares to be offered publicly at 80
share; the remainder are registered as "bonus

ihares." Underwriter—Israel and
Proceeds—To develop

fective Dec. 9.

Co., New York, N. Y.

mineral resources.

Statement ef¬

Offering expected about Feb. 15.

at

also

offered to employees of the company, and its sub¬

sidiary,

C.

15,000 shares of 6%

to

rate of

to be

participating preferred stock at
Whitaker,
Washington, D. C. Proceeds to finance company, Office,
417 Union Trust Building, Washington.
$1

by

with

nationalism and its evil

To

is not

the

free-en¬

direction of

3518 3rd Ave.,

(par 10c) at $1 per share.

stock

Refining Co., Ashland, Ky.
33,097 shares of $5 cumulative preferred
common

$30

stock

Jan.

Oil &

value) and 40,425 shares of

capital stock

at the rate

Utah
17

by

these disrup¬

wholeheartedly

necessarily

foreseeable

any

means

goal:

dangerous practices;

economic

that

at

appear

at

prosperous

that

to

countries that share

doubt that if we tried to amend

the

and

cooperating

bottom of the Havana text. I have
no

lead

will

a

the only

end be really put to

tive

is miraculous is that the American

signature

and

making it possible to put an end
to
import quotas and exchange
control and by insisting
that an

should

either; the only thing

Devlin, New York.
Proceeds — For
working capital. Business—To back theatrical produc¬
tions, distribute tickets and act as an agent for talent.

Jan.

devote ourselves
rebuilding multi¬

us

of

trade

which

object to the Charter is not mirac¬

(lc par) common stock and
500,000 management shares of 0.1 of a cent par value,
to be sold at 50 cents and 12.5 cents respectively. Under¬

Monarch

task

the

of

following the will-o'a fallacious universal

agreement let
to

interest

reconstruction.

world; by ceasing to throw away
our influence for the good by un¬

countries

Nov. 14 filed 2,000,000 snares

Hugh

of

Instead

re¬

the

stock, at $1 per share.

England

New

the

in

States

world

of

of these

That

Co.

of

stockholders

the

Congress

re-establish economic peace in the

remaining

of

Bullion

Ampal-American Palestine Trading Corp., N. Y.
Nov. 3 filed $3,250,000 10-year 3% sinking fund deben¬
tures due 1958 and 200,000 shares ($10 par) class A stock.
Underwriter—Israel Securities Corp. may be underwriter.
Debentures are to be offered at par and the stock at $11
share.

held

the

by

Charter is

not miraculous.

share. No under¬
The proceeds will be used to pay off $575,000 of

writer.

ness—Management investment company.

per

33,000 shares
to

for

United

a v e

should

to the Havana

agreed

fi¬
the

and

That

solvent.
countries

other

all

developed

economically

5^00 shares of 6% cumula¬

for each two shares now held, at

writer—

Inc., Los Angeles

shares of capital stock

filed

not

the Havana Charter should be

these two countries are both

Office—921 Lynch Bldg., Jacksonville, Fla.

offered

better

is

then, in short, my
considering that

are

reasons

own

world economy by

What did

bank loans.

Pa.

for account of selling stockholder.
S.

20

be

it

anything.

Waxed Paper

Beverly Gas & Electric
Dec.

think

I

lateral

writer—Capital Co., Inc., Jacksonville, Fla.
Proceeds—
To install steam and electrical equipment and for work¬

notes

American Mutual Fund,
3

loan made

con-?

lative preferred

(letter of notification)

ing capital.

to

is safeguarded

into that too deeply!

ing whether that agreement meant

preferred stock (par $10) and 50,000 shares of com¬
stock (par 10£) to be sold in units of one preferred
ten common shares.
Price—$11 per unit.
Under¬

mon

to be sold in

a

additional

tive

(letter of notification)

(par $1)

derwriter—C.

Feb.

lc)

Seattle, Wash.

American

stock

(par

with each $1

unit. No underwriter.
develop mine in Willow Creek Mining Dis¬

Colman Bldg.,

Dec.

stock

common

production note, at $1.40

Proceeds to

•

Mining Co.

(letter of notification) $40,000 of 4% cumulative

units of two shares of

Feb. 3

right

own

by escape clauses and special pro¬
visions?

Registration

Austill

its

tinue having them

these in¬

policy to which the
supposed strongly

United States is

Underwriter—None.

Co.

•

and

payable out of 25% of the net operating profit, and

notes

Oil

matter of defi¬

a

country in good faith

a

exposed to unfavorable American

to be offered in e^bhange for outstanding
and common stocl* of Freedom-Valvoline

(par $1),
preferred

us.

question of good or
that is in the present

faith,

•

Now in

Securities

against

the

to

may

countries

these

—

by

fact

gible

was

Charter

the

that the influence of the

of the Havana

accepted damaging compro¬

ways

But

vote.

United States upon the final shape

not

was
course

country in interna¬

a

numerical

its

true

the

True, the

As

50-odd

find

should

nition.

them

judgment

own

other

the

of

multilateral
trade
we
an
overwhelmingly

terprise

massive vote

context

a

tional councils is not measured

in

eco¬

is

States
in

influence of

ex¬

nationalism,

my

of the Havana Charter.

animated by

are

again

interests

countries

their

differs from that of the defenders

num¬

stake

al¬

S. Influence Negligible

Here

perma¬

whose

otherwise.

outvoted

ITO

whose

small,

will

governments

act in complete good faith.

U.

it

true, however, exclusively to the
fact that American delegates al¬

By joining the
this

that

commercial policy

in

and

often

the limita¬

throw

would

we

is

fierce spirit of

nomic

tion to them of the Most-FavoredNation treatment.

and

permanent minor¬

recent, and who

in such
include the
countries of

tariff rates and

trade

perience

power

negotiations would
application to these
lower

with

a

countries

of

world

namely

mind

bargaining

ber

of

group

in

nently invested in the large

negotiations
countries

bilateral

through

situation

the majority is

ity while

multilateral

of

means,

absurd

an

other

ways

vote" voting

one

creates

the world in

failed, as witnessed
by the contents of the Havana
Charter, the American
govern¬
ment might wish someday to seek
trade

country

vote. Yet

one

places the large trading nations of

health having

the reconstruction

sume, on

that

intolerable

to

restoring
the
to
its
former

of

problem

Charter; they,
Charter, as¬
the contrary, throughout
of the

defenders

member would have

absurd.

"universalist

The
the

the fact that in the ITO

as

the alleged diversity

Secondly,
of

that

Having stood
times publicly in op¬
position to the ITO I found it
incumbent on myself to
discuss
gaining

to

balance-of-pay¬

invoking

ments

object

discrimina¬

restrictions and

the Charter

us

position in the ITO Conferences.

coun¬

merely by its numerical vote, and
trade

before

determining proof of America's

a

try's position in international or¬
ganizations
is
not
measured

To World Reconstruction

Thursday, February 9, 1950

and Boston

DEALERS

UNDERWRITERS

,-vo*
BOS'

Sto

VhW*

c^°

CBV

Volume 171

Feb. 20.

Number 4880

THE

Price—To be filed by amendment.

—Morgan Stanley & Co.

COMMERCIAL

expand business
homes.
Office—108

February
Gilchrist

500

shares

of

4%

pre¬

Proceeds

28

at

80

building, selling and renting
Security Bldg., Davenport, la.

cents

per

shares

to

1950
...Capital

Southern Union Gas Co

of

Bonds and Stocks

Western Maryland Ry

Equip. Trust Ctfs.

February 15, 1950
Canam Mining Corp., Ltd
Eastern Harness
Racing Club, Inc

share.

Common

International Beauty Tools, Inc

Rights expire Feb. 28."
publicly at $1.121/>
per share.
Underwriter—Tellier & Co., New York City.
Proceeds—For additional
working capital.
Office—219
offered

Lake

Common

Preferred

Superior District Power Co

Moller-Dee

Textile

Fidelity Building, Oklahoma
City, Okla.

Vacuum

Daman

Helicopters, Inc.

Feb. 6 (letter of

(2/14)

notification) 3,365 shares of capital stock

Capital

and

warrants to purchase not
Latter will be sold to officers

than

more

336

Exploration
Canada

(Western)

shares.

Jan. 30 filed
at

1%

3%

in

the

of Carl M.

ment

Corp.

of

capital

stock

Loeb, Rhoades
State

&

Street

&

Co.)

Pennsylvania RR.

Feb.

Co.

of

March

capital stock, has agreed to purchase at the
subscription
price any shares of stock not subscribed
for by other
stockholders.] Underwriter
None. Proceeds
To be
used, along with a $2,500,000 bank
loan, to provide min¬
ing and
milling facilities to mine potash in
Eddy
County, N. M. Name changed Dec. 30
by stockholders to
Duval Sulphur & Potash
Co.
—

—

Gas Co.

series

1951, and 250,815 shares

(2/21)
C

of

interim notes,
stock

common

(par $1). The notes and 67,200 of the common shares
will be offered in units of
$25 principal amount of notes
and 0.6 of a share.
Price—To be filed in an amendment.
The series C notes will be
payable at
maturity

livery of 112 000 shares

by de¬

of $25 par value preferred
stock
on
an
equal ratio basis.
The other 183,615 shares of
common
stock will be offered
by Equitable Securities

series

B

convert

notes

from

these

unnamed

notes

into

the

Co.,
A

Chattanooga, after

notes

and

$161,400 of

"selling noteholders"
183,615 shares

of

and

common

stock.

Underwriters—For the note-stock
units, in ad¬
dition to those named are:
White, Weld & Co., New
York, and F. S. Moseley & Co., Boston.
Proceeds—
Along with those from the sale to institutional investors
of $8,750,000 of first
mortgage pipe line bonds, due
1969,
or

will

be

used

for

construction.

Expected

Feb.

20

21.
Harness

Racing Club, Inc. (2/15)
27 filed
1,000,000 shares (5c par) common stock.
Price, $1 each. Underwriter—Tellier & Co., New York.
Oct.

Proceeds—To

purchase,

Steuben Raceway.
in about a week.
•

improve and operate the Fort
Statement effective Dec. 20. Expected

Eastern

Stainless Steel Corp.
(letter of notification) 2,000 shares of, common
stock to be sold at $10 per share
by John M. Curley,
selling stockholder. Underwriter—Hansel & Co., Phila¬
delphia.
20

i.

•

Eaton & Howard Stock

Feb.

filed

6

500,000

Fund, Boston

trust ishares.

& Howard, Inc., Boston.

Business—A diversified

open-

Emery Air Freight Corp., N. Y.
Feb. 2 (letter of notification) 500 shares of common stock
(par 20c). to be offered at market (about $2.50 per
share), the proceeds going to a selling stockholder.
Office—314 East 39th

Finch
30

stock

.Bonds

1950

Bonds

Utah

Fuel

Co.

11

Telecommunications,

(letter

(par $1)

share).

Street, New York 16, N. Y.

of
to

Proceeds

notification)
be

offered

to

1950
Bonds

Common

working capital.
exchange will be sold at $10 each.

©

Food

•

27

Fair

(letter

Foster

Jan. 30

Metal

Products

Proceeds will be used for

•

manufacture, sale and distribu¬

•

diversified
Garfinkel

Feb.

2

investment

open-end

(Julius)

(letter

of

& Co.,

Business

company.

Redpath, Washington.
Gilchrist Co., Boston, Mass.
Jan. 20 filed $1,250,000 of
15-year

(2/10)
3%% sinking

tion

pay

for

bank

fund

Proceeds—To be applied to the reduc¬

borrowings.

Business—Operates depart¬
surrounding territory.

ment store business in Boston and
•

Grammes

(L. F.) & Sons, Inc. (2/15)
Feb. 6 (letter of notification) 1,200 shares common stock
to present common stockholders and officers
and em¬
ployees at $30 per share.

Purpose—For working capital.
Office—Jordan & Union Streets,
Allentown, Pa.
•

Grand

Rapids Stadium, Inc.
(letter of notification) 1,004 shares of 6% noncumulative participating
preferred stock at $100 per

Jan. 27

ing

No underwriter.

stadiuhi.

Proceeds

Office—2500

to

Turner

pay

costs of erect¬

Ave., N.

W.,

Grand

Rapids, Mich.
Granmesa

capital stock-at $100
ceeds for oil and gas

Office—874

penses.

per

share.

Gulf

of capital
(about $z per
services rendered.

No

common

underwriter.

Pro¬

leases, drilling equipment and ex¬
Texas
Avenue, Grand Junction,
Co., Jacksonville,

May 31 filed 620,000 shares of class A participating ($1
par) stock and 270,000 shares (25c par) common stock.
of common will be

offered

for

subscription

Fitzsinimons
Dec.

16

common

Stores,

Ltd.,

Los

Angeles,

Cal.

(letter of notification) 30,000 shares of class A
stock, of which 22,778 are to be issued in ex¬

change for 3,254 shares of Roberts Public Markets, Inc.
at

the

rate

of

seven

share of Roberts.

shares

of

Fitzsimmons

for

each

Any additional shares not needed for




by holders on the basis of one-for-two at
25 cents per share.
Underwriters—Names by amendment
and may include John J.
Bergen & Co. and A. M. Kidder
& Co.
Underwriters will buy the remaining 135,000
shares

plus

Offering
an

ocean

such

Hastings

Manufacturing Co., Hastings, Mich.
(letter of notification) 2,000 shares of common
(par $2) to be sold by Peter
DePaolo, Los Angeles,
$6% each.
Underwriter—First of

Jan.

