Full text of Commercial and Financial Chronicle : January 1, 1959, Vol. 189, No. 5808

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uiAN
(

BEST

WISHES

FOR

THE

NEW

YEAR

'•it

-f

Number 5808

Volume 189

New York 7, N.

Y., Thursday, January 1, 1959

Price 50 Cents

Copy

EDITORIAL

President's Eisenhower's unusual step in

giving
the public an advance peep at the overall picture
to be presented in his annual budget message has„
served at least one good purpose. It has put the
people of this country on/ notice of the attitudes
and probable behavior of the "spenders" in Con¬
gress, and, of course, there are plenty of them
there. Leon H. Keyserling, i former chairman of.
Truman's

President

visors, and
in

fiscal

Council

Economic

By HON. ALBERT RAINS

and

Fair Deal

advisor

the Democratic

1 His

views

party or
his

are

own,

clear

Last

session

saw

pressures

which, to

1958. He

some

also

upon

great

our

short-term interest rates in

anticipates

greater expansion in the

for

The

hectic

credit
and

markets have

strenuous

the

plan, and I was
delighted to introduce and support
it in the Congress.
:
We made a great fight for that
.

bill.

had

insurance

It was
the bankers, , by the
companies—by prac¬

have
a

Continued

page

Roy L. Reinrioa

potential undertakings in

and

dealers

less

are

short

extent

♦An address

ciation,

BROKERS
DEALERS

STATE

and

AND

investors

MUNICIPAL

volatility

The credit system, how-

likely in 1959.

page

111., Dec. 29, 1958.

in corpo¬
SEC and

State, Municipal

30.

Lester, Ryons & Co.
623

Associate Member American

PUBLIC
&

UTILITY

THE FIRST NATIONAL CITY RANK

OF NEW YORK

DEPARTMENT

Burnham and Company
MEMBERS NEW

VORK ANO AMERICAN STOCK

STREET, NEW YORK 5, N. Y.

EXCHANGES

•

Beack,
Pasadena, Pomona, Redlands, Riverside,
San Diego, Santa Ana, Santa Monica
Encino, Glendale, Hollywood, Long

SECURITIES

15 BROAD

Stock Exchange

Offices in Claremont, Corona del Mar,*

FOREIGN

BANK
30 BROAD ST.jN.Y.

Exchange

•Members Pacific Coast Exchange

RAILROAD

CORN EXCHANGE

Bonds and Notes

California
Members New York Stock

BONDS

014-1400

inquiries Invited on Southern

Teletype: NY 1-708

California Securities

New York

Distributor

Markets

Active

Net
To

Dealers,

Banks

Maintained

and

The Canadian Bank of Commerce

Brokers

(Rights Expiring March 17, 1959)

T. L.Watson & Co.;
ESTABLISHED

westc0ast

We offer to

1832 : •

transmission co.

Members

Block

Inquiries

CANADIAN

American Stock Exchange

Direct private

'■ \

DIRECT WIRES TO

•.

PERTH AMBOY

•

Co.

MEMBERS NEW YORK STOCK EXCHANGE

115 BROADWAY
NEW YORK

wires to Toronto, Montreal,

1 NORTH LA SALLE ST.

CHICAGO

for

California

Municipals
Municipal Bond

MONTREAL AND TORONTO

Goodbody a

NEW YORK 4, N. Y.

BRIDGEPORT

DEPARTMENT

market.

Ottawa, Winnipeg, Calgary, Vancouver,
Victoria and Halifax '

Invited

teletype NY 1-2270

25 BROAD STREET

DALLAS

Chase Manhattan

buy these rights at the

current

New York Stock Exchange

COMPANY

the

Correspondent—Pershing A Co.

Dealer'

DEPARTMENT

bank

Bond Dept.

BOND

TELCTVRE NV t-UCZ

CABLE: COBURNHAM

Public Housing Agency

Angeles 17,

So. Hope Street, Los

INDUSTRIAL

CHEMICAL

the

by Mr. Reierson before the American Finance Asso¬

Chicago,

"Securities in Registration" Section, starting on page

UNDERWRITERS

HAnover 2-3700

FIRST

that

and

Municipal

•

sharp

Securities

Underwriter

time.

precipitous business recession and
the subsequent abrupt recovery, such

BOND

Continued

complete picture of issues now registered with the

our

the

address

rate securities are afforded

firmed dra¬
Never before

more.

drastic fluctuations in market condi¬

tions

by Mr. Rains before the United States Savings and
Loan League, Kansas City, Mo., Dec. 8, 1958.

lows,, then
once

markets witnessed

our

swing in
To

League as that group.
Rules Committee and

you would choose the U. S.
bill was not cleared by the

brief

money rates

of interest rates in 1958 reflected the

I think one would have to say
that if you
could only have one
group in your corner in a legislative

fight,

1957,

recession

matically

ance,

the

period since
and bond
yields have moved through almost
an
entire swing of the cycle. From
peaks not seen in
a. generation,
rates and yields dropped steeply to
November

tically all other lending groups. And
yet, it received a 19 to 3 favorable
vote in the House Banking Commit¬
tee.
On the basis of that perform¬
Albert Rains

months.

posed by the Administration.

opposed

completed an. exceptionally
This is adequately illus¬

by the extreme gyrations of
interest rates over the past twelve

rejected 9 to 6
by the Senate Banking and Currency
Committee.
It
was
violently op¬

life

year.

trated

been

SECURITIES NOW IN REGISTRATION—Underwriters,

telephone:

effective anti-

inflationary policy.

The U. S. League did
the original work, development, and
research

♦An

State and

The

extent, were anticipated after mid-

supply than is consistent with

joint effort to enact the

enough by their own out-

U. S. Government,

per se.

..."

Guaranty Plan.

doubtless, but he is an

DEALERS

1959

money
,

further,

page

■

would claim that
sense a spokesman for
for any faction therein.

additional

interest level.

one

Continued

spiral rather than commercial bank loans

flexibility in government insured and guaranteed
and voices opposition to an even higher

A number of members of the new Congress
it

financing will be decidedly

larger—pushed by purchases of Government securities,'

mortgages,

The

made

benchmark, Dr. Reierson concludes

chief economist believes the net result of this will be

rate

aggressive individual and a facile exponent of
popular with the spenders in the Demo¬
cratic party.
■., /
:" \

have

capital seeking outlet in^FHA and GI loans." Turning
to the criticism that FHA-VA rates are rigid, he explains
why we will never—nor should—have complete interest

programs

Company, New York City

1959 demands for bank credit

occur

may

Trust

cyclical business rise and concurrent wage-cost price

adding that there is "no absolute need for a
balanced budget, when there is still so much
slack in our economy, and there is no possible
justification for a balanced budget if it can be
only at the cost of endangering our national
defense and starving those programs essential to
our
domestic
economic
strength and human

progress." Of course, no
Mr. Keyserling is in any

slump

Using 1955

unless^averted with lower cost FHA-GI aid. Rep.

Home Mortgage

went

Vice-President and Chief Economist
Bankers

Rains assorts we must encourage and add to conven¬
tional mortgage money "an ample supply of investment'

Ad¬

affairs, has described the forthcoming

former

two, housing construction

spring

terms of the worldwide situation."

The

By ROY L. REIERSON*

Chairman, Subcommittee of Housing,
Banking and Currency Committee

•

forCredit, !

Rater and Business

(D.-Ala.)*

Top Congressional housing spokesman predicts, one,
Congress will give top priority to general housing bill

budget program of the President as "deflationary
from the standpoint of the national economy, in¬
flationary in its impact upon price trends, dan¬
gerous to the national defense, irresponsive to
our vital public needs, disingenuous in its claims
of being 'a balanced budget,' and really blind in

facile opponent of all things sound

The Outlook

Bousing and Mortgage
Prospects in Coming Tear

Doawion Securities
Grporatioti

Department

iBank of America

Associate Member of American Stock Exch.

Exchange Place, New York 5, N. Y.

TeL WHitehall 4-8161

Tele. NY 1-702-3

300 MONTGOMERY STREET
SAN FRANCISCO 20.

CALIFORNIA

The Commercial and Financial Chronicle

(2)

The

Brokers, Dealers only

For Banks,

Security I Like Best
-

In 1959

participate aad (be Aeir

Try "HANSEATIC"
provides
kets, faster.

private wire

with

you

reasons

they to be regarded,

sys¬

more mar¬

JOSEPH P.

as an

offer

CROSBY

Our

Brewi^

pabst

major brewers
today because
(1) it is . the

close to the product we limit

St. Louis,. Mo. (Page 2)

^ Sons'
.

continued growth is now made g

the Blatz acquisition is its' effect

Exc-Hange

sold

now

■

••'.r::.:

brewer

'Wtf'M

the
with

sales

erage

line

Josepn

SCRIP;

Since 1917

welb-estawfshed

new

will

economies

deal

Members
New York

StockExchange

American

Stock

tici

a great
Having un-

ation

Call

•

write

Yamaichi

of Hew

■

Company

York, Inc.

V Affiliate of

California plant and Engsubsidiary, as well as its usual

new

llsh

information

current

Securities

toward 1959 with

Yamaichi Securities Co., LM.

Tokyo, Japan

areas,; high ; research expenses.
Polymer expepcts almost all operating

Brokers & Investment Bankers

111

Broadway,N.Y. 6COrtlandt7-5660

man-

"owarl

trend

S'S

0perating at low «**'

from the premium
, (2)
Raw material costs,
account for only Pally from capacity operation of
20% of U. S. beer sales. Brewers Pabst s two malt houses and one,
are
recognizing the advantages grits mill.
"
7
basket'handles
of
participating
in both price
(3) Overhead
costs

beer and away

beers which

re^ei^H

now

gjB

Exchange

BROADWAY, NEW YORK 8
2-781S

For example,

markets.

Busch three years
a

P°Pufai

new

limited

only

"or BOSTON

market

SECURITIES

Anheuser
ago introduced

pnc^ *Jfer ^ ®
which has been

gradually

combination
into

of two

wifh^the : USC(j {n automatic
organizations tfik segment of-'
'-

one.

(4) Blatz's
giatz

distribution

beer, which

it Supermarket

" costs.
heretofore has

-■

extended

wire

and

the

SneS ^ ls hST
\

KELLER BROTHERS

greater advantage of price, preference and regional trends as they
develop.

CO., INC.

(Corner of Washington St.)
Telephone Richmond 2-2530

-ryrodurpr^

u .'S

BOENNING & CO. "
•

Established

1914

1529 Walnut Street
115

Broadway
New York 6, N. Y.
CO 7-1200

Philadelphia 2, Pa.•
•

LO 8-0900

ATT

Teletype PH 30

fs the
nvTnn

Combined

iprodocer of nylon

Perlstein, Chairman pro-forma volume for the full
of Pabst,
had. retired from the year will be over four million
Presidency in April, 1956. How- barrels. In view of the increased
ever, the company's position sub- strength and many benefits desequently
deteriorated
to < the rived from the Blatz acquisition,
point where he was recalled to it is believed that sales of five

ofC seini
finish||j'nvioi-nrbdurtu bar^n"

mately.

break

even.

Harris

Mr.

ZERO COURT STREET, BOSTON 9, MASS.

un^Le

teitiig.rp^V^ihl^1-binnYnv

it is expected that for the second
half the company will approxi-

been shipped entirely from Mil- search expenditure, it should have
wal,kee> can now aiso foe produced a very marked effect on the profit
$10 and $20
jn other Pabst locations, reducing picture.
*
and promotional expenses alone,
shipping charges and permitting
: "
•
Paost, by acquiring the nation- m0re effective
competition with
The Company, and Its Business
ally-known Blatz \vh!ch is sold in other brands.
The Polymer'Corporation was
38 states, has avoided the diffi', 'formed ' in'^1 Q4fi-in Rp^in^
pQ
culty and expense of developing
On a pro-forma basis, in the uv Louis Ii*
in the hihlf that
a
new
popular brand, and now first half of 1958, Blatz's pre-tax nvlon because
of
nroner
has
a
merchandising flexibility eernmgs about offset the $1,6
as
pn
that will enable it to take much lion loss incurred by Pabst, and

Zmle

GENERAL DISTRIBUTORS

Corp.

Keyes Fibre Co.

come a significant contributor to
earnings instead of a sizable re-

Stat

Corp.

Stouffer

enmnanv's

Request

Grinaell

baskets

dishwashers. If

FUND OF BOSTON

Continuing Interest in

Fischer & Porter Inc.

sjjd a
estimated between
pei bariel in selling

i *oCn

MUTUAL

•

dergone eostlv sfart-im charges in

important

number

Board

<« Lower unit production costs facilities to.bel in the black next

priced

popular

STOCKS
For

and
new^vnamic
due to gfeater volume as. sales year. Perhaps one of the most enaffiment In recent
the increase and as Blatz's barrelage couraging:signs is the increasing
hSS indLrv has exnerienced is added to Pabst's breweries now nterest hi the' fluidi'zed bed coat-

heer

msf—

JAPANESE

vears

ffcpOHNELl&ft).
REctor

Pabst

Polymer^'" Corporation

avp?ue to profits!- j00{tjng
of them-

produce

.•

branch offices

our

XofTrnJU

> '

benefits

including:

-■

The consolidation of Pabst and- its

'j*

cov-w

NY 1-1557

Mobile, Ala.
Direct wires to

F.4'EDWARDS,' IH'■

non-competing^rolyraer Corp.-

selves and to Pabst.

additional

provide

HAnover 2-0700

New Orleans, La. - Birmingham, Ala

in vest-

Exclmhge and Chicago

distributors 'will

tnese

obvious

Blatz

production.

Xek

addi-N^^/*;

a popular,

^ema

high

plant

new

effective market;
will be obtained. The

with

can

mate-

todays

'consequently,

•

common

structure:

^tion of

rially^ without having to make

Specialists in

stronger

Ianc*

capac-

expand

RIGHTS

from

meaning

ity,

19 Rector St., New Ycfk I, N. t.

among U. S. brew- A G Edwar(,8 4 s
St. Lois, Mo.
now ha™
,ovef -1,000 fMember.: Now York Stock Exchange,
a» COmbme.d b?S1S^ American Sto.-k Exchange, Midwest
which a

dfflmfflFi

substantial
excess

stock " ahd,

structure., A

in Pabst's decline from third place -..BENJAMIN

major

that

Members New York Stock Exchangs15
Members American Stock Exchange
,

W§3Sjjm0jm. to eighth place
,

na-

san francisco

Principal Cities

Steiner, Rouse &€o

•

excellent
weakened wholesale organization ment for capital gain. '
was undoubtedly a major factor
;v- :"v' v
^

■

only

•

mfj

lillllflftplWmM

chicago

•

the distribution

and
popular
priced
beer

Teletype NY 1-40

WOrth 4-2300

both

premium

120 Broadway, New York

Bought—Sold—Quoteo

arei?AF^war^nI^A V^dw^dc

as the
war babies
reach % Deer/as:pabst begins to develop its new
drinking age.
v : "
potential, Jt .will be reflected in
KM.
Another important feature .of higher, prices for, the common.

•

Associate Member
American Stock

Prospectus

Louisiana Securities

afforded by Pabst. Further, thek shares outstanding with a book
1958, Pabst Brewing company is well situated to take Value per share of $14.90.
v v
the assets of Blatz advantage of the expected surge-j strongly feelthat as the forea step which placed
in beer consumption m the Y96uS|-gQjng factors are recognized and

On July 30,

wit h

1920

Established

TEL.

Joseph

acquired
Brewing Co.,
Pabst in a unique position among

Corporation

120

c0.

Crosby,^Partner, Bear, Stearns
& Co.» New York City (Page 2)

\
;

Alabama &

Brewing Co.

only brewer

Wires

nor;*

Participants and

possible by the additional capacity

Co.

New Yorii Hanseatic

Private

be,

of its single brewery and whose

Members, New York Stock Exchange

Primary Markets in more than

Philadelphia

Thursday, January 1, 1959

Their Selections

(

400 Over-the-Coiinter Issues.

boston

particolar security; ':

intended

sell the securities discussed.)

how

New York City

Pabst

able executions.

not

are

portant to Blatz whose sales

Partner, Bear, Stearns & Co.,

long experience and large
trading department assures you
of maximum service and depend¬

for faroiing

(The articles contained in this foram
are

Our nationwide
tem

Forum

A continuous forum in which, each week, a different {roup of experts /
In the investment and advisory field from all sections of the country <

..,

increase

?in^

the

use

P^lV^er Cora^arion

lAto-

disnlav impressive growth in hoth
cales

<p assess

b^ Dr^

SaLblv sW

hktnrv
g
shoit.hlstoiy->er

October, 1957. The million barrels can be achieved in relatlvely
share
Blatz
acquisition
provided
the 1959 resulting in earnings of $>.00.4
Siiles;
Earningsj'
outstanding executive needed to to $1.25 per share after taxes. The ipt.7
$t,946 197
s.us
take over the helm and permit potential earnings
of Pabst are i?®®----~——
o'=op'Inn
"If
Mr. Perlstein to step up to the much greater as the present
ex-:19mZZZLZZZZZ. .c
.10
position of Chairman. Mr. James cess capacity becomes productive i953__;v;_r„^,->v
2',425T60
Isg • |.C. Windham, the new Pabst Presi- an(f
idle plant costs are elimi*}'2o!Sq
J
dent, has an outstanding business nated. Earnings will expand much 1950%^;•'711.323
!o7
record, and more important, great faster than sales from the level
3i5!s9i
[01
success
in the brewing business, of
five million barrels due to
-r-v?----v.
During his tenure as President lower incremental costs and as 194/; .~ "~~y.~
3g'411
of Blatz, the company's rate of further economies from consoli;
sales doubled in two years from dation
are
accomplished.
The
' "Adjusted ^for stock distributions in800,000 barrels to 1,600,000 barrels above also assumes no increase in cludmg 3> stock dividend Jan. 10, 1958.
annually, while a $900,000 pre-tax beer prices, although it is believed '
During this period,
however,
loss was converted into a pre-tax that a recent price increase
oY\25 several other firms have been atprofit of $3 million. Only 44 years cents per case by three mapv
tracted to this fast growing inold, Mr. Windham gives Pabst the brewers in the St. Louis area will
_■
.»•
^
long - range dynamic leadership spread industry-wide and nation- dustry. To combat this competiwhich it had been seeking.
ally. This could have the effect < tion, and to take advantage of the
Most major brewers are produc-: of adding 50 cents to $1.00 per
»company's fine research organizaing close to capacity at a time share to Pabst's earnings at a five : tion which
pioneered successfully
when new capacity is extremely million bairel volume.
costly, about $25 or, more per barPabst's
financial
condition
is 1?jny ?f'
Placed conthis

office

■■

Your

•

RED

•

CROSS
must carry on

'^saving*

„

LAMB0RN & CO,, Inc.
99

WALL

STREET

N. Q. B.

NEW YORK 5, N. Y.

rel,

SUGAR
Raw

—-

Refined

—

compared

Pabst's

book

value of about $7 per barrel. The
two
million
barrels
of efficient

Liquid

Exports—lm ports—Futures

cost

million to reproduce toThe consolidated company

$50

day.
of

capital and
1.

current ratio of 3 to

Cash flow of $10 million, based

has

7.5

million

between
Illinois

total

barrels

California,

and

available

annual

New

capacity

distributed

Wisconsin,
Jersey.
This
is highly im-

siderable emphasis
opment
which

payments, c
and permit
which

i t

a 1 expenditures
dividend payment,1

specialty

require

™qskill

fortn 3T.W®
now

DIgby 4-2727

?olY^er has

quitje strong, with ample working

products

high

and

the develdegree

controi-

lahtatocy
;

20-Year Performance of
35 Industrial Stocks
FOLDER

Products

likely by the end
Although a relatively high-cost
of 1959. Capitalization cdnsists of i
material
nvlon is less than half
$22,640,000 in funded debt and .*65,000,000 in capital and surplus.,as dense as alummum, has excei-

REQUEST

appears

™f *' ny,

There

OVER-THE-COUNTER
INDUSTRIAL STOCK INDEX

are

4,352,412

common

18 less th?n hali

Continued

page

National Quotation Bureau
66 Front Street

New York 4. N. Y

■

The

5808

Number

189

Volume

;

■

;

• •

The Commercial and Financial Chronicle

Important Role of State Taxes

i n de x
i.„

By V. JUDSON

'*•:
Prof. Wyckoff examines the record of state tax collections,

of taxes and

pertinent state by state tax compari¬
and the relationship between taxes and personal liberties.

sons,

was

$199,259 for

—Hon.

'.
-

every

by, and that state tax collections' in absolute*/

Possible

by
In ad justing for; prices and

2.9% and 8.6% above 1956.

traditional

than

condemn

expenditures

praise

tby governments, yet if we actuI ally were faced with a choice between govern-

] ment

and

(government,
ifew

would

vote
;1

e r.

Jhave

: e

the

lor

[in the isolated
i

frontier

tion

au¬

.the group,
land
when
ling

into

move

the

settlement

area

the

and

com-

ex-

expenditures then

once

state

our

(and borrowing)

thf Weher levei esnec^Uv

and

.this

erowlfn population
in Donation

country
country

grows

geographic

size.

Naturally

shift of

political dominance
does not go unchallenged. In this
country with our three levels of
government' (Federal,

state,

eral .bureaucracy—if such, seems
to be the desiyable pattern—then
more and sustained attention must

common

Govertimen't» Division

the

RlirM11-of ^nsus

IT wlc

';.v

t Data
;

tax

State

•"
•

•

.j.

End of Ban

indrnduai states
dens

are

of the

v^Tlin

talked

when tax burFederal

about

speakers.

x_v

other,

have

specialized

V-.

See It

' I", V:

Salt

IU'A

' 1

.v.

•.'•■

■

....

•

Ling Electronics
8

• o0v

Midwestern Instruments

Einzig: "Franc Devaluation, Sterling and the U. S. Dollar"—11
From

Washington Ahead of the News—Carlisle Bargeron

/Indications of Current Business Activity

.Mutual

Singer, Bean

Funds

for 'fiscal
to

camt>

bUhon

save

NSTA Notes

News About Banks and Bankers

Observations—A.

Wilfred May

—J

Direct Wires
San Francisco

;

Philadelphia
Reporter

Governments.

Dallas

Los Angeles

Cleveland

Chicago

all '

later

Our

•

inc.

40 Exchange Place, tt Y.

Teletype NY 1-1825 & 14844

to '

this 'sum with other state

Mack ie,

HA 2-9£f0a

an.

Our

jdate

Reporter's

Report.

the Governments Division of Cengug

out

COme

total

state

with

Public Utility

report

Securities

—

including

revenues

^Tve'"

< Railroad Securities

the dollar total will not be much
^jfferent from the one just given.

Akamil

•

Prospective

Security

$14>0

Securities

bmion compare!5 • with
in absolute dollars'

which

1956.

For

The

Offerings

years

page

Salesman's Corner.——

Market

The

was

many

Corp.

Epsco, Inc.

and You—By Wallace

Streete

Jerrold Electronics

^ ^ ^
turn
8.6%

Continued,

For

former yearSt

1957

Alsco, Inc..

Jt .g natural to want to know how

th0

Securities Now in Registration!

sum for 1958 taxes, but.

this

Security I Like Best—

The State of Trade and Industry

—1—

Washington, and You—1
Twice

;

Weekly

Permachem

Corp. A-

Topp Industries

The COMMERCIAL and
'

PREFERRED STOCKS

Spencer Trask & Co.
New

York

Stock

Exchange

■"*

ST., NEW YORK 4, N. Y.

Boston^

TELETYPE NV 15

TELEPHONE HAnover 2-4300

Citv

Dealer-Broker Investment Recommendations.^

FINANCIAL

CHRONICLE

Reentered

25,

ary
,

Reg-. U. S. Patent Office

DANA

1942,

second-class

the

post

matter Febru¬

office at

New

York, N. Y., under the Act of March 8,1879.

Place, New York 7,

Subscription

N. Y.

Chicago

Schenectady

Glens Falls

Worcester

Subscriptions

9576"

Possessions,
HERBERT D. gEIBEBT, Editor &

WILLIAM

DANA

Rates

SEIBERT,

President

United States,
U.
and
Members

Territories

Publisher Pan-American

Union,

$65.00

&.
of

w* v. 'rant & co.
INCORPORATED

per

ye^tr, in
Canada,
$68.00
per
year.
Other Countries, $72.00 per year.
•
Dominion

Thursday, January 1, 1959

Other Publications
(general news and ad¬
Bank and Quotation Record —
Monthly.
issue) and every Monday (com*
plerte statistical issue — market quotation $45.00 per year. (Foreign Postage extra.
records, corporation news, bank clearings,
Note—On account of the fluctuations in

Every

■

COMPANY, Publishers

REctor 2-9570 to

Nashville

Lake

Pacific Uranium

■

——_jl

Stocks

*•

Cover

•

25 Park

Albany

JCY 1160

Direct wires »to Denver St

Permachem

(Editorial)

25 BROAD

Teletype:

—

Members

City Stock Exch*

Exchange PL, Jersey Gly
j

Coming Events in the Investment Field_

WILLIAM B.

co.,inc.

Members Salt Lake

New York State Bank Holding Companies

Fublished

For many years we

1. f. reiffy

Fair Labor Standards Act
20

Bank and Insurance

•

solute

relative

—___j.____.___

fnfnic tviic cvnsiis. fleiire omit<5

above

and

Swan_

for

lower levels of government.

Regular Features
As We

•

tries
compare

tax bill is tremendous both in ab¬

size

Prospects—Morgan J. Davis.

Urged by Sen. G. II. Pierce

of the

•

collections

Government « Th/'rlpori

persons

DIgby 4-4970

are' imDortnht

trust {funds

WzlLaLnJ
almostthan taxes of
necessarily

INVESTORS CORP.
to Investors

i———__

Condensed State Tax Collection

StureTandTar'gei tofbUls^Fed- definitive
u
touch

AMERICAN

George Humphrey Applauds President's Proposal for
Balanced Budget
!

Bureau ^.Census aie important.

pence of our Federal

Popovic

sense

'^toymen* compensation^

4ui

r,f

STERLING OIL

Increased Federal Prominence
vom.H

Freese

nroSmatelv «4 9

One result of this gradual shilt

—George Meany

1958 (most states end their fiscal

decentralisation.

REFINING

hands and not pass to a Fed-

our

ism, and states' rights versus Federal authority. • Similar problems
are
found, of course, in private
business as it grows: centralization in production and admiftistraversus

;

our representatives
Washington, D. C. And if con-

£2'*2 ™,!hafr0blS f
home rule
state paternal-

•tion

WESTWATER CORP.

ficials than to

and

versus

An All-Out Drive to Amend the

the following ' condenaed
figures on'^ tax collections for ;
fiscal 1958" recently released by

Not So Rosy Economy

Nattell———

Oil Industry's

—Eliot J.

^centralization0 of pomlcaT auto
as

YORK

Telephone: WHitehalf 4-6551

Monetary Policy and Problems in Recession and Recovery

J?.e given/ fbj; instance to state
^lsca^ .:£F9^eW! 3?fIU5f
{^fust
^For' this

itv in

WALL, STREET, NEW

HYCON MFG.

local of-

and

Obsolete Securities Dept.

state ;and

local finances
creates the grave danger of having the tax bills on these lower
levels of government considered
not
too
important.
Yet in our
state and local. governments are
the grass roots of our traditional
democracy.
We the people are
nearer

cash and

Inflation; A Key U. S. Problem—Hon. Lyndbn B. Johnson

Domestic

It is not necessary to labor the
point that- government usually is
,multilayered.
With such layers

l?a

Hedge in Over-Valued Glares, and

trol of government is to remain in
are inevitable:
then expend-

'once * government
taxes

s necessary

community

jpands.
j The next steps
itures, and

form-

form

some

{government bee o m e
igrowmg
in functions

iplexity

Wyckoff

\ v

relatively, subordinate posi-

______

—Roger. W.. Babson.^

;

tion

thority within

others

The

obscletes !

for 1958

was

S--*

Developments in Credit Markets and Bunking Industry

ernment took in about $69 billion '

fam-

•ily there must
be - recogni¬

Taxes—V. Judson. Wyckoff

net in taxes compared with apBetter Federate Debt Management—Carl- G.
proximately $15 billion collected "
by the 48 states as a group and an - / The
Inflations Disease and the Cure—Milan
estimated Vsiifijlar
sum
by I local .'£•
governments—counties, townships,' '
v Far-Reacliing Forecasts for 1959 and Advice
c.ties,-' special* districts, * etc.
The *

country,-thus,

by January 2 you'll

•

COMMONWEALTH

staggei^Ag ($100 billion, or $190,250 every fni'ntlte in every hour of
every day; duHrig the 12 months

Even

•

Solutions to Railroad Financial Problems

mean

-chaos.

have

—_€over

_£

—E. Sherman Adams——i

of the fiscal year.

fwould

That

! ■ Gentlemen, Be Seated—Ira U. Cobleigh„„

June 30,-1958) the Federal Gov-

in this

•

resolve

-Today's Stock Market: The My this and the Facts
—G. Keith Funston
!___I—„—

total tax lake for all governments '

gov-

Hains—

Carl Wedel__

^./.-—Robert

(the' 12 months ended

fiscal 1958

__Cover

v-'""

*rather

„r.

99
♦

higher level, and recommends that the layman interest himselfin the subject to slow down growth of government functions.*
i

The Important Role of State

•

population, however, the economist arrives at an opposfte.
state tax picture wherein fiscal 1958 collections were about
2% less than 1957. Nevertheless, he is concerned about in¬
creasing growth of governmental activities, ; and shift t» a

Albert

dollars continued its upward trend with 1958 above 1957

i i:

Credit, Interest Rates and Business

Housing and Mortgage Prospects in the Coming Year

;

some

staggering $190 billion,

minute that went

for

—I^>y L. Reierson—

Notes that the total tax take for all governments in this country
for 1958

Outlook

The

•

types

Page

Pauw University

Greencastle. Indiana

•

■t

Articles and Newsm

WYCKOFF^f ^

•Department of Economics, De

Thursday

39 BROADWAY, NEW YORK 6
Vk

WHitahall

3-3960

Teletype NY 1-4040 A 4041

vertising

state

and

city

news,

etc.).