23

stock
at

Michigan

Battle

Creek, Mich. An additional
sold at $7 each
by Agnes H. Siegel,

unsubscribed

shares

price' of class' A $5.

2,000

Corp.,

shares will be

Hastings, Mich.

Un¬

derwriter—Bradbury-Ames Co.,

Grand Rapids, Mich.
Hawaiian Electric Co.,
Ltd., Honolulu
June 21 filed 150,000 shares of
series E cumulative ($20
par) preferred and 50,000 shares of ($20
par) common.
at

l-for-3 rate and

common

rate.

will

to

be

preferred holders

offered to

preferred; unsubscribed
public auction

buy unsubscribed

will

common

to the underwriters.

or

common

Underwriters—Dillon, Read

& Co. Inc. and Dean
Witter & Co. will

be

sold

either

at

Proceeds—To pay

off short-term

promissory notes and to carry merchan¬
dise inventories and receivables or to
replenish treasury
funds. The balance would be used for
other
corporate

Indefinite.

Houston Diced Cream Co.

Feb.

1

(letter of notification) 300,000 shares of common
at par ($1 per
share). No underwriter. Proceeds
buy the business and assets of Camellia
Creameries,
Inc., Houston, Texas, and for working capital.
Office
—727 W. 7th Street, Los
Angeles, Calif.
to

Ice

Jan.

Cream

Confection

Co.

30

(letter of notification) 50r000 shares of
(par 10c). Price—50 cents per share.

stock

common

Undervyriter
Co., Pittsburgh. Proceeds—For operating
expenses. Office—218 Mt. Vernon
Ave., Etna, Pa.
Idaho Maryland Mines
Corp., San Francisco, Cal.
Dec.

&

12

&

(letter of notification)
$1.90 per share, to

14,000 shares of

at

for

the

be

sold

Estate

of

common

by

Gwendolyn
Errol MacBoyle,

Underwriters—E. F. Hutton & Co. and Daviea
Mejia, San Francisco.

Industria Electrica de
Mexico, S. A., Mexico City
Nov. 29 filed 250,000 shares of 6%
cumulative convertible

preferred stock, 100 pesos par value
ing—This stock is to be offered at

($11.5607).

Offer¬

holders

to

par

of

and

common

special stock at rate of five shares for each
shares held, either of common or
special, or a com¬
bination
of
both.
Underwriter—Banco
Nacional
de
Mexico, S. A.
Proceeds—To reduce
outstanding shortterm indebtedness.

of

Co.

the

new

Proceeds—To

of

North

America,

Philadelphia

Dec. 30 filed

30,000 shares of capital stock (par $10) to
employees of the company and its six
affiliated companies under an
employees' stock subscrip¬
tion plan.
No underwriter.
Proceeds for general cor¬
be

offered

•

to

Statement effective Feb.

1.

International

Beauty Tools, Inc. (2/15)
Feb. 6 (letter of notification) 4,000 shares of
6% pre¬
ferred stock (par $5) and
12,000 shares of common stock
(par$l). Price—At par. Underwriter—None. Proceeds

•

Jeannette

Co., Jeannette, Pa.

2 (letter, of notification) 10,000 shares of
common
stock (par $1). Price—At market
(about $4.50 per share).
Underwriter—None. Proceeds—To go to selling stock¬
holder (George W.

Todd, Chairman).

•

Julian

&

Kokenge Co., Columbus, O.
Jan. 26 (letter of notification)
20,000 shares of common
stock (no par) to be offered to
employees. Price—$15
per share.
Underwriter—None. Proceeds—For working
capital. Office—280 S. Front St., Columbus, O.
Kansas

Gas

&

Electric

Co.
(3/1)
shares of $4.50 preferred stock
(par $100), to be issued in exchange for existing 7% and
$6 preferred stocks on a share-for-share basis, with 7%

Jan.

6

filed

82,011

preferred stockholders also receiving $5 per share in
cash. Offer is to run from Feb. 7 to Feb. 28.
Underwriters

Peabody

&

Beane.

unexchanged

7%

about

&

Co.

and

Merrill

Proceeds—To

be

Lynch.

used

to

Pierce,
redeem

1.

•

March

and

$6

preferred

shares.

Expected

Kentucky Oil & Distributing Corp.,
Monticello, Ky.
26

stock

(letter of notification) 60,000 shares of capital
10c).
Price—$1 per share.
Underwriter—

(par

Peter Morgan & Co., New York.
tional working capital.

Proceeds

—

For addi¬

Kerr-McGee

Oil Industries, Inc.
(letter of notification) 1,500 shares of common
stock
(par $1), for Dean Terrill, selling stockholder.
Underwriter—Straus & Blosser, Chicago. Price—$12 per
Dec.

22

share.
•

Kohn &

common

complete
ferry, to finance dock and terminal facilities,

Glass

Office—1303

Feb.

Jan.

Atlantic Transportation

Offering-—135,000 shares

Passaic, N. J.

of

Fenner

Florida

shares

&

yield
aggregate price to the company of $6,000,000 will be
received at the Irving Trust
Co., One Wall Street, New
York, N. Y. at 11 a.m. (EST) on Feb. 28. Proceeds—
to finance part of
construction program for 1950 and for
general corporate purposes.

—Kidder,
Petroleum

Co., Inc.
(letter of notification) 2,295 shares of

Jan. 25

Lynch, Pierce, Fenner

working capital.
Brooklyn 16, N. Y.

Colorado.

market

legal

Office.—Fourth and Virginia Sts.,

of

Merrill

—For expansion and for
Atlantic Avenue,

Price—To be supplied by
Underwriters—Lee Higginson Corp. and

Estabrook & Co.

held

Boston Corp. Bids—Bids for the
pur¬
number of common shares as
will

porate purposes.

Inc.

notification)

5,000 shares of common
stock (par 50c) to be sold
by Mrs. Dee M. Schmid, Wash¬
ington, D. C., at the market price of between $19% and
$16% per share. Underwriter—Auchincloss, Parker &

amendment.

Brothers and

Insurance

Fundamental Investors, Inc., New York
City
7 filed 2,250,000 shares of
capital stock.
Under¬

writer—Hugh W. Long & Co., Inc., New York.
—A

stock

<

(jointly); Stone & Webster Securities Corp.; Otis

chase

tion of metal products.

Feb.

stock

of

12

Co.

(letter of notification) 21,500 shares of common
be offered at $12.50
per share.
No underwriter.

stock to

(2/28)
common

shares

deceased.

No underwriter.

Stores, Inc.
of notification) 376 shares of common
stock (par $1) at
$15.37V2-$15.25 per-share, the proceeds
to go to holders of
scrip which expired 011 Jan. 15, 1950.
Underwriter—Eastman, Dillon & Co.
Jan.

2,538,701

MacBoyle, executrix

Proceeds—For
the

of

Co.; The First

stock

Inc.

4,333

at

&

—Graham

10, 1950
(EST)

a.m.

Beane

•

Bonds

.Bonds and Common

4,

April

•
•

•

__

1950

Jamaica Water Supply Co

working

stock

Appalachian Electric Power Co

share.

Underwriter—Eaton

end trust.

Jan.

Bonds

debentures, due Feb. 1, 1965.

Eastern

Jan.

(EST)___

a.m.

Co.

350,000 shaves of

part

common

Lehman

©

21,

April
Georgia Power Co

filed

are

purposes or construction.

15,

March

be offered to
stockholders at $13.50 per share at the rate
of %ths of a new
share for each share held on Feb.
14,
1950.
[The United Gas Corp., owner of
373,557 shares,
or
74.71% of the outstanding 550,000
shares of Duval

Corp., Nashville, and Elder &
they buy in $619,500 of series

Bonds

Detroit Edison Co.__l

Sulphur Co., Houston, Tex.
375,000 shares of capital stock (no par) to

April 1,

(EST)

14, 1950
New Jersey Bell Telephone Co

Duval Texas
Dec. 21 filed

clue

a.m.

1950

March

3

5.2%

____Preferred

Equip. Trust Ctfs.

Mississippi Power Co. 11

California

East Tennessee Natural
30 filed
$2,800,000 of

Common

__

1850

7,

provide

(no par).
authorized but
by the company.
Under¬
writers—To
be
determined
by
competitive
bidding.
Probable
bidders
include: Dillon,
Read
&
Co. Inc.;
These

stockholders at l-for-9

___

6,

March

(letter of notification) 15,000 shares of
common
Stock (par
$1) to be sold at the market
price of about
$3.75 per share b,y Woodrow G.
Krieger, President. Un¬
derwriter—Shearson, Hammill & Co., Los Angeles, Calif.

Jan.

Common

Preferred
Co..

24

Utilities

Offering—Preferred will be offered

(EST)

1950

Pennsylvania Power Co. 11:30

Western Canada.

Douglas Oil

1950

a.m.

_

March

Management

Underwriter—None. Proceeds—For
general funds.
Business—To develop oil and natural
gas properties in
•

1,

Louisville Gas & Electric
Otter Tail Power Co

(par

Co., State Street Invest¬

Research

11

Kansas Gas & Electric Co

(including certain part¬

and

Co.,

Preferred

Common & Pfd.

February 28,
Gulf States Utilities

of notes, due 1.960, with interest
year, 2% in the second year, and

first

Bonds &

...

March

and 249,993 shares
To be sold to 17 subscribers

ners

12 noon (EST)
Virginia Electric & Power Co

$10,000,000

thereafter,

$1).

Common

I

1950

Metropolitan Edison Co.

Ltd.,

Toronto,

Plants, Inc

East Tennessee Natural Gas Co.___Notes and Com.
Greenpoint Coal Docks, Inc
Common

and employees who act
as
underwriters at lc per warrant while the
stock will
be offered to the
public at $1% per share.
Proceeds—
For
working capital.
Office—545 Fifth Avenue, New
York, N. Y.

Dome

Preference

February 21,

to

Bonds

Corp

Sharp & Dohme, Inc

®

and

43

an

Common

Grammes (L. F.) & Sons, Inc

be

obligations,

States

unissued

Jersey Power & Light Co._
..Preferred
Philadelphia Suburban Transportation Co
Pfd.

Corp.
Jan. 23 (letter of
notification) 375,000 shares of common
stock par
10c), to be offered to stockholders of record
Unsubscribed

Jan.

Debentures

New

Deardorf Oil

Jan.

Gulf

1950

February 14,
Helicopters, Inc.__

Doman

No underwriter*.

10,

Co

in¬

current

pay

capital.

NEW ISSUE CALENDAR

Inc.

notification)

ferred stock at $100
per share.

(643)

to

Manager

Business—Open-end

Davenport Garden Homes,

to

stock.

common

vestment company.

(letter of

CHRONICLE

Underwriter

Investments, Inc., Dallas, Texas

Feb. 7 filed 100,000 shares
of
—Texas-Arkansas Fund, Inc.

27

FINANCIAL

Proceeds—For property addi¬

tions and to repay bank
loans incurred for construction.
•
Crown Western

Jan.

&

Feb.

2

Co., Columbia, S. C.
notification) $75,000 of serial deben-

(letter of

Continued

on

page

44

44

COMMERCIAL

THE

(644)

Continued

from

in varying principal amounts. No underwriter.
Proceeds to build a new building.
Office—1526 Main
Street, Columbia, S. C.

11 a.m. (EST) on March 7.
Underwriters—To be determined by competitive bidding.

La Crosse

Scheduled

Telephone Corp.

9,100 shares o'f common
Underwriter—Bell & Farrell, Inc., Madison, Wis.
Proceeds—To pay advances
made by parent company, Central Telephone Co.

Feb.

1

of notification)

(letter

at

stock

$10.12 Vo

Telephone Corp.

Crosse

La

share.

per

Securities
Corp., and Shields & Co. (jointly); Otis & Co.; Carl M.
Loeb, Rhoades & Co.; Kidder, Peabody & Co. Proceeds
—To finance construction program. The SEC will hold
hearing Feb.

a

(letter

at the rate of one

No under¬
general corporate purposes. Office

share for each three

Proceeds for

writer.

17.

Dec.

Superior District Power Co. (2/15)
$2,000,000 of series C first mortgage

40,000 shares of S20 par

1980, and

due

Inc.; Kidder, Peabody & Co.;
Robert W. Baird & Co.; Equitable Securities Corp. and
R. W. Pressprich & Co. (jointly); White, Weld & Co.;
Carl M. Loeb, Rhoades & Co.; The First Boston Corp.
Proceeds
Property
additions and betterments.
Ex¬
Co.

&

Stuart

—

pected Feb. 15.
Litha-Fluor

Inc.

(letter of notification) 150,000 shares of class A
common stock
(par $1) and 150,000 shares of common

Jan. 23

stock (par

Underwriter—Phil Morse,
estate, plant
Office—Vir¬
Truckee Building, Carson City, Nev.

ginia and

to

Steel

Star

Lone

Co.,

Tex.