'./■•-

the

rate

Other. Offices: 198 South T* Sail" f?t„ foreign
^Chicago 3, III. (Telephone STat^r 2-0613). must be

exchange,
remittances
for
subscriptions and advertisements
made in New York

funds.

Direct

Wire

pun Jtncl DUI4

,■

(4)

The Commercial and Financial Chronicle

(10) The ending of inventory
liquidation (but with its re-accu-

<dthulation paving the
eventual new glut).
•

•

RED

General

(1)

ling-off

—NINETEEN FIFTY-NINE—

toward

list for the reader's con•

trade

termine

the

business:

ac-.

tivity

1959: On

our

ume

Willred

and

the

the stock market, we

will con*
sider the likely influences on
the latter separately in a sub¬
sequent article, v

which will be
new

use

continuing into the

With the year fast drawing to

effects

Long-range

European

Common

(8) Retail sales, which

with

Market,

ing

fresh turn-down in

status

the

stock

market;

with

the

possibility of a severe price
entailing major
psycho¬
logical repercussions on spending,
by both consumers and industry.
break

Ghas. W. Cobb V.-P.

(9)

Continued

growth;

Vice-President and

open

director

Harriman Ripley plans

San

early this
be

Francisco

office

and Mr. Cobb will

year

charge

the

planned

branch.
PLEASURE

".;••••

Edmund
•

•

E.
•

' '

V '

with °the

HAS BEEN

ADMITTED AS A

OUR

production

Week,

lower.

was

plants

many

retail

trade for the country at large show that
chases boosted the total dollar volume for the

selling

season

high set

record level

were

closed

However, reports
•

last-minute
entire

San

Manager

Francisco

office.

1942, with the closing of the West
branch, Mr; Cobb was trans¬

ferred

FIRM

Christmas

which exceeded slightly the pre-,

ago.

year

Sales,

prices and profits of metalworking companies will
head upward during 1959, "The Iron Age," national metalwork¬
ing weekly, stated on Wednesday last.
'
."The Iron Age" based its forecast on the results of a 20-industry survey of top-rhanagement people in big and small com¬
panies comprising a cross-section of metalworking firms and their
■

■

suppliers.
The

„

optimism

of metalworking management was in sharp
last year when the majority of firms looked toward
anything but enthusiasm.
A synopsis of "The Iron Age" survey's findings show that
prices for metalworking products are on the uptrend. Slightly*
contrast

half

those

year.
some

surveyed plan to raise prices an average of 5% /
Reasons for the expected increases undoubtedly are
companies delayed price hikes in 1958. Now with busi- ;

ness
better they
absorbing them.

think

the

market

stands

The sales outlook for metalworking is
than it was last year.
Then only 28% of
see

higher sales

volume to rise

the horizon.

chance

better

Laurence m. marks & Co.

considerably brighter "

of 18% this year.

average

Profits for most metalworking companies are expected to be
healthier this year than last. Poor earnings reports of 1958 pretty
much reflected industry opinion at the start of the year.
Now
some

60% say profits in 1959 will increase about 23%

over

New

the

firm's

main

York where he

office

has

been

business

AMERICAN STOCK

EXCHANGE

Wall Street,

down

goods were
could

start

much

scramble

among

74%. A sudden spurt in
manufacturers to replen¬

Order backlogs for metalworking products dropped steadily
during 1958. With few exceptions, most of the industries report
orders on hand at year-end 1958 below those of 1957 at the same

Continued

page

Tuller & Zucker

Formed in New York

(ASSOCIATE)

New York 5, N. Y.

j, t

Tuller

•

are

Wall

City.
Principals in the

Street, New

lias been admitted
new

Robert

announce

Tuller,

who

Robert

pleased to

Tuller

the

MR. JOSEPH

F. Eberstadt & Co.

(Special to The Financial Chronicle)

E. SULLIVAN

Co.,

members

now

45
of

with Dean Witter

Montgomery
the

Street,

New, York

JACQUES COE A CO.

and

Pacific Coast Stock Exchanges.

NEW YORK STOCK

„

MEMBERS

EXCHANGE
,

With Schuyler Coffin

AMERICAN

STOCK EXCHANGE

(ASSOCIATE)

LONG BEACH,

't I

NEW YORK COCOA

•'

EXCHANGE, INC,

NEW YORK PRODUCE EXCHANGE
EXCHANGE, INC.

Calif .—Elmo G.

Barnett is associated with Schuy¬
ler Coffin, 132 Pine Avenue. He
was

COMMODITY EXCHANGE. INC.

NEW YORK COFFEE AND SUGAR

*
.

(Special to The Financial Chronicle)

December 29, 1958

December 31, 1958. :
*

our firm

•

SAN FRANCISCO, Cal.—Robert

the

Exchange.

lias retired from the firm

L. Fields is

gener al partner

New York Stock

With Dean Witter Co.

Andrew W. Eberstadt

headed

Tuller and Zucker have,
aggregate, over 50 years'
experience in the bond business.

and

General Partners in

and will represent us on

Messrs.

Peter B. Cannell

becom ing

are

firm

Co., and
Abraham
W.' Zucker,
formerly
head of A. W. Zucker Company.

that

announce

MR. MARTIN J. WEINBURG

York

are

pleased to

Zucker, dealers in
state,
municipal
and
revenue
bonds, has been announced. Of¬
fices

IFe

are

Formation of the securities firm
of

JANUARY I. 1959

1958.

ish depleted stocks, this trade weekly pointed out.

MEMBERS NEW YORK STOCK EXCHANGE

ofi

those surveyed could
Now 78% say they look for sales

member of the sales office staff.

pur¬

Finished

the

Coast
IN

result that

Christmas

Metalworking firms * cut their inventories of raw materials
and finished goods to the bone during 1958. At year-end,. stocks
of raw materials were off as much as 88% from a year earlier.

GENERAL PARTNER

•

being

Co., Inc. in June, 1934

Barrett, Jr.
'

He joined the staff of The Na¬
tional City Company in 1921 and
the staff of Harriman Ripley &

IN ANNOUNCING THAT

Charles de Gaulle in radio and television

foods, canned goods and the like, which Europeans,
because of the shortage of dollars were unable to

week

this

constant
bulwark of demand for goods and of the investment banking firm of
services, and for the continued Harriman Ripley & Co., Inc., 63
Wall Street, New York City, is
growth of total personal income,,
announced by Stuart F. Silloway,
now at an all-time high.
a

presently and in the months to

obtain.

that

Ripley

The election of Charles W. Cobb

population

constituting

President.

Mr.

breakfast

over

Of Harriman

are

and

receive

1958 with

were sus¬

higher than last year, and
expected in 1959 to register a
further 4 to 5% increase.

which

announced

heretofore,

vulnerable

should

economy

the French people on Sunday evening
that the French Government was devaluing the Franc by
17.55% along with other stringent financial measures to revive.the
economy of the nation.
Britain also decontrolled the pound ster¬
ling, paving the way for the increased imports from the United':
States and Cdnada of many itc*ms, such as cigarettes, coffee,'

highly

the

last,

new

trade

(3) This week's European Mon¬

-■•••

Premier of Frahce

addresses

vious

orders,

gains in physical volume remain in doubt.

a
20%
month-to-month
registered from October to

The

into

ports indicate, will show an increase in dollar volume in the com¬
ing year as in the past. This is not hard to understand when one
considers present-day costs of materials and labor.
However,

November last.

sive.

desires

is expected that business

Last

its

and

come will be building its inventories to take care of the increased
volume of business that is anticipated.General construction, re¬

orders for machine tools, amount¬

surprisingly well through
recession,
with
Christmas

1he

current survey).

•

strikes.

decline

prospects for business

converts

by McGraw-Hill.
(7) Growing labor troubles, and
major work stoppages as already
presaged by current increase in
(8)

the

big lift.

surveys, as

tained

partly unfounded, seems to sup¬
ply a fillip to consumption (partly
offset by the scaring-off of some
buyers of consumer durables, as

WE TAKE

(6) Slow-up in capital spending
1959, indicated in preliminary

Business Failures

close thoughts are centering
industry in 1959. Much will
depend upon the auto industry and its performance in the days
ahead.
If the public is very receptive to the 1959 models and

the

industry.

(10)

income.

(2) The public's widespread in¬

way.

production, based on the 1958 and
apparently continuing rise in farm

depressions and
expansion. (With un¬
favorable tax prospects and busi¬
ness-baiting | constituting partial
brakes).

revealed in

high

build¬

The bright prospects for
machinery and equipment

(7)

limits

harmful

residential

Auto Production

Industry

improve¬

1959

later imposition of new discrim¬
inations,
including
the
Euro¬

should

new

Price Index

likely to be slow and lim¬

(2)

year. '

farm

stimulates

psychology;

and

(9) The oil industry's newly un¬
The recent sharp rebound favorable outlook; with the world's
electrical equipment business, crude capacitk indicated as exces¬

political climate," evi¬

otherwise

trade

(6)

by the:* 1958 election re¬
sults which,
irrespective fo£ r tho.
unsoundness involved, should in¬
crease governmental intervention-

however

1959—with

vol¬

only a maxi¬
mum of 85% of the industry's ex¬
panding capacity, entailing some
brake on
the
price and .profit
structure.)

denced

flationary

billion

into another

increase would

STPIU^TING,FACTORS

that

$67

record

(5) Rising steel production and
orders, indicating a 25% increase
to possibly 110 million tons next
year. (But even such a production

course

about

ing leading the

May

economic

betiyeert

elements

ism

over

for

relation-

<1); The

spill

permanent

all-time

1958

Commodity Price Index
Food

ited.

which

international

generally,

whose

premise of a
general
a bsence
of cor¬

level-

Trade

Retail

State of Trade

INK

peans' erection of tariff barriers
advantages to the U. S. may pos¬ against outside goods.
sibly be
entailed
later in
the
(3) Registration of a decline in
stiffening of competition with an commodity
prices,
indicating
accentuation of the pricing of our¬
over-supply situations.
selves out-of-the-market, in the
(4) Uncertainty of the key auto
transfer
of
financial
power
to Industry's
sales,
with
possible
London, and the permanentizing hindrance from high
prices, and
of U. S. gold exports).
of general durable goods recovery.
(4) Construction activity, that
(5) Increased competition; as
leading economic barometer, is emerging in the key chemical

course

convertibility;

step

and specifically
European
restrictions on
U. S. exports (some offsetting dis¬

de-

structive,
likely to de-

the

relax

constructive
ten

with

increase

should

venience^ the most significant
factors, ten
and

Agreement,

Production

Carloadings

•

postwar

Further

exports.
ment

Following our custom at the
forecasting 'period,

Steel

Electric Output
'

worldwide

the

boom, with major declines regis¬
tered
in U. S. as well as world

The Bright and the Bleak Prospects
New Year

for

way

THE

By A. WILFRED MAY

etary

Thursday, January 1, 1959

formerly with Tucker & Co.

Broadway

New York 6. N. Y.

Number 5808

189

Volume

...

The Commercial and Financial Chronicle

W 5Q
all ?

for

ir^nsportatipircfinancing/., must go toward repaying annual obsolescence^., ha&vnot to date
Percy jYoung ^df j thd; Prudentiall maturities oh already DUfstahding - loomed* quite so large id your oWn "
for example, in additibri td think-» equipment issues
and mortgage picture. :
!
'
"
mg anout Tailroad diesels is now: and debenture, debt.
Therefore,
How have these two major segthinking ^bout 46,000 d.

each yearu rails have had to raise
from the money market of this
country close to $1 billion,
"Wall Street Journal," also fol- I know few people, even in tne
lows the financial convolutions of financial
world, not intimately
American Flag
subsidized ship- connected with the railroads, realping lines; Herb Schriver of Har- ize the magnitude of the financial
riman Ripley worries about the problem the ^carriers have solvea
economics of containerships.
In so calmly year after year withou.
our shop
people like me have re-;—until last year at least—bothersponsibility not only for raiiroads ing Congress for special appropri-:
but
have
other
transportation ations, the ICC for subsidy or the
credit responsibility.
This list Treasury of the U. S. for forma*
could go on indefinitely. Y Y,
government fiscal support.
This
(4) Although I suppose it is is another proof of how well to
never, on the face of it, a good date
they have mastered
the
thing to lose a monopoly, it may problem of competing for money
sometimes be a good thing to in a tough world. /\
>
>
Y
open
up
a
little monopoly on
To the airlines and subsidized
credit thinking,
In other words, shipping lines, however, capitax
even
though the trend in the fi- expenditures in the amounts outers

Vke-President, The First National City Bank of New York

New York commercial banker suggests non-rdN transportation

w: t. tankBoeing 707s; Dave Jones,

ana

who

By T. CARL WEDEL*

handles

railroads

for

•

ments of "the transportation industry solved their financial

the

problems?
1

Airlines' Approach

The airlines basically have done
it as follows: they have obtained
techniques of equipment and capital expenditure and guaran¬
revolving credits from banks and
teed loan methods applicable to railroads' financing require¬
insurance companies giving them
ments which he believes will be as large or larger than those
maximum
financial .flexibility
through the contemplated. delivof airline and subsidized shipping lines combined over the next
ery period of the jet equipment
three years. Mr. "Wedel then offers railroaders five-fold advice ,
which will extend toward the end
to improve their competition for money with the non-rail seg¬
of 1960. They have then arranged,
ments of the transportation industry. ■ "V.-k/!'-':
following the delivery of the last
jet, to "fund" these revolving
I would like to outline some of
Nobody,
however,
even
re¬
credits into long-teravloans and/or
motely connected with transpor¬ the major financial requirements
debentures of .varying maturity
tation can help but know the pre¬ faced by companies in other fields
lengths —- the annual amortizadominant role the railroads play of
transportation,
to
mention
tion of the debt {at least whensome of the financial media used
in this always
; Y '
ever a prudent lender is involved)
vital
element
by these companies to iulfill their nancial world seems to indicate lined; aboveloomlike the Hima- being keyed to a figure well befinancial
of
our
econr.Y
requirements; and
to that railroad finance, per se may laya Mountains to a traveller, in low "break even cash generation,"
suggest some implications of this ho longer monopolize the com-: the lowlands of India — possibly i.e.-! well bdldw depreciation? • It
omy.
These
non-railroad
transportation
fi¬ plete attention of certain invest- £ because they are
days, particu¬
large} in rela- is really the size of this maximum
nancing relative to the railroads' ment sources and certain invest-vtion both to past requirements allowable a n n u a 1 amortization
larly, there
own financial future. •
seems to be a
ment officers, this "loss of monop- and
to that key ingredient ol figure!, in relation to the total
Such
information
may
prove oly"
tremendous
may very well work to'the,, credit .(probably more important amount of debt needed which has
•

•

ofY

volume

Y an

problems,:, i'i- ;
nancial or:?;

concept which has forced

otherwise,"
fSfCihg other

Carl

Wedel

least, will refer only to the seg¬
When I. ments, of those other forms which
do not in the least compete with

transportation.

mountain of material it

that

the

people
familiac/rnvlth
these
other concepts
will, with
hglp and cooperation, make every
attempt to apply them where feas-

insurance company: money maturing far beyond the relatively
short period over"which a commercial bank carv in good eonscience
lend
and, 'surprisingly
enough, maturing far "beyond the
depreciable, life of the equipment
financed. Since equipment -debt

ible to the railroads'

finane-

own

to a railroad having coinpletely to reconstruct»within • a
two year period all its right of
way, tracks and stations and to
scrap and replace all its revenue
equipment
at prices per
item
ogous

in.,the in¬ railroads!).
ing problems.
terest of perspective, to examine > (1) The railroads, like all free
Before proceeding into a brief roughly? twice; the
cost of - ,the
a -few
transportation
statistical enterprise corporations, compete discussion of how someother present
equipment.
The ; same
facts of life and, *°Y^nd that the ; for the :investable.'.funds of the forms ?of
transportation have at- can be said to a lesser degree of
railroads, in recent years, have country with all other corpora¬ tempted to
win
the
race
for the
subsidized shipping
line
carried nearly 50% of the total tions seeking such funds.
money, I want to point out that faced with the problem of comis

always reassuring,

virtu-

ally every airline rta obtain some

discussing .other forms of trans¬
portation,--J,
in this - paper at

airline's

and it is this

expend¬

cepts of equipment and capital Ueague^ present market value of
iture programs for the following
expenditure financing, guaranteed- equity versus book value,. To an
reasons:,;(At this point, I want to loan methods, etc. found^ practi-i airliner-faced \vith converting to
make
absolutely clear
that - in cable in other fields. I am sure jet operatidriv the problem is anal-

press aboutY
the many ?

men

will be to

substantial capital

ways

and civilianc.

read this

financial

railroad

raise the funds for their own al¬

financial '*

forms

whose responsibility it

words in both
the

•

useful

is virtually the only, debt in an
airline's balance sheet and they
hdVe

"after acquired property
in*their

relativelv

few

large extent in the to date, at least, the railroads pletely replacing all their vessels rea* estate mortgages, they have
furnished 35% of all passenger
past, those lending officers of the have shown themselves to be within a 10-year period. You can been able to own their own equipmiles and have piled up operat¬ insurance
companies, investment master competitors in the race at least be thankful that "block
,
1
Continued on page 24
ing revenues totalling 55% of the banking, houses and commercial lor the investable funds of the
;
operating revenues of all forms of banks who have been primarily country; in fact so masterful that
transportation put together. From responsible for judging the com¬ in the majority of cases, commer¬
an investment point of view, it is
petitive position of the railroads cial bankers like me, even; for the
The sole proprietorships of Robert N. Tuller Co,
also interesting to note that at in the
money market, have been early maturities of equipment is¬
miles moved

ton

in this country,

(2)

■

the
of

assets

able to concern themselves almost

sues,

country

exclusively with railroad financ¬

our

$26.8 billion versus total net
for all the domestic trunk

ing, and the railroads have, until
recently, enjoyed a virtual mo¬
nopoly on their time and on their
credit thinking.

equipment

end
the

were

assets

1956

railroads

total
of

net

this

airlines, lor example, of only $923
statistics

million.

These

that

railroads

are

the
the

prove

basically

still

mainspring of the trans¬

portation industry and, therefore,
their financial problems m u s t,
should
be, and,
of course, are
viewed
and

with

often

concern,

awe

the vineyard of

sympathy
toiler in

any

transportation fi¬

nance.

talk

by Mr. Wedel before the An¬
of the Treasury Division
Association of A.tnerican Railroads, Roa¬
noke, Va.
*A

nual

Meeting

and A. W. Zucker

have not been able to lend
funds

have

railroads

purchases

been

money

the

Company have been dissolved

1958.

of the close of business December 31,

they
long-term

since

getting

well

for

below

even

our

prime rate for short-term obliga¬
tions. This is a real tribute. Long
may the credit magic of equip¬

(3) As the capital expenditure
requirements of other forms of
ment trust certificates live!
transportation have grown, and
Now let us discuss briefly the
especially in view of the capital
expenditure
requirements
far financial requirements of some
larger than ever before now fac¬ other segments of the transporta¬
ing airlines and American Flag tion industry and some of the
shipping companies, it has been ways in which they have raised
inevitable that many of the same the funds to fulfill these require¬
lending officers who for so many ments.
happy years concentrated on rail¬
Other Transportation Methods
roads are increasingly being as¬
We have seen many headlines
signed the~: credit responsibility
in the

press

posedly
domestic

underlining the

startling
airlines

that

fact
of

this

Announcing the formation of

Tuller 8s Zucker
Dealers in

State, Municipal and Revenue Bonds

40 Wall Street, New

York 5, N. Y.

Telephone: DIgby 4-9474

ROBERT

Teletype: NY 1-1040

ABRAHAM

TULLER
W.

ZUCKER

sup¬

January 1, 1959

the

country

must

purchase over $2 billion
of jet airplanes during the
remain com¬
petitive one with another and that
worth

Samuel K.

three years to

Phillips, Jr.

the American subsidized

Harry L. Heffelliuger
Edward J.

shipping lines must them¬
selves raise about $2 billion over

to replace their
shipping fleets in order to remain
eligible for subsidy. Many must

formation of

Partnership

January 1,1959

continue under the
the business

same

name

excitement
from

Members

Philadelphia-Baltimore Stock Exchange

1500 Chestnut Street

•

Philadelphia 2

LOcust 4-2600

was

statistics

about

one

can

because
see

that

the railroads have calmly,

quietly,
importantly, at rela¬
tively low interest costs, consist¬
ently raised the new money re¬
quired to spend on an average of
over $1 billion per year on capital
expenditures since 1946. Further¬
more, from various estimates it
appears that the railroads con¬
template the necessity for spend¬
ing for this purpose at the rate of
about $1.5 billion per year almost
and

SAMUEL K. PHILLIPS & CO.
.

There's

need for confusion here. Of

course we

have often wondered what all the

Ralph T. llarker
the

ETC'S

the next 10 years

Phillips

announce

interna¬

tional

mean

Equipment

Certificates—a

-Trust

special

specialty of Stroud.
In fact—our semi-annual

most

ment trusts

evaluation of equip¬

has become^a standard

financial institutions nationwide.
copy

reference in

If you'd like

of the latest one, just 'phone us at PE

5-7330

and ask for our Rail Department.

infinitum into the future.
Interstate

sion

Commerce/Commis¬

statistics,

tell

that

total

funds available to the Class I rail¬
roads of this country from depre¬

ciation

(which we have come to
call internal break even cash gen¬
eration)

$500
year—much of which

approximate

million per

only

COMPANY,

INCORPORATED

123 South Broad St., Phila.
HEW YORK

•

PITTSBURGH

•

9* PE 5-7330

ALLENTOWH

•

LANCASTER

The Commercial and Financial Chronicle

Today's Stock Maiket—
The Myths and the Facts

President, New York

that

Exchange

Stock

York

New

future,
today? If we

fwith investors

worth
•_

Stock

head calls for tax reform to encourage venture
financing, and government fiscal responsibility and cessation
of wage inflation to end price inflation. Charges discrimination
at imposition of higher requirements for market as against
other credit.

less

than one-third the amount in,

The presence in the market
professionally-managed finan-/

12-month

completing a

are

period in which the stock market
story has moved off the financial
section of
to

and. oh

newspapers

our

the

front,
pages. We
have

;

seen

market

stock

volume climb
to the

years.

people's money—lends a steadying;
influence. The evolution of gov¬
and

lar stock

as the man
San Francisco

note

"Hand Over All Your
Normal." The teller,
an
intellectual,
considered
the
note a momeqt and then wrote at
the bottom: "What is your defini¬

have

evit ab 1 y

tion of normal"?

raised famil¬
iar

Keith

Funston

questions

items further

these
But

size

the

for
we

dealing with two' dis-

are

the

compare

with

stock

prices.

No¬

body knows. The market is, after

and the

30 years ago.

one

Market

Myth

the Future

number two takes

.all

-v

un^

J h^y;,
1

are

turn
a

out

later

snare

delusion.

actual

value.

1955with
1945

the

and

general,
mentals,

bonds

hard for

to believe that over-paying for

anything
gives
hedge protection.

From

early 1946,
the /basis

were

inflation

you

1938

exception

stocks
of

of late

funda¬

undervalued.

That

why they offered a good long
pull inflation hedge during all

■

situation/

those

Robert S. Natteli

bar existed-:

throughout 1928 and 1929.

the pace for

beginning to wonder
whether over-paying for stocks is
an
inflation hedge or whether it

J
^

their

is¬

Historically, stocks
have been a good inflation hedge
only when they were, cheap on

and

similar

ping < considerably
period.
V
-

and

in -blue,
chip s are
coming out at
5 _and/5V4%.
Th is large
sues

bad inflatiohary hedge drop-during
this

very

will

a re

bond

vof

concludes that

the market is setting

spreads in

happy view of the public's inyest-.'.
ment decisions and

2; J/2/%,;;

Assess

Yields

o c

new

Reflects the Way

Merely

Investors

:'*•

He selects gold

an ounce.

running be¬
tween - 1 and

market

present

38G.

tinct and separate universes when
we

devalue gold to $70

today's sensible investment hedge, and predicts 1959
.will witness a business .slump and a major market decline.

b lue

moment.

around 570. .This compares to the
1929
high of /

they empha-,

present

Act

Money.

These devel¬

into

which read;

aver-

opments

answer

expect,

time before

/ The stock market, as measured
by the Dow-Jones^ Industrial Average, is at an. all-time high of

regula¬

bank and handed the teller

highs.

new

categorical

who walked

record

ages

Exchange

tions provides the machinery for;
preventing illegal manipulation,.
As a prelude to uncovering the And
finally, a virtually ;new pro¬
myths about the market, there is fession, devoted to securities an¬
one often-heard query I'd like to
alysis, makes available to the pub¬
discuss. It is a question that goes: lic the detailed data necessary for
"Is the market too
high or too sound investment decisions,
low"?
Let me say that anyone
I would like to explore some of
Too Low?

frustrated,

We have

the popu¬

seen

Totf High

going to be badly disappointed. As

2 8

Market

the

expecting

highest

Leve1

with

cial institutions—trustees for other

.l;

picture it; charges Mr. Martin of the Federal Reserve
a-tight-money blunder; and believes it is but a matter of

some

i/ii

1929,
of

the over-valuation

as H hedge were a
'*
complete failure and advises only when stocks are under¬
valued do they serve as a hedge. The financial editor
explains
why the- present state;of the economy is not as promising as/

to '

extended

to rationalize

easy

•

-1942 and 1946-48 when over-valued stocks
/

Exchange firms is actually;'

ernment
We

credit

amount
^

by using the word inflation," Mr. Natteli points to 1937-

away

Margins or down payments neces-^
sa'ry for the purchase of stock .^re
imposed at the rate of 90%/versus:
as liftle as 10% 30 years ago. The

the Exchange

tending "it is always

compared. with. ap-.
one
billion
shares;
about $90 billion in 1929..

proximately

long-term economic solutions,

function but would not achieve

stock list- now eneom-/
5 billion shares worth)

billion,

$250

fortably similar to that of 1029. Warning that government
restrictions on the market would only affect its thermometer
/

Ex¬

The

Financial Editor, "United States Investor";

Today's stock rd&rket to Mr. Natteli is over-valued and typical
erf a broad distribution top of a buH market which does noL
present the conditions That constitute an inflation hedge. Con¬

striking/

similarities.

change's

get-rich-quick binge; and (3) is nncom-

and the present,

opinion,

the

y./'

differences/

the

the past

By ROBERT S. NATTELL*

passes some

(1)
inflation; (2) is overly speculative

business activity,

causes

than

Mr.

specific proposals to end the real economic problems.
Funston denies the myths, for*example, that the market.

arc,

;

economic problems
but is unfairly blamed for, and offers

market reflects

the

head attacks myths circulating

what are the
look at them

the

dispassionately,

maiket, discusses vital

the stock

about

to predict;

collapse cannot occur some-/

facts

Stock Exchange

tp outlaw de- /

bold

or so

No Hedge in Over-Valued Share s
And a Not So Rosy Economy

know,
suggest-

managed

pressions,
time

rash

one

between

Thursday, January 1, 1959

its,

While I

past.

our

have

Fl'NSTON*

By G. KEITH

roots

has

obviously,

point-of-view,

i«i n

On the

,years.
For, while every*
thing else was moving up in price
rapidly, stocks were still cheap
on
the basis of earnings, yields

basis
of
earnings, stocks today
all, people. It is a flesh and blood the rest of the economy. If the
are selling at the highest ratio in
and net worth,
affair. It is not subject to formu¬ market
booms, this myth holds,
history. At the 1929 top, stocks
las or predictable behavior. In the then the
Now, however, this situation
country and the economy
sold at around 19 times earnings
does not exist.
final
analysis stocks are worth Will follow along. If the market
Therefore, to try
while today the Dow-Jones Incomfortable similarities with what people are willing to buy
say that because when stocks
declines, so will commerce and in¬ ctustrial
Average is selling at ap- were under-valued
1929"?
"How does
the, market and sell them, fqr. And who c$p dustry
they were a
■'v- '/ ■
%■'» .V".'I/,;• /"
affect the rest of the economy"? make a blanket judgment for mil¬
earnings./g00c| inflation- hedge, ' it means
The fact is that in a market J?,r0_x"Va^^ 120;1"JiltlCes)
1 oday s popular blue chip growth;
My aim is to answer these ques¬ lions
of
individual
investors—
that'today, when they are over*
about the

mar-

;

ket.

People wonder, "who's in the
maiket—and
why"?
"Is it too
high, or too low"? "Are there un¬

tions

best

about

the

market.

the

harder

and

These

surface,

difficulties

face

obscured.

are

myths

facts,

facts

actually
exposing
focussing on the

and

the

distinguish.

of the pressing

some

economic

the

have

captured

made

harder to

result,

equally,
old myths

some

attention and

our

But

can.

explode

bubbled

hope

suggest

governed by stern and rigidly-en¬
rules designed to prevent

stocks

selling

are

valued, they are also a good in-*
All those former, ff&tion hedge, may prove to be a
yardsticks, however, are now be- costly thing./ The
history of the
prices, or those, are "unrealistic."
lug, discarded because of the so- ^tock /market has
proven
over
No one, let me add, can speak
called
"flight from, the dollar.'
and
over
again
that
whenever
unequivocally for the long future.
The word inilatjoii is being used
stocks are over-valued they turn
We shall certainly see prices move ket," as the "Wall Street Journal"/
as
a
slogan to justify good old- Qut to be. a bad inflation
hedge
in both directions—and at times said
recently,
"merely
reflects fashioned gambling and specula-:
and always result in subsequent
move
pressures.
It
causes
sharply.
But a prominent economic
lion in the stock
market.
It is losses.
A recent example is that
member of the
Exchange Com¬ neither booms for recessions, in¬ always easy
to
rationalize
the in France the stock market went
munity told a newspaperman not flation nor deflation. Its prices, over-valuation away by using the' too
high/and they had a crash
or
low/ are
results. not word inflation,
long ago that "over any long high
with prices dropping an average
:1 ;
period—10
years,
20
years,
50 causes."
/
of 2 l%y despite really bad inflayears—the market is bound to go
When Stocks Were Not a Hedge
tion.
r
v
Indeed, it would be convenient
up." Why? Because it is a meas¬ to blame the stock market—which
If you recall dui'ing the top of
ure
of
our
national
vigor and means millions of individual in- the stock market in 1937 the word
Why the Worry Now
their

with

vaying objectives
determine

needs—and

that

and

these

forced

tunes

earnings.

illegal manipulations, stock trans¬
actions simply mirror the hopes,
fears and convictions of a great
mass of people.
"The stock mar¬

some

—steps
are

out of

ways

difficulties

our

will have to take if

going

handle

the

deeper

problems which the stock market
mirrors.
admit
easy

In this last regard let me

that

have

almost

decisions. A philosopher

wrote-that "Delay is

and

gerous,

...

fect

time

take

anything;
out

turn

*An

any

never

under¬

Mr. Funston before
the Minneapolis Junior Chamber of Com¬
merce,

Minneapolis, Minn., Dec. 16, 1958.

We maintain active

something drastic
America, business is

happens to
going to keep

growing."

vectors

other

this

examine

1929

exist.

1958

vs.

perspective

some

ter

can

of the stock market

myths that keep springing
Myth number

up.

looks at

one

"
ris¬

ing stock market volume and the
level

stock

prices and holds
that today's market is uncomfort¬
ably similar to that of 1929. Hence,
this

reasoning

deep

and

goes,

difficult

trading markets in:

for

inflation

life.

But if We

are

headway in 1959, we had bet¬
begin by recognizing these

problems

for what they are and
not by fooling ourselves that they
are somehow caused by the
mar-\
ket.
For the stock market isfes¬

sentially

can

perhaps

restrictive

tion's

impose

measures

investors.

term"

Atlanta

Columbia
Direct

Greenville
Wire

All

CHICAGO

Raleigh
Offices

Roosevelt

used to justify over-

At that time
his large deficit

stocks.
with

spending and with world-rearmament going on inflation was inevitable

and.

therefore,

the

that stocks yielded' little

previously

ignored.

had

huge

The next five

na¬

fact
had

and

rise

was

years

that

followed in the stock market

was

rec-

ord

despite a period of rapid inflation
throughout
the
world.
Stocks as an inflationary hedge

-Myth
the

*=-■'

Ranges;

number

essential

This

/•;•/

top -of the bull market in 1946 the/ that theJ stock market has been
inflation was again used to
making a great distributive top
justify over-paying for stocks. At that has been forming ever since
that time inflation was rampant
August.
During the
past .five

Risks Are

three

throughout

concerns

great

composition

shareowning
myth

holds

Street and "the market"

*./-•

popula-:
that Wall
are

real¬

the

world

shortage

goods
money.

all

due

kinds

and1; a
great
excess
of
When the OPA went off

iir the

summer

dieted

that the

of 1946 many pre-

price level would

ly synonymous.. It argues that the

double and in the next few years

in many cases

claims
ments

Richmond

Another strange thing; is that
while < commodity
prices
were
moving up rapidly people did not
seem to worry as much-over, in*
flation as they are now worrying
about it.
Perhaps we have; all
developed what is known as "conditioned reflex." Ironically, world
commodity prices as measured by
Reuters ' Commodity
Index,1 are
around a nine-year low/
Also,
future commodity prices ;in* the
United States have hit an eightyear low.

Stock" Exchange is merely a trad¬
ing
ground
for
the
few,
the
wealthy and the privileged.
If

Exchange

NEW YORK

was

for

word

tion.

INCORPORATED

CHARLOTTE

paying

our

Understood

1919

Member Midwest Stock

the

solutions

Most Shareowners Are in Middle-

Income

R. s. Dickson <&_ Company
•

increasingly

But

economic

America's
Established

inflation

measuring instrument: one!of the worst declines

'-1-a thermometer. The government

Gulf Life Insurance Co.

Jefferson Standard Life Insurance Co.

for

going to make

mometer's rise.

Commonwealth Life Insurance Co.

and

aspects of our
These problems do

long- ; between 1937 and 1942 were a
We: are
starting
to
wonder
not
complete
failure.
During
that .whether the present worries over
This
lie in shaking the thermometer, or period the^ price level throughout
inflation, with excess capacity
in applying ice packs on it, while
the. world nearly doubled while and
inventories
at
the
highest
forgetting the patient and ignor¬ stocks at the same time fell from levels in history, are exaggerated
ing the real causes of the ; ther- ? 50% to 90%. Then again/at the based'on hindsight.
We believe

are

danger.

—

unpleasant

economic

any

Market:
With

under¬

do, it will

And,

"unless

noted,

never

badly."

address

business resourcefulness.

once

wait for the per¬

shall

always dan¬

circumstances

entirely favorable for
taking

age

that

further
are

all

stock

remote from

American.
if

that
And

these

the

aver¬

double.

From

1946

liadi

most

rapid infla-

one

tionary

concludes
are

true,

page

•

the

periods

stocks'once
°

things

Continued

invest¬

prices actually did

1948

record

atrnin Droved to
again, .provea to

address

Mr.

Natteli

and
be
dc

before

fsTsisf. & c°~ phili,del|,hia' Pa- Dec-

months the
stock

public has entered the

market

wild

manner,

gambling in cats and dogs and
kind

any

bullish

news

the

past

rjse

few

the

rumor

piece

printed.
Iii
months despite a

that

Dow-Jones

Industrial

Average of around 70 points, the
broad

list

ticipated.

stocks

has

not

par-

The peak in the amount

of stocks hitting new highs for;the
year 0ccurred in late July and
eariy

August and despite a continued rise in the Dow-Jones In-

Continued

on page

4.
Volume

189

Number

5808

.The Commercial

[and Financial Chronicle

1957.

Be Seated

By DR. IRA U. COBLEIGII

Net

per

greater rise in
—from $2.24 to $2.51.

even

;

Another

been

showed* an
the period

favorable^ factor

the rise

don't
in

think

public

design

seating,

and

against substantial decline in mar-

you

ket value.

of household furniture.

case

has

AMZ

actually

done

very

has School and auditorium seats have little marketwise in the past five

profitability.'For

Enterprise Economist

You

fabric

do in

&
7

(7)

traditionally

been

drab

and

in-

years.

On the basis, however, of

1956, the profit margin (before jstitutional in appearance. Attrac- the heavy construction program
ssful
Reviewing the; record and the' prospects of a successful com- f
'depreciation and taxes) was 11.6% tivenessand comfort are, however, for the building of schools, public
/ ^i-°f salesrl2.9% in 1957; and opera- now being increasingly demanded buildings and churches in
1959,
j
pany of> long standing, American Seating Company.
^
y
tions this year have been running and stressed. American
v,.

Seating is

have

county

seats, seats of

learning, and seats

the

Exchange, but seldom do
¥

company's1 national

mahfe-cas«s,r ebnip^ition

Stock

smaller'regional
tories/* ' T'' ;.■**% ;/YY
from

we pause

to reflect that few people sit down

unless

comes

J'!,

consistent

manufac-

'%"•

•

r *

Dividend

Paver
.

...

AllflGriCRn^ oG3till£f

tables as well

chairs and seating, should enter upon a new
wooden ones are plateau of prosperity. Benefitting

away

h8S>DG6Il^l}C£"'

v':

».i

•

WiUC j.ic*o wcca ihuch inipxuvcmtni

„

dUiiity^

And,
of;'

plant, but mainly to
production techniques;

public seating,
Y. enterprise y

production per labor hour has insince 1946 by more than

im-*<

creased

and";

renown e

100%;

Partner
In Jacques Goe Firm

Co. which be-1'
Ira

providing

gan

U. Cobleigh

wholesale
csedontarv

farilifipc

incf

tb®/^Upe^that

f^00' decor.by
miBht £> 'SSd ?„ s" table:, design
and appropriate
,qsVif th<^OTesent unvSard trend c?1?r„al'f in increasing demand

earnings continues.

The shares

81VmgIclasp1'ooma ™°''e warmth,
and a less barrack-like

air.

vpqvc

Y:■yy

Earnings Stability

five

ended Dec. 31, ; 1957.'consistently good with the Sept
produced not too 30' balSnce sheet showing $21.4

years

videdTy motor cars since most At the same time, it
new theater construction is of the nounced that Joseph E.
has

dllve-in vanety.)

$6.6 million'in current liabilities.
,
,
.
_
Seating market is in the classroom pation of a price; rise posted, by Capitalization is quite simple conDemonstrated Earning Power
In
the
Fall
of
1958
717nfifi
company (effective in janu-; sisting of $3,125,000 in long term
Now American Seating cannot
nunils (kindergarten through hiah
ary 1957); and also ^v.i0m the debt preceding 644,940 Wp™ Vm-ir boast
because in
shares of
the glamor and market
pupus /Kinaergarien tniougn nign
thP
nHHc

fhn

much late 1956 buying in antici-

lavood

T-

oommrm

fional
institutions

learning,
students do their striving sitting
About

down.

7.0,000

the 1957-58 school year.

ping these
Co'

rooms,

was

turnine'-out
classrooms

White

In equip¬

American Seat-

maior^suDolier

line

complete

eauiomentv

desks

seats

class¬

new

completed for them in

rooms were

chairs

including
'

educational market

this

however, within two weeks-; and
a
l°nS period of labor stability

assured by virture of a
three year contract'concluded ;at
that time. For the nine months
ended Sept. 30, sales totalled $291/2
million, ,a m% advance over
now seems

tables

and

Things have been coming along
nufSh better this year with but
one
minor
disturbance, a ,short
strike in July. 'This was settled,

source of sales,
Seating products also
include stadium, auditorium, and

elected
_

Gibbons

Vice-President
p

olding
chairs,
truck
and
!heater seats; chuch furniture and " 'Y
bus

seats. School supplies and equipment, in addition to those of its

manufacture,

own

chased
and

from

sold;

and

division

v
•

and

turns

out

•V. The

machines

demand

for

offer to sell

nor a

solicitation of

offer to buy these securities.

offer is made only by the Prospectus.

December 31, 1958

aircraft

certain

Uninterrupted Demand

>;:

parts for the Douglas Aircraft Co. /
:

neither

pur¬

special

announcement is

The

manufacturers

there's

which

devices,

also4

are

other

s.-.This

673,299 Shares

-seating

has

i'been
7

in a long term up curve.
Since World War II, the birth rate
m the United States has averaged

The Columbia Gas

continuous rise in the demand

for educational facilities. We

into

the

world.

school -in

1968.

pand

school plant

($10 Par Value)

babies

They'll

fstarting school in 1960; and high
*

Jan. 1,

V/J958.S, In ; 1954,, .4,000,000
v'came

Common Stock

were
:

140,000 classrooms short
•

System, Inc.

50% above that of 1940, pointing

We'll' have do

ex-

"/'■■■ t,-

our

20% "to ' take

by a least
them, not

care

■

counting

outmoded or fire-trap
schoolhouses
that
must" be
re-

Price

•

placed.
cate
U

-a

So unless

generation

American
manage

are

to edu¬

standees,

->;*

i*-*,-*v"■

'•

$21.75

per

Seating

Co. should
keepfairly busy for

years to come../:And its deliveries
of

equipment

for

churches

^other public buildings should

and
ex-

pand according^.
-

The

manufacturing
Seating is

Rapids,
famous

furniture

Copies of the Prospectus may be obtained in any State only from such of
v
fu-'y
as may lawfully offer these securities in such State.

plant
of-.
in- Grand
Michigan, "internationally

■ •

-American

center.

the undersigned

Unlike

many

companies, however, Ameri¬
can Seating Co. has a large scale
storage problem.
It must regu¬
larly produce seating (especially

during the

summer

months)

well

in advance of immediate
use, and
hold it until structures to accom-

flnodate it

are completed or ready.
result, while the company's
plant covers 900,000 square feet,

its additional warehouse and stor¬
age areas total

feet.

over

800,000

For nationwide

there

are

cisco

and

branches
Los

distribution,

San

Philadelphia, Atlanta
(These branches

are

and
vital

Carl M. Loeb,

Rhoades

Glore, Forgan & Co.
"v4;

Co.

Merrill Lynch, Pierce, Fenner & Smith

Goldman, Sachs & Co.

Kidder, Peabody & Co.

Harriman Ripley & Co.
Incorporated

Ladenburg, Thalmann & Co.

square

Fran¬

Angeles, Syracuse,
Dallas.
to

the

has
of

been
P.

sells at about 12 times earnings).
~
23
But it has demonstrated long term YjorgaiJ
Incorporated,
earnings power since its first unit Wall Street, New York City. >
started, business 70 years ago.
Moreover,. in the roaring bull
Reinholdt & Gardner
market we now witness, AMZ
The ' company has substantially shares have not been bid up to a . CAPE GIRARDEAU, Mo.—Reinimproved the efficiency of its price out of line with their statis- holdt & Gardner has opened a
manufacturing and has betted tical worth. At 33 to yield cur- branch office at 517 Broadway,
sales coverage of its market than rently 4.54%, they appear, to under the management of Francis
ever before.
afford an above average defense F. Lewis,
Seating over the longer term appear interesting and it is quite
possible that net sales Tor 1959
will reach an all time high, and
per share net may approach or
exceed the $3.59 recorded in 1955.

American

Sullivan,

Morgan & Co.

provides the major
'

an-

was

firm

Gibbons V.-P. of
Francis

these

the

1958.

J. P.

versities

ine

from

plus

retired

Dec. 31,

school)

& Co., 39 Broad¬
New York City, members of

" satisfactory results first because of million in current assets against

iarv fame
„11

Jacques Coe

after'SXnVR.nThe yearM957
RV

way,

the New York
Stock Exchange,
rYtc; are characterized by considerable
Martin J.
Y
market stability ranging, in the
The sales outlook appears good have announced that _
. ^
A considerable stability has past seven years, between a low of jP religious, educational and Pub- Weinburg has been admitted to
marked company operations. iNet/16 and a high of 38. There was a he auditorium fields and only the general
partnership
and
will
sales, have; ranged ^tween $35 2-for-l stock split in 1952.
■
movie "theatre business is lagging, represent the firm on the floor of
million and $40V2 million in the' YBalance sheet position has been (Here new seating is mainly pro- the New York Stock Exchange^

than Ameri- ;
can/Seating /
v

streamline"? a£.<*

area

portant

efficiency'andJ

at plant

™

•is

uptrend

Paid without interruption for in comfort and contour so that this sitting pretty,
payout averag- generation of kids should do confn the^astYlec^^
over ? tf^^ars wlth the Payout averaS- feneration of Wrt. sho„1H rtn eon- .. .
P .
$10"million (principally out of ie*~%gg?
i
?fderably less s<Juirming than earITw rZ^hJ^
tained earnings) for sonie addition
S !"£ ones'. .further, chairs ,and Weinburg
ging

for. the

purpose.

•"

range

first

a %
bene h,
seat
chair, stool or Y

jn the

long

the

response. -Metal

5?i

'.**»

and

abreast of this trend and has defi- population, American Seating Co.,
"itely broadened its product line the largest manufacturer of public

/ supplied

divan

at the rate of about 14%%.

some-

has

/one

sales,'

Lazard Freres

Co.

Wertheim

Co.

The Commercial and Financial Chronicle

(8)

National Fool Equipment Co.—Memorandum—J. H. Hilsman &

stock.

Precision Transformer Corp.—Report—John R. Boland &

Dealer-Broker Investment

Co-i

B^oad Street, New York

Scranton

Spring

It is

understood that the firms mentioned
tend interested parties

United American Life Insurance

both

-To date, no cash dividends

have

been paid on either

class of stock,
although several stock dividends

Company—Review—Ralph B.

of
varying
-paid.

Leonard &

Company, Inc., 25 Broad Street, New York 4, N. Y.
Zapata Off Shore Company—Report—G. H. Walker &
Co., 1
Wall Street, New York 5, N. Y.

the following literature:

the class A

respects

Dividends

Co., Inc., 52 Wall Street, New York 5, N. Y.
Studebaker-Packard vs. Botany Mills—Report—Lerner &
Co.,
10 Post Office Square, Boston 9, Mass.

will be pleated

other

G. A. Saxton &

Recommendations & Literature

paid

classes have equal rights.

4, N. Y.
Service Company—Analysis—

Water

Brook

Thursday, January 1, 1959

declared

CtC, Citizens & Southern Building, Atlanta 1, Ga.
Inc., 30

...

been

have

amounts
;

Prospects

;•••

Polymer's sales and net income
during the first six months of 1958
were
adversely- affected by the
general business recession. Srncd
v

Agriculture and Growth in Latin America—Study in "LatinAmerican

Business

Highlights" published quarterly—Chase

Manhattan Bank, 18 Pine Street, New York 15,
Atomic

N. Y.

last

Letter No* 44—Discussion of

projects for nuclear pro-,
pulsion of rockets and earth satellites with particular com¬
ments

Inc.

Tracerlab,

Atomic

and

Combustion

Securities- Co.,

Development

Inc.,

Street, N. W., Washington 7, D.
Bumham View

ments

Engineering—
1033 Thirtieth

isfactory
for

BOSTON

SECURITIES TRADERS ASSOCIATION

able is current Foreign Letter*

annual Dinner

Company, Inc., 99. Wall Street, New York 5, N. Y.
Eastern Railroads—Bulletin—Bache & Co., 36

Favored

Str6ct ■York 5

"YV

JNF

hold

its

for

35th

The

Security Traders Association of Chicago will hold their

annual winter

dinner

the

Sheraton

Hotel, Jan. 26,

conjunction with the National meetings.

Fifty Nine Stocks For Fifty Nine—Bulletin—Stanley Heller &

r.L-;;-

;

1959,

Japanese Stocks

—

Current information

ft;

Continued from page

The Security I Like Best

New York.

Over-the-Counter Index—Folder showing an up-to-date com¬
parison between the listed industrial stocks used in the Dow-

:-v::
lent strength

Jones Averages and the 35 over-the-counter industrial stocks
used in the National Quotation Bureau Averages, both as to

yield

market

and

National

performance

over

19-year

period

Reynolds
available

Securities

Data

—

10 selected

issues

Shojfr

and

review

trial

All States Freight Inc.

—

7/.//

Memorandum

—

Fulton Held &

plastic

Co.,

•

way,

Celotex

New York 5, N. Y.

Consolidated

Edison

Also in the
Co.

same

New

try.

are

Edison

„'

;

Admits E E. Barrett

*: ~

......

5?*

48
Wall. Street, New York CifJV
J^^^Wvbers of the New York^Stock Ex-

Ire

located

„

Pany's products

used for such -

are
wide variety of

sales '

made' to

are

that

purposes

virtually

In; Investmpnl J'lel*

all^

and

desirable

FERROTRON,*^

flexible

for any appreciable
percentage of
total sales.

the

electronic

research
name

can

•

Class

$340,053 .-/the

400,000

Jan. 29, 1959

3^,071
273,805

out

come

Options
To

purchase
nn

somewhat

manners

powdered metal.

this

wear

to"$16.02.

similar

Applications for

resistant

material

elusive

in-

the

elude cams, bearings and slides.
-

A
IV
for

particularly promising
Pnlvmrvp

PnrnnrifiAn

area

Polymer Corporation is the
fluidized bed coating (Whirlclad)
process. This process is expected
to have the largest potential earn-

ing

power

recent

all

the

developments.

dividend

stock

has

preference,
can

the

class

stock

unless

or prior

Hotel..

Bellevue-Stratford Hotel.

April 1-3, 1959 (San Antonio,Tex.)

con-

thereto in the

Group

Bankers

of• Investment

Association

ica annual

Amer¬

meeting at the Hilton

Hotel.

greater amount shall have been

dipped into a fluidized bed of
specially- prepared, finely pow¬
dered dry plastic material.

Happt|

"FOR SALE"

Cast¬

ings, stampings, wood, steel wire

parts, etc., can be clad uniformly
with a variety of plastics in
just
one
dip, with thickness control

Urar

far

In AU

exceeding that obtainable with

Bound Volumes of the

COMMERCIAL

conventional finishes. Other quali¬
ties that can be imparted with

FINANCIAL

CHRONICLE

From 1928-1942

this process

TROSTER, SINGER
Members New York

are: controlled sheen,
durability of finish, smooth finish,
electrical, and thermal insulation,

& CO.

uniform

Security Dealers Association

Write

resistance to salt spray, water and
sunlight. The company has; the

Edwin L.

exclusive license for the fluidized

Teletype NY 1-376-377.378
-

-^Registered
Corporation.

Available

immediately in N. Y. C.

good

adhesion, im¬
pact and abrasion resistance, plus

Trinity Place, New York 6, N. Y.

HAnover 2-2400

and

trademark
.

•

the

Polymer
.

■-

Phone

Philadelphia annual dinner at

the

paid

fiscal year dividends in like

revolutionary
plating
technique
whereby a preheated • article "is

Plaze

Sheraton

Texas

currently
same

As^or

eiation 35th annual dinner at the

Feb. 27, 1959 (Philadelphia, Pa.) •
Investment Traders Association

certain

that

be declared
B

ex-

however,

company's
It

class

divldend

rights;

(Boston, Mass.)

Boston Securities Traders

onA

Class B stock has

voting

the Sheraton Hotel.

Feb. 6, 1959

$6,70 and 1,200 shaies

be used in

(Chicago 111.)
Security Traders Association of
Chicago annual winter dinner

class

16,656

Southern HoteL

1.000.000

Class B >:

indus¬

(Baltimore. Md.)

Baltimore Security Traders Association 24th annual dinner at

Outstdg. ■/

Author'd

Long-terirt debt
Capital stock $1 par—

rod

rat the Warwick Hotel.

Jan. 16, 1956

CAPITALIZATION (6-30-58)

NYLASINT,* -a
fine
polymidc
are
chemically

for

which

; v

applications

A third product to

single customer accounts

„

Securities Associar
tion annual meeting and dinner

—

Laurence Marks Co.

principal plants

with

manufactured and

■

has

g°T types of todustries. The customer™
1-t totals more than 3,000 names, ^
Philadelphia

have

Potential

powders

Hemphill, Noye£ & Co., 15 Broad Street, New York
5, N. Y
Morgan Guaranty1 Trust
Company of New York—Analysis—
The First Boston
Corporation, 15 Broad Street, New York
New Yorkjr

laboratories
„

■ been
'active '/in
plastic alloys. One

and

tape.
seen

—

trade

Bros.1

Stores, Inc.
Consolidated Electronics
Industries—Report—Thomson & McKinnoivll Wall Street, New York 5, N. Y.
Equipment Trust Certificates—Semi-annual
evaluation—Stroud
& Company,
Incorporated, 123 South Broad Street, Phila¬
delphia 9, Pa.
Hoppers Co.—Memorandum—H. Hentz &
Co., 72 Wall Street
New York 5, N. Y.
Lone Star Brewing Co.
Memorandum
Dittmar & Co., 201
•North St. Marys,,San Antonio
6, Texas.
>
Minerals & Chemicals Corp. .of America
Memorandum
—

cores

& Co., 120 Broadway,
circular are data on
and

offer-

time

Reading, Pa. • A.ddi tional xnanufac— change,

products is-a line

new

netic
and

York

ferromagnetic
properties, is sold as rigid .mag¬

)

Corporation—Survey—Abraham

-has
new

alloy,
plastic

& Co.: 20 Broad¬

New York 6, N. Y.

that

used

filled

•

—

Inc.—Analysis—Schweickart

these

other

Co^—Report—Palmer-Kennedy Organiza¬
tion, Davis Building, Dallas, Texas.:*. *
>
of New York—Bulletin
Laird/Bissell & Meeds, 120
Broadway, New York 5, N.vY.

Carter Products,

The company's

properties with regard to wear,
friction and heat resistance. An¬

& Pacific Tea Co. r

•

t'Corvel Fusion Bond Finishes."

developed '.and

these / powders

Associated Oil & Gas
Bank

of
powders for coatings;
(3) Operation of a custom coating/
plant." The trade name used is

SoC bfiS^oidinf^

—

analysis of Great Atlantic

»'•'C-.;/:•":
/ ; • Analysis — du Pont,'
Homsey &r Company, 31 Milk Street, Boston 9, Mass. Also
an

Polymer
developing

Petrofina—Review—IraTIaupt & Co./ 11 Broadway,

available is

Market

since

(1)

•

memoranda *>n Ceco Steel Products Corp. and Controls Co. of
America...

bed

Sales

New York 4>, N. Y.
•
American Telephone & Telegraph'Co.

material

mark.

Laboratories, Inc.—Report—-Shearson/ Ilammill & Co.,
14 Wall Street, New York
5, N. Y.l Also available is a study
f11 AaIt,
C4nnlr
"t QIaO
^
.N'-"
of the outlook trfAl* tlThr*- Stock Tl/Tn'olr/vi A-r\ 1959,
for the
Market in

American

Over-the-Counter

from

ways:

the fluidized

announce .That Edmund E.
turing facilities are locatedin - Barrett, Jr. has 'been admitted as
extensively, in Detroit, Santa Ana,. Calif., ;and ^ geTOral partner .in tfte firmv'C
electrical/industry, in the
Hertfordshire, England, and ware*/1
."■i
f"i 1:
chemical processing industry, and
*
'
>-m
in .military.,
equipment./ espeeiaily ..,-p^f®
aircraft and guided 'fhissiles; -" :Yerk-Gity and Chicago. 1 The
com//

■

oils

produced by Du Pont uridGr lfiG
company's own registered trade-

UniontCommeree^Building^ Cleveland-14, Ohio^7*zm ¥
A

and

The principal.Indus-of nylon are in gears,

uses

income

three

the

American Marietta Co.—Memorandum—A; C.
Allyn & Co., 122
.South Xa .Salle Street, Chicago
3, 111. Also available are

insulator

chemicals,

most

electrical insulator's. The company
processes and
sells TEFLON, a

Allied

time.

process,

ing prices
Royalties from sub-licensees; (2)>,been

lubrication, be-

derives

process

bearings, > valve seats and ' other y;\;T:'V- 'X:
r
machinery parts, wear surfaces arid1'' Production and Marketing

Japanese economy.
7: ♦

excellent

resistant

*•

Polymer

re-

and greases.

—

Mitsubishi

German

the

ing

—

Analysis — Vilas & Hickey, 26
Broadway, New-.York- 4, N. Y.' ■ -v.!
Shipbuilding Industry in Japan—Survey—Nomura Securities
Co., Ltd.,-61 Broadway, New York 6/N. Y. Also in the same
issue of the Nomura Monthly Stock Digest are data on
and

process,

were

Polymer stock was first, offered
to the public in September, 1956,
at 71/4. The range of approximate

coating

invention, in the United States.

excellent and it

are

quires little

Toyota Motor

bed

properties

120 Broadway, New York 5, N. Yj Also
bulletin ori' Geheral Shoe Corporation.

for

—

& Co.,

Railroad Outlook for 1959

toughness

October
a

near

l'or research

and

of
on

new

the

coating
i

unfilled plastic and is resilient
and semi-flexible.
The frictional

Quotation Bureau, Inc., 46 Front Street, New York

Over-the-Counter

.■.

4, N. Y.

" r

month

$525,000

financing is anticipated
future, and working
capital is substantial ($1,661,989
on June 30, 1958). Reported earn¬
ings in the next few years may
be affected by heavy charge-oi'fs
in

Yamaichi Securities

—

Company of New York, Inc., Ill Broadway, New York

How

:in the black for the first

--J
—

Co., 30 Pine Street, New York 5, N. Y.
to Use Options—Descriptive booklet—Filer, Schmidt &
Co., 120 Broadway, New York 5, N. Y.

months

consolidated
basis including the English sub¬
sidiary. Polypenco Co., Ltd., which
is now reported to be operating

SECURITY TRADERS ASSOCIATION OF CHICAGO

Wall

the

about

Friday, Feb. 6, at the Sheraton Plaza Hotel.'

being ' shown
of August and
Unaudited net sales

earnings

the

September.

The Boston Securities Traders Association will

suggestions—Gerstley, Sun-

Co., 121 South^proad Street, Philadelphia 7, Pa.
Cuba—Current situation and effect on sugar—Study—Lamborn
&

received:

orders

new

quarter were $1,110,900 with sat¬

Monthly Investment letter — Burnham and
Company, 15' Broad Street, New) York'5, N. Y. Also avail¬

stein

and

Unaudited net sales for the third

—

Common Stocks For 1959—List of

February there has been a
upward trend of ship¬

gradual

—

REctor 2-9570

Beck, c/o Chronicle, 25 Park PL, N. Y. 7

Number 5808

189

Volume

The Commercial ancl Financial Chronicle

(9)

\
dent

Developments in Ciedit Markets
And Banking Industry

and

well.

-•

some

Their

the price level has

rise

Federal

to expect

reason

any

authorities

Reserve

will

naturally

take into account
inflationary tendencies that
develop.
-;J-; ~
•;

In analyzing private and public supply and demand

any

may

;peflcit;Financing and the Banks

be some
tightening in the general availability of credit during 1959.
The outlook for banking envisions lower net profits to capital
accounts than for 1958 which may even drop below the
8% banks averaged in recent years.
may

The problem, of monetary
trol

will

conr

particularly, compli¬
cated
by the Treasury's deficit
spending.The Federal Reserve
has

course,

in 1959, we need to analyze
questions: What will be the

there appears to be some
of demand, and most spokesmen

What

credit?

see

add

additional boi

some

How

total

sive

demands

increased

will this de¬

for credit from all

mand -supply

borrowers.

Public Borrowing Will Be

invest¬
interest

and

And

rates?

finally,

have been

how

will these and

Large

record volume
the past year and

issuing

bonds

over

likely

are

E. S. Adams

Or.

other develop¬
ments

demands,.

;

"w;

„

large amount of

new

to borrow

...

earnings statements'
At the outset, we

even

heavily next year.

re-

;

must make

throughout

P'1* °1 this deficit. In other words,

^'lirJlnf as they did m
19oo-57, bank holdings of Goveminent securities will probably

!l! Jat.()l.
increase

during; 1959,

UndeB th®se circumstances, the

will

„

with

its

Reserve authenties may

Treasury

Unj£a §

sheets and

fleeted in bank balance

1959.