Dallas,

592,185 shares of common stock (par $1),
offered to common stockholders on a two-for-five
filed

25

Jan.
be

Price—$4

basis.

Underwriters—Straus

share.

per

(estimated to

and to discharge part of

cost $1,250,000)

current indebtedness.
Louisville

Gas & Electric Co.

(Ky.)

capital.
•

Lowell

Feb.

Corp.

Factors

Adams

machinery. Office—209 Atlas Bldg., Salt Lake City,

25,000 shares of 6% cumulative
stock (par $4).
Price—For pre¬

(par, 10c) and
convertible preferred

ferred, par; and for common, $2 per share.
Underwriter
—The First Guardian Securities Corp., New York.
Pro¬

working

ceeds—For

Street,

Pine

Y.

New York, N.

Lowell

Office—20

capital.

Light Corp.,

Lowell, Mass.

shares of capital stock (par $25)
Offering—To be offered at $35 per share to common
stockholders at the rate of one new share for each three
shares held.
Underwriter—None.
Proceeds—To repay
55,819

and to make further im¬

loans, for construction

bank

provements.
Indemnity Co.,

Cincinnati
16

stock

stock.

ferred

through competitive bidding. Probable bidders; Kidder,
Peabody & Co. and White, Weld & Co. (jointly); Smith,
Barney & Co.; W. C. Langley & Co.; Lehman Brothers;
Drexel & Co. Proceeds—For property additions, to re¬

10.000 shares of common

at $27.50 per share.
No
Proceeds to increase capital and surplus.

underwriter.

to be offered

Hardware

Wholesale

Northern

Co.,

Portland,

Service
19

and retire

Office—805 N. W.

obligations to stockholders.

Glisan, Portland, Ore.
Norwich
26

stock

Pharmaca!

Co.

(letter of notification)

share,

per

3,713

Price—At market,

(par S2.50).

$15.75

shares

of capital

but not less than

Underwriter—To be sold
Exchange through Hornblower &

average.

on

the New York Stock

Purpose—To increase working cap¬

Weeks, New York.
ital.

Omar, Inc., Omaha, Neb,
of 41/2% cumulative convertible

Feb. 6 filed 20,000 shares

preferred stock ($100 par), to be offered in exchange for
16,933 shares of outstanding 6% preferred stock at the
rate of one share of 6%
stock and the payment of $1
each

120,000 shares common stock

share, and

new

(par $1) to be reserved for conversion of the convertible

preferred.
will

who

Underwriter—Kirkpatrick-Pettis Co., Omaha,
reoffer unexchanged 43/2% preferred at $103

share.

•

Paradox

Jan. 26

150,000 shares of common

be sold at par

($1

per

Parking Services, Inc., Washington, D. C.
(letter of notification) 120.000 shares of class A
common
stock, non-voting (par 50 cents) and 60,000

voting common stock (par 10 cents).
unit, each unit to consist of two shares
of class A and one share of class B stock.
Underwriter

shares

of

class

B

per

DeWitt

&

Co., Washington, D. C.

Proceeds

general working capital to lease or buy property

—For

parking

and garage

Office—1419 Eye Street,

use.

W.j Washington, D. C.

stock

Price—$15

(par $10).

per

share.

Underwriter—

Proceeds—To increase authorized capital and sur¬

None.

Office—Baronne at Gravier Sts., New Orleans, La.

plus.

Messenger Corp., Chicago
(letter of notification)

11

Jan.
stock

Messenger,

M.
Price—$11 per share.
Under¬
Co., Chicago.
Office—1 N. La

President.

writer—Cruttenden
Salle

2,000 shares of common

(par $1), to be sold for the account of Harry

(2/21)
Jan. 20 filed $7,000,000 of first mortgage bonds, due 1980.
and 30,000 shares of $100 par value cumulative preferred
stock
(par $100).
Underwriters—Names to be deter¬
mined by competitive bidding'.
Probable bidders: Drexe]
& Co.; Harriman
Ripley & Co. and Union Securities
Corp. (jointly); Carl M. Loeb, Rhoades & Co.; Halsey,
Stuart
& Co.
Inc.
(bonds); Kidder, Peabody & Co.
(bonds); White, Weld & Co. (bonds); Lehman Brothers
(bonds); Kuhn, Loeb & Co. (bonds); Smith Barney &
Co. and Goldman, Sachs & Co. (jointly on pfd.); Glore,
Forgan & Co. and W. C. Langley & Co. (jointly on pfd.).
Proceeds—For

for

past

•

Mexican

23

Jan.
stock

to

writer.

Edison

Co.

construction

capital

received Feb.

21

and

expenditures.
at

12

Village,

noon

offered

reimburse

treasury

Bids—Expected

to

be

at

par

24,000 shares of common

No under¬

estate and erect buildings.

Building, Central and Washington

Streets, Phoenix, Ariz.
•

Jan.

Mines
23

Operating,

to

Probable

bonds due 1980.

determined by competitive

bidders:

Loeb, Rhoades & Co. and Blair, Rollins & Co.,

Carl

M.

Inc.

(jointly);

Drexel

&

—Alex.

reimburse
Bids—Bids are
(EST) on March 6.




a.m.

March 7.

300.000 rights at 5 cents

No

underwriter.

Proceeds for

Suburban Transportation Co.

Philadelphia
(2/14)
6

Feb.

company's Employee Retirement Plan Trust in payment
of contribution to the fund to the extent of $50,000.
Power

Petroleum

Ltd.,

Toronto Canada

April 25 filed 1.150,000 shares ($1 par) common of whici
1,000,000 on behalf of company and 150,000 by New Yorl
Co., Ltd.
Price—50 cents per share.
Underwriters—
S. G. Cranwell & Co., New York.

exchange

in

for

&

Brown

who

Proceeds—To redeem at $75 each

15.

about Feb.

or

and Drexel & Co.,
purchase from the
shares of $4.25 pref¬
by the underwriters

plus accrued dividends any $3.50 preference stock not
surrendered under the exchange. Business—Pharmaceu¬
Statement effective Jan. 3.

Shedd-Bartush

•

filed

6

Feb.

Proceeds—For admin¬

which

by

Francisco

(letter

of

Engineering

notification)

&

Mining

200,000 shares of com¬

share. No underwriter. Proceeds
develop and operate the Mad Ox mine, Shasta County,
stock

at

$1

per

Office—139

Calif.

N. Virginia Street, Reno,
Street, San Francisco, Calif..

821

Market

•

San Juan
2

Nev. and

(letter of notification)

1c)

to

be

627,000 shares

of capital

be

(par $4) and 300,000 shares of
to be offered in units of one

preferred stock
stock

5c)

(par

preferred and six shares of common stock at $5
per unit. No underwriter. Proceeds will be used to pay
a $38,000 bank loan, and approximately $35,000 accounts
payable and for general corporate purposes. Office—385
North

Ave., New Rochelle, N. Y.
Oil

Sinclair

Corp.

Jan. 27 filed 598,700

shares of common stock (no par) to
and employees of the company
subsidiaries under a stock purchase plan.
These

offered

shares

officers

to

held

either

are

in

the

treasury

or

will

be

re¬

The maximum number of shares which can be

acquired.
sold

under this

5%

of

plan in
outstanding

the

five-year period is 598,700, or
shares. Proceeds—For general

a

funds.
Carolina

South

Nov.

filed

22

Due

bonds.

Co.,

Columbia,

refunding mortgage
by amendment.

Underwriter—Names

redeem

like

a

amount

of

outstanding

Underwriter—Names by amendment

1979.

Due

Gas

$22,200,000 first and

1979,

Proceeds—To
bonds.

&

Electric

Carolina

South

(probably Halsey, Stuart & Co. Inc.; Kidder, Peabody 8c
The First Boston Corp.; Union Securities Corp.).
Expected in January.
Co.;

California

Southern

Petroleum

Co.

(letter of notification) subscription warrants to
issued to common stockholders at the rate of one
23

be

shares

three

each

for

shares

common

be

to

held,
issued

and enough no par value
under these warrants, at

No underwriter. Proceeds to pay existing
Office—General Petroleum Building, 612
Flower Street, Los Angeles, Calif.

$3.75 each.
obligations.
S.

Union

Southern

Gas

Co.

(2/14)

$18,000,000 of 2%% first mortgage sinking
fund bonds, due 1975; 30,000 shares of cumulative pre¬
ferred stock (par $100) and 99.698 shares of common
stock (par $1).
Underwriter—Blair, Rollins & Co., Inc.,
19 filed

Jan.

York, for the bonds and preferred stock.

Price—

Of preferred

issue to be filed by amendment. The com¬
stock is to be offered at $17,50 per share to common

mon

stockholders of record

share

new

for

Proceeds—To

each

retire

Jan.

12

30, 1950, at the rate of one
of common stock held.

shares

outstanding bonds, debentures and

bank debt and for construction.
or

15.

Jan.

(par lc) and 60,000 shares of cumulative
(par $5)

to be offered

common

one

will presently be

ing capital.
New
•

share.

Of

preferred

in units of one preferred
this amount, 2,500 units

sold, the proceeds to be used for

No underwriter.

work¬

Office—48 West 43rd St.,

York, N. Y.

Standard-Thomson Corp.

(letter of notification) 21,500 shares of common
be sold, at the market price of about $4.50 per

1

to

Webster (President), Lillian M.
M. Kimball, Lincroft, N. J., and
Greenwich, Conn.
UnderwritersHigginson Corp., Carreau & Co. and Reich & Co.*

share

Reginald

by

Webster
Audrev
Lee

Expected around Feb. 14
•; "• A

Spectrolux Television Corp.
*
17 (letter of notification) 60,000 shares of common

stock

sold to old stockholders for reoffering at 1.2 cents per share. No underwriter. Proceeds
to pay. for, development program at Matterhorn, Colo.
Address—Eox 18, Montrose, Colo.
(par

to

share of

Feb.

Mining & Developing Co.

shares

Business—Manufacturer of food
-

common

Corp.

25

by

Sightmaster Corp.
Jan. 26 (letter of notification) 50,000 shares of non-con¬

stock

San

sold

20,000

Proceeds—From

products.

and

Statement

being

are

balance.

to cash

stock

drilling.

shares

120,000

amendment.

added

effective

and

common

Bartush, President, and 20,000 are being offered

•

expenses

Detroit, Mich.
stock (par $1),

Inc.,

Foods,

shares of

140,000

Stephen J,
by the
company directly to employees.
Underwriters (for the
120,000 shares)—Blair, Rollins & Co. Inc., New York,
and Shader-Winckler Co., Detroit.
Price—To be filed

of

June 27.

istration

to

Offering—Offered

Sons, Baltimore,
have agreed to
company up to a maximum of 86,000
erence stock which may be offered

New

1,000 shares of 5% pre¬
(par $50) to be issued to the trustee of the

(letter of notification)

ferred stock

stock

(letter of notification)
their * holdings.

expected to be received at 11:30

•

working

Inc., Philadelphia, Pa. (2/15)]
shares of cumulative preference

171,815

par).

Philadelphia,

Proceeds—To

Co.

treasury for construction expenditures.

Feb.

Inc.

each to be issued to holders of common stock in propor¬

tion

be

Halsey, Stuart & Co. Inc.;
Lehman Brothers; The First Boston
Corp.; Equitable
Securities Corp. and R. W. Pressprich & Co. (jointly);

bidding.

mon

($10 per share).

(no

Jan.

filed $3,000,000 of first mortgage

Underwriters—Names to

Jan.

Inc.

Proceeds to buy real

Office—518 Goodrich

to

(EST).

(letter of notification)
be

1

Offering expected to be made

&

Street, Chicago.

Metropolitan

(3/7)

Pennsylvania Power Co.
Feb.

Proceeds—For

Angeles.

Los

229,085% shares of $3.50 cumulative convertible pref¬
erence
stock, series A, at rate of three new shares for
each four old ones.
Offer expires Jan. 19.
Underwriters

Dec. 29

N.

filed

9

stock

•

Marquette Casualty Co., New Orleans, La.
Jan. 30 (letter of notification)
10,000 shares of capital

Co.,

&

Sharp & Dohnie,

and

Corp.

(letter of notification)

share). No underwriter.
Proceeds for milling equipment.
Office—1515 Tremont
Street, Denver Colo.

•

notification') 65,000 shares of common
($1 each).1 Underwriter—Dempsey

Office—607 £>. Hill Street, Los Angeles.

Dec.

be

per

for

Co., Los Angeles, Calif.

Finance

(letter of

vertible

•

busi¬
Silver

(letter

cates of indebtedness,

Jan.

a

Price—Par

ticals.

of notification) $125,000 10-year certifi¬
bearing 4% interest, and 100 shares
of common stock to be offered at par ($1,000 per share).
No underwriter.
Proceeds to provide working capital,
9

Jan.

equipment and operate
Office Road, Box 352,

Post

Spring, Md.

on

Oregon

—James T.

(letter, of notification)

(par $5)

Bids ex¬

plenish working caiptal or pay off bank notes.
pected to be opened about Feb. 14.

Price—At $5

Manufacturers & Merchants

Dec.

Power & Light Co. (2/14)
shares ($100 par) cumulative pre¬
Underwriters—Names to be determined

20,000

filed

16

stock to

Electric

filed

30

Dec.