•-./

decide

J.hat' to Prevent total bank credit

during 1958. As

result, net prof¬

its in relation to capital accounts
will be lower than for 1958 and

■

not declined much from their 1957

may even drop below the modest
much higher than' 8% that the banks have been av¬

are

1954,

Consequently,
large expansion of loan de¬
would tend to tighten the
availability of bank credit more
quickly than during the 1955-57
boom.
'
".
any

mand

•

Putting

all

these

supply and
demand factors together, you may
agree that they probably add up
to some tightening in the general
availability of credit during 1959.
This may not occur right away
but

likelyk to

develop} before

the end of.the year.
Interest

rates,

doubtless

will
Again,

eraging
,*

things
the

seems

may

credit

develop next
markets

the

way

year

and

the

industry — provided, of
that nothing unexpected
happens. The trouble is it so fre¬
quently does.

banking
course,

F.EberstadtAdmits

Gannell&JL Eberstadi
F. EberstadtT & Co.,, 65

course,

Broad¬

way,
New York City,.: has an¬
nounced the admission of Peter B.

and

rates

over recent years.

that

irregular.
Open- Cannell
already re¬
bounded quite sharply from their
lows of last Spring.
If business
recovery should falter, the Fed¬
eral Reserve
might temporarily
shift its policy in the direction of
greater ease.
By the year-end,
however, ;> increased demands
could
easily push the price of
credit somewhat higher than it is
today.
\
■ >
- market

Andrew

Eber-

have

The Outlook

rnong# the

Looking now at public financ- T r e a s u r y must borrow? The
ing, we find that states, munici-ances are that the banking syspalities and other public bodies tem will oe called upon to finance

policies

ment

„

?+ut ^picturebecause will the
m 19o9 of
be
quite
different

lending

and

loan

types of private

situation af¬
fect

able . to .discharge this lesponsibility without adding to the
amount cf Government securities

rowing

lendable
funds?

expect

held by tne banking system. Indeecb hie banks were forced to
by farmers and rancheis Seii large amounts of Governments
and you come up with an impresjn orc|er to obtain funds to meet
Then

supply

the building industry
generally good year.

the

will

for

demands

postwar

•••'

obligation, of respond in similar fashion.
to it that new movements in interest rates will

Next add in a goodly demand
for mortgage money. Here again

these

the

unwritten

Treasury flotations find a home,
a* least lodging for the night,
backlog
tlVr iy5a"57 boom, it; was

the outlook for
banking indus-

appraise

during

•

loan-deposit ratios have

at the end of

prices during 1959.
Nevertheless, prices could edge
upward during the year, and in
formulating--their: policies, ..the

factors, and probably Federal Reserve course for the not too

than

decade.-.*

peaks and

American Bankers Association, N. Y. City

credit and for the

liquid

there

encompassing a possible setback somewhere along the line,
before reaching new output highs and strong demand for funds

try

To be sure,,

big

liquid commercial banks, Mr. Adams opines there

market

be reflected in

been stable in recent months and

Bankers' economist detects irregular general recovery ahead,

in 1959.

the .stock

may

other markets

By E. SHERMAN ADAMS*
Deputy Manager,

which

for Banking

;

How will these and other devel¬

opments

affect

the

banking

in¬

dustry?

Peter B. Cannell

As far

cerned,

as
we

that there

increase

bank

have

are

already

holdings
and

of
in

noted
some

stadt to general partnership in the
firm.
; •
v
v

major

categories of loans. Holdings of
state and municipal securities will
some but not at the unusually
rapid pace of the past year.
Oil
the liabilities side, of course, de¬
posits
will
be
correspondingly
higher.

rise

Cannell

Mr,

govern¬

all

A. W. Eberstadt

con¬

will probably be

securities

ment

assets

joined

Eber¬

stadt & Co., invl955>and has been
active-as the assistant to the presi¬

of Chemical Fund,
Inc.,
sponsored by F. Eberstadt & Co.
In March 1958, he was elected a
vice president of Chemical Fund.
Before joining the firm, Mr. Can¬
dent

perhaps we
the lirststime since Worid from expanding too much
they
following, no w
n
T
exnenditures should curtail the flow of bank
shooting war, no relaxation of the
^
revenues even during credit to private borrowers move
nell was associated with Merrill
armament race, no wild spending
calendar year. £a" «iey ,othc.lw f might.
On
°r lending spree by Congress, and
As for bank earnings, gross op¬ Lynch, Pierce, Fenner & Smith in
,
.regardless ofjust the otoer hand, toy may feel
their investment research depart¬
no
debacle m the stock market
how'the bud
ev|ntually shapes Justified in permitting a some- erating earnings will doubtless
One
further assumption is that
fienai iqiin
thP Tr/asnrv i«?
what faster rise 111 total bank show some improvement, prob¬ ment. He is a resident of New
Main Street will not become afin the red aloans Plus investments and in the ably somewhat more than enough York
Cityv., ^
vd; ,v ,
flicted by the inflationaiy psyc oto offset the persistent rise in op¬
duririg the last half of calendar '?2S2ey su^ ^ than during 1955Andrew- W. Eberstadt joined F.
sis that has recently been rampant ig5g;1957.
erating expenses. On the other
assumptions and

some

the

agree

can

irij^Yall Street.

Turning

^Any ol these assumf^
of, course, prove t° be w

now

to the supply side

0f the credit picture, there is little

hand, banks will certainly con¬
tinue to add to their capital funds

Credit Availability and
Interest Rates

and will in all

probability realize
<=>»
reason to expect much change in
Another
have to ie- ^ ^ of growth of lendable
important
factor sizable net losses next year on
Another important
factor
their
appraisal of the outlook savings in the hands of nonbank bearing on the supply of credit
security
transactions — in
contrast with substantial net prof¬
for the economy and loi
lenders and investors
Therefore, next year is the fact that com—
its realized on these transactions
conditions.
while this flow of new savings mercial banks are now far less
which case vve would

Co., in

has

been

1947.

the

thfs®a^

expect that
production and .employment will
be appreciably higher in 1959 than

enough to meet all of the

111

mean

-i?
considerable

the recovery is
we

setback

line.

wholesale representative for sales

Chemical

could even c
somewhere

However, before

This

of would-be

means

banki

borrowers.

This advertisement is neither

which ig to

regidu.al

large
o£

gource

The

that the commercial

extent

New York

Fund,

Inc.,

Metropolitan

resident of Orange, N. J.

offer to sell

nor a

solicitation,of offers to buy

any

of these securities.

offering is made only by the Prospectus.
December 31, 1958

MAY ISSUE

credit, will be called upon, as it

145,200 Shares

able

supply of lendable funds. In
sbort, bank credit will expand,
how expansible it

The qUestion is

g
^

the end ot

prove

ditior^s

to be under 1959 con-

output should reach new
Fed and Foe
and this should generate
strong demands for funds.
This will depend in large meas¬
During me cany part of the
uring
the early ij<h i
^ "Vr ure upon Federal Reserve policy,
business demands for'
year, business demands for
j
general,
genera^ of course, the Federal
0£ course, the Federal
may be quite moderate a
Reserve authorities can he counted
Reserve authorities can be counted
more
than seasonal reasons
For
up(m tQ dQ their best to gupply
one thing, long-term corp
a
enough credit to meet the needs of
1959,
highs

nancing
is apparently
lower.
Also, over the past

businesses have a

many

y
"

cash and
fnr

will not need to bor o
while for working capital pu

P0^8;

This

and even
plant and equipment, as may we

lays for inventories

Add

borrowing.
been

mobiles

this

rise

consume

Backlogs of deman
building up for auto-

and

•An

other consumer du-

make_ a
showing in 1959.

Adams before the
Conference
for the

address by Mr.

Business

Press,

Outlook

sponsored

gSSTK ct. Dm. 9>'

the

Chamber

J ass.

restricting

credit

ex-

How will they apply this

principle to 1959 conditions?
Qne
basjc
complication
^be

WaSh'

tbat

fact

con-

dencies

our

inflationary teneconomy have by

disappeared even though
unemployment has been relatively
bjgb> The 1957-58 recession has
nQt
been
accompanied
by
the
usual readjustments in production
costs
and
prices.
Construction
costs are higher today than they

Holders of the
to

the

rate

are being offered the right
additional shares of Capital Stock

Company's outstanding Capital Stock
$36 per share for the above

one

new

share for each

two

shares held of record

the close of

December 23, 1058.

Subscription Warrants will expire at 3:30 P.M.,
Eastern Standard Time, on January 19, 1959.
The Underwriters have agreed, subject to certain conditions, to purchase any
unsubscribed Stock and, prior to and after the expiration of the subscription offer,
may offer shares of Capital Stock at prices and on terms set forth in the Prospectus.
business

n0 means

were

year ago and so are aver-

wage

incj[cafions

rates jn industry.
are
fbkt during

The

again

continued

The

Wage-price
QVei*

have

the

fributed

Spiral

Copies of the Prospectus

may

be obtained from

any

of the several underwriters,

including the undersigned, only in States in which such underwriters-are qualified
to act as

dealers in securities and in which the

The First Boston

Corporation

Prospectus

may

legally be distributed.

Wood, Struthers & Co.

1959

industrfai wage and price policies

rabies, and at
1^as^us®1^
lines of business should

reasonably good

time

flation.

idly as business continues to
xpand. It is especially likely to
so if, as sales and profits impiove,
businessmen increase their out-

happen.

growing economy while at the

pansion sufficiently to combat in-

fronting the monetary authorities

however, co
later change rather rai

situation,

sooner or

same

and

have

£ 12.50 Par Value

lated

Capital Stock

area.

will not be

large, it

usuajly is, to augment the avail-

To
hkety to b

for credit.

demands
and

demands

tions, however, we can

Since

Eastern

con-

large

n„„mn

basis of

the

credit markets will

the

tinue

Credit

For

into

More Demand

More Business,

1955

the

our

vise

lar

Eberstadt

Paine, Webber, Jackson & Curtis

Shelby Cullom Davis & Co.

inflationary

vigor

and

the

concern

Federal budget have
the inflationary psy-

chology which has been so evi-

A. M. Kidder & Co., Inc.

John C. Legg & Company

The Commercial and Financial Chronicle

(10)

Inflation: A Key
By HON. LYNDON B.

supply cannot keep up with de¬
■<>",.
•
A'Iv;-"*/

mand.

0. S. Problem

Senator, United States Congress

problems

[> *■;,

have to

Committee

basis for such

ments

stances have

and
more

some

There

lieve

that

eyes

prob¬

one

referring to the prob¬

has

Lyndon B. Johnson

that

misunder¬

they are based upon a
standing of thetway in

government works.

;

Our elections are—of

which our

reporting.

And

Somehow, they must find ways
means of giving
a thorough

and

headline "Cost of Living

find, on reading the

fine

print, that the index has gone
down one-tenth of one per cent.
Inflation

part of

the rare occasions when

see

responsibility of representing all
their constituents;

"new record high" has
commonplace of news¬

become
paper

necessity— Drops",

But our elected officials
themselves faced with the

partisan.

part

It presses upon

every

hearing to all points of view. And
the legislation that emerges—as a

the businessman

It presses

upon the farmer who
finds that the prices of the things
general rule—reflects this kind of he must buy go constantly up.
a hearing.
It presses upon the workingman
When it does not,
the voters who finds that his weekly pay¬
have an effective remedy which check provides fewer and fewer
they, can exercise within a two- groceries.
»
'
It presses
year period.. - ,>..•■[;:'. : /,. ,
.*[ -•
upon
local govern¬
It is my belief that the next
ments who find that it is more
Congress will do the best it can and more difficult to float bonds
with materials it has at hand to for local improvements.

■

problems of our times. I
will try < to resolve—

solve the

believe

rather than to create—issues.

find

national

tional problems.
The
solutions

solutions

na¬

please

more serious, nobody can
with anybody else on what

it is.'

■

rates. Yet these

There

claim

learned

are

that

tight

the

—

high interest
high interest

same

increased

listed

who

men

for inflation

cure

money

have

rates

perous.

no¬

even

stronger and more pros¬

weather.

body does anything about it. What
is

everybody and rarely please any¬
body completely.
But they are
solutions which help our country
grow

the

cost

already some of government.
There
are
which I believe the
many
who believe
next Congress must—iand will— that rising wage rates have forced
face. The list was admittedly in¬ up costs and cheapened the dollar.
complete. No man has a crystal But others argue that higher wage
ball
which
can
peer
into the rates are necessary to meet the
future accurately—not even a year higher cost of living.
ahead.
Some people blame government
Under ho circumstances, would
spending.
Others claim that if
I presume to draw a blue print of government
spending were to stop,
the next Congress or to plot its our whole economic
system would
course step by step.
be thrown out of gear and we
I

have

...

the problems

Furthermore,

there

another

point 1 would like to make today.
It is

that

cannot

adopt

George do it" attitude and

"let

ledve

everything to Congress.
/
There are many problems which
require the cooperation of every
] level

the

load,

will

another

11 step in to do the work.
;ii

i aware

goes

takes cruel bites out of the liveli¬

hood of all those who live

fixed

incomes.
It's

the

basic

school

But

principle

Different

days.

economists

There
which

book

source

Inflation

the

"classic

pat¬

was

period last year in

had

than 6 million

which

tem

omy.Our govboth comprehen- /ernment now

man-

important influ■■■jcr,*

be lower than the $12 billion anticipated because of possible hifdipr
jnated. hf»raiis#» <vf riossihlp higher

out

was

seems

the

look

that

again.

once

$280

we are

of Federal

trolled if

erosion

;

Apart

the

open
WJL_

week

mail

my
„

find

and

ten

fleeting

day of

any

„

even

Many of them
appealing and attractive. *

But

cannot afford to

"go for

system

merely because

Carl. G.

r e -

allaying the

Freese

idea

must

All

?£

ideas.

Treasury

has

widespread Tears of
as

and

motivated

investors

are

consumers

Clearly,

things

considered, there is

policy is but

*!V-

flationary

debt
one

management

of the anti-in-

weapons

uie aniwnavailable to

l'
^
indeed the prospects are for fur- ordination with Federal Reserve

the

iripnc

tested

economic

inflation., So long

1,2^
idea
idea[ is annealihe and attractive llttle llk?llho°dm the years ahead
is appealing and attractive.
The

the

■

broader

tally, a sound market for U. S.
.Government securities depends on

gianted

tinkerins? with our ec0
,lnlce"hg wltn our ppo-

in
111

nomic

power

;

from

over,

inflation problem.

hrokp"

purchasing

the

steady

the Treasury requested an their actions by a belief in the inincrease in its temporary debt evitability of inflation, so long
ceiling from $280/to $288 billion will it be difficult to market new
recently Treasury securities successfully.
Congres

thirty proposals for handling the
sound

con¬

direct interest in combating the
of. inflation." Fundamen-

cent and expected deficits, more-

•

to. avert

[ forces

precedents. We are going to; ness outstandto bring together our best* ! n g
inthis
minds to find solutions.
)'
country. R e can

are

•considerations,

searching

Yet the volume

spending must be

of the dollar.

have

be reduced.

soon

close to ..
billion,-

owes

need to

resulting from the gen¬

improvement in business ac¬
tivity.' It is not likely, however,
that
Federal
expenditures
will

about
o n e The Situation>th i r d of the
confronted has [ total indebted- ;

kind

same

revenues

eral

tl.n

Inn/]

v.nnannnfn

nwfll

increases.

ther

/..ii.!.

fnH /fll,

addition

considered

Tt.-1-.

monetary and credit actions is
sentiab dnd, by now, a well

es-

by men problems associated with raising
acexperience; it must be large sums of-additional new fi- cepted principle.
During periods
put up against counter ideas; it nancing,
the
Treasury's debc when economic expansion threatmust be assayed and weighed by.
management team must contend ens to become excessive, for excritical minds.
with trying problems of refinane- ample, and the
monetary authoriThe launching of such a study ing maturing and called issues. In ties
are
rightfully
pursuing a
will, I hope, be one of the major, meeting these problems the Treas- policy of credit restraint, it is imactivities of the coming Congress, ury has a profound and continu- portant that the Treasury offer
We need light in dark
corners; ing influence* on general finan- securities
which do not require
and we need it soon.
cial developments. Indirectly, its Federal Reserve support on more
of skill and

debt x1Jiai?agTenJt P?licixes "?flu: than a temporary basis.
^"fe tbe
a^d ^te.QTsavings,
jg not as weu accepted, at
motion for action.
And
motion'^directly theyimfluence conddions- least in practice, that there,are
without forethought is rarely ac- Jn cal:)ltal marKets,^inciua
other Federal programs in major
tion—and never s at i sf a c t o r
yAc
credit areas which must, also, be
action.
* ?/
lending. As savings, bankers,, coordinated with Federal Reserve
I have presented one ox the oro- ' ^
1 nave piesentea one of tneprorI' Te
-r ^ interest in and Treasury operations, if' debt
-a+*e t fP?n
Clal
and :continuing
All

life,

avoid the fatal

have
of

eiTor

tried to
mistaking*

managpment

posals which I hope will be

con-

activities

Treasury

Sound

man-

.
° ,UI . IIiaii
We, agement of savings banks' investhave a base for it already in our ment Dortfolios reauires bur close
Tni-nt Frnnnmif. rnmmittPP
'
menx poiuonob itquxies oux Liu&e
.4
'
i
interest in, and understanding of,
All that is required is-expan- Treasury financing problems and

ciriprpri
sideied

...

thn
the

in
in

Congiess.

and

fnncn-Pw

npvt
next

plans for the study.

practices.

; j

Rutter

Co.

.,v

Recent refundings and new cash

...

Changes

^ana&ein®5;1:
ti

^
„

? £•

Richard

particular

Federal

pariicuiar, reaerai

competition for investment funds
with the treasury . Department.
Higher
y i e I d ing
mortgages,
,

&
Co.,
20
Exchange^
New York City, members
ccherHiled
for
earlv tt
c:

that

bP mnV pffcr.
w Oe most, ettectn

programs to insure and guarantee
mortgage credit operate in direct

Butter

announce

tive and the battle against rnfla-

offerings have, in. the main, not backed by the contingent'liability

at,on®

of the New York Stock Exchanee

It does not fit what
call

agement has

inflation is to reduce expenditures and/or increase revenues,
The deficit in fiscal. 1959 may well

and credit structure that its

the economic sys-

sive and authoritative.

Place,
a

and advises raising savings bonds' rate[' *"
3% or 3% percent.
/

now,

;

Canadian Conversion Loan is appro-

recent

the only, national eeon- ./

And its reports became

though outstand¬

(2) devising improved

—and

tern."

scientist.

physics

that

"nature
abhors
a
This
principle holds

;vacuum."
true in

government

does

the natural sciences.
When

problem

months

Wallower

•

seliectulecl
of

th/

±or

however,

1959,

may

nrvnnrl,

or„„fpi, a

F^eral/;Government(vpro-

? as. much. safety as do
earl* U. S. Government securities, tln-

the

deed

-T

their afnortizine naturp
'

1lcli

r>ro-

u* i^msuaxure pro-

eateiv" investment oppor-, V1des for/a type of; hquidity not
York Stock. ExdSmS'^hUiD:^ .tumties for our industry.
*; inherent;in : Government; bonds.
Gill and Edgar Z. Wailower, for*"; Debt Management anOi InflationThe Federal^ Gqverninent
merly general partners,1 become
It is important to recognize that
stimulating
limited partners effective Jan:' 1.,present
burdensome ;; Treasury
f
Cr
,v0t^
:
>i
/■ problems, are the resqlt.of heavy
^ economic
Names Director
"wartime expenditures together
d,at ^
l^ames l^irecioi
tbe
has hppomp

rQ...

member of thp Now

people will insist

that

secure

point.
upon
!

another

There

action

heavy responsibility

the state and local

govern-

*From

talk

by Sen. Johnson before
the San Angeio Board of City Develop¬
ment, San Angeio, Texas, Dec. 11, 1958,
a

That

million

men

and

women

wanted

work,

who

were

work

and who

means

who

looking

could not find

■

ith

„npnr}1n^

nr0prarn^ recently

Henry C. Alexander.

Chairman, undertaken. In' fiscal' 1958 'the
of J. P. Morgan & Co.. Incorpoi -Federal Government'
spent close
rated,
has
been
named
to
the to-$72'
billion, nearly-$5 billion
,

the

it be faced. And if it is ignored
I at one point, they will sooner or
later

people unemployed.

for

exists,

American
,

from

testimony

•i
.

Meanwhile,

leaders—people from '* ence : hot only leaders
on the state of
every walk of life.
Federal Ti¬
It was nonpartisan to the core.
It sought explanations rather than
nances,
but
justifications. It tried to be con- also on the \
structive rather than destructive,
course of the k

sion

misery.

government — federal,,
Furthermore, it is not the kind
local.
And whenever of inflation that we studied in our

of
and

-'[state,
| .,one of those levels fails to pull its
llshare

would have widespread

[

labor

ers,

rr>arirp+r»iQpp
max ketplacc

Inflation

talks about it but

Everybody

agree
never

Inflation

great deal of confi¬
dence in the ability of Congress
have

Agreement

priate for

lnfonr

with which

who finds his costs mounting daily.

Doubts dramatic

businessmen, scholars, farm lead-

take

hits practically
population.

our

volumes

even

for application to Treasuries;
(3)
exploring redemption, conversion and. tax benefit techniques;
and (4) coordination of Treasury and other Federal programs.

byways - of
the
The Federal debt is so large a
economic
system., It part of the nation's entire capital

American

;

forward :commitments

and

highways

prs

decline an# fluctuate;

may

the

searched

our

government securities

on new

ing issues

was

committee

That

improve

can

payments

Temporary

took

much a

daily

our

gone

prophewide of the mark. I think

become

lives that it is not
even
necessary to cite statistics.
The fact that the cost of living has
of

are

find

cans.

Personally, I
these

facing

lem of inflation.

fixed solely on
1960.

believe

are

require the
cooperation not only of all levels
of government but of all Ameri¬

will operate

its

...

which is going to

lem

are

.T.

handled by the
National
Economic
Committee
headed
by
Senator
Joseph C. O'Mahoney of Wyoming.
It

avers we must give top priority to this and subordinate
all other considerations so we may achieve economic growth
and price stability. Recommended are: (1) higher interest

through the most searching

history.

banker

an election.
1930's, this nation

the

Bank

spending. : Regardless of what is done, the Connecticut savings

;

scrutiny of its economic system in

fate.

those who be¬

with

Back
went

when

And

responsibilities.

ing

tensely parti¬
san.

that

mood

the

responsibilities are ignored, pre¬
rogatives usually meet the same

Congress

will be

[

going to have to rid our¬
selves of preconceived ideas.' < We
are going to have to approach this
problem in the same mood that a
surgeon approaches an unknown

politician approaches

Strength and integrity are main¬
by meeting and discharg¬

the

that

V*w

Study

Nonpartisan

Connecticut Savings

Haven, Conn.

are submitted by Mr. Freese as to >
debt management policies and prac¬
tices, besides controlling the increasing volume of Federal •

how

We are

tained

quar¬

ters

;v
yy.
Recommends

of Inflation

Problem

Treasurer,

[ Several recommendations

be done to pre^

•■/[[ • ['■ Ty ■r*

disease—not

given rise to
apprehensions

new

vent it.:,

integrity. No one feels this
keenly than I do.

and

New

is causing inflation

of what

idea

and what should

maintain their strength

President

The fact still

remains that we have no clear-cut

review.

Chairman of the Committee on Government Securities and the ;
Public Debt of the National Association of Mutual Savings Banks

t,; v"\
examples could be multi¬

The

plied many times.

cope

Congress is faced with heavy
responsibilities which must be met
under a set of totally new cir¬
cumstances.
Those
new
circum¬

sies

one

with and urges a thorough
nonpartisan study of the economy in the new Congress. Claims
we suffer from a ^different kind of inflation than heretofore,
recommends we institute a study similar to former temporary
National Economic Committee, and suggests Joint Economic

Management

By CARL G. FREESE*

Still inflation

before.

continued.

inflation is

Senate Democratic leader Johnson asserts
the major

seen

Thursday, January 1, 1959

Bettex Federal Debt

demand than the world has

ever

JOHNSON (D.-Tex.)*

a-greater ratio of supply

We had
over

work.

board

According to the academic schol¬
ars

of economics, that

tion

which

was

situa¬

should

have brought
down.
Instead,
they hit all-time highs.
Throughout a great part of last

prices

year,

tumbling

our

steel

mills

operated

only about half of capacity, Ac¬
cording to some theories of eco¬
nomics. inflation is caused when

directors

Corporation

Discount

York, sueceeding George Whitney who has
resigned.
New

New Bache Branch
on

ST.

Tncpnu

n/r-

Co., has opened
2003 Lake Shore
dnection

;
u

JOSEPH, Mich.

—

•

Bache &

branch office^ at

'more than it took in.
fiscal

In the

year

direct and effective way of easing
debt management problems with..

*An address by

■

...

Botkm.

Mr.freese before the

Drive, under the

of Gilbert

cur-

ehding June 30>
i95g? it expects to spend S78 billion, $12 billion more than anticipated receipts. Clearly, the most
rent

field, nt a time when inflationary
f°rces are rampant, it is assuredly
actln§ at cross-purposes. .
It is necessary, therefore, that
the huge, and [expanding;federal
mortgage credit programs—some
$48 billion or 44% of aU home
mortgage debt is now underwritten by thq Federal Government—■
be subordinated to, _and modified
from time to time in accordance
with the changing need to control

inflationary forces.

^ «
Banks,

New

York

City,

Dec.

1958.

For

after all

»e ability of the Federal Gov-

ernment to stabilize the value of

Volume

189

Number 5808

The Commercial and Financial Chronicle

the currency is seriously impaired,
the public's confidence in Fed¬
eral
obligations
is
undermined

than

Franc

and Federal credit guarantees be¬
come
of limited value.
The co¬

ordination

credit

Federal'

policies

with

policies

monetary

fiscal

and

Federal

underwriting

also

the

Mortgage
Home

Federal
System, and
Administration.

Bank

Housing

extend, also, to
agricultural
credit

nation's

Funds"It

basic

tenet

•/';

«T

■

States that the long-run

enterprise

compete with other
of borrowers—both private
public—for the funds avail¬

tional

and

able in financial markets.

fundamental

.sound

principle

' a

management
combat inflation

•need

'coordinate

all,

and

markets

Order

•

t h

fiscal,

which

operate.

can

t i

step

attract funds away from

the Treasury must

compete

the basis of interest rates and

other terms. There

can

franc.

neither

it,
to

other borrowers, and successfully
to finance its debt largely out¬

tem,

oft h

o n

On the face of

side the commercial banking sys¬

devalua-

French

the

Thus,

vertibility

con

monetary and credit policies,;;
•
There are no isolated or pre¬
ferred

restora¬

of sterling and

•Treasury -

—

tion of the

the

Federal

the

This is

debt

mone¬

tary sphere

appears

very

dramatic.
Or.

Paul

Sterling's

Einzig

ap-

pros¬

se¬

or banks to hold them
part of their legal reserve.

Techniques
fand

appeals

moral

British

residents

stricted

in¬

transfers.

devalued

'are themselves in
tion for the

and

have

sharp competi¬

savings of individuals
prime obligation and

public trust to depositors, share¬
holders, and stockholders to earn
the highest return

possible

inVested capital commensurate with
on

safety and liquidity requirements.
Long-run considerations of infla¬
tion

the
are

are,

best

essential

course,

iii

weapons

but

battle

this

sensible and courageous fiscal

and

monetary policies of the Fed¬

eral

Government, effectively co¬
ordinated with housing and agricultural policies to preserve the
purchasing power of the dollar.

be sure, a

debt management
policy based on offering securities at competitive rates of inter¬
est

The

Treasury is, for the most part,

without

not

competition

who

able

are

its

with

problems.
borrowers

deduct

payments from their

interest

tax

bill.

.'corporate borrower, for example,
who pays 5% interest on debt se¬
curities has a net
cost, after Fed¬

eral

'same
"

income

tax, of 2.4%.
principle
applies
to

The
the

^mortgage borrower. To compete
effectively

with

these

borrowers

and

remain

re¬

of investment

respect

As for the

franc, it

was

number of times since

the end of the

war.

Nevertheless, both events

are

outstanding importance.
For all
practical purposes sterling was
already convertible
before
this
latest

move,

since the

ever

decided

ernment

cessive wage increases

ex¬

in Britain

likely to be offset by the con¬
tinued
pressure
on
the ' dollar.
this

point of view the cir¬

cumstances

the

are

gov¬

devalued

This

was

political

until

that

the

now

would have been in
position to discontinue support¬
ing the "unofficial" rates at a
But

have

the

now

fied with the "official" rates, and
the government is under obliga¬
tion

support the

between

tion

$2.78

unofficial

rates

allowed to

routine.
could
as

sion

and

the dollar.

the

In Loeb, Rhoades Co.
Carl

Wall

Loeb, Rhoades & Co.,
New York City,

Street,

of the New York

members

announced

Exchange,

for

family

the

long

h-as

Run

Prospects

Gaitskell,
that

son

senior

present

The
to

rate

government
the

the

franc

confidence.

largely the result of the
instability inherent in

result

which

Government

was

measures.

ary

such

measures

will

the
not

Gaulle's

enough to enable him to take the
necessary measures.
son

relatively moderate devalu¬
of

the

franc

likely
holders

to
of

dollar securities

extent

incomparably

moment
be

called

followed

sweeping

by an
flight from

even

the
on

States

drastic
in

call

measures

for

than those taken

Miller is

the

ing

These securities

were

They

from

offices

Miller

as a matter

it¬

gesture

BEVERLY HILLS, Calif.—Mor¬
M. Tannen has been added

the

staff

of record only.

James Talcott, Inc.
$3,000,000 Subordinated Notes due 1970

means, further, that prices on
outstanding issues of Government

securities
tuate

may

over

decline
wider

and

fluc¬

range

than

They have in other earlier
This

ized

phenomenon
the

market

securities

Higher
Federal

has

for

years.

character¬

Government

the past year or so.
interest costs
on
the

over

debt, while not in them-

Continued

whether

the

are,

would
a

doubtful

flight

should

page

sufficient

which

ernment

embark

re¬

withstand

from sterling if there
a widespread anticipa¬

tion of the advent of

F. Eberstadt & Co.

Labor Gov¬

would

revert

restrictions and would
on
inflationary policies.

exchange
on

$1,000,000 Capital Notes due 1970

election result.

Treasury's -gold and dollar
serves,
reinforced as they

December 29, 1958

Hanauer

Co., 140 South Beverly Drive.

indicating

not

Co.

ton

strength.
dence

2925

name

J. B. Hanauer Adds

are

for sale and this advertisement appears

(Special to The Financial Chronicle)

United

placed privately through the undersigned with institutions purchasing them for investment.
arc not

years

Texas — Walton S.
engaging in a securities

business

United States and other industrial
States

two

Walton Miller Opens

Much will depend, of course, on
the
degree of inflation in the
far

for

DALLAS,

Walton

Force

Rosedale under the firm

September, 1957.

countries.

Air

1954.

United

the

repeated

even

served

and joined Carl M. Loeb, Rhoades
& Co. in 1957.

occasions since the end of the war,
would

then

admission of

committed

tjhe,

partner,

Harvard Business School in

pound

concerned, any weaken¬
the dollar as a result of
the devaluation withdrawals of ^French capital and
London's
more
moderate of
competition
as
a

repatriate their capital.
The

French

many

dollar balances
to

For this rea¬

for, as sterling'is Tikely to remain
reasonably firm. But another fi¬
nancial or political crisis would

and

Today General
position
is
strong

rates

suppdrt of the unified

the

and

defeat.

self

founded
firm

1931,

only be allowed to decline
major policy deci¬
an

late

M. Loeb,

the

was

1
'
is

grandson

who
John L. Loeb Jr.

the

been

Loeb

the

Carl

The Leader of the

out

Mr.

matter of

amounting to

partnership.

run,

Party, Mr.
in pointing

been

admitted- to

however, the
prospects of sterling will depend
on
the
government's ability to
resist inflation.

the

Europeans

the
In

organization,

Conservative victory continental
sterling balances will increase.

Long

convenient fi¬

Sterling's

Jr..

Loeb

the

probable that after

seems

third

generation

attract

wishing to keep balances abroad,
and

John

Loeb

the

Geographically

Stock

that

rela¬

matter of

unified

J. L. Loeb, Jr., Partner

New

rates

now

have

could

decline

Now

unified
$2.82

Until

will

ity of the franc.

uni¬

been

politically to resort to
drastic steps to ensure the stabil¬

induce

notice.

level

command

position

ation

"unofficial" rates

than those witnessed

moment's

to*

owing

right

the constitution of the Fourth Re¬

government

It indicated its confi¬
only in the economic
strength of sterling but also in the
quest an increase in the statuprospects of a Conservative vic¬
}f tory rate of interest which it van tory at the general election. For
pay on Government bonds.
the anticipation of a Socialist vic¬
Competing with other capital
tory would produce a landslide in
market borrowers on the basis of
the foreign exchange market dur¬
| interest rate means, also, that the ing the period between the an¬
cost of interest payments in the
nouncement of the election date
Federal budget will be increased.
and
the
announcement
of
the
it may be necessary at some fu¬
ture time for the Treasury to re¬

its

failed

French

difference

London

external

short-term'

John L.
Succeed
result of the return to converti¬ Loeb Sr. Young Loeb graduated
The reason why previous de¬ bility sterling has become more from Harvard College in 1952 with
valuations of the franc failed to vulnerable, and
that in conse¬ an A.B. degree, (cum laude), and
his ' Master's
degree
in
produce such effect on a really quence there will be increased earned
noteworthy scale was that even pressure in favorf of disinflation¬ Business Administration at the

public,

which differed only slightly from
the
London
market
rates.
The

large scale transfer

world-wide

Labor

the

sterling in the close vicinity of the
official parities.
As a result of
this policy foreign holders were
able to sell their sterling at rates

under strong pressure.

devaluation of

of considerable sig¬

Why French Devaluation May

market quotations of transferable

support

York,

from

subject

restrictions,

residents

vestors to overlook normal market
Considerations in order to sup¬
port Treasury financing are not
-'realistic, short of war or grave
-^national emergency.
Fiduciaries

remain

exchange

overseas

suasion,

institutional

been

funds

center

effect

curities,

nancial

adverse

others.; Dec.
27,^1958, does
short the process. For

to purchase U. S. Government

have

London

the

1959

inflation

wage

come

In the

Had convertibilty been restored
earlier, its immediate effect might

not complete nificance, because it is likely to
financing method
sterling is only cause substantial repatriations of
of Federal regimentation or stat¬
convertible for non-residents and French capital from the United
utes requiring investors directly
only
for
current
requirements. States.
effective

liabilities, to avoid dangerous un¬
warranted optimism.

Britain and other major industrial
countries.
But during the course

are

extent

dollar

the

figures

London.

tion

pressure

ling during the initial period
its convertibility.

abroad

conclusion

correct

the

it will be sufficient to assist ster¬

funds

justification—even

reason.

the franc

made

announcement

monetary

their

determining
policy.

changed'situation the need
bound to result in persistent pres¬ for a strong British gold reserve
sure on the dollar.
The extent of has become more imperative than
this pressure is not likely to cause ever. British experts and the pub¬
majo r
embarrassment
to
the lic must acquire the habit of com¬
United States. On the other hand,
paring the gold figures with the

the basis of the wrong

longer

would

fidence

the

tive

balance

Washington

afford
of
payments and the

can

other hand,

Prospects of wage infla¬
as
gloomy as ever, and
in the long
run
the-future of
sterling will depend on the rela¬

though
reached

and

the

French holders
realizing their dollars. On
many

the

The

inflation.

authorities

many French holders will
repatriate their funds, and this is

now appears to have a

deal

From

■

dis¬

resist

to the prevailing
scarcity of dollars.
During 1959, however, dollars are
not likely to be scarce, owing to
French; selling.
So the dollar's
poison is likely to be sterling's
meat. Indeed, provided that con¬
vertible sterling will inspire con¬

sterling

great

proach to con¬
vertibility has been very gradual,
;

such

policies,

economy
that buyers
sellers, borrowers and lend¬
LONDON, Eng.—The Christmas A few months ago this confidence
ers, compete in open markets for
holiday season of 1958 will long in
Conservative
victory
might
the goods, services, and financial
be
remembered
as
having wit¬ have been considered foolhardy.
claims, which they offer and seek. nessed two events of first-rate
Today it is considered reasonable.
In this setting, the Federal Gov¬
.importance in
Likewise, the government's con¬
ernment, in financing its opera¬
.the interna¬ fidence in the economic soundness

types

given the higher should force disinflationary meas¬
domestic political sta¬ ures on the United States, Britain
bility in France, and the resulting too would feel impelled to adopt "a
prospects
of
sounder
financial* similar policy. Otherwise sterling

and

tions,^ must

reason

Africa

degree

pects for sterling will depend upon Government's ability to
resist inflation and the degree of inflation in the United States.

free

our

period of convertibility.

international movements of funds
in

from

during the

initial

Competition for Capital Market

banking center would make
important than before to

to disregard the ups and downs

the

does not anticipate repatriations will cause any embarrassment
to the U. S. dollar, though it will assist
sterling

programs.

world

courage

moderate devaluation will not give rise to wholesale repatria¬
tion of French funds from the United States. Thus, Dr.
Einzig

Coordination must

The

Dollar-Sterling-Franc Ratios in the Offing," Chronicle, Dec. 25,
1958, p. 17), correspondent Einzig judges that the relatively

National

Association,

Loan

Public

agencies—

Federal

that

for

North

definite forecast of the "heavy" franc
solution, in foreshadowing a revaluation by 100, ("Changes in

—

1928,

during the late 'twenties and the
early 'thirties. Moreover, the po¬
litical situation in Europe and in

S»

The first to provide

expecting
spectacular reflux of
French funds as
was" witnessed

By PAUL EINZIG

only the Federal Housing and
Veterans Administrations
the

such

include

must

not

but

Devaluation, Sterling

that

was

there

And the United States Dollar

housing

(11)

White, Weed

Co.

(12)

The Commercial and Financial Chronicle

Security not be similarly invested
tp enjoy the same tax exemption

The Inflatioii, Disease and the Cure

when set aside?

All

By MILAN D. POPOVIC

corporation
covered

now

President, Blue Ridse Mutual Fund, Inc., New York City

sorily

Investment company head and

economist would deny retireprofit-sharing funds invested interest in inflation by
not allowing them tax Jree status unless they invested in
government bonds. Mr. f'opovic expresses concern about the
destructive effect on the economy now that almost everyone

the

meet and

aware

inflationary trend;

place in

ment

United

States

in¬

are

also

annuities have

deductible

but. their

talk is in evi-

"'■'!>

it used

dence. Appar¬

ently, there is
yet no will-

quite

ingness

with

This

•volved

in-

make

Federal

Milan D. Popovic

and

towards arresting the

trend, prin¬

now

tend to stimulate

inflationary psychology.

the

stated
form

beginning,

that
of

favorable

"omy.
eral

past

influence

the

years

mild

was

our

econ-

It was a stimulant of gen¬
business activity. It created

•confidence in the future values of

everything

which

meant

high

turnover of money and free buy¬

ing of all goods,
credit.

mild

Our

the present tax free
inequitable on a perfectly*
basis.
Specifically,r if the

legal

company

system

sets

aside

from

indirect

tax

Lenin

was

who

said that the first step in destruc¬
of democracy is the debase¬

the

This may be a
that those who

before

profit sharing

retirement

What

done

can

ment

stop this

value

dollar?

The

heart

paid
This

the matter is not deficit
credit

or,

rather

than

the

cause

tax

incentive

sdek

high income and capital gains by
speculation in such funds. These

calities, most of which are largely
effects

invests

withdrawal from the plan.

gives

good reasons both in fairness

are

becomes universally known,
becomes destructive since no

wants

one

the

saver

when

the

spenders get all the benefit.
becomes a negative force be¬

ing

economy,

•system.

that

is,

the

credit

•

perity is based
we

upon

the fact that

things in a big way which,
turn, is made possible by the

fact

that

pool
financial

vidual

small indi¬

our

into

resources

great

aggregations of capital for
large scale industry. Most of this
pooling is accomplished through

and

the

exist

inflationary
collateral

spending

effects

which

exemption Tor the
and
organizations

plans

are,

there: should

effect,'

special

favor.

inflationary

psychology.

Sees Beneficial Side Effects
If
it

this

would

upon

One approach could be to foster
which

would

make

these

Republicans

pretty much disuse through the
operation of discount houses. The
courts Of several States have

say

such; things,*

turned

they asked,,

will make

when

up at;,this session.
uphill battle.

their

two leaders in
the House and

Seriate; we re
Sam Rayburn

J and

ect ivcly.

's p

Both
•are

Carlisle

Texans

who
;kcep their feet

Bargeron

fact

•welfare,

4q
the

that

could

'these two

don't

know

involved

are

it.

but

For

instance, all
pension beneficiaries, including
Social Security, now depend upon

proposal
have

adopted,

were

other

the economy.

ground.

the fixed

their

value

current

and

the

dollar

future

for

retire¬

ment income. This fact should

for

all

for

create
S.

the

side'effects

On .the favor¬

to
a

safeguard it. .vIt
large new market

securities

-can

have to do

do not want to.
tionable

fact

that

majority

who

and

power,

welfare

and not

by hard cash. Even

dol¬

taxes.

lar

made

apparent
cated

form

that

this

credit.

very

compli¬

out

and

profit sharing funds
earnings
before
income

These

contributions

taxable

unless

Government

could

invested

securities.

highly efficient system The U. S. managed Social Security
involving long-term processes retirement funds are also set aside
would
basic

but

unit

destroyed
of value

when

declines

least is uncertain.

the
or

The

get

of articulation,

means

increase-

revenues

chairman inasmuch

of them

one

chairman.
neck

thinks he

tax free but

are
mandatorially in¬
only in U. S. owned bonds.
Why should not the private plans

vested

which

are

supplementary to Soeial

differently.
a

gained

the government. Tax free govern¬
ment bonds would not be affected

because pension funds do not buy
them anyway since they are not

interested
ture.

There

their

have

$30,000
High taxes inflate

tax

would,

free

fea¬

course,

1942

were

few months

labor

basing their demands

take-home

and

Stevenson

they receive, but what
they have left after taxes.
As a
result

liked.

There is

doubt that he

would like to make the

but it is

doubtful

again

run

if he will enter

"any primaries.

and

newcomers

some

red

which

their

ithe

eyes
any

Southern

and. Republicans

can

Already -there has been
exploring towards the re¬

operated

the

this

alliance

which

effectively under the

never

complaint

that

equity

would be more difficult to

money

In the first
be

are

executive

will be

fairly compensated.
If this isn't inflationary I would

like to know what it is.

raised

place, it should
of
pension

out

funds
and, secondarily,
wishing to participate in

anyone

the

Humphrey Applauds
President's Proposal \
■i For Balanced
Budget ;
.

President Eisenhower's proposal
a balanced budget in the com¬

;

for

ing fiscal

year was strongly sup¬
ported last Dec. 30 by George M.
±i u m

National Steel

Corporation
former

and

Secretary of,
the
Treasuryr
"The

proposal

the

dent

Presi¬

for

an¬

other balanced

budget

now

one

the

greatest;
tions '.of

ac¬
his

entire Admin¬
Geo.

istration," Mr.
Humphrey

Humphrey

..I

"It will lay the foundation
for more better and steadier
etter
jobs
stated.

help to hold down the
hki;
rising cost of living. It is a giant
step in the war against inflation,
and it will

gives notice to the whole world
that this country has the courage
and determination to maintain its
great economic

well

superiority."

military
<

•

Now With

Hathaway

(Special to The Financial Chronicle)

DENVER,
Bluh

is"

Colo.
now

—

George

affiliated

with

Hathaway Investment Corp., 1845
Sherman Street. He
with

Columbine

was

formerly

Securities

Corp:;1

ex¬

pansion of industry on an investor
basis, can do so by investing per¬
sonal savings.
Old age annuities
have no
place in a speculative

the

market.

passed

phrey,

Chairman of

•

pretty

together they outnumber

.coalition

effect.

order that the

They will probably succeed in
preventing Stevenson from get¬
ting the nomination
two
years
hence!

fantastic incomes

some

paid

have gotten further in his
campaigns because lie is a "right
popular figure,
personable .and
well

pay

They hang around the

Adlai

would

receives

man

will

the amount

every

should

may

raise.

allocated

Within

They

albatross. Without them, Stevenson

would

Corporate securities would lose

tax.

and; it is sur¬
prising that they can get together

arise

which

year

Conservatives

leaders

prima donnas,

are

curity markets would receive the
identical total capital funds but it

part

second-

they had a ten strike
they passed the withholding

when

eeiveel publicity, and who are now
scattered and belong to the ADA

formation

automatically resolve

under

making
the employer pay the withholding
membership. They are mostly for- tax through increased' wages. Even
merly office holders in the New. persons in the higher brackets
in
Deal, in which capacity they re- now think of their income, not in

would

tend

take-home pay.

•the Democratic Party is

money

bill

A $30,000
$100,000 so

unques¬

kinds.

Industry and trade is almost en¬
tirely conducted by book entries

cards

important and that is high taxes.

things they

some

dramatized by appropriate pub¬
the problem of investment super¬ late Bob Taft. Not all Southerners
obligations of all
licity. It is proposed here that all vision
of
many < small
welfare can be counted in the conservative
Savings, loans, mortgages,
pension plans and future retire¬
funds, principally those of labor school and not all of the Repub¬
insurance, etc., all are in specific
ment income should be tied di¬
amounts of a unit of
unions, some of which are now licans either, for that matter. Split
money, a
rectly and visibly to United States
common
managed by unqualified persons. as both sides are, a conservative
denominator
of
value.
Government credit as much as
Only a part of capital savings is
The
objections that could be majority can't be mustered.
possible not only actually but also
in equity or venture
raised to the proposal are that it
Eisenhower's main problem will
money in the minds of the
people so the
•fstocks). It is sufficient to point
is
compulsory and that capital be his budget. It will be a miracle
finances of the U. S. Government
but that practically no construc¬
markets would lose an important if Congress doesn't greatly add to
becomes everybody's problem in¬
tion activity or
it and it is doubtful if he will be
source of money. As to the first,
capital investment stead
of being the concern of only
would
be possible without bor¬
able to raise gas taxes and postage
as stated, Soeial Security is com¬
the Washington officials and in¬
rowing of fixed capital funds from
Gas taxes, in fact,
have
pulsory in every way so there is rates.
comprehensible economists.
the
great pools of savings. We
no
reason
why
supplementary become so high that they cost alhave
come
This
to
can
the
be
done
most as much as the gas itself,
point where
simply by benefits should not be as compul¬
purchase of a $20 radio is on in¬ amending income tax laws which sory as to investment since both, The American Triickers Associastallment
now permit
which,
in
setting up of private in effect, come from the same tion will lead the fight against
effect,
is
financed
by someone's savings. pensions,
retirement
plans
and source, the public* purse. The se¬
fixed

their

sent

great on them tiat they

be so

may

Democrats

would

any

people
whom
you
would least suspect of
suctija thing,

country's

entrusted

and

postage,

of-

men.

thereby solv¬
ing the difficult refunding prob¬
lem now facing the Treasury.' It
and

this year was off because of

first-class

number

side, as stated, it would make -i-i; Johnson's and Rayburn's work
pensions, present and future, will be cut out for them next year.

would

But they are two

men.

people directly interested in the
dependent on U. S. Government -The flock ,.of
stability of the dollar for personal credit
creating a personal interest ...much all have
reasons.

over¬

druggists

ness

piei?

V It

The

fight to tighten them
Theirs is an

a fight on inflation
and is always
.wanting to; increase the cost; of
services. They add to the cost of
living. The Christmas card busi¬

Lypdon
nson,' re¬

~Joh

State laws.

impossible to comprehend
an'Administration that is, making

able

all

;

their

possibly

Proposes Tax Reform

,1'.

other

and

of"

tax

private

edge would bring public pressures
which would automatically reduce

action

For background, it may be good
to remember that our
great pros¬

credit

government

income after taxes

arresting of inflation. Such knowl¬

it breaks the basic fabric of

cause
our

interest lies in protectr

added

thought

dividends

and on which only the
capital gains taxes will be

have

everything.

which

account

lower

financing,
policy or wage price spiral
other little understood techni¬

staff of lobbyists to fight for fair
trade laws. These have come into

How

which went all out to put them in

free money

deterioration of confidence in the

capital

because, to be good in
its effect, it must be invisible and
generally not recognized. As soon

Nixon.

their intel¬
■owners,
in turn, reducing their lectual inspiration from the Amer¬
good place to say
Simul¬ icans for Democratic Action, a
accept
and
propagate
inflation personal tax payments.
now are either fools, not
informed, taneously, the employees;get an group " which receives publicity
interest in a long range invest¬ out
of
all
self-seeking or subversive.
proportion, to
their

end

President

could

radical, a
captive of the labor organizations

and from revenue viewpoint why
helping to diffuse the purchasing the basic
problem. The main dif¬
they should not enjoy the tax free
by diverting it from the
ficulty is complacency and an ac¬ feature unless invested In
govern¬
savers,
where it may have lain
ceptance of inflation as something ment bonds.
Excluding Social Se¬
inert, to the spenders who set the
affecting only the other fellow.
curity, any private individual cab
higher pace of business activity.
People should begin to realize that save for his old
age only out of
This pleasant stage of inflation is
their vital
an

Association

its

reduces

power

Vice-

It also reduces

employees,

direct tax liability.
net
income
and

tion

good deal of it

addition, it acted

funds

fund to be received

without.

ment of currency.

it should

inflation

the

tocsin of danger

call for action.

This

paying taxes for

cipally through amending the tax
the

Bank..

this imposition and they have one

class postage. Economists attribute
By virtue of their leadership; inflation to nearly everything it
basis •they wield power but the
scems to me except the one most
pressure

is endangered from within and not

start

•laws which

Reserve

ominous and is

which)

as they should, ;?;■
minor variation, the same

stocks.

itself and its agencies, such as the

some

Will at least
make

With

-proposals for
'action

inflation and do not object to it as

strenuously

common

and

„make

oi;

They, there¬

fore, become directly interested in

places.

many

inflation by use

lax deductible funds.

Figures published background prevails^ in "various
recently show that all classifica¬ welfare and; profit sharing plans
tions of holders of U. S. Govern¬ .being set up in great numbers ?by
ment
bonds
are
reducing their industry. In many such instances,
are
other
factors
which
positions except the government there

re¬

issues

higher exportation of gold and
the flight of capital from bonds to

proposes
clarify a bit

benefit out of

-'inevitably"

confidence

minority of the fortunate
employees get possible additional

say

.are

view
the

lack

that the

may go

people

The most obvious indications of it

this

serious prob¬
lem.

ttyat it

Some

plainly visible fact in

face to

come

face

and
*

complacently

This

so.

lower."

even

campaign

Druggists

and

vestibent is usually left to the dis¬
cretion of company officials. Part"

recognized

last

the

the Democrats professed indigna
of the most
(powerful lobbies
tion at the radical charges leveled ■the
country.
at them by President Eisenhower
The
National Retail

in-

We are now at the stage where of these funds are increasingly
being increasingly
a
danger to this The evidence Shows'art increasing invested in common stocks pre¬
country. There is much deploring amount of people have become sumably to offset the lOss Of pur¬
-of it but so far little more than aware that the dollar is not what chasing power. of the dollar; sc>
Inflation

Throughout

Govern¬

bonds

tax

of the News

By CARLISLE
BARGERQN

exclusively.
Many
companies have private pension
plans designed to add to retire¬
ment payments above Social Se¬
curity.
These
contributions
arc

speculative market.

vested

age

Washington

Ahead

payments
from
individual em¬

These contributions

taxes.

believes his proposal would

U* S. securities created; and believes old

and

by compul-

ployees out of their income before

direct vested interest in dollar's stability and Gov¬
ernment's credit for personal reasons; sees larger market for
provide

collected

company

From

employees are
Social Security

trust funds established

Thursday, January 1, 1959

...

Robert S. Bookman
Robert S.

New

Bookman, member of

York

away,

Stock

Exchange,

December 22nd.

Volume

189

Number

Commercial and Financial Chronicle

The

5808

(13)

and

Fai-Ranging Forecasts te 1959
And Advice lot Investors
By ROGER W. BABSON

i;;

switch from stocks to bonds in 1959.

will

J
i

real

Russia

threatens

World

War

knd

recession

recent

the

the boom

wood

will

following

awaiting -developments

•-

■

ia1959 will be *

nothing"
Con- gre s'sf Both /
parties • w i 1Ig

; a "do

year for

hold

tHe

Republi-;)
will want;,

cans

Most

Demo-

Roger

.crats will vote

Babson

Tor

raost

the

inflationary legislation;. but
a few of these Congressmen

'only

Will vote for such

legislation

will

over

,-r-

the President's/veto.

crats

may

prior debt or cumu¬
lative preferred stock outstanding.
They are the best common stocks
for "capital

Both timber and oil

Canada
in

will

value.

reserves

gradually *• increase
bullish

gains."

Convertible

imports of pulp-

expected

stocks,

should seek companies with-*

out too much

hold

should

bonds

fairly well during 1959.

The best
1959

investment policy for
one
now
to have a

for

good bank account so funds will
be available to buy bargains when
a

sufficient

J>reak

in stocks,

comes

bonds, real estate, and commodi¬
ties;

many

Canadian and African investments.

/There will be many failures in

The- greatest
factor in deter¬
mining the price- of city land and

hastily organized electronics^ nu¬
clear, and similar companies dur¬
ing 1959.

businesses in general is the auto¬
mobile and

the

both

availability of parking
is
responsible
for

This

space, i

boom

suburban

real

With

two

three

exceptions,

railroad stocks should be avoidecl

during

1959 and until

definite

that in standing a decline in subruban estate and the' decline of city long-range program of govern¬
unfavorable* building. Small farmers holding- property. Buying city real estate ment aid is assured.
labor legislation and poor business such land should not now sell.
. without nearby parking facilities
For "steady income and fair mar¬
conditions, labor leaders were on - 'Small farms without any sub- is a great mistake. :
ketability, well-established utility
I was wrong in my forecast a
their-good, behavior ini;1958. -t /^ urban possibilities -may well con-"
stocks should be the best for con¬
f: It
is now difficult to forecast sidei4 selling to adjoining farmers year ago as
to the Dow-Jones servative investors not looking for:
the ^unemployment ^situation for if offered a fair price in 1959.
</ Averages/ Although many stocks profit. This especially applies t6
sell lower today than a year ago.,
1959^1 OwingIto z the 'increase 'of ^ Large commercial farms with
cumulative first preferred non-;
Due

1959

to fear

the Dow-Jones Averages — espe¬
cially the Industrials—sell higher.

However,
risk

will

agaip

forecast

and

that

sell lower sometime in

they do today// '.

callable
The

the
they will
run

1959

utility, stocks.

three

handicaps to Amer¬

ican business

are

the fear, of in¬

flation, the fear of, union labor
leaders, and the fear of President
r;
Eisenhower's physical collapse.
*

than
.

business//'

good

you

common

their
when

—

pine,

Most wageworkers: will be more. for cartons and
packages for ship¬
efficient during 1959, which should" ping and displaying merchandise.

automation;^ working forces will latest >: machinery, should prosper
Looking ahead duri»gXT959; but small farmers
to the elections of I960,"; rnanu- may not do so well.
: ]
facturerSj who are mostly Repub^ / .Pending a serious war,; there
licans; will' want no; more serious will be no radical change in the
;
urtemploymentfo: occur.X;
Government's farm policy during
z?'( Many /plans ;'for expansion * of J 959. ";'" ^ ■■
/
'7 ...
plants were postponed during1958'gg Real Estate and Housing
J

until

chests
1960

now

-r

continue to bevcut.

their

cards

This

tb^lRay'*

If you are

elec-

vember

fions.) *•'.;••• 1

1959.

1959;
this should largely be offset
by the increased domestic demand

labor troubles
1958.

the recent No¬

but

III.

^economic war; er side of growing cities will conmove strikes and
tinue to increase in price notwith-

fighting us with
--There will be

applies

More Russian

Both

during

pulp.-Hold woodland in 1959.

tern lfond«.and c»A;.;Tkelastfn,case>tf.a^^
drop in the stock mmrket. "Though wrong about what the JM~-- Executives will attend : more
r
averages would 4>e in 1958, again offers prediction fthat they5.
Strictly/ to business during '1959,
v
v will be lower sometime in 1959 than Ihey are today. V';
" ^ reducing/time spent on luncheon;
:■■{■■■;
w...
.
3
J « clubs, golf. etc.
,f Business in 1959?
Not too good sion /is noU over. 'Russia is still
-Good building land on the propbad.

continue

which is used for the best lumber,
and to- spruce, which is used Tor

;;

not too

demand

especially

and

buying level."

these low-priced

will

Due to unemployment and the

portfolio should be1 well diversified between stocks, short?■enable some managements to .in-

/one's

Woodland

Recommends, however,

that bonds worth holding onto for long term are these that are y
Xi non-taxable-or ^convertible *bn a reasonable basis, and ;that '

-v,
-

advice for investors, Mr. Babson opines many investors

houses of all kinds will depreciate

during 1959.

until—with Rus¬

difficulty of borrowing funds for
installing automation (automatic
factories;), the machinery industry
will continue quiet during 1959.;
; I now see1 no probability that
either wages or retail prices will
be/"fixed" ' during 1959
unless

;

wide-ranging enumeration of forecasts, interspersed with

power

help—ithey bring
depression. \
•

sia's

The

uvu

Demo-

dilemma.'

Sees

^•: -With less fear of serious w,'
in 1959^hw®fcS«r a^more moS the real estate'situation in
the
Lrafl scale
!al«er 'cilics
™Prove; but
There

•

will be

need for «on<

Selling Less

1958

clined

was

now

cast in the

correct.

case

reverse

in¬

that fore¬

of long-term non-

is, they should sell for less

selling

nation.

some¬

time in 1959 than they are

our

convertible corporate bonds—that

suburban houses now
owned' by: well-paid > executives
will come on-the market in 1959/
^ue ^ i°ss of/positions oi moves

three

hopes for America
are our churches, our schools, and
a desire to "pay as you go"!
For
these
to
function
properly we
must depend upon the parents of

My forecast of the bond market
for

The

numiclpal.taxes. will increase.

tinned economic readjustment in.s/ Some
-1950;*,but the playing of' politics
by/both parties may temporarily

Bonds

•

Shearson, Hammill Branch

lor today.

; RANCHO SANTA FE, Calif. —
Shearson, Hammill & Co., haa

;
1 continue to forecast that highhearts they will not - want postpone it. /v^ ;
;
grade,
cumulative,
non-callable
business in 1960; but they / >1959 will vnot* see- any marked to other sections
the
opened a branch office at PaseO
first preferred .stocks
will sell del Cios
-must be very,/careful not/to do change -in money rates. However, > Real
estate mortgage /money
undefr. the management
higher sometime during 1959 than
anything which
could
be
held/ Borrowers ywho have not estab- willv be tighter in 1959 than in
of Lester Walls.'
they do tod ay.
;
..."
f' *
'
'
*
"• *
'
*
' •
agaihst'them;in^960»'sliehed good credit will continue 1958. Furthermore, due to infla-

their

country,

good

tO ;find,4t

difficult to get new
other leading Presidential candi- funds',in 1959.
' .
dates pf both parties will be care* This ineans that, it should be
iuRy;;scrutinized ;?to analyze their^
to -sell.
-vote-getting possibilities for i960;
bonds in;r1959 than in
Every

act of Rockefeller's

and

I/will comment on these possitoilities-ih our Forecast 'Tora I960
;

4958; Buy only, hpn-callabler se;Tigl|ibph^s' pr^nds^bf "reasonably

year:from: now./:?>;
'/>///'V> :shprt/matpritips.
r.'; So long .as Russia is fearful /of
' The 1 s u p.pXy* of

C1J',

UCl

Uil

T7.:

wrong horse" when he made
his report to Truman. •. > r

be the uncertainty of . the Federal
polity regarding the new $30,000,-

r Our national budget will show
«a"heaVy deficitin" 1959: This and

000,000'rqtdbuilding .progra m.

gg-

ANNUAL REVIEW & OUTLOOK

WilXit compete with or protect
fOther factors should cause a con- tollroads) recently ,|huilt?
I be.tinued gradual, although not dan- lieve this program will? not harm
serous,' inflation.
X ) ■ . / '
v; outstanding ,Turnpike /Bonds.
i i Serious
competition will;' con¬
tinue at" all levels in 1959/Mar.u-

tfacturers,' merchants;^' p'ftd

others

who reduce advertising and other

•selling appropriations will surely

Switch

Despite competition, the profits
will be eased for many

concerns

by strenuous cost-cutting
-programs and improving'business,
■i
More foreign goods will enter
-the-V United

States

during

1959.