Proceeds to buy

Office—Old

ness.

Utah.

New Jersey

Jan.

for

(letter of notification) 50,000 shares of common

2

stock

(letter of notification) 2,500 shares of common
stock to be offered at par ($10 per share). No under¬
20

stock.

Co.

Corp.

Products

Seafood

•

capital.

on

(3/1)
Feb/8 filed 101,297 shares of common stock (no par) to
be offered publicly.
Price—To be filed by amendment.
Underwriters—Lehman Brothers; J. J. B. Hilliard &
Sons; Stein Bro. & Boyce; Almstedt Brothers; and Blyth
& Co., Inc. Proceeds—For construction costs and working
•

working capital.

Dec.

Mining

Consolidated

250 shares of preferred
No underwriter. Proceeds for
Office—8th and O Sts., Lincoln 1, Neb,.

$105 per share.

at

Tegeler

&

Chicago, 111., and Dallas Rupe & Son, Dallas.
Proceeds—To
build cast iron pressure pipe foundries

Blosser,

stock

Paper Co.

(letter of notification)

30

stock, to be offered at par (10c per share). No under¬
writer.
Proceeds to buy drilling equipment and other

$1). Price—At par.

Kingman, Ariz.
Proceeds—To buy real
construction, materials and mining claim.

Schwarz

•

Jan.

(letter of notification) 250,000 shares of common

Jan. 27

Probable bidders for bonds:

underwriter.

stock

as

Halsey,

Co.,

textile plant in

a

Mono-Kearsarge

value common

(par $20).
Underwriter—Bonds to be offered
under
competitive bidding;
stock to be offered to
common stockholders of record Feb. 9 at the rate of one
new share for each four held, with
Robert W. Baird &
stock

Co.

textiles.

Cotton

&

Betz

bonds,

Jan. 23 filed

Under¬
Price, par.
Business—

Philadelphia.
Israel.
Expected about Feb. 15.

writer—Coffin,

Denver, Colo.

writer.

Israel

Proceeds—To build
Lake

Wilmington, Del., and

(2/15)
7 filed 500,000 shares ($5 par) capital stock.
Tel-Aviv,

Office—1620 Market Street,

capital.

additional working

Jan.

Moller-Dee Textile Corp.,

held.

LaSalle St., Chicago, 111.

—120 So.

& Co. Inc.; The First

Halsey, Stuart

Corp.; Glore, Forgan & Co.; Equitable

for

Proceeds

underwriter.

Bids—

bonds.

opened at

bidders:

Probable
Boston

of notification) 900 shares of common
stock (par $10) to be issued to holders of common stock
27

Jan.

be

to

1,000 shares of 8% pre¬
($100 per share),
No
expansion and to provide

stock to be offered at par

ferred

Mississippi Power Co. (3 7)
Feb. 3
filed $3,000,000 first mortgage

(letter of notification)

11

Jan.

•

Scarry & Co., Denver, Colo.

(E. J.)

Office—

tures,

•

Thursday, February 9,.. 1950

CHRONICLE

.mining development and for operating capital.
1909 Northern Life Tower, Seattle 1, Wash.

43

page

FINANCIAL

&

and

J.

New York.

John

Webster,

N.

Volume

•

171

Number 4880

Stanzona

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

(645)

Petroleum Corp.
*.

(letter of notification) 288.570 shares of common
stock (par $1).
No underwriter.
Proceeds to buy and
sell oil leases.
Address—Box 1408, Phoenix, Ariz.
Sudore Gold

•

Alabama

Mines Ltd.,

Toronto, Canada

3

mated at from

first

Power Co.

to

be

planning sale of about

None. Proceeds

purchase of equipment,
road construction, exploration and
development.

Blyth & Co., Inc.; First Boston Corp.; Lehman Brothers.

filed

7

375.000

shares of

share (U, S. funds). Underwriter

—Funds

will

be

applied

stock.

common
—

Price—$1

to the

\

Jan.

filed 100,000 shares ($10 par) common stock
Offering'—These shares are to be offered to holders of

stock in Zenith Radio Corp. at rate of one share
for each five held.
Underwriter—None. Proceeds—For
common

working capital and the promotion of Zenith's "Phonevision"' device, whereby television users could
pay a
special fee for costly television programs by
calling the
telephone company and asking to be plugged in.

Feb, 1

&

Co.

and

25

pipeline would be

common

capital stock (par
Underwriter

income debentures due
1970; 32.000 shares of $5 class A
cumulative preferred stock (no
par), with no rights to
dividends until 1956; 52,000 shares of $5 class B cum¬
ulative preferred stock
(no par), with no rights to
dividends until 1956; and 2,000 shares of common stock

(no par), represented by voting trust
certificates; to be
under a plan of debt
adjustment. Any interest
payable on debentures must first be approved by
RFC',
which recently loaned the
company $15,100,000. Under¬
writer—None. Business—Oil production.
issued

line

from

(letter of notification) 1,000,000 shares of com¬
capital stock (par 10 cents), to be offered at 30
per share, the net proceeds to be used to drill

Office—4012 N. Second Street,

J.-•

''Lv'" A'.:.-L;u:V-V;y'

U. S. Thermo Control Co.

Jan. 30

(letter of notification) 35,000 shares of common
stock (par $1) to be sold at $1.50
per share to George F.
Breen. New York. No underwriter. Proceeds for
work¬

ing capital.
Minn.
•

Office—44

S.

12th

Street, Minneapolis 3.

|

Universal

Winding

Co., Providence, R. I.
Jan. 25 (letter of
notification) 1,000 shares of common
stock (par $5) at about $10.25
per share for Charles W.
Mason, Jr., Chestnut Hill, Mass. No underwriter.
Upper Peninsula Power Co.
Sept. 28, 1948 filed 154,000 shares of

Telephone

the

common

stock

Underwriters—SEC has granted exemption
competitive bidding. An investment banking group
aged by Kidder, Peabody & Co.; Merrill
Lynch,

(pai
from
man¬

Pierce,
Beane, and Paine, Webber, Jackson & Curtis,
be underwriters. Proceeds—Will go to selling stock¬

Fenner &

holders.

Consolidated

West

Corp. will sell
respectively.
•

Electric

&

Gas

Co.

and

Middle

34.000

120,000 shares and

shares,

Price—At

writer—None.

par

•

($100

Proceeds—For

purchase equipment, etc.
Philadelphia 30, Pa.

per

Office—471

common

share).

working

6

stock

(letter of

Under¬

capital
No.

and

17th

to

Street,

notification) 60,000 shares

of

common

Price—37M>c per share.
Proceeds—To
selling stockholders. Underwriter—Henry P. Rosenfeld,
New York. Office—229 West 26th
St., New York, N. Yr.
•

Videograph Corp., N. Y. City
Feb. 2 (letter of notification)
300,000 shares of common
stock (par' 10c).
Price—$1 per share.
UnderwriterGeorge J. Martin Co., New York.
Proceeds—For addi¬
tional working
capital.
Business—Assembles a coin
operated combination television and phonograph. Office

Virginia Electric & Power Co.

(par

(2/21)
unspecified number of shares of common
(par $10) and 100,000 shares of preferred stock
$100).
The company has called for conversion
an

be

sold

3V8% convertible debentures,
1963, at 102% and interest. It wall sell underwriters

the

number of

not

issued

bentures.

shares of
or

common

before Feb.

Underwriters—For

20

stock

in

equal to those

converting the de¬

common

stock:

Stone

&

Webster

Securities Corp., Blyth &
Co., Inc.; Harriman
Ripley & Co., Inc.; First Boston Corp. and
Kidder,
Peabody & Co., New York.
For preferred stock: Stone
& Webster Securities Corp. may head
group.
Price—
To be filed by amendment.
Proceeds—From the com¬
mon

stock

sale

will

be

used

to

redeem

unconverted

debentures, and from the preferred stock sale, to finance
construction.

bidders

Co.

(3

21)

include:

due 1980, to
March 21.

Ripley & Co., Inc.; (4)
&

Co.

on

in¬

authorized

capitalization by 20,000 addi¬
tional shares of preferred stock (par $100) and 200,000
additional

4%

shares

eliminate

planned.

stock

series A,

$15), to limit
17,500 shares and

(par

to

preferred stock, series B, which

but

unissued.

No

immediate

is

financing

Traditional underwriter: Smith, Barney & Co.

Belt

31

common

stock,

the 4%

authorized

Jan.

of

preferred

Ry.

Co.

of

Chicago

Shields

and

of

ders:

Halsey, Stuart & Co. Inc.; Salomon Bros, & Hutz¬
ler; Harriman Ripley & Co. and Lehman Brothers
(jointly); Harris, Hall & Co. (Inc.); Lee Higginson Corp.
Expected early in April.
Boston

Edison

Detroit

Edison

•

probably about
Probable bidders: Halsey, Stuart &
Brothers: First Boston Corp.; Harri¬

Brooklyn Union Gas Co.

Feb. 4 it

ferred

was reported company may sell some
$8,000,000
mortgage bonds this year, and possibly some pre¬

stock.

and F. S.

Co., Inc.
Moseley & Co. (jointly); Merrill Lynch, Pierce
Proceeds may be used to retire about

$15,000,000 of bank loans and to pay part of
conversion from manufactured to natural gas.
•

cost

of

Buzzards Bay Gas Co.

Feb. 4 the company

petitioned the Massachusetts Depart¬

of Public Utilities for authority

ment

Burr, Inc. and
Stuart

•

t.q

issue $750,000

Carolina, Clinchfield & Ohio RR.
4

reported

company

planning

(jointly); Dick & Merle-Smith; R. W. Pressprich & Co.;
Harriman Ripley & Co. and Drexel & Co.
(jointly).
Proceeds to pay notes due to Louisville & Nashville RR.

Expected late this month
•

Central RR, of

&

Co.

Stuart

&
&

Brothers

or

early in March.

New

Co. Inc.; Harris, Hall & Co. (Inc.); Salomon
Hutzler; Harriman Ripley & Co. and Lehman

(jointly).

Central
24

Expected in March.

RR. of

to

RR. of New Jersey.

&

Coffin

&

Co.

(jointly); Halsey,
Inc.; First Boston Corp.; Dillon, Read &

Stainless

announced

stock

mon

with the

$5)

(par

Steel

company

for

Corp.
issue additional

may

subscription

offering to be underwritten.

bank loans of about $1,000,000.

by

com¬

stockholders,

Proceeds to pay

Equitable Gas Co.,
Jan.

19

Standard

Gas

&

Electric

Co.

announced

Phila¬

delphia Co. may shortly file an application with SEC to
sell its Equitable Gas Co. common stock to be outstand¬
ing following its proposed reorganization (see also Wis¬
consin Public Service Corp. below).
Probable bidders:
Lehman

Brothers

and Drexel & Co.
(jointly); Kuhn,
Smith, Barney & Co. (jointly); W. E.
Hutton & Co. and Glore, Forgan & Co.
(jointly); First
Boston Corp.; Harriman, Ripley &
Co., Inc.

Loeb

•

&

Co.

and

Florida

Power

&

Light Co.

Jan. 12 McGregor Smith,

President, said company plans
1950 for construction. The fol¬
lowing have groups to bid on the 191,590 shares of com¬
to

spend $18,000,000 in

stock which Electric Bond & Share Co. will receive

consummation of, American Power & Light Co.
plan: Blyth & Co. Inc.; Dillon, Read & Co. Inc.; Lehman
Brothers; First Boston Corp.; Merrill Lynch, Pierce,
upon

Fenner &

Beane; Glore, Forgan & Co.; Union Securities

Corp.
Power

Co.

(4 4)

Jan. 17 reported company expects to file a
registration
statement with the SEC on March 3
covering

$15,000,000

of debt securities.

April

4.

Bids

Probable

are

scheduled to be received

on

bidders:

Halsey, Stuart & Co. Inc.:
Glore, Forgan & Co.: The First Boston Corp.; Salomon
Bros. & Hutzler, and Shields & Co.
(jointly); The First
Boston Corp.; Drexel & Co.; Morgan
Stanley & Co.; Har¬

riman. Ripley & Co.

Proceeds—To finance construction

program.

Greenpouit Coal Docks, Inc.

(2/21)

Jan. .17 announced bids will be received
by 3:30 p. m.
(EST) 011 Feb. 21 for the purchase from the

Attorney

General of the United States, as a
whole, of 2,500 shares
common capital stock
(all of the outstanding stock
of the corporation). Bids must be received
at the Office
of the Alien Property
of

Custodian,

York

120

Broadway,

New

5, N. Y.

Howe
Jan. 20

Sound

Co.

announced

stockholders

011

March

will

20

con¬

sider

authorizing approximately 76,000 shares of con¬
vertible preferred stock (par
$50) to be first offered to
stockholders.

common

Underwriter—Union

Securities

Corp. Proceeds—For further development of company's
properties and for other corporate purposes.
•

Hutiig Sash & Door Co.
March 9 stockholders will vote
ized

common

stock

from

on

increasing the author¬

139,861

shares, par $5 (of
outstanding) to 400,000 shares,
$10, each old share to be exchanged for one new
share, and one additional share will subsequently be

which

issued

held.

Jan.

137,292 shares

are

as a stock dividend for each two
$10 par shares
Traditional underwriter: Stifel, Nicolaus & Co.