-This

especially applies to German,
Italian,
Japanese,
and
Russian

goods..-

As inflation becomes more serious, only short-term bond issues
—other than convertible bonds—
should be held to maturity. Bonds
-should no longer be considered
good
"permanent"
investments
unless thye - are non-taxable or
convertible on a reasonable basis,
The best investment policy dur-

ing 1959 will continue to be a
•England, "Germany, Norway, well-diversified
portfolio — of
•Sweden,
and
Italy, will be .stocks,
short-term
bonds,
and
launched in 1959. This should re- .cash. Every conservative investor
suit in most American-built and will keep one-third of his portjAmeriean-registerecl ships operat- folio liquid, to have funds avail¬
he

f#.

loss.

Failures
1959

.now

may not increase durbig corporation,

listed

will
•rates

tied

the

Dow-Jones

bi financial

case

sudden

very

drop in the stock market.

■

THE CHRONICLE
Will be Published

January 15, 1959

•

the

1958 /Congress

accomplished

abuses

in the

1959

has

1959.

the

disputed

•Management.

Federal

both

Labor

have been
will

Union,

and

ably

Banks and utilities prob-

strikes.

Labor

On- the- basis of the above state-

ments, I forecast, on the average,
wide change in 1959 for commodity prices. The recent reces-

tio

are

amended,

nor

from

Act

will not

will labor's

★ Get

your

perspective

leaders who manage
★ Do not miss the
Bank

the nation's banking, indus¬

the outlook for business in their respective

opportunity to advertise your Firm, Corporation or

this important

issue constituting a composite cross section of

America's most competent
outlook for the year

next yeafs business possibilities from the

the country's industries.

business and financial opinion on the economic

ahead. Please reserve your space requirements before

Regular advertising rates will prevail
for space

in this important issue. A

THE COMMERCIAL & FINANCIAL CHRONICLE

anti-monopoly

25 PARK PLACE, NEW

YORK 7, N. Y.

ex-

removed, until after the 1960 election.

fields.

the most nearly immune.

Taft-Hartley

emption

trial and financial leaders

in correcting

Teamsters

Congress will do little to

the labor situation,
Therefore,
Invest * in companies
which
will
not
be
subject
to

Tables

present the official opinions and forecasts of

OUTLOOK ISSUE will

not

cost-of-living. figures, improve

disputed

★ The 1959 issue of our ANNUAL REVIEW &

closing date of January 10th.

This will come some day.

tlie

and wages which
to

able

severe

Some

Federal

"be

Japan,

More subsidies will

;A.Yf.ra^.s> maJ"
idiificuliies.
.

demanded.

.ing

■

•

New cargo ships, built

ing at

better security.

squeeze

.ja

X-" Manyanvcstors, will switch from
stocks; to,,bonds in4959/thus ob-.
taining both higher income and

suffer.
/

ISSUE OF

Stocks to Bonds

from

•the

•

non-taxable
loyalty/? she will not in- staid; ^ municipal, X?nd
revenue
•tent ion ally start a shooting war. bonds ^vyill increase during 1959.
I hope that Chiang Kai-shek willr,This/wii^ be due both
to less

OUi

•

I repeat what I

said last year
To Be Droulia Partner X.
regarding "cheap" stocks: "The
due. ..
Droulia & Co., 25 Broad Street;
v The demand for motels is lai;ge- large fortunes made in the stock
]y •; satisfied-; but there will* be an market have come' from buying New York City, members of the
increasing demand for very mod- n o n-dividend-paying C o m rri 6' n JSTew York Stock Exchange, on
stocks at $5
a share
or
under. January 2nd, will admit Alex¬
era. apartmentshouses—especially
pf / the co-operative type.
Old These will be the first to reach a ander L. Berliner to partnership. *
,

China's

pjuuii

tion, it will be worth less when

Labor leaders will get more

RECTOR 2-9570

Domestic Oil Industry's Prospects
DAVIS*

By MORGAN J.

President, Humble Oil and

We arLnot running out

Dps

Mr.

Refining Co., Houston, Texas

of oil and becoming a have-not nation,

proved reserves can be
produced
efficiently
were
set
forth in some detail in the 1957

avers

domestic petroleum

The Texas oil head breaks down our

regulatory

drilled
more,

They include: (1) multiple com¬
pletion of wells; (2) hydraulic
fracturing of producing forma¬
tions; and (3) water floods, pres¬
sure
maintenance
project
and
other recognized means of stimu¬
lating or maintaining producing

sup¬

the

rates.

industry

oil

domestic

our

its centennial, some power¬

nears

raised

what sounds suspiciously like

the

ful

voices

t>eing

fare

premature preparation of an obit¬
uary.
This is nothing new. The
same cry that we are running out
of oil has been raised many times
It is

before.

surprising, however,

that the note of alarm should

sounded at this time when domes¬
tic production is

below

capacity

restricted so far
by lack of mar¬

The

expressed as to a

concern

have

proved

Further¬

reserves.

ground rules do not

estimation
of

field

allow

effect

of the

The first question of

immediate

public
interest is
the
current
availability of petroleum supplies.
This question has been asked of
the National Petroleum Council
several

times since

1947, and re¬

consistently

studies have

availability from domestic
increasing at a faster rate
than domestic demand. The Coun¬
shown

wells

clear, therefore, that our
reports on reserves pro¬
public with a bare mini¬
mum estimate of oil economically
recoverable through existing fa¬
official

vide the

direct and vital

The Reserves Committee has done

job, but there is now a
question in the minds of some in¬
a

good

If the oil industry were to adopt
methods
commonly applied

the

estimating coal

it too

reserves,

seeable future

right,

by Bruce C. Netschert, a member
particu¬ of the staff of Resources for the
larly significant in the light of Future, which stated that there
the prospects that domestic pe¬
may
be 500 billion barrels of
troleum demand may increase in
crude oil potentially available for
the future at an average rate of
future
recovery
in the
United
only 3% annually, about the same States.5 This theoretical concept
as the long-term rate of growth in
of a "resource base" to which "the
domestic
requirements
for
all industry can
apply its ingenuity
forms of energy. While petroleum
and science" serves at least to

therefore,

the

expect

fact that their

own

engineers have

participated in these studies.
For the most part, criticism of
provide 'the most accurate and

leaders of the petroleum industry
to

the

non-partisan analysis that

can

seems

estimates

NPC

capacity

to result from the fact that

made of-current jand future avail¬

since 1943 availability has greatly

ability of domestic petroleum

production.
T h u s,
there has been no opportunity to
demonstrate
that
the
reported
producibility could
in fact be
achieved or, if called upon, could
be sustained for any
length of
time.
Skeptics also point to the
fact that the reported total pro¬
ducibility
constitutes
a
higher
percentage
of proved
reserves
than the relationship existing in

sup¬

plies.
An

evaluation

future

our

domestic discovery and production
of oil and gas is not an easy task.

Past prophecies have consistently

underestimated the availability of

domestic oil and gas.
In
the

retrospect,

clear

that

pessimists about domestic

pe¬

troleum supplies have made their

major
rent

error

in assuming that cur¬

conditions

would

continue

indefinitely into the future.
an

assumption is

today

was

tory shows that

Such

unwarranted

in the past. His¬
ours

highly

dynamic industry—one with

con¬

tinuously changing conditions. As
pointed out recently by Thomas B.

Nolan, director of the

U. S. G. S.,

outstripped

dangers

projecting

what

can

current trends into
be

sure

will be the

changed world of tomorrow."!

exploration
and drilling are curtailed drasti¬
cally. Continuation of present per¬
centage depletion is

basic need

for this result.

These

conclusions

age

rate of 5%

per

year

aver¬

over

long period, that rate was possible
only while oil was increasing its
participation in total energy re¬
quirements. This rate of increase
continue

cannot

markets

if coal holds
has

now

the

which

has a price advantage and if gas
glance, these ideas seerii continues to be an
increasingly
to have a plausible basis. Unfor¬
effective competitdr for residen¬
tunately, however, they reveal a tial and industrial
heating.
lack of understanding of the con¬
ditions that govern producibility
Future Petroleum Discoveries
and of the methods by which it
The second important question
is determined. An article appear¬
about our industry is the ade¬
ing in the November issue of
"Fortune Magazine" is one of the quacy of future domestic supplies.
This subject is one that the public
latest to misinterpret the avail¬
will always find difficult to un¬
able facts.3
derstand because the figures on
At first

The

the
is

producibility

National

not

reported

Council

Petroleum

It is

guess.,

fields by trained specialists. Con¬
ditions have changed since 1948.
We

have

sources

domestic

•

and

over

that

make

our

re¬

known

look insignificant. Many
familiar with a recent book

reserves
are

emphasize the inadequacy of
estimates
based
on

petroleum

re¬

serves

traditional
the

rules

when

our

used

for

of evaluating future
supplies. Beyond Mr. Netschert's
estimate, we could also add some
purpose

500 billion barrels of shale oil and

arrive

supplied

potential
liquid fuel
from domestic sources

sufficient for hundreds of years.6

History

not

to place
ability
to predict the ultimate amount of
warns

too much confidence in

oil

production

the

United

such

in
Nevertheless,

States.

estimates

our

realized

continue

Others

represent

calculations

based

projections
on

re¬

constitute serious studies by

ogists and other scientist^.

relatively short period of years.
is particularly disturbing to
people outside of the industry and

extra¬

polation from the past, and

few

geol¬

oil with

Experts;

Some years ago.
one

suf¬

the

Wallace Pratt,

nation's

most

distin-

quished geologists, estimated that
100

100,000

billion

barrels

oil

would

References to coal reserves,
more wells.
These new fields and
ultimately be produced in the
are -to
make an intelligent
wells have their own individual however, are usually based not on United States.7 At that time, his
>
appraisal of the future we must
capabilities, in no way related to supplies to be produced by pres¬
5 Bruce
C. i Netschert, '"The
Future
ent mines but on estimated "com¬
deal with the dynamics of domds- those of
previously existing fields.
Supply of Oil and Gas," published for
mercial" reserves in place.
By Resources For The Future, Inc., by the
2 National
Petroleum Council Commit¬
*An address by Mr; Davis before the
contrast, the petroleum industry Johns Hopkins Press, Baltimore, Mary¬
tee

tinued

Meeting of the
Institute, Chicago,

Petroleum
1 Thomas

newal

Sept.

15,

-Nolan,

Natural

"Use

Resources,"

1958.

American

111.
and

Science,

Production

Capacity

(1957), Sept. 12,
3

Re¬

Petroleum

Charles

1957.
Silberman

and

Sanford

Parker, "Capital Goods: The Energy Ex¬
plosion," Fortune, November 1958, page
136.

goes

the

other

extreme

Official estimates of the
'

4 Reserves

from

OIL and

Gas

Journal.

two

level now
-production
million
If these important

barrels

grow

exceed

and

one-quarter

daily.

considerations '■ had
into

have

concluded

duction

that

10 to 20 years,

ultimate

pro¬

rise

for

notwithstanding his

conservative

very

Texas

continue

can

taken

been

Dr. Hubbert might

account,

estimate

Texas

production.
The
United
States Geological
Survey concluded in 1956 that a

total of 300

ultimate
States

billion barrels
of

reserves

and

tinental

the

United

adjoining con¬
might be a

shelves

reasonable figure considering sig¬
nificant improvements in recover-

ability

that
complished

now
being
promised in

are
or

ac¬

the

future.9

Unfortunately, all these widely
varying estimates or guesses, how¬
ever

leave confusion and

The doubtful value of
using es¬
timates of ultimate production in

planning for the future is shown
by the 1956 estimate of the Chase
Manhattan

Bank

which

plotted

future crude oil production in the
United States on the
assumption
of

ultimate production of 165
barrels.10 The next year,

billion

this

organization had ac¬
plausible a minimum

same

cepted

ultimate

recovery

barrels.11

estimate

Within

250

one

billion

year,

the

raised by .more than

was

50%.
Where policy decisions in the
public interest are concerned, we
would

to
we

be far

seem

vised

what

take
can

reasonable

better ad¬

critical

look

ahead within

see

period

Beyond that, there will

years.

doubt be many variables that

20
no

are

unpredictable now, such as other
uses
for petroleum and develop¬
of other forms of energy.
One cannot refrain from speculat¬

ment

ing

to what volumes of whale
forward-planning. New Eng¬

011

land
the

whalers
Drake

casted

the

year before
have fore¬
probable require¬

well
the

ments for A.D.

may

1958!

The American Petroleum Insti¬
tute and the American Gas Asso¬
ciation
at the
than

oil,

report estimated reserves
begininng of 1958 of more
billion

247

barrels

crude

nearly six billion barrels

natural

liquids,

gas

and

almost

cubic feet of

trillion

natural

The crude oil figures are ap¬
proximately twice what they were
20 years ago, and close to the
peak
figure reported at the end of 1956.
estimated

Since
have

failed

8 M.

proved reserves
increase much in

King

sources

Hubbert, "The Mineral Re¬
Texas," April, 1958. "

Committee

9 Joint

on
Atomic Energy
(McKinneyV "Peaceful Uses of
Energy," January 1956, Volume

U. S. G. S.
Atomic

page

82.
and

Growth

6 United States Department of Interior,
Bureau
of
Mines,
"Synthetic
Liquid
Fuels," July 1956, page 3.
7 Wallace
E.
Pratt,
"Our
Oil
Re¬
sources," 1950, page 151. '

the World

1956,

page

11 Chase

Growth

try,"

April

Manhattan

10 Chase

land.

speaking of its estimated known
reserves.

gave

billion

peak of about 3,200,000

estimated

———.

Annual

about

barrels

38th

methods

Both

answer

barrels of total recoverable Texas

gas.

Cites

common

years.

bases.6

two

This

are

scientist, made .a projection of fu¬
ture oil production in Texas on

made, particularly in recent years.
Some of these represent no more
than a glance into a crystal ball.

will be exhausted within

today roughly twice as is contrasted with the
producing fields in the U. S. belief that coal reserves
containing in the aggregate 40% ficient to last a thousand
reserves

speak of vast potential

sources

proved reserves commonly heard
leave
the
impression that
our
known

many

could

are

demand has increased at

1948.

figure re¬
the petroleum
industry is one of sulting from competent engineer¬
the best examples of the effec¬ ing studies of individual wells and
tiveness of science and
technology,
and he comments on "the

unless

by pessimists^
Last spring, M. King Hubbert,
another
outstanding petroleum

well-meaning they may be,
even genuine
dustry people as to whether this concern in the minds
of those un¬
type of estimate, by itself, best able to evaluate
them. -Probably
serves
the public interest since,
in no other field have so
many
unfortunately, there seems to be
intelligent
prophets
been
con¬
a
growing tendency both inside founded.
Beginning with the early
and outside industry to use it as
days of the petroleum industry,
a
basis
for
deciding
whether
forecasts of shortage by otherwise
domestic supplies are adequate to
knowledgeable people have come
meet future needs.
This use, of
forth at frequent intervals
only to
course, has neither been encour¬
fade away before the
surprising
aged nor condoned by the Com¬
progress of the industry.
mittee on Petroleum Reserves.

7,000,000.
It is surprising that representa¬
interest in an accurate appraisal
tives
of
some
companies have
of our future prospects for these
questioned the official estimates
fuels. The American public has a
of the Council notwithstanding the
a

most of his col¬
leagues, but now his -figures are
regarded as entirely too low even
by

looked in this prediction was the
already developed productive ca¬
pacity in Texas, which -has con¬

estimated reserves
probably average only about onethird or less of the oil in place
in fields already discovered.
It

highly

considered

was

optimistic

demonstrated.

results

and

result,

estimate

daily in 1962-1965, a rate
which had already been exceeded
in March 1957. Apparently over¬

and
pressure maintenance by fluid in¬
jection until the facilities are in¬
stalled

1959

Thursday, January 1,

recovery

secondary

producing days.
cilities.
Those of us who have
example of the type worked
on
reserves
estimates,
of development that has affected know
from experience that the
availability is a field in West actual
production
from
known
Texas
which
is
operating with fields will exceed the presently
water
flood
and
exempt
from reported estimates by a substan¬
shutdown days. North Ward- tial
margin.
Estes
produced an
average
of
The
policy of preparing re¬
nearly 28,000 barrels daily in 1957
serves
estimates on the present
—equivalent to an annual rate of
basis was initiated 22 years ago
production of 14.4% of its esti¬
at a time when the nation's chief
mated reserves of 71,000,000 bar¬
concern was to keep books on its
rels at the end of the year.
By
inventories of recoverable petro¬
contrast, in 1948, its production of
leum rather than to estimate rates
10,600 barrels daily prior to water
at which oil could be supplied.
flood was equivalent to 7%
of

All of

al¬

A dramatic

prospective shortage of oil has a
domestic producers,
cil's latest report showed an abil¬
particularly those in Texas.
In
ity to produce 9,867,000 barrels of
Texas, most wells have been re¬
crude
oil daily as
of January
stricted to 12 producing days or
1957.2
By contrast, the produc¬
less since October 1957, and there
estimated
at
that
tion of
crude oil in
1958 will the reserves
seems to be little prospect of re¬
probably average less than 6,800,- time, or less than one-half of the
turning to 15 days or more for
000, indicating a reserve produci¬ demonstrated rate of production
some years except as the result of
in 1958.4<
"
some
unioi-eseen emergency bility of not less than 3,000,000
barrels
daily. Furthermore, the
A study of individual fields op¬
abroad. In these circumstances, it
Council reported that this producierating efficiently with modern
is not surprising that many do¬
mestic producers should wonder bility could be sustained with the producing practices supports the
already
stated
that
if the alarm about future supplies drilling of 41,000 to 50,000 wells conclusion
contains elements of propaganda. annually. Since the rate of well crude oil productive capacity of
completions has been toward the at least 10,000,000 barrels daily
Domestic
oil
is
the. nation's
upper end of this range and pro¬ can
be counted upon for some
principal fuel, exceeding coal in duction has been far below esti¬ years.
Since this is more than
importance by a substantial mar¬ mated availability, it seems safe 40% above the recent rate of
to say that current availability is
production, it is reasonable to be¬
gin. -Natural gas is also a major
at
lest
10,000,000 barrels daily lieve that the domestic industry
source of energy which may soon
compared with estimated produc¬ can keep pace with the growth
displace coal in second position. tion in October 1958 of about of domestic demand for the
fore¬

hollow ring to

operation

Current Availability

sulting

kets.

The effect of these factors

illustrated in

part by the fact
tic petroleum supplies with par¬ that District 3 proved in March
ticular reference to the probable 1957 that it could produce at a
impact of) technology both on oil higher relation to reserves than
1948
even
though
prorated
currently available and on that in
still to be discovered.
wells in Texas were restricted to
was

though, technically, the estimates
include a small increment of un-

report on productive capacity by
National Petroleum Council.

ability of the domestic industry to meet increasing require¬
ments at reasonable prices. ^Concludes the pessimists will err
again unless Ahere are unwise state and federal
actions and foolish industry decisions.

facilities

and

the

of future supplies, and

ply into current availability, adequacy

They have contributed materially American Petroleum Institute,
to the present productive capacity. ably prepared by the Committee
Perhaps
the
greatest of
all on Petroleum Reserves, are re¬
to
"proved"
reserves.
changes since 1948 is the advance stricted
in technological developments. The These are reserves recoverable at
various
factors
that
have
in¬ present prices and with presently
creased the rate at which esti¬ known technology through wells
mated

in submitting that an aggressive program of
exploration and development, plus an efficient use of technol¬
ogy wilt permit our domestic oil and gas industry to continue
to supply a major part of our energy needs for years to come.

Chronicle

The Commercial and Financial

:„U4)

Financial

Bank,
"Future
Requirements
of

Petroleum Industry," Feb. 21,

24.
Manhattan
the

25,

World

1957,

Bank,
Petroleum

page

26.

"Future
Indus¬

Volume

Number 5808

189

The Commercial and Financial Chronicle

(15)

recent

people have
industry can
no longer find enough new oil to
keep pace with growing domestic
demands.
This is not believed to
be

the

that

conclusion.

correct

The Crucial Issue Ahead

some

years,

concluded

The

crucial

issue,

then,

position is not true.

respect to future domestic petroieum supply is this: Can the domestic

industry

19r>8

realize

fact is

drilling, rising costs of materials

progress and is assisted by regu-

latory agencies to be

!n
is

•

£ormfr

based

This slndiec nf
statement

Humble

Two principal
mnnb

for

presenting

wi££

account

errors

efficient

it knows how to be

se"es at about the same rate as costs.

through
3

The

that the industry is continuing to and latjor, and other factors that
find fields with substantial re- have alarmed us about future

with

to
10

this

analvsis

VealsnwSKitv
necessity

emphasize
einpiiasize

the

production from domestic
be only 10% higher

will

1951,

wells

tomore
produce

number

have

but

capacity

„

creased far

rapidly.

oil

Crude
with

iyo0-iy0/ :

in-

limit

production

slightly

in 1957
than two and a

tviuuocu

As just
new

mentioned,

this

the

exceeds

range

oil added

during the past 10
only slightly. Since drilling
is currently at about the average

at
year-end
about 12
production.
Historically,

reserves;

level for 1948-1957, it follows that

times

the required goal can be reached
with a level of activity that will

however,

the
to

reserves

low

not

but, instead, is about the
industry

one

average

exceed

therefore,

the

1956

that

one

peak

jurat

tae

ten-

mestic suDnlies of

The significance of this situation from the standpoint of future
oil discoveries is that the increasing number of small fields has
been in addition to, rather than

and,

easily at-

has^carried tamable. The only circumstances in lieu of, large fields. These

the effect of
improved technology in offsetting
inflation. The other error lies in
the implicit assumption that all
exploration, drilling, and producing expenditures are related to
crude oil only. Needless to say,
industry finding and producing
C()sts must be related not only to
crude oil but also to natural gas

accomplished

and

ea*

onlva

oastis

stiflremains

remaiIls lu

domestic

♦

cpuM do
v™'

J?™ 5
^

and natural gas notwith-

small

what

to
be

oil

iudgmentthe

agencies, xne r eaerai uoviSf d

c^ptai^

estimated

the

billion

current relation of

production

jcata.

finding of large nelds, there has
been an enormous increase in the
number of small fields found in
recent years.

the

years

half billion barrels with estimated

uiC

ture is that concurrently with the dency to overlook

upper

ning
times

barrels

the

were

production

1948, they

the

year

that

beginonly 10

drilling
Under

less than 11 times
1958, therefore, we

the

Reserves

were

proauction.

a sharp drop in
developed per well.

reserves

year;

oil

new

rules

used

available
largely
through
«n—
™c,uUlw
proved technology in both ex- concerning costs
deserve
brief
ploration and well completion.
mention. First, all unit costs are

new
>.

the

Committee, the bulk of
credited

the

adversely affected by

New Oil

Old Fields

severe

npfvnlmim

•

J+

i-Powin
y oe resioreci.

q *.

re-

stnction of production. At present

cannot
^

Finally, I wish to repeat that it

are

tion
we

„

iuvujvco

worried about

the industry was

shortage

immediate

supplies,
or 20 years ago when
the industry was worried about reserves
being discovered too rapidly.
m

another way

ing at the relation of

of look-

production

reserves
that should help to
dispel fears that the United States
is running out of oil.
At' the be
ginning of 1938, the United States
had estimated proved reserves of

barrels.

billion

15.5

the

beginning of

1948.

ending

p®}

yeaJ

fn-o

-«u

but

increased^ to 2T5 bihioir
the

barrels

with

exhausted

not

were

serves

19o7, crude oil production
exceeded
2? billion barrels, or

slightly more than the known le—
serves
at the beginning.
Once

the paradox of pro-

again, we find

ducing

all

endmg

clearest picture possible ot present

daced efficiently in many fields
Wlth
f- feweJ wells. With the
cooperation of state regulatory
age,ncles> the industry should

fLnd./ldure ^01??e,s^9.,£i* supplies.
On that score, it is difficult to see
how there could be important dit¬
ferences among us once we have

with moie

said^ wethan evei
had and

before-

fields

the

reserves

tech-

from

recovery

will
'

raised

drilled

offer

this

which

reservoir-

treatment,

substantially

may

rake

estimates of the percentage of oil

little
a

total

level.

period with

than 3%
40%

the

above

would

1958
the

end

then

added

estimate

crude oil

new

for the next decade is
considerably less than some recent forecasts which assume a 5%
necessary

.annual rate of increase in demand

and

that discoveries

and

must

one

half times production. The
estimate of .the Chase Manhattan

Bank
'

that

additional

barrels

billion

domestic

oil

crude

.would be necessary, if domestic
production is to continue to supply 90% of the nation's„oil needs,
will
rect

probably prove to be incorfor1 two reasons. First, demand

rate

reasons

ond,

likely
3%

increase

rather than

already

stated;

improvements

5%,
and

for
sec-

reservoir

management will permit reserves
to

THese
rate

produced

additions

rapidlv.32

considerations
to

require
oil

half

laboratory.

the

industry

will

see

inereasing number of old

Paul Torrey has estimated

that at least

billion barrels

these

all

possibilities for improved recoveries from existing
fields might even exceed production
expected during the next
decade.

0f supply.
account

20.

a number of large untested offshore structures have attracted

finally to the

Here

the

exploration
new

sources

must take into

high bonus bids on the
portions so far offered for

small

rated promising
panies.
.

many

Conclusion

will

discoveries

oil

leads

petroleum reserves or re- erations to come.

rafiSt?m^01L«h

ery

techniques makes

toy forecast

within

it possible

the

additional

minimum

years

Even

recov-

m®nts'

vSf

IXlOlG

OJc

oV*r»^7r»

Jnv

,^ay

!i?v vpL

5"'try'

continues

urogram

untested

350 million undeveloped
present proved reserves of 36 bilcurrently held under oil and lion barrels of petroleum liquids,

netroleum
petroleum.

search
searcn

our
oui

S in"

oil
on

for
101

Basis for Optimism
slows down, as at present, it is
quick calculation provides the not doe to a lack of new prosloi'o
fnv
ratb-*11*
basis for optimism rather than «n/,4« but UA/iJumn xv,^^ is n inn
pects
because there
a lespessimism about future discov- sened incentive to continue an
about future

P?,,

Sachs & Co

llflLlJilflXCij-^^1
xxxuxxjlcxjljcix

uuxiu

in Boston, early in

1955, after having been associated
with the First National Bank of
Boston from June, 1951, to Feibruary> 1955,

^»r» long
:,,

m»v

„

th©

er?i Strre!t- bas been announced,
?r' £°'"lst<>n joined Goldman,

of exploration and devel-

Rll^lllll

department of the Boston office
of Goldman, Sachs & Co., 75 Fed-

aggressive

MVimiliillj vavllS) IIU9IVII
+!«
BOSTON, Mass.—^The appointtill nient of George L. Johnston as
Xlldll

na,.

^5* nnrinf
J®ry in terms of current requiie- (Jfl IIIlit/I II

sup-

plies of about 70 billion barrels of

J0hllStOIt NSIDGll MSfa

inllnvp!

Third, we have a sound basis
f°r r^asonable optimism that discover*es and reserves of petroleum
San
-ep pa^e W ? jncreasing

our

fare and national security for gen-

the period under discussion.

with little allow-

prevail and

First, the United States is not

poor

Frogiam 01 expiorauon ana aevei

f0r improvements

domestic petroleum supplies will
contribute to our economic wel-

the conclusion that they will keep
oace with
national needs during

a cursory survey

continue

conclusion, I should like to
summarize my main points:
1

analysis of the outlook for

domestic

Tho

only hint, however, at the im

can

com-

some

acres

official Changes

7,.w„i,ra,-m

p-,„n

Ephraim Propp, President of
c?very due *0 improved tech- Propp & Co., Inc., 400 Park
Call ad(\ 3 ?immu™ ^venuPe'^Ne^ Yo^k ^y'
°f 70
^?ir
?! su,pp y; ^1S
^
aboYe tbe 30 b}!lio1} barrels of S,hange' as °f DeJ- 33 also becan?e
crude oil now estimated.
Treasurer. As of the same date
allawanc[e *?r increased re-

Sidney S. Schatz became a Vice—

ba maintained so long as the incontinues itg technological

President.

eries.

the

conservative

as-

sumption that only 2% of the 350
million
acres
of
undeveloped

aggressive search in view of an
already burdensome surplus producing capacity and an uncertain

leases

outlook

will

produce

oil

and

that

the average ultimate recovery per
acre will be 5,000 barrels, the re-

coverable

reserves from new fields

this acreage may ultimately
exceed 35 billion barrels. There
on

•

Dealer-Broker Addressing Service

for

domestic production. Our national

There

We
firms

probably for longer, can, if we
choose, be formulated on the basis
that domestic sources can continue

recent

same

that

proportions of
they have in

can

fields

"find today

with

thin

are

sands.

small
Those

reserves

Torrey,
"Peaceful
Uses
of
Energy," January 1956, page 81.

Independent

Petroleum

Association

Addressing

America, "The Oil Producing Industry
Your State," 1958 Edition, page 5.

not

economic
be

detailed

petroleum

has 'beeil

priced

date

survey

data, which need
here, shows that

stock

stencil

and

for

bond

every

business,

one

all

these

arranged

$7.00

charge for the entire United
per thousand.

States or

list (Main offices only), also
arranged geographically and alphabetically, approxi¬
mately 3,900 names. Cost for addressing N. A S. D.
list $8.00 per thousand.
a

Tbe ^na.l Question that'requires
consideration is the ability of

past

metal

the

Special

at reasonable prices.
13 Paul

Canada

years.