Hytron Radio & Electronics Corp.
21 company reported to be
planning issuance of
$2,000,000 to $3,000,000 convertible preferred

between

•

$3,200,000 equip¬

bear the guaranty of the Cen¬
Probable bidders include: Hal¬

Stuart & Co. Inc.; Salomon Bros. & Hutzler; Harris,
Hall & Co. (Inc.).
sey,

Traditional

underwriter;

Barrett Herrick

&

Co.

Idaho Power Co.

Feb. 7 T. E.

additional
up

Roach, President, said company plans to sell

4%

preferred stock later this year tq raise
to $4,000,000 to finance, in part, its 1950 construction
Traditional underwriter: Wegener & Daly

program.

Corp., Boise, Ida.

Chicago & Western Indiana RR.
Jan, 31 reported company will probaly issue in the near
future some bonds to refund the 4% non-callable con¬

solidated

31

stock.

Pennsylvania

reported company may issue

ment trust certificates

tral

Probable underwriters:

Spencer Trask

par

Jersey
Jan. 30 reported planning sale of $3,700,000 l-to-15-year
equipment trust certificates. Probable bidders: Halsey,
Bros.

(3/15)

Co. Inc.

1. 1971; 4,000 shares

preferred stock (par $25); and 10,200 shares of
stock (par $25).
The shares are to be offered
at not less than par. Proceeds—To
pay in part $1,546,904
presently outstanding indebtedness.
Feb.

issues—White, Weld
(jointly); Morgan, Stanley &

Construction costs in 1950, it is

Co.

the middle of March.

Probable bidders include Blyth &

Fenner & Beane.

only—Harriman,

all three

looking forward to an
early refunding of the $35,000,000 3]i% general and re¬
funding mortgage bonds, series G, due Sept.
1, 1966,
through the sale of a like amount of 2%% bonds about

Georgia

Ripley & Co. Inc.; White Weld & Co.

man.

on

Co.

Jan. 30, directors authorized
steps

Co.

the middle of April.

Inc.; Lehman

later,

r

Jan. 26 reported company is planning to issue
$18.0GO,000
of first mortgage 30-vear bonds due 1980,

Co.

&

Co.; Lehman Brothers.

mon

asked ICC for authority to issue $2,equipment trust certificates. Probable bid¬

company

832.000

voLi

estimated, will total about $25,000,000.

Halsey,

Hydro-Electric Co.

the

months

on

Jan. 25 announced stockholders will vote Feb. 14

creasing

Jfr * ^o* Wi*4

This stock will

Several

bonds and 50,000 shares
preferred stock (par $100). The common stock
offer¬
ing may comprise 250.000 shares. Probable bidders:
(1)
On bonds only—Halsey, Stuart & Co.
Inc.; Kuhn Loeb &
Co., and Salomon Bros. & Hutzler
(jointly); First Boston
Corp.; Union Securities Corp.; (2) on common and
pre¬
ferred stocks—W. C.
Langley & Co. and Union Securities
Corp. (jointly); (3) on common stock

Jan.

Stuart & Co. Inc.;
Kuhn, Loeb & Co. and Union Securities Corp. (jointly);
Harriman, Ripley & Co. Inc.; First Boston Corp. Proceeds
are for expansion.

Bangor

—cs

stockholders.

first

mortgage bonds due July 1, 1952. Re¬
funding of the first and refunding mortgage 4¥4% bonds,

Iowa

Jan.
a

28

Electric

rumored

Co.

financing

may

be underway—through

negotiated deal.
Iowa Public Service Co.

series A, due Sept. 1, 1962, is also said to be a
possibility.
Probable bidders: Halsey, Stuart & Co. Inc.; Morgan

Jan. 10 reported that corporation plans to issue and sell in
March approximately $5,000,000 of preferred

Stanley & Co.; Lee Higginson Corp.; Harris, Hall & Co.
(Inc.); Drexel & Co.; Kuhn, Loeb & Co. and Salomon
Bros. & Hutzler (jointly); Harriman, Ripley & Co., Inc.;
First Boston Corp.; Lehman Brothers; Paine, Webber,
Jackson & Cilrtis; Kidder, Peabody & Co.

net

stock, the

proceeds to pay for construction costs, etc. Probable
bidders: A. C. Allyn & Co.; Harriman Ripley & Co. and
Merrill Lynch, Pierce, Fenner & Beane
(jointly); Kidder*

Peabody & Co. and Blyth & Co. (jointly); Equitable Se¬
curities Corp.; Lehman Brothers; White, Weld & Co.

.

•

Yogo Sapphire Mining Corp., Billings, Mont.
Jan. 19 (letter of notification) 285,000 shares of common
stock at par ($1

Power

new
first mortgage bonds,
competitive bidding, probably

at

Probable

March 2 $4,000,000 of its
due

on

less than $100 per share.

Electric

$25,000,000 of

Jan.

stock

to

Jan. 17 announced that the company expects to file with
the SEC about Feb. 17 a registration statement
covering

Avenue, New York, N. Y.

Jan. 31 filed

em¬

up

sale of $3,885,000
mortgage bonds. Probable bidders: Halsey, Stuart & Co.
Inc.; First Boston Corp. and Kidder, Peabody & Co.

(par 10c).

—701-7th

of

common

Video Corp. of America

Feb.

subsidiaries

of prior

Plants, Inc. (2/15)
Feb. 7 (letter of notification) 600,000 shares of
stock.

its

a

nor

to

of

$27,549.-

a

Telegraph Co.
a
third offering to

of 4% bonds or notes, to mature Oct.

Vacuum

"A"'

&

and

company

shares at

than $150

more

of first

$9.

may

build

price of $20 per share less than
the market price when payment is
completed, but not

to

13

L

to

directors voted to make

of

-

to $19,000,000.

Ap¬

Lambertville, N. J., to the New England

American
Bee. 21

now

underwriting.
Albuquerque. N. M.
•

Inc., Albuquerque,

M.

No

obtained

states.

the

Transcontinental Oil Co.,

cents

(jointly);

company's proposed
through the sale of mort¬

plication has been filed with the FPC
100

$17,000,000

oflered

Eastern

Texmass Petroleum Co.,
Dallas, Texas i
Jan. 13 filed $3,000,000 of 4 xk % senior
cumulative in¬
terest debentures due
1965; $1,200,000 of 5% junior

wells.

Hutzler

distributing companies.

Appalachian

mon

&

gage bonds and common stock, with the stock to be sold
to three New England gas

2.800,000

$1), the proceeds to be used for investment.
—Television Shares Management Co.

Jan.

Bros.

reported that funds for the

ployees

Fund, Inc,

filed 750.000 shares of

N.

Salomon

Algonquin Gas Transmission Co.

Teco, Inc., Chicago

Nov, 21

Television

Shields

be

it is planned to offer
SI0.000,000

reported

company

$8,000,000 bonds after July 1. Probable bidders: Halsey,
Stuart & Co. Inc.; Morgan
Stanley & Co.; Equitable
Securities Corp. and Union Securities Corp.
(jointly);

•

—■

,

Prospective Offerings

Feb.

per

.

Feb. 1

June

45

per

share).

No underwriter.

Proceeds

to buy properties and resume mining operations.
—21 Hedden Bldg., Billings, Mont.




Office

Jan.
for

Columbus & Southern Ohio Electric Co.
26

announced

company's budget for

1950

provides

expenditures totaling $18,725,000.
Delaware

Power

& Light Co.
Cooper, President, said company may
issue $4,000,000 to $5,000,000 of common stock early in

Jan.

21,

Stuart

Jamaica Water Supply Co. (3/21)
will vote on approving issuance of
50,000 additional shares of common stock on a l-for-2
Jan. 31 stockholders

basis, the unsubscribed shares to be sold to underwriters
at subscription price.
It is also planned to issue and
A*

)

.

Continued

on

page 45

46

>

Continued

from

page

45

ding.
Probable bidders—Halsey, Stuart & Co., Inc.;
White, Weld & Co.; Blyth & Co., Inc.; W. C. Langley &
Co. and Union Securities Corp. (jointly); Kidder, Peabody & Co.; Carl M. Loeb, Rhodes & Co.
Proceeds to
retire $5,745,000 first mortgage 3%% bonds, series A,
and $1,250,000 of first mortgage 3V*% bonds, series B.
and for other corporate purposes.
Bonds expected about
March

will

consider

authorizing

ing name of company to Laclede Gas Co. Probable bid¬
ders; The First Boston Corp. and Blyth & Co., Inc. (joint¬
ly); Smith, Barney 6i Co. and Goldman, Sachs & Co.
(jointly); Lehman Brothers, Merrill Lynch, Pierce, Fenner & Beane and Reinhoidt & Gardner (jointly); Harri-

Power

Co.

stock.

common

Financing of $10,000*000

shortly.

Halsey, Stuart
& Co. Inc.; Blyth & Co., Inc.; Union Securities Corp.;
Merrill Lyrtch, Pierce, Fenner & Beane; Smith, Barney
& Co.; First Boston Corp.

Union
Co.

bonds:

Texas

bidding

440,000

authorized

Co. (3/14)
Utility Commissioners
to issue $50,000,000 common stock

company

shares

Registration with the SEC expected

The

(par $100) and $15,000,000 of debenture bonds. Under¬
bonds:
To be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Morgan Stanley & Co.; Kuhn, Loeb & Co.; Shields & Co.;
First Boston Corp.; White, Weld & Co. Expected March
14. Stock to be sold to American Telephone & Telegraph
Co., the parent. Proceeds—To discharge notes of parent

New York Central

7

Northern

additional

stock

common

rights.

preemptive

offered

be

to

to

bidders for

Probable

Peabody & Co. (jointly), and The First Boston Corp.

that

announced

•

of

Island Edison Corp.

Staten

Feb.

the company proposes

to

at

announced

SEC

1

decision

a

Utilities

Public

General

granting the request
exemption of its

Corp. for

bidding.

Weld

outstanding, the latter to supply from $9,060,000 to
$10,657,500 of new capital. The net proceeds, together
with other funds, will be used to finance the company's
construction program.
Probable bidders for the deben¬
tures: Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.; The
First Boston Corp.; Kidder, Peabody & Co.
Otter Tail
Jan.

18

announced

authorize

Co.

Power

asked

has

the

FPC

preferred

stock

Gas

Gardiner

conclusion

subsidiaries

investment

of

of capital available for corporate

banking
firms.

capital

The two groups which bid for

the
the

issue

just

about

made

investment banking

embracing,

between

up

noted, that
in the

was

a

Co., Inc., took in 224

of

underwriting

and

without

But

the

two

the

large

Probable

Co.

fact

the

that, being

units, it is argued, it could never

With
vania's

the

State

veteran

(S. S.)

of

334

underwriting

distributing firms
have

represented

which
close




and

must

to

the

$375,000,000

it

of

bidders:

be

in

the

originally

for

shares.

19

be

seen

at

a

an

The

Although there is reportedly a
goodly sprinkling of recent issues
remaining
unsold,
institutional
buyers apparently are showing

Robert W.
and

little

interest

the

at

either in that direction

Power

of

moment
or

in

the

The

issues

new

stagnation

has

marked effect

had

not

more-than

little
cent

of

high

the

shade

levels

coal

common

more

insurance
or

less

carrying

their

re¬

consequence

its

and

tering

of

on

companies
standing

more

than

cautious

the

There

a

are

new

mium

.

bonds while also

aside,

for

smat¬

new

buying,
Fire

ac¬

other band,

are

,

shares

was

for employees.

quick

a

a

oversub¬

fair-sized

■

in

possession

of

of

G.

D.

of

Searie

needed
:

''
•

■

■■

.

.

/

'
\ i

\

John P.lavin With
F. S. Yantis & Co.

providing funds

offering

pre¬

the price.

CHICAGO, ILL.-r-John P. Lavin,
well

known

for the

on

past 25

associated

Salle

La

years,

.

with

F.

S.

Yantis

Co., Inc., .135 So. La Salle
members

of

the

Street

has become

construction needs.

Public

is

all

mortgage

%'f
A Real Quickie

com¬

on

•

$15,644,000 shprt-term debt and
of-3y4%

shares

additional working capital.

$3,500,000 4>f the issue.

$10,000,000

share

per

yesterday.

The proceeds will put the com¬

'

bonds,
of

$38

26,573

scription with

a

Proceeds wilLpermit retirement

dire

additional

pany

bankers

at

market

the issue is slated

utility

through

the

also being sold but this portion of

Co.
of

maturity,

ment,

of

little

Light

$37,000,000 of-such

threats.

doing

as

stock

An

direct
sales
underwriters
Pennsylvania

and was able to announce place¬
but

in

strike

panies,

for

fair

reached

up

filed with the
State Public
Utility Commis¬
sion only about a week ago for

the

would

(jointly); W. E. Hutton &. Co,
Co. (jointly); Harriman, Ripley.

announced
$33,500,000
first mortgage bonds, of

The.

any

Co.

Co.

&

in

trading mar¬
ket.
High-grade utilities and in¬
dustrials are holding at their best
and even the top rails have done
on

to

but

&

Forgan

2%% coupon rate.

temporary

Electric

':

picking

placement

30-year

seasoned market.

gustp

&

new

&

application with the SEC to sell all the

Baird

Glore,

& Co.

real

private

Corp.