„s^n»rs,.o,«'S
we

have

alphabetically and geographically by States and Cities.
This list is revised continuously and • offers you the
most up-to-the-minute service available.

h^ellreadr^en"foundS|nd*that
an

approximately 9,000 Investment dealers

are

and. brokers In the United 8tates, and 900 in Canada.'

policies for the foreseeable future
of 10 to 20 years at least, and

will also be much additional leasing of land and a number of dis- to supply the
coveries on new acreage before total demand
1968.

future markets

•>

methods

pviripnnp

yklds beyond current reserve es- ments on the threshold of realizawitb obviously favorable tion. If we can only capitalize
efrects 011 COSts"

lease. In our newest state, Alaska,
the commercial search for oil is
i
-incf
Vv/^rftviv»im/*
wwUnllGCl uldlGS IS
just
juoi
beginning,
ucgxiixiiiig,
with
wxixx
piusjjctoia
prospects q nnrt nrtfl harrplo

prospects crude oil alone from known fields
already located as a result of past and acreage already under lease.
exploration and other possibilities Since this is in addition to the

Atomic

page

there

Unauestionablv

ducing structures that still rpinain

ance

Our analysis leads

past 10 years.
Ibid,

the

recovery

samp

wider scale roust raise ultimate portant technological develop-

jection methods will be applied addition,

of
12

although

surprising increases in recovery, to be developed and produced
Finally, more orthodox fluid in- from large offshore extensions. In

only slightly higher than that of
the

fields

group

pvaminpH thp

^n":|

lar^YnTltnh "thorite proved

major "field, .or

methods

during the pJst ten years.

This

auite

new

quantitative

those

ducibility at that time, then during the next decade we must add
about 31 to 35 billion barrels of

It is still too early Area will be credited with subeffects stantial increases in reserves in
work only 1958 and in years thereafter.
In
well in practice as in the
California, there are known pro-

estimate

but

production of about

equivalent to nine or ten
times annual production in 1967
will support
the required pro-

pros-

economically.

.3 V| billion barrels for; the year probable results of
1967. If we assume that proved activities m locating
reserves

^ placoS %£*,caT be'rlcovered Louisa

annually, or

New provinces

intriguing

has barely begun

ov-v-inn

proved reserves. In this case, demand would increase at a rate of

Another

year

cdaitiC

nvnannnon

still

exceeded oil may be recovered from pres30 billion barrels. Judging by past ently known fields by secondary
if
VPQCOllJlVil
n4-£11
11
experience, it seems
reasonable projects still to be initiated.!3
piujtcia
suu
tu
uc
iiiincm-u.'-"
that the industry could, within During the next 10 years, several
the
next
10
years,
xoioduce 30 billion barrels from this source
billion barrels, or approximately should be added to the estimates
the
equivalent
of
its
piesent of recoverable crude oil. The sum

beginning

around

known ered in 1953-1955

within

simiim.

fields.

crude

Proved

improved

niciues.Tuchas enriched^as drive to'be

10 years crude oil production exceeded 15 billion barrels. Yet, re"■stead

serves can be developed and pro-

nology to these and older fields, ample is the Headlee-Dora Robprospects are quite good that esti- erts area in West Texas discovmates

ments of its capacity for future
progress. On the contrary, I Con¬
sider it our duty as citizens and
as suppliers of petroleum to present to the American public the

application

•

Another Technique
There

credit*Tn"the Tears"immediately areas" contribiite" AiT examnle ^of cient capacity, and Probably not
following discovery. In view of a major field in an old producing more than 55% in Texas. Second,
the large number of fields found area is
the Neches field in East we have not been developing rein recent years, and revisions that Central Texas
discovered in 1953 s?rv<;s
as„ economically as
we
will result from development and after
many
dry holes had been
Most of us know that re-

reasonably

despite

deeper

can

small

also

supply lists

gummed roll labels at

additional charge.

Herbert D. Seiberi & Co., inc.
25 Park Place

—

REctor 2-9570

—

New York 7, N. Y.

The Commercial and Financial Chronicle

all. The old $9 rate had

since /

ever

The new

peace.

lent

was

CONSOLIDATIONS
NEW BRANCHES

the present

also taken as'con-

146 firmation that inflationary

rotated year the gain ran some

demand

$9.90

shares,
Selective

News About Banks

through
and
rate, equiva¬

boom and depression, war

STREETE

By WALLACE

through the blue chips to points over the final posting thinking is responsible for
carry the industrial average of
1957, which more than many official actions and for
to
successive
new,
all-time made up for the 102 points the . decided preference for

•

market

tional

this week's- stock this index lost from the 1956 equities.
give the tradi-high to the "October,- 1957, .
yearend rally a defi- low. And it did this in far ,
The Public

shorter time.

;

W3§< Vice-President.

Moving in

.r*.

;

The

r;}

T4-

powerful finish to,

Mr. Wittine has also beefi with

The Lincoln since 1935.

of .the

from

recovery

modern days.

the recession fof business gen-

erally and—if it is still a barometer of business—has been

respective corporations providing
for the merger of Camillus Bank,

■;

; j,,

Despite the dour business
parlv

rpnnrtc

'fbi

thP

never

"ground
H
it

norpipeo

came

o!f Stbadv

There

'iivm-nnTiomnvil

Profit and incur

capital.

gains tax lability.
*

•

Whether

;

•

rvD

cmop

new-t0 apologize

this

split its

mg avalanche descended, as it
had in thp nnst tbp r»rpvinn«:

in thp

shares • 2-lor-l

vpar

lor since

early "wmugtuj

the

at which timp thpv

ahe™osting

had reached lM

;

- -

™ value.
•.

rh.rlp.

KelWarit

aI1(j

President

chi_

Roebuck

cag0> hag

been elected a djrector

Bran ch Division;
"Mnnr
VrvrD-

months

and

" Split

years,

--two attemDts coming Within

defensive

major!ftew York, it

the

^finish

was

announced on

. y^

is,'.witti tne oanK s

micoxx-Lxecuuve investment Division at 30 Broad

section^ their Thomas

» D $$35
President—operations Mr. Kane Headquarters, Fifth Avenue and
npmrtaf 0 1 e an s on 34th Street,
. At +he same time the bank
other promotions to assistant
Oik
as

J,'bS

new

Joseph

f0n0ws;

Dawson,

month was^ also a Stephen S. Eyre^ Robert P-

the , whirlwind ham, P. Henry Mueller and Kengiving; them a Decern- **h M. Spang. ^

rousmg

faibhs^i ^

supervise

Kane

1958 pattern ran a bit counter

Talk Rampant
V

Walter B wriston, Overseas Di- r
visi6n>-A11 were Vice-Presidents.:
.- Cad W. Desch, formerly. Vice-'
President, Operations Division,

ineirv

April 6. 1956, was a* year's low around 120. The. td the others, bteady progress
toppled without anything ap- split shares were back over." was "[iadf in ^
proaching a struggle. That old the 150 line by Fall and above mp^hs, followed by ^/lull m
peek of 521.05 had been ap- 200 well before the year
proached several times m sub- out.
:
tne^more voiauie secuons. pui

-slight

;

to levels not functions in the bank's four prin- Dec. 31 by Harold H. Helm, Chairmore ^0d«is»n^un
raa„

sequent

York,

The Well-Acting Utilities )< .was appointed Cashier. Charles H. Kellstadt
The utility section had little-y The newly 'appointed Senior
irx
fnr
tbpir ^ Vice-Prewdente with exception of /0f Chemical Corn Exchange Bank,

valid, the old average pushed
Sep- measurements «didn't ,c u r b.«**». anoe'

momentary bit-thinking

was a

s!:
not

■

•of caution shown when

posted

Pub-

and

odP

a
,

Break-Through

/.;

Vipnwxr

ivii

£y .institutional myestors and age _^at the yery least.vraSy a
by the reluctance of even good bid to accompany the insmall investors to sell out at dustrials uphill. ;V:- . . / , .

The Momentous
n

•

Economic

1957 high by a small fraction

"advarmpc irom tbprp on.
advances from there nn

bank's

Scott, . New Yori^
Ir, Q' TToKv.i Jv made in the supply of stocks the year by the carrier aver-tBranch *»■ Division;. Frederick - C. *
on a February
institutional investors and
at the verv least was a Windisch, National Division; and.

month the list turned unward
was

The truth is that they suffered. Division;* E. Newton .Cutter, Jr.,
more than most lines in the National Division; Lewis B Cuyrecession, except for a hand-, ler Personnel, Robert G. Fuller,
It, was getting popular in ful of western roads that had gag!onjr s'peeial^^ Industries
most+^irc1^' h°wever. to de- a good lift-from non-Kiih-oad^0up, Nktional Division; Leo A.
cry the old yardsticks atf a income and little trouble from <Kane,
Bond
Administration;
^me when the purely arith- the staggering passenger, defir i Chester R. Leaber, Overseas Dilinn

although

veor

sinking spell. The following •
'and it

by a11 the concern over infia- roads. Nevertheless,, the-60--New York
inrnorle
nncfprl
'
tion' by the heavy inroads Point improvement posted on George , C.

losing

was

the

011

;

vpar

in/ine+vioi

s;?tsss^s3:
•list

;

i :

N. YV into Marine Midland Trust

continue in charge of the

the

;

predicting lately not only that tional yardsticks.
the recovery has a long way
• |
to go but that it ought to gain
Trad'taorol Yardsticks
speed in the Spring.
•
•
Discarded
'

*
*y Plan of Merger-together with
Certificate of Compliance of the
v

tor

the peak

set

•

■

banks Company of - Central New York
cretiit policy supervision; and Mr. under the title Marine Midland
' Temple will continue in charge of Trust* Company of Central New

-pAv.

Sweeney

; -lie Relations Departments. Rich*' :
*
*
* .■/'
,
. v
There is more or less genWhile the industrials were ard s. Perkins,-:. Vice-Chairman v> Marine Midland Trust Company
eral agreement that the ster- the bright spot, the rails were' {since December,*I 1953, continues
Central/New York, Syracuse
ling action of the industrials the drag on the
.^merly
tt^SlXkfrom ^
m 1958 carried them to a high ket. They have made no
ari<Ts Cashier,.; waS>r^(^r;c;ah s i sting of 310,000
level based on actual results to equal even their 1956, high designated Vice- President —op- shares of par value of $10 each,
for the year and using tradi- and, in fact, only exceeded the orations. /* <
"t? $3,250,000'. consisting-of 325,000

market turned up well in advance

-inee

s!s

- /, >

The

history.

market

stock,

continues.

covery

was .a

rather extraordinary year in

-Mr.

Wittine, formerly Assist¬

Mr. Sweeney has been with the
bank since 1935. £ < i
:

a™

men

Mr.

antsTreasurer.i

1959 earnings as the re- 1955

ori

wua

announced

30 the appointment of Peter

formerly Assistant Secretary

and

°*

Sweeney and Rudolph J. Wit-

was

rea(?}lecj t^e target area, makf in part, a spillover from the
a time of decision, hectic days of 1929 when 1.1
,
„T
,
are more optimistic billion shares changed hands. «*wi«A;For™- ; Alan h. Tempie
many estimates range to Apart
from a 930 million additional Vice-Chairmen and 12
time of the year the only way
figures turnover in 1928 which was Senior Vice-Presidents.
to establish profits for 1958
y
o
,
,
,
, ,,
,
Appointed Vice-Chairmen were
was
through
next-dav
and
ing computed from the also part of that frenzied era, DeWitt A. Forward, formerly
irtfiri tv,p price-times-earnings levels in the 1958 trading was fourth Senior Vice-President, and Alan
casn
sales
wnicn aoiiea
i
Gther periods of enthusiasm best in history and far above H.:: Temple,. formerly Executive
tape liberally.
and matched against estimates the 649 million total posted in Vice-President Mr. , Forward wil
Extraordinary vYear

Y.,

■./
of

Bank

tine to Assistant Vice-Presidents

ill

a^ ap-

The

■

President

Savings

^ effective Jan.

vnor

Hooper,

Lincoln

Dec.
M.

rar!dKri?e
\Sf J ing it
to establish
^profits but it was Q^m
all Well
absorbe
,

f§§. Brooklyn,'r N.

quarters of a billion shares
fnr
flin
for the year which made itthe highest in 28 years. The
810 million total of 1930 was,

*•

•

John

moving into the market in
large numbers seems assured.
Turnover approached three-

•

Mr. Crawford,:Mr. Ohlenbusch

The First National City Bank

of New York, on Dec. 23 an, and Mr. Held were promoted
Haulenbeek from Administrative
n°U"Ced the apP°lntment °f tw° 1-r°m" Vice-Presidents . and Mr.

That the public has been

f: ixu
u
,
The 1959 Estimates
Despite the act
5*
Estimates
of
where
the
another hohday-shortened
verage
will ^g0-,in 1959
week, there was !5'• £.r .•§. J?
ai uic
r*onrf£irl
ixnrlDlxr
Tn tlift
ranged widely. To the more
tionary lightening- p
p
cautious the average around
the trading in errup ion ,
580 as the year closed has
there was plenty of w
4-u

-4.

Bankers

and

OFFICERS, ETC.

CAPITALIZATIONS

and

nitely bullish aspect.
tn

NEW

REVISED

Wghs

Thursday, January 1, 1959

1,922 and main¬

tained

THE MARKET... AND YOU

been

established in

(16)

one, •

Arthur

shields

J. Westervdt.
*

and

Cornelius

Ebbeson ancj, Alfred E.
have
been
elected
Vice-

Ebbe

Presidents of New England Trust

Boston, Mass.
-i.'

withdut
this time.,

struggle back didn't keep it from being

■'

Candidate for a'new snlit"

a candldate tor a new spilt.

Three
around

monthly
two

industrials

dozen

—

fli

onh/

rv^

ran

points for

thoJ

WpmW
yh«
,Anfl/the

gains

The
was

talk,

given

i10n'

[The -inews
J.r c .-coincide
° ??£
time

Chromcle.

• &

obviously,

heftv

exjnessed tn thi$.-Sectors
are presented
authoi only.]

They

those of the

gtaje

rousing

vpar

fnr

tive Committee.

„

counseling firm of Douglas T.
Johnston Ih6„ New:York, accdrdin§ to an announcement made by

The resignation becomes effective
on Jan./,12.
:
,
y
is, Inc., Jfi-as' Executive Vice-President.
•'Mr. Clifford"also.■- announced
6505 Wilshire Boulevard. He was John M. Ohlenbu^ch, P. Raymond that the Board of Directors of
formerly with Bennett-Manning Haulenbeek and Harry Held were the Worcester County Trust Comon

Dec. 30

announced the

Morris- D.-> Crawford,

ll Which ended the most of them
famous,
but static, dividend

mgn graae issues, roi tne lull

tirV.ir>n

nelty, impef
" v
-v.
-*•
»
«
years^of specula.-.,^ i^Yith Atlas • Securities J
Th
Board of Trustees of The
American Telephone.. {Sf^hl i? TaiW chkonxcle) - .Bowery .Savings Bank, t New* Edward, L. ; Cliffords President.
-Kenneth
'

York,

thpi

Julius S.. Wikler, i Charles Beach Barlow has reof Insurance of signed as Assistant Treasurer. ;of

imnetm

iau

i'-

New York., Mr/Wik-'f the Worcester County. TrastComlef wag fdrmerly a Director of the pany, W orcester, Mass., to become
bank and a member 0f jts Execu- associated
with the investment
the

associ-'i election "of

short

thi Superintendent,

_wipi those of the

split

Ti,W;'Tn g Z
Sa

-^Ce

•

•;

Company.

elected Senior Vice-Presidents.

pany

has

voted

approval of an

Number 5808

Volume-189

application

The Commercial and Financial Chronicle

New

a National Bank
proposal must also
be ratified by stockholders. Ac-

Charter.
tion

ioc

stockholders

of
Jan.

held

Trust

tion

the

County

commenting

By the

Board

the

Mr.

widen

will

the

service

national

interests of

wide
ness

and

other forms

the

our

busi¬

be used

Worcester and
County citizens. It has

roots in

its

banks

Worcester
throughout its his¬
been activity identified

tory has
with
Worcester

County history and activities.
1864 it

was one

become

National

increase
is

first

official

word

this

letter

to the stockholders dated Dec.

from

26,
Peterson,

Raymond

Chairman

the

letter also

Board.

encloses

This

the notice of

the annual meeting of the stock¬
holders to be held on Jan. 27,
1959

which

meeting the

the

to First National Bank

name

Passaic

has

County

Illinois

Trust.

change
the

since

records

First National

that

national
At

would

bank in

Co.

present

Midi.,

Wanaque

Ring-

wood.
If

the

change

name

is ap¬

.' The

First

National

Bank

Wyckoff, N. J., increased its com¬

capital stock from $100,000
$150,000 by a stock dividend,
and from $150,000 to $200,000 by
the sale of new stock, effective
Dec. 19.
(Number of shares out-

mon

standing—8,000 shares, par value
$25.)

George

tjs

B.
Kneass has
been
Senior Vice-President

Bank

Rockford,

capital

.elected

Arthur G. Altschul

the

San

Francisco,
45
MontStreet, main office to

gomery

':fe

Witter &

Co.'s 39

office

ment

from

The

first

•

A.T.&.T.

San

Francisco

the

firm

investment

field

the
to

install the Bell System 81D-1 fully
automatic communications system.

time

the

Bell

System

81D-1

James

City, Kan., increased its com¬
capital stock from $750,000
$1,200,000 by a stock dividend,

sas

Dec.

16.

(Number

shares outstanding—60,000 shares,

value $20.)

par

ment

—

The

gram

sj!

Okla., increased its

capi¬
tal stock from $100,000 to $200,000
by a stock dividend, effective Dec.
17.
(Number of shares outstand¬
ing—2,000 shares, par value $100.)
common

Mr. Robertson joined the firm in

business

liam

Drugs"
Cudahy).

1st Lieutenant.

ington, N. Mex.,
$450,000 to

gon,

Portland,

that

the

new

^ He has

-been-with the bank since

dent.

bank

Ore.,
.

will

announced
construct

branch in the northeast

tion of Portland.
total

branches
to

«-r--?
.

ihJ 1954,; as. an. Assistant VicePresident,r ig^assoeiated with the
bank's '-f'Out-offcTown''
Division
and

serves as

regional head of the

The

Fay to

in Portland

Oregon.

Midland

& Fay, 22* Montgomery
Street, members of ther New- York
and Pacific Coast, Stock Exchange,
have admitted Hodge IT. Davidson,
John

Jan.

from

Thalmann

Freres

& Co.;

Bennett

Benson

20, and away

Dec.

following

Sloan

at the

age

has announced the following firm

long illness.

Prior to

Bank,

York

tire from Stearns & Co.

Co.;

Winslow, Cohu & Stetson on De¬
cember 31st.
Edward S. Amazeen will

Cullen,

Jr., member of the Exchange, to

partnership
-

McAlvanah, member

Exchange, yrill retire* from

the firm December 31st.

with¬

from Coffin. & Burr Incor¬

porated December 31st.
Edward C.
Henshaw,_

general

partner in Hooker & Fay will be¬
come
a
limited partner January

City, members of the New

James

Fowler, Jr., will with¬
draw from limited partnership in
John B.

draw

1st will admit Thomas W.

December

31st.

and Wert-

York Stock Exchange on January

of the

Eugene Rosenfield and
will re¬

Leslie G. Schoenhart; Sr.

Cartel & Co., 26 Broadway, New

passed

firm

Weekly Firm Changes

lieim & Co.

Sloan

Benson B.

retired

the

The New York Stock Exchange

Co., Inc.; Kidder, Peabody & Co.;

Lazard

Ney York Stock Exch.

Sachs & Co,; Harriman Ripley &

Ladenburg,

Henshaw

Dec. 31.

Goldman,

Co.;

effective

partnership
C.

partnership

changes:

Forgan

Edward

Participating in the group are:
Glore,

Raggio, John Redington,
Sisson and Harold J.

Samson

natural

Daniel

Carter Co. to Admit.

London, a partner in Harris, tJpham & Co.
.England, announces that ~asr from He
was. a
member of: the New
Jan. 1, Mr. John" Pryor hak been
York Stock "Exchange, .from 1899
appointed as Representative in
New York, in succession to Mr. to 1947.
.

distribution

Hooker

Fund and Delaware Income Fund.

sec¬

This will bring
National

First

and

FRANCISCO, Calif.

SAN

gas.

his retirement in 1941 he had been

Terhune, who joined PNB

Admit Partners

Secondary Offered

sion

Mr.

Hooker &

Loeb, Rhoades & Co.
and Merrill Lynch, Pierce, Fenner
& Smith headed a group yester¬

was

,1934.
"

1941, from the firm of

to Goldman, Sachs in

Columbia Gas System
Carl

from

The First National Bank of Farm-

the

came

Weil, McKey, Pearson & Co., in Boston, of which he was a partner.
He is currently Manager of the commercial paper department at
Goldman, Sachs.
•

Forum—

$175,000

and

Division

post for one year in 1956 to accept an appointment as Assistant
to the Secretary of the Treasury.

Wass

by a stock
February 19: The Mead Corpo¬
$175,000 to
ration, H. T. Mead, V.-P.
$200,000 by sale of new stock,
February 26: Texas Instruments, day. (Dec. 31) which publicly of¬
effective
Dec.
17.
(Number of
Inc., J. E. Jonsson, Chairman; P. fered 673,299 shares of Columbia
shares outstanding—20,000 shares,
E. Haggerty, President.
Gas System, Inc. common stock
par value $10.)
March
12:
Trane
Co., D. C. (par $10) at a price of $21.75 per
(t
*
Minard, President.
share.
March 26: To be announced.
By a stock dividend the City
The shares are being sold by
National Bank in Wichita Fails,
April
2:
Sunstrand
Machine the group as selling stockholders
Texas, increased its common capi¬ Tool Co. (All Day Field Trip at and none of the proceeds from the
tal stock from $1,500,000 to $1,- Rockford.)
sale of the stock will accrue to
650,000, effective Dec. 19. (Num¬
April 9: Consumers Power Co., the company.
ber of shares outstanding—165,000 R. P. Briggs, Executive V.-P.
The Columbia Gas System is
shares, par value $10.)
April 23: To be announced.
*
*
^
April 30: Pennsalt Chemicals primarily engaged in the produc¬
The common capital stock of Corp., William P. Drake, Presi¬ tion, purchase, storage, transmis¬
$100,000

a
•

after

(Chairman, Wil¬

President.

1942,., when he was elected
Vice-President, resigned his

Investment

aide to General George C. Mar¬

common

since

PNB'S

affiliated with

♦

firm in St. Louis for several years. During
World War II he served in the U. S. Army and was discharged a
being

from

•

"Ethical

•

The

1946, and has been in new
He served in the U. S. Army

Mr. Tenenbaum became associated with the firm in 1953,

Mr.

January 29: Aluminium Ltd., D.
T. Batholomew, V.-P,
capital stock of
February 5: Middle South Utili¬
The
Peoples National Bank of
ties (Invitational) Edgar H. Dixon,
Conway, S. C., was increased from
v '

development since 1951.

during World War II and was
shall, Chief of Staff.

Invest-1

January
8:
National
Homes
Corp., James R. Price, President.
Midwest

Callaghan joined Goldman, Sachs in 1924, and is presently

Mr.

ings, with guest speakers:

15:

Harold S. Wass

Tenenbaum

Manager of the syndicate department.

Analysts Society of Chicago
following pro¬
ol Winter and spring meet¬

January

Jay

with the rank of Lt. Commander.

has announced the

City National Bank in Norman,

CHICAGO, lib

Robertson

ing department at Goldman, Sachs, he was recalled to active duty
with the Navy during the Korean conflict and was discharged

Chicago Analysts
Spring Schedule
■T

Goldman, Sachs & Co., leading investment banking firm, has
announced the admission, effective Jan. 1, 1959, of six new general
partners.
The newly appointed partners are Arthur G. Altschul, John
W. Callaghan, Charles L. Grannon, James D. Robertson, L. Jay
Tenenbaum and Harold S. Wass. Walter E. Sachs, who has been
associated with the firm for over 50 years and is presently a gen¬
eral partner, will become a limited partner on the same date;
Mr. Altschul joins Goldman, Sachs from General American
Investors Company, Inc., where he is a Vice-President, Secretary
and director. He was previously associated with Lehmah Brothers.
Mr. Grannon joined Goldman, Sachs in 1945, after his discharge from the U. S. Navy as Lieutenant. A member of the buy¬

ffi

mon

effective

Grannon

A unique feature of the installa¬
of tion is the combining for the first

stock

Security National Bank of Kan¬

;

operation. The equipment was installed by the Long Lines Depart¬
ment of American Telephone &
Telegraph Company and the plant :
and
engineering department of
Pacific
Telephone & Telegraph
Company. Witter leases the equip¬

increased from $100,$200,000 by a stock divi¬
and from $200,000 to $250,-

Charles

brokerage firm.
The high-speed system officially
went on line when John Witter,
partner in charge of operations,'
sent an inaugural message from

May 7: Lily-Tulip Cup Corp.,
increased
W. J. Bergman, Chairman.
$500,000 by a
tand Stephen T. B. Terhune has
May 21: To be announced.
stock dividend and from $500,000
been elected a Vice-President of
to $700,000 by the sale of new
The Philadelphia National Bank,
With Delaware Company
(Num¬
Philadelphia, Pa. The elections, stock, effective Dec. 18.
ber of shares outstanding—28,000
were
announced by Frederic A.
PHILADELPHIA, Pa. — Robert
M. Lynn has been appointed to
Potts,
President, following the shares, par value $25.)
ft
ft
last meeting of the bank's board
the research staff
of
Delaware
of directors.
C. B. Stephenson, President of Company, 3 Penn Center Plaza,
investment manager of Delaware
Mr. Kneass, who has been head the First National Bank of Ore¬

•

■

the

was

dividend

proved at the stockholders meet¬
ing on Jan. 27, it is proposed that
it will be effective on March 2.

capacity

stalled for Dean Witter & Co., na¬
investment banking and

common

■

operates

and

the

offices, with seven located in

Totowa,

double

first

Paterson, two in Clifton and one
each in Bloomingdale, Pompton
Lakes, Mountain View, Preakness,
West Milford and the Boroughs

most

;

Switching Center with the SCATS
(Sequentially
Coded
Automatic
dend
Transmitter : Start)
System, pro¬
000
by the sale \o£ new stock, viding for automatic pick-up and
effective
Dec.
18.
(Number of delivery of messages among sta¬
shares outstanding—10,000 shares, tions along the lines and elimi¬
par value $25.)
nating contention for circuits.

allowed
clearly7 show

bank

System

fully automatic teletypewriter
communications system which will
Cut message time in half and al-

000

Passaic County.

the

The Dart National Bank of Mason,

been

the

Transmitter

of Dean

common

The

was

vote

National

Comptroller pointed out that

the

Dean Witter Installs

designed to meet the requirements

Jan.

111., in¬
capital stock
from $1,500,000 to $2,000,000 by
a
stock dividend, effective Dec.
15.
(Number of shares outstand¬
ing — 100,000 shares per value
$20.)

granted by the Comptroller of the
Currency in Washington, D. C.
The

record

'•!/,-j

creased its

pro¬

posal to change the name will be
voted upon by the stockholders.
Preliminary7 approval to change

eligible
meeting.

The

if the

The

important London branches.

$1,650,000 to $1,800,000.

National Bank of Passaic County,

connection is contained in

$150,000

Company of Paterson, N. J., will
be known in the -future as First

management's recommenda¬
tion is adopted by stockholders.

immedi¬

authorized

approved,

annual

Trust

and

surplus of $300,000

Shareholders

will

National Bank

the

it from

Bank.

First

Mr. Pryor has held appointments
in the bank both at head office
and

New York partner, Austin Brown.
this amount will be transferred to >
The new system was customthe
capital account,
increasing

was

Worcester National

new

Banking System and

then known

Six New Partners for GoMman, Sachs

appointment in the bank
London. For a number of years,/

tionwide

num¬

surplus at year-end to $2,550,000.

of the first banks

member of the

English who, after five
there, is returning to take

private wire network has been in¬

Worcester

and :

capital

increase in the

ate increase in

throughout

County—and

which will bring the bank's total

than 20 earlier

to increase its

move

Directors also voted

Worcester

group

Worcester

effective

$20 par value shares out¬
standing from 82,500 to 90,000.

County Trust Com¬
the largest and oldest com¬
bank

authorize

County, traces its ancestry to the
Worcester Bank organized in 1804

have voted to ask shareholders at
their annual meeting Jan. 21 to
ber

mercial

$2,800,000,

Ohio
Citizens
Trust
Company, Toledo, Ohio., directors

industry. Present checks
may

stock, the

account,

Worcester

before."

pany,

C.,

nation¬

Worcester

new.

16.
(Number of shares out¬
standing w 280,000 shares, par
value $10.)

Clifford

scope

Columbia,
Washington,
was
increased from $2,-

"It

tem

sale

Dec.

ac¬

believed that mem¬
bership in the National Bank sys¬
said,

000,000

National
on

England

common
capital stock of the
tJnIon Trust Company of the Dis¬

trict

Worcester

name of Worcester County
Company would be changed

Bank.