Gas

of the System to sell only one of these holdings. Prob¬
able bidders for Wisconsin stock: First Boston Corp. and-

spectre
of
up to plague

came

with

Service

Standard

Big One Goes Privately

cording to observers.

bidding,

Public

announced

lines of equities.

Taking It Easy

glance that this could hardly go

competitive

been

Dental Mfg. Co.

picture.

But

Pennsyl¬
issue

bonus

can

Had

stockholders will

announced

,

total

Corp.

12.

able Gas Co. to be outstanding following its proposed
reorganization (see Equitable above). It is the intention

reported to be

municipal,

a

banks will

managing

have been gotten together.

world,

them,

Higginson

common
stock
of the Wisconsin
subsidiary, and the
Philadelphia Co., its principal subsidiary, will ask the
SEC for permission to sell the common stock of Equit¬

Co.

Utilities

Texas

commercial

The second group, headed by
&

White

Jan.

Halsey, Stuart & Co. Inc.; The First Boston Corp.; Blyth
& Co., Inc., Kidder, Peabody & Co. and Smith, Barney
&
Co., and Merrill Lynch, Pierce,. Fenner & Beane
(jointly); Union Securities Corp., White, Weld & Co., and

First Boston Corp., and Halsey,
Stuart

underwriting.

Lee

Wisconsin

reported company plans sale of $8,000,000 of
bonds early in 1950, the proceeds to be used to finance
the company's construction program. Additional financ¬
ing also is anticipated in the first half of 1950 by other

firms, which observers were
as the "power¬
house" aggregation, since it em¬
braced the bulk of the larger un¬
derwriting firms.

about the ultimate in aggregation

•

28

The winning group, headed by
Morgan Stanley & Co., comprised

was

company

shortly file

Electric Service

Texas

syndicate, it would
have been virtually impossible to
have set up such a large deal for
competitive bidding.

here

that

Maryland Ry. (2/14)
was reported to be planning the issu¬
ance
of $2,450,000 of equipment
trust certificates on
or
about Feb. 14.
Probable bidders: Halsey, Stuart &
9

(jointly);

for construction.

110

the

Western

Jan.

Corp.

President,

inclined to refer to

to

and

and

additional

unsuccessful

Looking at American Telephone
Telegraph " Co.'s $200,000,000
flotation in retrospect, well-posted
investment banking interests came

Business—Mining of coal in
manufacturing of coke in Utah
sale of said products.
Colorado

Inc.; Harris, Hall & Co., (Inc.); Salomon Bros, &
Hutzler; Harriman Ripley & Co. and Lehman Brothers

(jointly); Kuhn, Loeb & Co. and A. C. Allyn
(jointly). The proceeds would be used in part

without the two top firms

&

Broadway, New York.

Co.

Inc.; Stone & Webster Securities Corp. and White,

Co.

banking capital.

it

(4/10)

vote April 4 on in¬
creasing the authorized capital stock (par $20) from
300,000 to 450,000 shares, through issuance of 150,000

Nov.

mortgage bonds to retire outstanding
notes and to finance its construction program had been

Moreover,

Symonds,

(jointly); Leh¬

offer

Feb. 2

25

to pay

first

Reporter's
Report

Transmission

Co.

will

scheduled for Jan.

&

Power & Light Co.
reported that company's tentative plans call for
funding of $9,000,000 bank loans, probably in March. On
Sept. 15 it was said plans to do some permanent financ¬
ing of approximately $7,000,000 through the sale of

Our

140

Weld & Co.

Pacific

available

new

of about

& Co.

to

Dec. 24

of

$8,000,000

bidding, but the amount has not yet been decided."
Banking circles speculated that a $40,000,000 bond sale
would be forthcoming. Probable bidders: Halsey, Stuart

stock would be issued after March

peak

about

stock. Probable bidders: Blyth

common

announced that
"some bonds will be sold late this summer at competi¬

1950 construction program.

additional

(jointly); W. C. Langley & Co. and Union

Co.

Tennessee
Jan.

1, 1950.
Underwriters—Glore, Forgan & Co. and Kalman & Co.,
Inc.
Proceeds—To help finance present bank loans and
common

&

Fuel

referee

Utah and

Corp.; Kidder,' Peabody & Co.

(no par) and 125,000 shares of common stock (par $5).
The preferred stock, with a dividend rate not to exceed
$4.40 per sh*re annually, will be issued in March 1950.
The

seeking

be

Spring through additional sale

tive

of cumulative

shares

25,000

the

at public auction at 11 a.m. on
April 10 all of the 100,000 outstanding shares of stock of
this corporation at the Guaranty Trust Co. of New York,

Securities Corp. (jointly); Lehman Brothers; First Boston

(3/1)

company

in

Utah
The

The exemption is applicable only to the sale of
the stock to private purchasers.
Probable bidders may
include:
Stone & Webster Securities Corp. and White,

sell

Co.

to

der, Peabody & Co. (jointly); First Southwest Corp.;
Rauscher, Pierce &. Co. and Dallas Union Trust Co.
(jointly).

bonds:

issue

20

and

reported

Co., Inc.; and The First Boston Corp.

Halsey, Stuart & Co. Inc.; Blyth & Co., Inc., and Kidder,

Neb.

& Hutzler.

Utilities

Brothers; Dillon, Read & Co. Inc.; Union Securities
Corp.; Merrill Lynch, Pierce, Fenner & Beane and Kid¬

stockholders

competitive bidding $40,000,000 of 2%%
20-year debentures and to sell 304.500 shares of common
stock on the basis of one share for eight shares now

Jan.

Omaha,

Corp.; Blyth & Co., Inc.: Kjdder, Pea¬

400,000 shares of
&

proposed sale of its entire holdings of 325,000 shs. of Edi¬
son common stock from the requirements for competitive

Co.,

finance

to

was

man

under

Gas

19

money

will be financed initially by bank loans/ Which
will be refunded later through the sale of bonds.
The
1951 financing may be through the sale of $5,000,000

RR.

Natural

Dec.

$18,360,000 will be applicable to the 1950 program, and
$14,160,000 to be spent in 1951. This year's

that

Bros.

Texas

program

offering of $9,000,000 equipment
trust certificates is expected early in April.
Probable
bidders: Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler; Harriman Ripley & Co., Inc. and Lehman Brothers
(jointly). Expected in April.
reported

Salomon

has applied to the FPC for

the remaining

and to finance 1950 construction costs.
•

First Boston

it

program,

Co. (jointly); W. C.
Langley & Co. and Glore, Forgan & Co. (jointly); Carl
M. Loeb, Rhoades
& Co. and E. H. Rollins & Sons
(jointly); Union Securities Corp.; Drexel & Co. and
Hemphill, Noyes & Co. (jointly): Lehman Brothers;

Beane;

Co.

announced company

4

construction

application covering

subsidiaries

to

body & Co. and Smith, Barney &

authority to construct natural gas facilities at an esti¬
mated cost of $32,520,000, which will be financed through
the issuance of additional securities.
Of the total cost,

writers—For

Feb.

Natural Gas

Southern
Jan.

SEC

advanced

be

to

Co.
in

revealed that Texas
Power & Light plans permanent financing probably to
extent of $7,000,000 of bonds before August, 1950.
Prob¬
able
bidders
for
bonds:
Halsey, Stuart & Co. Inc.;

Glore, Forgan & Co., Kuhn, Loeb & Co. and Lehman
(jointly).

New Jersey Bell Telephone
Feb. 3 New Jersey Board of Public

loans

1heir

pre¬

Probable bidders: A. G. Becker & Co. (Inc.),
Securities Corp. and Ladenburg, Thalmann &

(jointly); Merrill Lynch, Pierce, Fenner &

& Light

Power

Texas Utilities Co.

28

Oct.
bank

Custodian is

for preferred stock:

(2)

Stuart & Co.;

Halsey,

White, Weld & Co.; Glore, Forgan & Co.

Brothers
•

a

cost be¬

nancing of the new project would probably consist of
75% debt and 25% stock.
Probable bidders: (1) for

(total issue outstanding) late in March

early in April.

or

Probable bidders for bonds:

electric lines.

build

to

Chairman

competitive

at

stock

plans

company

$140,000,000 and $150,000,000. James F. Oates, jr.,
of Peoples Gas Light & Coke Co., stated fi¬

tween

offer

to

common

announced

was

1,400 mile pipeline, which it is estimated will

Seaboard Air Line RR.

paring
of

it

5

Gas Pipeline Co.

Natural

Texas-Illinois
Dec.

certificates.

Jan. 26 announced the Alien Property

more

or

Co., Inc.; Lehman Brothers; Kidder, Peabody & Co.;
Smith, Barney & Co.

Sobering Corp.

in bonds may be undertaken in May.
The proceeds are
to be used for expansion and extension of its gas and

100,000 shares of new pre¬
Expected to be sold competitively, possibly
April.
Probable bidders may include W. C. Langley
Co. and Glore, Forgan & Co. (jointly); Union Securi¬

ties Corp.; Hemphill, Noyes, Graham, Parsons & Co. and
Drexel & Co. (jointly); Harriman, Ripley & Co.; Blyth

about March

appointed a committee to proceed with
approximately $31,800,000 outstand¬
ing first mortgage bonds, provided satisfactory terms
could be arranged.
Probable bidders include Halsey,
Stuart & Co. Inc.; Kuhn, Loeb & Co.; Lehman Brothers;
First Boston Corp.; Harriman Ripley & Co. (jointly).

the company may issue in a few months
approximately $22,000,000 in new securities, which may
include bonds and debentures and possibly some addi¬
tional

&

was

the refunding of the

Dec. 20 reported

"

v

Co.

reported may offer

19

Dec.

Feb. 7 directors

planned over the 1950-1953 period.
Montana

it

9

market

•

Ripley & Co.; White, Weld & Co. Proceeds—To be
used to finance part of $20,000,000 construction program

Service

&

Z

man

Salomon Bros.

ferred stock.

Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler;
Harriman, Ripley & Co. Inc. and Lehman Brothers (joint¬
ly); Harris, Hall & Co. (Inc.); First Boston Corporation.
Jan. 9 also reported company is expected to take care of
additional equipment financing through issuance of series*

a

issue of 480,OuO shares of preferred stock (par $25),
of which 160,000 may be presently issued, and on chang¬
new

Electric

Texas

(3/1)
reported company would probably be in
1 with $10,200,000 additional
equipment trust certificates series Y.
Probable bidders:

Light Co.

stockholders

14

& Co. (jointly); Lehman Brothers;
Hutzler; Harriman, Ripley & Co.

&

Pennsylvania RR*

Jan.

21.

Feb.

Co.; Drexel & Co. and Hemphill, Noyes, Graham, Par¬
sons

in

the

Laclede Gas
On

Glore, Forgan & Co. (jointly); Carl M. Loeb, Rhoades &

postponed to about May 1, 1950.
Probable bidders:
Halsey, Stuart & Co. Inc.; Kidder, Peabody & Co.; W. C.
Langley & Co. and The First Boston Corp. (jointly);
Union Securities Corp.; Equitable Securities Corp. and
Salomon Bros. & Hutzler (jointly); Blyth & Co., Inc.;
White, Weld & Co. and Harris, Hall & Co. (Inc.)
(jointly); Carl M. Loeb, Rhoades & Co.

sell $7,995,000 first mortgage bonds at competitive bid¬

Thursday, February 9, 1950

CHRONICLE

FINANCIAL

&

COMMERCIAL

THE

(646)

Midwest

&,

Street,
Stock

220,000

Exchange. Mr. Lavin has recently

&

been with

Co.,

Bear, Stearns & Co.

Volume

171

Number

4880

THE

Largest New York
Stock

of

partner

Merrill

Lynch,

Pierce, Fenner & Beane, re¬
ports net profits, before in¬
of

taxes

$2,335,370 in

which 86 partners
participate.

Stuart

Halsey,
associates

Inc.

E

2 Va %

CHICAGO,
1

equip¬

trust

certificates, maturing
$255,000 annually from Feb. 15,
1951 to 1964, inclusive, on a bid
of 99.657.
The certificates, issued
under the Philadelphia Plan, were
re-offered

subject

Interstate

to

Commerce Commission authoriza¬

tion, at prices to yield.from 1.25%
2.425%, according to maturity.

to

Grimm

has

with

S.

F.

Geo. Rice Joins Staff

lon

officer

an

ROCK

R.

with

La

inthrop H. Smith
Merrill

Charles

Lynch,

&

Beane

oi'

E.

Merrill

Salle

Fenner

profits

in

&

associated

Co.,

Street,

South

208

Chicago.

Mr.

recently -been
with
Beyer-Reuffel & Co. of Daven¬

port, Iowa.

Prior thereto he
representative
Blyth & Co., Inc.

ries

1949

cent,

Winthrop

H.

tirm.

J 13

the

annual

of

This compares with

earned

mated

in

income

there

of

$3,604,-

After

taxes

of

esti¬

$1,100,000

$1,235,370 available for

was

distribution
ners

1948.

the

the

profits.

the

among

firm

This

86

part¬

participating in

$1,704,513 available after taxes in
3 948.

Mr.

Lynch

contributed

$581,777

to

the

total

a

employee

plan

and

bonuses last year.
Charles
E.
Merrill,

partner

of

the

firm,

directing

said

believed 1949 represented

turning

point

government

in

the

in

his

investors

people

in

do

not

major

a

attitude

toward

However, Mr. Merrill
if

at

121

of

life

who

own

million

an

dustry

Seven

With

MINNEAPOLIS,
B.

Ander,

A.

than

he

been

who
in¬

there

are

corporate

directly who have
but

not

the

treatment

more

securities

a more

real

obvious
with

concern

investors

receive

—

and

Francis

added

Weir

R.

the

to

Co., 210
Mr. Kemp

with

been

in

Co.

Jones,

Pasadena.

investment

business

Announcement

is

staff

IND. — Wil¬
with Merrill

G.

Curry is
Pierce, Fenner

&

Beane,
Circle Tower.
He was previously
with Kidder, Peabody & Co. and

First Securities Co.
ILL.

dealers in reorganization

.securities.
at

40

Offices will be located

Exchange Place," New York

of

City;

telephone

is

Bellingham.

Whitehall

Crane

David

A.

J.

and

pre¬

Noyes &
was Rich¬

prior thereto
mond, Inch, representative for F. S.

Yantis & Co.

MO.

—

Fusz-Schmelzle & Co.,
Bank

Westland
staff

4-8247.

have

of

been

added

from

First

on

In the past, he

Trapelo Road.

offices

was

Boston

Corp.

and

Building,

members

King Merritt

Chamber

Joins

of

&

Co.,

BEVERLY

HILLS,

Mor¬

Koval have been added to

staff

of

South

Hamilton

Hogan, Price &Co.,
Beverly

Hutton

Drive.

previously

was

associated

with

Heller,

Co., Mills Tower.

Bruce

Mr. Jordan

of

the
was

Co.

Two With

&

Co.;

Mr.

with

Koval

SITUATION

LOS ANGELES,
has

The

First

National

Bank

of

; of

the

association

to

The

Financial

H.

hereby

business

Stock

March
open.

16,

1950.

Pacific

of

Company

the

Los

Transfer

books

The

Hurlbut National Bank of
Wlnsted,
at Winsted, in the State of Con¬
necticut, Is closing its affairs. All creditors

to

The

with
scot

Financial

Atlas Corporation

become

Titus-Miller

&

connected

Building, members of the De¬

troit

and

Midwest

Stock

Ex¬

changes.

Trader

Public.

seeks

Common Stock

connection.

of

the

association

the

to

present

are

therefore

claims

for

hereby

payment to

undersigned at said bank.
EDWARD

F.

December

9,

Commercial

&

Financial Chronicle, 25 Park

1949.




Place, New York 8.

of

•

this

4,

N.

Y.

company

on

of

close

of

February

2,

Directors

business

1950,

cents per share

on

of

the company payable
stockholders of record at

ness

February

on

10,

will

company
dividend of

on

declared
a
15
the Common Stock outstand¬

ing of
to

March

on

this

February
the

18,
of

close

1950,
busi¬

1950.

EDWARD

FRAHER,

Secretary.

Board

of

Pennsylvania

Directors

G,

have

1950
declared

for quarter
1950,
DIVIDEND
of
ONE
PER CENT or $1.50 per
share, on PREFERRED STOCK, payable April
20, 1950 to stockholders of record April 6. 1950.

March

31,

ONE-HALF

declared

(1V2%)

a

DIVIDEND

of

FIFTY

CENTS

G.

share has been declared, payable

F.

CRONMILLER,

JR.,

Secretary

March 20, 1950, to holders of record
the close of business on

at

28,

February

1950

the

on

Common Stock of

Corporation.

(Special

to

The

Financial

Safeway Stores, Incorporated

February 1, 1950

First California Adds

Preferred and Common

Chronicle)

FRANCISCO,

California

to

The

Stock Dividends

CALIF.—

Co.,

300

The Board of Directors of

Financial
—

gress

THE DAYTON POWER AND

Samuel E.

15th Consecutive Quarterly

share

Add

pany,

(Special

to

The

Financial

T.

Brown has become connected with

Investment

Securities

tional

Building.

Bank

Co.,

on

on

Na¬

business

on

March

record

at

ness

B. C.

at

the

1,

1950

on

rate

at

the close of

to

share
stock¬

the close of busi¬

March 15,1950.

The dividend

to

the Common

of 50c per

payable April 1, 1950

the 5% Preferred

on

a

per

February 15,1950.

February 3, 1950

dividend

holders of record

Dividend

the Common Stock of the Com¬

payable

stockholders of

Chronicle)

MICH. —John

The

and is

DAYTON, OHIO

regular quarterly dividend of 50c

Investment Sees.

Company's $5 Par Value Common

Stock and 5 % Preferred Stock.

Stock is

LIGHT COMPANY

Chronicle)

Street.

Safeway

Stores, Incorporated, on January 27,
1950, declared quarterly dividends on

Mont¬

is engaging in a securities
business from offices at 50 Con¬

JACKSON,

McARDLE,

Liquidating Agent.
Dated

27,

the

at

Board

Also

The Board of Directors has declared

V

Directors

YORK

Walter A. Peterson, Treasurer

Will be available March 1st.
Box

COMPANY

NEW

per share on the NO PAR COMMON STOCK,
payable March 1, 1950 to stockholders of record
Febiuary 16, 1950.

A regular quarterly dividend of 40
per

Atlas

BOSTON, MASS.

Utility

of

February

J.

Co., Penob¬

STREET,

Pittsburgh

Dividend No. 33
on

Chronicle)

MICH. —Donald

has

JR., Secretary.

1950.

and

located

notified

McCASKEY,

HARBISON-WALKER

33 Pine Street, New York
5,N.Y.

(Special

1950 to Preferred
the close of busi¬

1950.

REFRACTORIES COMPANY

Guild
Experienced

1949.

record

The

of

Angeles

share

HOFFMAN, Secretary.

StiW^

Exchange.

at

1,

INVESTING

Board

Checks will be mailed.

EDMUND

ANGELES, CALIF.—
T.
Caffery is now con¬

(Special

TRADER

BUNNELL,

A.

BROAD

15,

On

remain

one-half
per

February 2, 1950, declared the regular quarterly
dividend of $1,375 per share on the outstanding
5 Va't'e Series Cumulative PVeferred Stock of the
company/payable April 1, 1950 to stockholders
of

Preferred Stock of this Company, payable April
1, 1950 to Stockholders of record at the close of

(Special to The Financial Chronicle

members'

COMPANY

January 31, 1950 a quarterly dividend of one
and three-quarters per cent was declared on the

Brashears & Co.

with

CITY
25

STOCK

15,

record

Maich

on

S.

associated

Samuel E. Guild Opens

Liquidating Agent.
Dated December 9,

March

Stockholders of
ness.

The

CAN

and

($l.l2Va)

declared on
the $4.50
Cumulative Preferred Stock
of the Corporation, payable

Noble, Tulk & Co., 618
Spring Street, members of
Angeles Stock Exchange

AMERICAN

Penna,

twelve

cents

the

UTILITY

to present claims for
payment to
undersigned at said bank.

CLARENCE

lar

ated with

PREFERRED

invest¬

own

was

DIVIDEND NOTICES

Los Angeles Stock Exchange. Mr.
Portman was previously with G.

the past Mr.

meeting of the Board of Directors
Allegheny Ludlum Steel Corporation
held
today,
January
26,
1950, a dividend of one dol¬

a

the

CALIF.-

gomery Street.

notified

'the

At

Ewance A. Copeland and Thomas
H. Donaldson have become affili¬

Morgan & Co., 634 South
Spring Street, members of the

Robert

In

DIVIDEND NOTICES

Chronicle)

nock have become affiliated with

Wlnsted,

therefore

are

Street.

&

Noble, Tulk

ANGELES,

with

First
(

Fox

was

CALIF.—H. R.

become

Opens

Morton conducted his

the Los

SAN

WANTED

University

ment business in South Bend.

of

South

the

Allegheny Ludlum Steel Corporation

Myles H. Sinnott and Roy E. War-

located at Winsted, in the State of Coninectlcut, Is closing its affairs. All creditors

East

CALIF.—
James O. Jordan, III, has become

(Special

in

SOUTH BEND, IND.—Max L.
Morton is engaging in the securi¬
ties business from offices at 1425

FRANCISCO,

LOS

Street,

(Special to The Financial Chronicle)

(Special to The Financial Chronicle)

Mr.

r-

with Floyd A. Allen & Co.

LIQUIDATION NOTICES

Columbia

—

Pittsburgh,

formerly with Newhard, Cook &

DETROIT,

CALIF.—
and

36th

Max L. Morton

Commerce

Heller, Bruce Staff

SAN

R.

He

Midwest Stock Exchange.

Nadeau

Douglass W. Hamilton

East

27, N. Y.—paper—40b.

ending

(Special to The Financial-vChrOnicle)

12

to

Building.

Boatmen's

California, 623 South Hope

F.

Nations

Bank in Los Angeles.

Ralph

and

Bankers

Developments

(Special to The Financial Chronicle)

LOUIS,

1950—A

Business

on

Press, 2960 Broadway, New York

formerly with the municipal bond
department
of
the
California

nected

business

Banking

World Economic Situation—United

(Special to The Financial Chronicle)

A.

Stock

was

ties

E.

Association,

Recent

Four With King Merritt

Street,

Midwest

the

Mr.

viously with

Salle

La

LINCOLN, MASS. — Frederick
B. Taylor is engaging in a securi¬

118

Day
book

New York 16, N. Y.—cloth.

Company of Chi¬

South

Exchange.

LOS

(Special to The Financial Chronicle)

the

as

Present
reference

in

becpme associated with

cago, 134
members

Co.

Myran

—

Ma-

Washington 6, D. C.—cloth—$3.00.

Merrill

ANGELES, CALIF.—
Elgin, David J. Mentzel,
Harry L. Thomas, Jr., and Clyde

Myran Crane With

Frederick B. Taylor Opens

to act

with

Mildred

Herald

James C.

With Pacific Co.

gan J.

the

and

LOS

Eastman, Dillon & Co.

formation of D. J. McMillen & Co.

in

Social

Banking—The American

,

Portman

Hogan Price Adds Two

the

offices

Lynch,
Fenner & Beane, and in
the past conducted his own firm

With Titus-Miller

of

Schlotterbeck

of

Meriam, Karl T.

roney—The Brookings Institution,

With Morgan & Co.

INDIANAPOLIS,

Financing

Pierce,

Pasadena.

of

(Special to The Financial Chronicle)

City

made

with

formerly

in

White, Weld & Co.

Formed in N. Y.

Co.

(Special to The Financial Chronicle)

D. J. McMillen Co,

Walton Opens

L. Walton has formed J. L. Walton

Smith has become associated with

Eric

L.

With Merrill Lynch Co.

with

from the government.

&

Minneapolis Associates, Inc., Rand

six million individuals

hold

Barth
Street.

&

own

Tower.

Lynch,

American

said

MINN.

Cortlen

Jodouin

have

liam

holdings of life
savings deposits.

and

his

Assoc.

Cloutier,
Richard M. Engebretson, George
W. Fried, Carl A. Heinecke, Guy

He also
over

John L.

and

Security—Lewis

BELLINGHAM, WASH. —John

Prior thereto he was with Edgerton, Wykoff & Co. and conducted

ST.

back

are

firm.

&

With Fusz-Schmelzle

Minn.

(Special to The Financial Chronicle)

are

Americans

through

Furthermore,
who

there

interest in

insurance

more

offices

North

gain in

that

J.

recently

investors.

easily be lost.

out

has

Secretary and Treasurer.

support those

public

1949 could

eighty

business from

in

High Street.
Offi¬
cers
are
Raymond M. Maddox,
President; H. D. Thornburg, VicePresident,
and
L.
M.
Maddox,

warned that

anxious to put the investor
on
the political map the

pointed

Company is engaging

securities

of

annual letter to customers that he

with

Seventh

Crane has

HARTFORD CITY, IND.—Town

a

has been ap¬
Vice-President of their

a

ANGELES,
CALIF.—F. Building to engage in the secur¬
ities business.
Mr.
Walton
was
Kemp has become asso¬

First Securities

Finance

Kennedy

pointed

(Special to The Financial Chronicle)

(Special to The Financial Chronicle)

profit

employee

Elouise

the

Smith said that Merrill

rharing

Group,
Incorpo¬
rated, 63 Wall Street, New York
City,
announce
that
Margaret

Cost

(Special to The Financial Chronicle)

with

compares

Cum¬

&

F. Thomas Kemp Joins
Staff of J. Barth Co.

for

Town Finance Co.

Smith,

report

Wheelock

CHICAGO,

managing
partner,
announced
yesterday (Feb. 8) when he made
public

135

Inc.,

after partners' sala¬
interest on capital of 6

and

per

net

Co.,

was

Island

$2,335,370

had

of

Cosgrove

ILL.—George

become

&

has

Rock

Pierce,

has

Reynolds

Rice
W

ISLAND,

Rice

Moseiey

Distributors

\

LOS

47

Distributors Group

F.

associated

mins, Inc.

West

Reynolds & Co.

ILL.—Edgar

become

&

ciated

(Special to The Financial Chronicle)

:

formerly with Eastman, Dil¬
Co., and prior thereto was

was

(647)

Vice-President of

Moseiey

South La Salle Street. Mr. Grimm

Thomas

Of

CHRONICLE

Margaret Kennedy,

(Special to The Financial Chronicle)

and

Feb.

award

FINANCIAL

With F. S.

Gulf, Mobile & Ohio

series

Railroad
ment

the

won

of $3,570,000

Co.

&

&

Edgar

Ohio RR. Equipments

Report

Winihrop H. Smith, managing

come

Halsey, Stuart Group
Offers Gulf, Mobile

Exchange Firm

Issues Annual

COMMERCIAL

Stock is
and is

at

the

rate

of $1.25 per

payable April 1,1950

holders of record

at

to

share
stock¬

the close of

business March 15, 1950.
MILTON L. SELBY, Secretary.

TAYLOR, Treasurer
January

27,1950.

^

48

Thursday, February 9, 1950

CHRONICLE

FINANCIAL

&

COMMERCIAL

THE

(648)

exclusive

in the

who ate

the few outsiders

BUSINESS BUZZ

private dining room of

the Board.
Senator

on.

hended

•

•

Douglas has compre¬

the

of

problems

the

closely that his JEC
Monetary subcommittee report
Board

Behind-the-Scene

Interpretations

from the Nation's

WASHINGTON, D. C.—One of
truly significant speeches of
the present year is the address
.delivered to the Senate on Feb. 2
the

by Chairman Brien McMahon of
the Congressional Joint Commit¬
tee on Atomic Energy, for it hints

bomb

the greatest of

as

encies of the 20th

all emerg¬

Century.

most dangerous

the

ap¬

praisal to the H-bomb of all the
many
that have been bandied
about in print.
The bomb is 1,000
times
stronger than the
"ordi¬

to

question of
American cities will be
a

earth unless—

off the

"unless"

the

unless

is

government of the United States
adopts some such bold program
as

the Connecticut Senator pro¬

have
the
United States spend S50 billion
over a
5-year period, 510 bil¬
lion a year, a paltry two-thirds,
he says, of what the U. S. now
spends alone on defense.
This "money" would be spent
in transmuting the evil spirit of
would

He

poses.

into a world-wide

atomic energy

angel of peace and plenty, for a
world-wide Marshall plan, and for
a
world-wide Point IV program.
As
a
consequence
of
this
gigantic

S.

U.

the

of

deserts

the

endeavor,

Saraha—even the deserts

of the

could

be

con¬

into

said,

Senator

the

verted,

—

Arid lands would be
made to produce plenty. Every
gardens.

hungry mouth on the face

of the
the
world

earth could be fed. In return

the

of

nations

other

would have only to agree to an

control and

effective
of their

inspection

atomic energy de¬

own

velopment, to guarantee peace¬
ful use, and recipient countries
would have to agree also to di¬
.Ad¬

equivalent
two-thirds of their own mili¬
paltry

verting
to

sums

for

outlays

tary

constructive

Senator, it

the inner

Administration know
whether the hydrogen bomb is a
few times or
a
thousand times
circle of the

than

powerful

more

mal

presentation

does

seem

For

of

eyes

fact,

in

the

sign of

mestic

expanded

be

almost

served

speech

n

to confirm

for

it is

foreign

aid

So

*

sit

*

■

as

will

any

ferred

for

to

"atomic

an

explosion."

For the

a

Marshall
;'Y''

the

no

built.

the

tative, except
members

very, very

Congress,

of

few

and

it

aid

better, with
or

H-bomb

or

things

cost

scope,

If the ways

A.

ton

in

maturity to small business¬
of longer

and business loans

are

who

have

System
others

been

more

in

December to

re-write

Avenue,

they

Administration's determination to [welcome,

invited to Washing¬

Paul

able to compre-

than any
Within the
Reserve
Board

clearly

to

.

Senators,

Congress.

maturity if there is

outstanding busi¬

S90
interest on
former
Treasury capital. This.
Douglas said, would improve the
to

cut

its reserves by some

million

}

standing

j

to

pay

country.

|

with

banks

of

the

(This column is intended to re¬
scene" inter¬

flect the "behind the

pretation from the nation's

Capital

not coincide with
the "Chronicle's" own views.)
and may or may

Riverside Cement

Spokane Portland Cement
Oregon Portland Cement

Coplay Cement Mfg.
Giant Portland Cement

problems of the Reserve

hend the
'

two

Douglas, Ph.D, of Illinois, and
Willis Robertson, of Virginia,

heavily-guarded
marble palace

collateral, is
emphasize and underscore the

use

capital,

adopted. So the FDIC in

Cement Stocks:

of God and man are

stranger.

by

men,

interest on its past

government

lending

*

■

strange, the ways ct'
bureaucracies are sometimes

H.

years

no

sometimes

en¬

Senator Lucas of a bill
giving the Reconstruction Finance
Corp.. the power to make charac¬
ter
loans of not more than
10

this

that agency's
*

significance of the offer¬

ing

as

wants

powers.

There

prices—or peanuts.
nessmen were

expand

to

other

for its operation after

he

because

therein,

done,

RFC while he is

At present there are
substantive plans worth the

Chief

budgeted for less than
of
supporting
potato

A number of

knocked down by Sena¬

questions asked about the
leading the drive

dirty

new

some

was

Lucas

tor

pro¬

on

have

and have

Constitution
always been

been

LERNER & CO.
/nvestment

10 Post Office

Securities

Square, Boston 9, Mass.
Teletype BS 69

Telephone HUbbard 2-1990

among

the

be doubted even how much

technical aid bill under the spon¬

they really know of the funda¬
mental facts about atom war¬

sorship of Rep. Christian Herter,

may

of

Massachusetts,

a

secrecy,

and

through

the

Firm Trading

the bill.

blanketed

in

Commission

monopoly

for the facts are
a
dark shroud of

the government
Atomic
Energy
has a pretty tight

oil

all

substantative

information.

So

one

no

President

knows whether the

Senatorial

friends

truthful when they say, in
that

he

is

on

are

effect,

the verge of hold¬

his hands an instrument
of devastating much of
civilization.' Few -can
possibly
ing

in

capable




Teletype—NY 1-971

HAnover 2-0050

Republican,

the Administration
a
big break. These businessmen
did meet and they did re-write

fare progress,

f

It

been

which
the
pending bill would be ordered

pro¬

a

quashed.

actment.

,

technical

its present

In

on.

so

anything authori¬
a

fare

name,

agricultural methods, and

program is

the Adminis¬

both
Then

This latter is still regarded

Russian

sanitation, public health, improve¬

despite his statement to that ef¬
order the hydrogen bomb
outside

future.

.

ment assistance for such

fect.

one

through

near

skeptically in Congress, and

will

present. Point IV is just
for the one leg,

except
"technical aid."

ment of

No

the

in

that

seldom

Congressional investigagation, approved as this one was
by two Senate Committees, is
posed

pay

of

was

was

is

It

auto.

"technical

IV's

has

to

governments

emergency.

whether the President did. in fact,

tration knows

Pbint

investigation

but that it
also should be the first agency

critical of the
making
equity
capital "loans" to such relative¬
ly
big
businesses
as
Kaiser
Fulbright

to

respectable
phase of Point

should

ernment

William Fulbright of Arkansas.

guarantee of foreign investments
will be brought up for action, but

indi¬

a

actually know, furthermore,

Few

small price

first

as

investigation of the
RFC by a Senate Banking Sub¬
committee headed by Senator J.

proposed Export-Import Bank

the

practicable atomic visions, so-called, the U. S. would
go vern men t - to -go vernbomb, for the President-only re¬ provide
developed

one

pushed

be

Houses

most

Y";.Y

Plan.

to

now

later.

the

bigger scale than

a

He proposed that

the FDIC be
important quasi-gov-

only

ernment agency to repay a gov¬

proposed

provisions, without some of
former
business opposition,

aid"

even

on

was

private bankers in

way.

the

credit
further underscored by the
business

small

for

Majoritys Leaders killing of the

IV.

approach

another

of

toward

an

was

for acquiring a

backing

these

if there is
Administration
sentiment
suspicions,

It

group.

the

McMaho

committee

quick to accept the recom¬
of
the
business

pay

business.

The

tude

mendations

at

contraction in do¬

a

IV,

regarded so
skeptically
and
has
so
little
backing, the State Department
was

another

solici¬

Douglas also set out

the

help

not

Administration's

The

is

pressure,

to

ever.

parts, and under Administra¬

tion

something on the

could

which

American
Point

entire

the

Senator

diggings. Luca's bill is not yet an
official Administration bill, how¬

a

;

while reported out of

ly countries and providing an out¬
let for surplus
U. S. products,
farm and manufactured—and out¬

Under

in

Since

expanded to serve as a means of
propping the economies of friend¬

let

"create

investments.

which, once enacted,
thereafter modified and

be

should

political

particular

these

work

foreign

that

notion

climate" favorable to

program

could

the

governments

books in the form of any

statute
new

independent power of
the FDIC to examine a risk was
the

ators,

killed.

ments,

the nebulous and
"Point IV" by way of

groping to get

have

Reds,

that *—* popcorn away!"

and

offering

was

undefined

the friendly sen¬

with the help of

in

here

System, however,

Reserve

The

championed, it said, the problems
of the private bankers, who didn't
want
"triple examinations,"
so

feasible.

persons

in¬
potential

trouble spot.

public life have suspected
that the Administration had not
in the least reconciled itself to the
termination of ECA in 1952. They
have felt that the Administration

coasting,

the

stantly to examine any

of

out

raised, it

should have the right to move

long' time a considerable

a

number

at

insurance coverage were

'Well, this is NOT the movies!—put

nary" atomic bomb of today, for it
has not been built.
Few know
whether

while

Congress
of the

to

the

in

White House, to be

point of view was that
were to be reduced
the same time deposit

FDIC's

if its income

its for¬

arrives when

time

the

power

energy

ally proposed, but may be re¬
duced in size when, as, and if

"ordi¬

the

of the Reserve Board.

be actu¬

never

may

cation
Of course few beyond

of examination with¬
requiring
such permission

first

Connecticut

the

permission,

out

that

program

by

written

on

offered
by Mr. McMahon is not at this
stage a formal Administration
proposal. In the precise form
presented

only
be given

examine state member banks

a

reco very-atomic

development

con¬

arrangement for re¬

an

ducing these assessments, on con¬
dition that FDIC, which now can

rep¬

trial
balloon, it is just the forerun¬
ner
of others. The $50 billion
As

Corp.,

Insurance

Deposit

reduced. FDIC finally

sented to

this grandiose

the McMahon idea,

purposes.

eral
fund

major Administration

idea.

private bankers want the
the Fed¬

These

shared in that quarter.
it is a pretty good bet

aid

world

minutes.

nation's econ¬

effectively.

burden of assessments to

originate from fairly high
within the Administration, prob¬

foreign

believes

to regulate the mone¬

necessary

not

trial balloon for

of

The

Congress

Board

the

powers

desires
the

Board's

the
from

obtain

to

omy

a

publicly

Board

tary affairs of the

Hence

System.

Eccles of the Fed¬

Reserve

frustrating

Committee represented the
alone of even such a
prominent Senator as Brien Mc¬
Mahon.
The inspiration, if it did

explosive that levels hun¬
square
miles."
Great
American
cities, he said, could
be
incinerated
in
a
matter of
an

burned

Reserve

the

in

inspiration

that the McMahon speech

.time when

all bank examina¬

Now Gov.

pronouncement as that made by
the Chairman of the Atomic En¬

was

perhaps

of

idea

the

blames the nation's bankers for

resented

Surely it is only

at

tion

assume

ably

re¬

centralizing

eral

nary" atom bomb dropped on Hi¬
roshima.
"Densely
populated

dreds

aimed

*

American cities are made to order
for

BOARD ROOM

capital few are so naive
that such a major

In this
as

the

over

requirements of ALL nonmember
banks,
and
a
study

from the earth."
*

control

including

ever y-

necessary,

saw

serve

perish

will

you

or

me

thing the Board

STOCKS

judge what safety there would be
in refusing to follow the Presi¬
dent if the President should say,
"follow

almost

recommended

JL ir £€>

ergy

McMahon categorically

Senator

attaches

hydrogen

the

evaluate

to

means

Administration

the

that

clearly

V^lff

/■ yi jfw

xjl il\JL

Capital

so

and they gave

Executive &

70

r ARL

invest¬

should provide all selfhelp possible, and so on, which
were incorporated in the tech¬
nical aid hill. Idea was to at¬
well

as

guarantee of invest-

YORK

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SECURITIES

SPECIALISTS

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MARKS & r.O. INC.
FOREIGN

i

5

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ments,

tempt to tie in to technical aid

NEW

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ing legal generalities to the ef¬
fect
that
recipient
countries

as

Hill, Thompson & Co., Inc.

FOREIGN SECURITIES

This bill was re-written stat¬

should be kind to U. S.

Markets

AFFILIATE: CARL MARKS

Trading Department

120

New York 4, N. Y.
& CO. Inc. CHICAGO

BROADWAY

Tel. REctor 2-2020