New

years
C

The

will

and

group.

taken at the Board meet¬

was

ing of Dec. 231 The next meeting

York

The

(17)

1st.
:

Harry C. Clifford,, general part¬
in Kidder, Peabody & Co.,

ner

will

become

limited partner

January, 1st.

general part-,
StaatsCo.,

John E. Cameron,
ner

in William. R.

will- become-

January 1st.

limited.partner#

The Commercial and Financial Chronicle

(18)

Monetaiy Policy and Problems
In Recession and Recoveiy
By ELIOT J. SWAN *

Vice-President, Fedora! Reserve Bank of San Francisco

First

Sttft fpaftoiscan central banker observes tfiat the present stage

the deftcate pmMem of adapting monetary
entourage sound recovery without encouraging

s* at

first

influence

from

70%

and "'

Federal

Bank of San Francisco.

weeks

to 21/>%

ago

with

line

rates

out

ual lenders and borrowers.
are

As short-

the

consistent

measures

enterprise

the

economy,

These

with

in which most

of the decisions regarding the employment of funds and resources

this is necessary in order to inanother group's share.
Another

is that,

point of view

uncontrolled inflation must

avoided, some small degree of
or creeping inflation is

controlled

necessary,

order

at least as a lesser evil,
maintain

and

high

expanding level of business activ¬

ity, employment and income. On
this problem alone, let me make
one
or
two
assertions.First,' is ;
the obvious one that even at,
s.ay>
2%

dollar

depreciation

becomes suostantial
made through and directed' by^
short span of years.
market processes. Also.

few

Second, if it

a-year,

are

money

market.

interfering directly with

decisions of thousands of individ-

to keep it in

supply,

banks, and, indirectly, the credit
extended by other lenders, with-

rates rose further, the
a

while

the

cost
and
availability of credit extended by

Reserve

discount rate was increased

crease

tightening the lending capacity of
banks, the* Reserve System can

to 2%, initiated

the

term money

After presenting a brief review of
w£*t monetary action has aecempfisbed and, also, indicating
wfcy we cannot rety exclnsivety on it, Mf.iSwan warns against
comprouifelny with inflaition, finds it is not necessarily an
altenrafire td depression, and casts a skeptical eye at propeeah for sefective lending rates for favored borrowers and
dlreet controls over wages and prices. He concurs in the continval need to explore ways to improve our economy's operaHons and the part played by the credit system, but hokfs that
flexible, indirect credit controls are prerequisites for a

general credit ^controls over
bank reserves.; By increasing or

recently to 90%. The System's
policy of monetary ease was moderated, as reflected by a somewhat
less easy bank
reserve position,
and by an increase in the discount
August

etpectafmn of inflation.

arc

rate from

of flie ttpftRTft poses
aetftftt

peared.
Stock
market
activity,
involving increased Use of credit
for stock purchases, led to two
increases in margin requirements,

Thursday, January 1, 1959

...

rather

rtonet^>.^is"^sS?d^to^be^"imD^ible

policy decisions

Un-4Schte^adequate predion

flexible.

are

and
expenditurepolicy-employment with reasonably
Present Money and Capital
actions, they can be modified or stable
prices, it would seem to be
/• Markets
reversed promptly when
;
.
circum—eqUally reasonable .to assume that
With considerable demand out¬ stances require.
^
js impossible to keep prices
side the banks for short-term se¬
XT,j.XT
1.
from rising faster,than at any
curities, the money market, though b:" Questions Direct Controls >fixed rate.
If everyone becomes
like

tax

and

tighter than

few months ago, is

•Second, when real inflationary'convinced that prices are eertain
considerably easier thary it- was pressures
are
present,
so
that to rise, whether at an annual rate
during the period of credit , r^- credit expansion and rising spend- of 1, 2, or
3%, their actions in re¬
straint in 1957. Rates in the capiing will? be reflected in higher sponse will simply tend to accelprincipal monetary measure or tal
markets, however, have re- prices if they are not curbed, the erate the rise, so that it is most
credit control used by the Reserve

free economy.
The objective of monetary pol¬
icy, stated broadly, is to promote
monetai# and credit conditions
that will contribute to high levels
of business

tivity and

System. By buying or selling Gov¬
ernment
securities, the
System
rTnincrease or reduce at its own

ac¬

em¬

initiativeC the reserves'of

«S§t

Other factors affect mem-

banks

ployment, to

member

turned

their
""""

levels

1937.

closer

alternative
to
general
controls
should be clearly recognized. The

has been some evidence of a level- alternative is the reliance,

in^ off in the ;P®st month. or so- greater or less degree, upon a netxhis difference appears, to reflect work of direct controls over vari-

primarily

maintain sta¬

much

highs> although there

the

continuing

doubtful that there is

real choice

between unemployment and mild
inflation.
In any event, inflation
and depression are not

alternatives.

necessarily
itself

inflation

that contributes to the

distortions,

bility of the
dollar, and
promote

sus¬

1S.

tainable

trST

rierorvA

if further Treasury borrowing and road, or that, barring a national
perhaps still some general hesita- emergency in which there is sub¬

a
»
riolt'ir<? are high
And these reserve dollars are high

growth in the
economy.

These
in

Moral

reserve

dollar

not,
opin¬

are

ion^ unrelated
contradic¬

tory

Eliot

the

bank

deposits

Long-term rates

dollar,

markets

run

through January,

we will not over the longer
be able to achieve sustained

economic growth at high levels of

business activity.

Currently

1957-58

reces-

the

II, the ecohomy

been

fortunate

enough

prolonged

really
depression.

clines

1948-49

lasted

less

than

public agreement as to
priorities ; in the production and

initments of fnnds through, the
ever, no

significant indication cur-

effective

then

and

moderate

flue?
limits,

able to utilize their .additional

The.

T..

nod.

reduce

their

re-

bor-

extended

any
.

,.A.

particular

economic

groups

and""tta

yrar,
recent downturn, which began in
fall of 1057 and which was

the

Let

also not lose

fact that

some

power

withstand

kjncjs 0f goods and services being

tor m

one

-produced

favorable to recovery', . with inthe
creased liquidity throughout T

variety of such fluctuations ' w i th i n
a consider-. limits.

able share of the risk; through VA

To accomplish-this. I dm cer- }
taihly not proposing that we rely {>
exclusively upon monetary policy. ?
There
are
many - factors
over 1*
which monetary measures have no
"
t-

direct

influence.*'Fiscal

Specalatfom

this

pectations

for

increases

some

general

■

downturn,

Governments

reflections

In June and

interest rates

July, however, ex¬
declines in

further

(or of further price
securisubstantial amount

in/ Government

steps

taken

andI

severo;

has, at

simply limited the
availability
of
mortgage
funds,
depending upon the attractiveness

and seco
;cond, by the
during the recession

that helped to increase the avail¬

ability of and reduce the cost of
credit, not only bank credit but

why I

of recovery and boom came to an
end.
Plant
and
equipment
ex-

penditurcs of business,"which had
u .ore than taken
up the slack from

situation' a recognition of the of a much ledger Federal deficit
larSe. amount of Government fi- this fiscal year than last, has

the loss of momentum in the hous-

nancing necessary in the months
ahead, and with a worsening of

Presents

Brief

Review

iln the fall of 1957, three

iig

and

automobile

...

years

markets

1956, could not be Sustained at the

the

record

eially in the Middle East last

levels

mid-'57,

and

international
The

mer.

general downturn got under way.
^
was succeeded
Vy !n
ease.
The Reserve System"in®3'

Oredit restraint

in-omoted easier credit

c.iscount
.-.J

rate

Af.._

conditions

ments

System's purchases and
Government securities in
to

the

Annual

ihgs

Convention,

and

Loan

ment

market

carried

over

the

as well.
The summer
saw,
rtM It^T

and

Francisco,

Selective

Lending

demands

are
pressing
productive capacity,
that prices tend to rise, a situa¬
tion
making general credit re-

actual

upon
so

of sound recovery without at the
same time encouraging expecta-

straint

appropriate, there are always difficulties confronting some
borVowers—if restraint is at all effectiie—and the objectives of such
-

borrowing

the seeds of another, and possibly
° ^ °
"
more-serious, downturn."- So far,
the moderate reduction m raone?
uie muaeiaie reaucuon in mone?

G1171 n Cf

1VI

lems oX the one hand of unemploymenf>and oil the other of a
possible renewal • of inflationary
pressures in thg months ahead are
istill with us.< * /
;
.

On the basis of this

stocks

growing

experience,

I would like to prseent a few more

then,

rather

finnnniAT

w«

c-x

general

propositions
TU

stateo°skr-' lie^ed expectations of inflation,, and credit

United
San

Opposes

When

se-

^orporate and municipal markets

banking

There

and

often wortny
houses, more schools,
are

easier

for

credit

small

preference

compared to bonds

for the

ap-'

controls.

for
T

—

consid-

Pharge«v—all of these

and

themselves

funds cannot be
lower

rates

borrower
money

all

for

But

one

without

spending and saving are of funda- 1
importance, and their inflationary implications, if they are
so
oriented, may be difficult, if '
not
impossible, to
counter
via
mental

borrowers

less other demands

by direct controls

busi¬

well—un¬

are

restrained

unless Gov-

ernment. is prepared to lend in
particular areas, at less than mar
ket rates, funds which are obtained

/*_

JT_

monetary
fluence

cisions

policy

monetary

climate

the

which

made

are

in¬

Yet the

measures.

these

upon

de¬

means

negligible. I would readily recog¬
nize, too, that the application of
monetary measure? is not always *
precise or immediate in its effects. :
Also, those who apply them are ;
not infallible.

and;

There

offsetting

which

are

time lags ;

are

factors

involved

often difficult to assess,

eyetoWith the-best available
nomic

trols

intelligence.

afford

problems.

eco- ;

But other con-;
from such

escape

Certainly

need

con-

available at lower rates to

other

and ;

types of ;

of improving the operation cf our
M
economic
system
and
the
part

class

making

business
as

tinuallytpexplore the possibilities;

made'available
any

labor,

decisions

•

;

ones,

desirable

are

debt

policies of Government, price and wage decisions of

11.

played by the credit mechanism, ;
particularly seeking to minimize;
.

wuste und suffering of

Government

emphasize that

League,

July, intensified by

necessary to afford direct support

onen

would, like to

serious situa-

the'to tne market by substantial pursales of chases of issues under pressure,
the mar- The price deelines in the Goverh-

system.
I

problem

"network"

adapting monetary policy actions
so as to encourage the processes

-broadly based recovery. A somecurity prices fell sharply and both what greater degree of price stathe
Treasury and the Federal bility seems to have emerged, at
Open Market Committee £pund it least for the present, but the prob-

aet) that provided substantial adreserves

require¬

iry, March and April, and bv
[fcarket
operations
(that is

of Governments.

•

reserve

tion in late

ments of member banks in Febru-

Titional

delicate

word

advisedly.
linkage among

large V0lame or tniniy margined
iarge volume of thinly margined
ness,
lower rates for Treasury
^oans' arranged largely outside the tary ease of the last few months hbrroWing so as to reduce the
system, for the purchase has not discouraged a growing and burden in the budget of interest

April" by a
margin require¬
in
January, by. significant
n

reductions

sum-

shakeout

„

^e resuu was a snaxeout mi e «i«e cncuuiagmg cxpe«a-

reductions,

November to 1%% in
eduction 1
in stock
aii

the

the vari¬
ous sectors of the
money and capi¬
tal markets so that they simply
cannot, be
completely atomized
or fragmentized.
y
-

such sgwutettve hold-. -trons of inflation that might lead
W '1 some fail in- Govern- ito an U"sus^tamable, specula^tive
s^car^y_Pr^ces" .This was ;^
followed

which carried the rate
paid by
member banks for borrowing from
the Reserve banks from
ZVi % in
'."n/lnnti

was

espe-

used

controls

enough

June.

credit

through

result

situation,

posed

■

demands.' To at

competing

tics) led to a
creait in other sectors of the marof speculative holdings of Governas wel1*
ments. Such expectations were ill
founded, however, since they col• ;
-Tlle Hehcate Problem
lided
with
increasing evidence r The upturn, coming as sharply
of a basically improving business as it did, and with the prospect

conclusion.

times

and

management
business

longer

tolerable *

;

efforts/By assuming

consumer

during

are

were

latest reccssiqh and
recovery, with
specific reference to money and
credit markets, as a background

over¬

change in i re- /
sponse to changes in the demands >
1
p]ant equipment, inventories, and
1S4il10 key
-y W1^ of its' members, as expressed both >
durable goods
>;
submit to another,
'
'T
VT:;T':XTT-/
individually
and -.collectively y
This is not to say that individual through Government, and if new I
What of monetary policy, then.
in these past 12 to 14 months of measures seeking to influence the products and processes are to be I
recession and recovery? All of ftow-of funds, and the terms- of"made available. The critical probthe measures available to the Sys-;; their use in particular- a-reas can- lem, which is now generally Tec- ;
tem were utilized to - ease the; not be effective in some degree;- ognized as a responsibility shared /
credit situation in late .'57 and; Housing finance affords an excel- by Government, is to keep such V

erabiy

should like to review briefly some
of the
developments

sight of the

fluctuation in

all

...

political
or
have
enough

banks; economy was created. Many other guarantees,. and FHA insurance.brought down from a factors; both public and private, the Government has undoubtedly
high of over $1 billion in 1957 to contributed to the turn around in succeeded -in
making mortgager
business activity,.but I believe it
money available with longer mamillion by niid-'58, and to
is.fair to say that monetary policy
turities, lower down- payments,
increase substantially their hold-'
imme a significant contribution—
and -' lower
interest
rates
than
ln6s of Government securities, so

de¬

;

the consequence of it.

activity is bound to occur in a
pc.dynamic market economy, if the

rowings from the Reserve

which

1953-54

and

both

serves

severe and

over

alternative to inflation, depres¬
is much more likely to be

sion

use of specific
types of goods and
services, such controls could be

low 1% in May, 1958. Banks were, early '58, and, certainty, a climate/lent example of

postwar period,

Sined World War
has

markedly^

the securities
rapidly

matically throughout the first half
of
1958, going from a high of
3.633% in. September, 1957 to be-,

period of

avoid—so far—a

stantial

com-

XnS Therettfbf bSSl

T rently

down

went

within

tuated

iion'
downturn

T/'T Short-term money rates fell dra?

we are

from the

recovery

about

of inflationary psychology
As a result of toe lessening de-.
iefieeted
in
business
and
conmand for aiid the rising supply ot
sumer
intentions
to
spend Tor
credit, interest rates fell

rea¬

sonable stabil-

ity

b^XdenosT

ana

i mrs.

Without

requirements, one
support a

reserves'will

b£some investSrs

being
an

ployment,

well

unem^

the inequities

distortions of inflation, but'
ihe flexibility and indirect nature
and

general credit controls
real advantage in the

of
battle,

are

against both inflation and depressioin, if we want to maintain the
essential framework of

terprise
.

conclusion,

free

en-

economy.

j
I

would

remind

stake in constructive;
solutions to these problems. Obviyou

your

«...

Except i'or -.done, it is never convincing to the ate in

authority to set margin requirements, the System's powers

group

whose

share of the

credit

pie is being reduced, to point out

an economy in which ex->
panding employment and incomes
will support a demand for new'
.

Volume

Number 5898

189

The Commercial and Financial Chronicle

mortgage money, as well as assure
repayment of your mortgage loans

outstanding.

well

Bank

lenders—

must also be able to operate
in an economy in which people
are
willing, as well as able, to
save, and in which they are will¬

New

the

Pierce would allow present

expire
the

longer

run

This

freeze

company

More notes of

May I and substitute positive regulation covering
and expaasion of hank holding companies.

ers

fnrmatkm

metropolitan

The following is a statement by
Senator George H. Pierce (Oleah

inflation is to surrender, to

latioil

will; enable the State to
continue to exercise its authority

•Government. It is the Committee's

With the approach of the 1959
conviction that
legislative session, a statement by!
the traditional
"the chairman of the Joint Legisla¬

tive

New Partnership!
j.

PHILADELPHIA,

Pa.

Committee
banking law

An¬

—

a new

the

partnership consisting

the
was

established
'1955. .At

-holding

New

andV

Sen. G. H. Pierce

which

changed

had

Committee

The

studies

have

heen devoted

largely to questions
jof branch banking, district lines
jand holding companies. Commit¬

tee

This

un-

•

Favors

One

Bank

"other hand, the State
not give undue advantages
the

actions - have' been influenced

/by the enactment, in May 1956, of

any

for

was

condition'held

same

Mutual

American

relatively. Also

Keystone

Custodian Fund. The lattei-'s hold¬
are

Fidelity & Guaranty.* stocks.

good list.

Oct.

ings

Fire

two of the top grade life
'

■

losses

almost the

Northern Insurance, one of the
quite few companies to issue a
quarterly income account, reports
for three quarters ended Sep! 30
an underwriting
gain of $296,000
versus a .loss of $1,367,000 a year
earlier.
Bearing in mind that in
underwriting 1958 will be another

for

October

same as

•

were

for September,

but

lower than for October, 1957,
by about 5%. For the 12. months
through Oct. 31, the later period
shows losses totaling $1,051,045,r
000, compared with $1,033,316,009,
1958 being only about 2% abovd
the earlier period. The trend id
fire losses has been showing slight
"sour" year for the fire-casualty
industry, this may well be rated as improvement; but a billion is too
a
a
figure
even
for
our
good showing.
Premium vol¬ high
ume
was
down moderately from economy.
•,
■'<
Brief data for Glens Falls In¬
$29,916,000 to $29,117,000: Invest¬
ment income was higher, $1,333,- surance show the company's 1958
'000, against $1,192,000 in the 1957 underwriting loss .to have been
•nine months. The $4,526,000 gain only about half of that for
the
•in
investment
value - compared nine months ended September a
With a debit of $2,122,000 a year year earlier.
Investment, income
earlier. Not a bad showing by a was sufficient, more than to off¬
the
company that has been doing con¬ set
underwriting loss - and
siderably better than the industry. leave a net of about $443,000.
j
Liquidating value was higher at
New Hampshire' Fire,
in the
$131.32.
*
same nine months,
A
reported an
;
American Re Insurance has pro¬ underwriting loss ;of $2,027,000,
posed a 25% stock dividend.
compared with $787,000 in the
1957 ^quarters." As the company's
•V Stockholders of Insurance Com¬
pany of North America are to vote investment income was not large
on
March 18 on an increase of enough to offset, it wound up with
capital from the present $30,000,- a net loss of $179,000. This gives

bank

bank, class of banks
holding company. Today
the "freeze" serves to prevent all
others from
entering the field;

still adequate in

fundamentally as had banking in
.those intervening years.
| .

H. L. Heiteir.n&_r

runups

field

must

41 years ago, was

Says Freeze
'-'

enacted

Almost the

jqu estioned
jWh ether a
1

Cor¬

company,

-Vestmefite

since

:1 $14,

Midland

communities.

fjust to penalize Marine Midland
'by forcing dismemberment or di-

been

not

State. It would be unwise and

State

revised

that

established in
•1929, has proved beneficial to the

Banking Law
had

fact

13 banks with 164

owns

^offices- in

that

the

Marine

State.

poration

time, I noted ~
York

face

only one State-wide bank
holding company, operating across

Com¬

mittee

"that

must

have

timely.

The

between

practical matter,

percentage basis the change:
minor;
>
<
<

ppropriate

and

of Samuel K. Phillips, Jr., Harry

Samuel

banking.
v;'
Moreover, as

•we
a

must maintain

balance

Federal; and State supervision of

both

seems

nouncement is made of the forma¬

tion of

revise

Fund,

area.

over banking development in our
Committee, to revise the State, and thereby avoid abdica¬
York State banking law. V
tion of its powers to the Federal

New

United States

islative

ing and intelligent criticism

of insurance stocks:

ings 'from .97% of net assets to
1.24%. 1 Large
holdings, include
Fireman's ..Fund,- Great American,

should be considered. Such legis-

it. For its efforts to be mpst ^fefcRep.) of the New York State Leg¬
tive, the Federal Reserve ' System
islature and Chairman, Joint Leg¬
needs both informed understand¬

Insurance Stocks

—

Affiliated Fund—As of Oct. 31,
insurance stock hold¬

realistic geographic limits mwst he set, too, in
permd wider branching powers in fhe doWn-jtate

order to

Week

interest to hold-

increased

mittee agrees

surrender to inflation.

with

antitank holding

Believes this should "receive priority over proposals to enlarge
New York City banking districts though, he adds, his Com¬

if we
Although
•inflationary pressures may not' be
dominant at the moment, we
Should remember that to comprise
vestors

By ARTHUR B. WALLACE

discrminately favors the Marine Midland Corp., State Senator

in¬

and

savers

legislator favors additional bank holding

companies in bis state. Charging that the present kgidalkm

ing to hold a substantial part of
their
savings; in dollar claims.
Shares in savings and loan insti¬
tutions, like time deposits and
other debt obligations, bota public
and private, cannot maintain their
to

York State

Bank and Insurance Stocks

HehHng Companies

you

attractiveness

Urges End of Ban oh New York

But your institutions

borrowers

are

(19)

one

000 to

effect

$50,000,000.

the

stockholder's

equity in the change in the un¬
Columbian
earned premium reserve,' which
National Life Insurance Company
would have reduced the net loss
-yet it allows the one, already
•of Boston with Hartford Fire in¬
'statewide holding company, to ex¬
to about $17,000. There was a size¬
surance, Second Bank State Street
able gain in investment value.
pand ' through mergers and ac¬
*
-Trust
Company has been made the
quisitions by its subsidiary banks.
] Agricultural Insurance Company
exchange agent, r
-To stifle competition is intolerable
Hartford Firer§ semi-annual re¬ ;of Wq|ert6wn, N. Y., is, to -absorp
':-and is' in violation of the State's ;
Empire State Insurance Co., ah
long-established policy against port showed a sizable underwrit¬ affiliate.
r
'
J
monopoly. We must promote con¬ ing loss, $9,799,000, compared with
A subcommittee of the House
ditions which will enhance bank¬ a loss of $6,665,000 in the 1957
Representatives
Ways
first half.
and
Premium volume was .of
ing's vitality and remove those
-over.
10%
higher than
in
the Means Committee is to go more
that will deaden it.
J; The fact that primary considera¬ earlier period. Investment income fully into the matter of taxing
the
period
was
$10,731,000 ,the income of life companies.
tion
is
given to the statewide .in
These companies have been oper¬
problem of bank holding com¬ .versus $9,968,000. Net income was
ating under a sort of stop-gap ar¬
panies in no way lessens the im¬ .$1,048,000 against $1,620,000.
rangement that, in effeet, came
portance of the pressing question v It must be remembered that in
.out to 7.8% of income from hpof wider branching powers in the a case such as this, the under writ¬
vestments. Legislation continuing
downstate metropolitan area. The ing-deficit enables the company to
this arrangement will have to b<e
Committee
recognizes that
the •escape income tax on underwrit¬
enacted if, under the old law pre^
geographical limits established ing operations, whereas much of
ceding the stop-gap, the tax bill
years
ago .today
are
no longer .the income from investments is
of the life companies is not to be
co-extensive with the social and taxed at only 7.8%. This is beIn

the

merger

Federal Bank

cche

;Federal

Holding Comprovides for

which

Law,

..pany;

regulation of; bank hold¬

months after
this act, the First

ing companies. Seven
ithe .'passage of

(National City Bank of New York
•filed

application with the Fedseeking per¬
holding

leral. Reserve Board,
Edward

Phillips

Kaipti

mission to establish

Marner

a new

in New York State. This
was to acquire
First National City Bank and

company

,L. Heffelfinger, Edward J. Phil.lips and Ralph T. Harker to

holding
the

carry

the investment securities busi¬

ion

its

affiliate, City Bank Farmers
Company, both in Banking
2, and County Trust
Company
of
White
Plains
in
Banking District No. 3.

of Samuel K. Phillips & Co.,

ness

i1500

Chestnut,■ Street, under

Trust

District No.

the

same name.

The firm of Samuel K.

Phillips
:& Co. was founded in 1904 by the
-late Samuel K. Phillips, father of
(Samuel, Jr. and'Edward, to engage
■in

investment

(business

listed

and

are

located

regulating
bank
holding
panies, the Legislature, in

Chestnut

150Q

with -Samuel

K.
a

'general partner in the firm since

quiring

j/This

'came

Accords

In submitting

to the

4n 1939.
J.

Phillips,

who'

K. Phil¬

lips & Co., since 1918,

Joins Dempsey-Tegeler

Mervel-

has

joined

the

staff

recommendations

issues

give first
that

are

previously with
& Co., Inc.

Daniel

are

ever

has

safeguards

the

June

question

terests.

Since 1955, when the Committee
to Revise the Banking Law was

panies

further useful
In its place, the enact¬

serves

formation and expansion of bank

holding

companies

our

State

;and

with

down

the

markets

convened, but due to the fact

Head Office:

26 BISHOPSGATE, LONDON. E.C.2

t3 ST. JAMES'S SQUARE, S.W.1
54 PARLIAMENT STREET, S.W.1
Bankers to the Government in: adbn, kenya, :
UOANPA, ZANZIBAR gc SOMAJUILAND 1'rotecioratl

Branches in:
.

india, TAKJSTKS, ceylon, burma, kenya.
1anganyika, zanzibar. uganda,

aden, bomaliland protectorate

northern and southern rhodesia.

they have a devastating
liquidating values, as at
the"bottom of the depression of.
ithe 1930's.
On

BANK

the

basis

Oct.

data,

«nd

INSURANCE

'Investors Stock Fund reported an
'increase

from

$19,257,000

that there may

personnel of the Committee.

STOCKS

$31,415,000 in the valuation of its
"insurance holdings, although on a

■

.course,

effect

London Brancltes:

be changes in the
The Committee had planned to : personnel- of the Joint Legislative
have proposed amendments to the Committee to Revise the Banking
Banking Law ready for introduc¬ "Law, I feel that this matter should
tion as soon as the 1959 Legisla¬ rest pending such changes in the
ture

preliminary

BANK LIMITED

stocks and bonds. But as insurance

'companies do comparatively little
•in-and-out-trading in their hold-

subcommittee

Amalgamating National Bank of'India Ltd.
and Gvindldys Bank Ltd.

-ings, - valuation changes are not
too important: Under extreme and
'.severe
economic
conditions,
of

The

started

NATIONAL AND GRENDLAY?

was

of changes
in
•banking districts, branch banking
and other matters is highly con¬
troversial, and it is extremely
doubtful that any legislation can
be adopted which will be satis¬
factory to all of the banking in¬
The

heavier.

already

hearings.

mindful of ^reserve for the half was only
public in¬ about $80,000. Liquidating value

Dempsey-Tegeler & Co., 210 •purpose.
.West-Seventh Street, Mr. Mervel ment of legislation to regulate the
was

policy to be determined. The established by; the Legislature, ap¬
function, of the State is to- bring pro* i m,a t e 1 y 1 2 §
important
the best possible banking to its
..changes Have been made in the
people. It is not the function of banking laws of this State. Most
the State to protect any special of these changes were approved
interest.
;
: "by the Banking Department, the
I
believe
that- the
stop-gap New York Clearing House, and by
"freeze"
on
bank holding com¬ the various banking organizations.

'Weston

much

cor¬

taxed only to the
extent of 15% of dividend income,
are

against; undue

Priority

ANGELES, Cal.—Bernard

term

Mr. Harker has been associated

<3pecial to The Financial Chronicle)

porations

expansion.

the need to protect the
terest with adequate

ing companies, rather than issues
at the local level, such as district
lines. The time has come for long-

general partner aince 1939.

LOS

state-wide in scope, such as hold¬

^associated with the firm since 1927

iWith the firm of Samuel

public.

district

Legislature at this time, the

consideration

j member of the Philadelphia-Balti¬
more
Stock Exchange, has been
a

Committee is obliged to

Edward

1957,

general partner in the firm

com¬

legislation,

stop-gap

Heffelfinger joined Samuel

K. Phillips & Co., in 1921 and be-

across

Board.

•1939.

.and

banks

dividends of domestic

.cause

The Committee is acutely con¬ -the rate being, at present, 52%.
scious of its responsibility to the This is why Hartford's income tax

temporary measure pro.-

new

since

have

concentration of .$148.33 compared with $138.47.
the^so-called "freeze," was in¬ banking assets and possible tend¬
Securities holdings appreciated
tended to give the State time to ency .to monopoly. In. seeking to -some
$25,612,000, whereas- in the
formulate
long-term
policy on -'achieve this goal, the Committee 1957 half it was $2,435,000. Not
bank holding companies. In July acknowledges
with
thanks
the -toe much weight should be at¬
"of this year, the First National
co-operation it has-received from tached to this item in an insurance
the
City Bank application was finally
many
bank and non-bank company income account; securi¬
denied
'
by the Federal Reserve "sources.
ties holdings, of course, move up
lines

which

areas

dication of further

hibiting such companies from ac¬

Phillips & Co., since 1930 and

Mr.

economic

evolved and which give every in¬

laws

enacted

Samuel K. Phillips, Jr. has been
active in the investment securities
business for the past 30 years; has
associated

state

absence

over-the

:Street, Philadelphia.

beep

the

brokerage

and

-counter securities. The firm's offi¬
ces

company

Laird, Bfssell & Meeds
Members New York Stock Exchange
Members American Stock Exchange

12U BROADWAY. NEW YORK 5, N.

Telephone: BArclay 1-8.vr)
BeU

Teletype—NY 1-1248-49

Specialists in Bank Stocks

The Commercial and Financial Chronicle

(20)

1959

Thursday, January 1,

Ail All Oat Drive to Amend the

unorganized, not
the United i
firms, hotel
"Mom and

much; it is whether we provide
wTitten into the law of our enough for those who have too

little".

For the first time in Ameri¬

floor for,

wages
and ; a
.ceiling for
hours, along

with

oiir

terstate

in¬

ment insurance, or

merce.
;

cele¬

brate

the

anniversary of

George Meany

the Fair Labor

Standards Act

benefits

try during the past generation.
As we look back now, in the

of experience, and survey
unchallengeable
economic

the

gains derived from the operation
of the Fair Labor Standards Act—

Wagner

the

Act.

■.

has

brought to the people of our coun¬

light

guaranteed

was

because of the great

at this time

humanitarian

unemploy¬
public housing
or
bank deposit insurance — to
cite just a few examples. It was
only twenty-three years ago that
the right of workers to organize
.into unions of their own choosing
for Social Security or

com¬

"y^;'

Federal law was

And in 1938, a

would

which held

inter-state
pay
workers less
cents an hour, or to en¬
for

than

force

work-week of more than

without

hours

time,

major

paying

over¬

to employ children under

to under privileged
the age of sixteen.
workers and their falhilies, but to
When
the
Government

not

only

industry,
whole
should

and

agriculture

nation—it

the

that

opposition
been

have

this

law

bitter

and

And

this step, and when the Supreme
Court held it had a Constitutional

right to do

ophy

unyielding.
ceivable

equally

seems

that

incon¬

today

even

took

our

fantastic

seems

power¬

enacted

unlawful

industries

this

that

signed

so,

our

the original philos¬
founding fathers—

Government

de¬

was

promote the general
given practical im¬

welfare—was

against
further and clearly necessary im¬ plementation by law.
We in the trade union move¬
provement of this law. They are
still totally unreconciled to the
ment, regard the "general wel¬
basic philosophy underlying the fare" philosophy of the Constitu¬
ful

forces

Fair Labor

arrayed

are

Standards

the Government has

Act

that

—

direct

re¬

tion

the

true

essence

Americanism.

sponsibility and obligation to en¬
Our
opponents — those who
act laws to lift up the conditions
fought the enactment of the Fair
of its people, that the establish¬
Labor Standards Act in 1938 and
ment

minimum

standards

decency in industry is a vital step
to protect the economic health of
the entire nation.

still

bitterly resisting its mod¬
ernization— call
it "Socialism".
are

Just

the

does

what

term

"So¬

cialism" mean? I confess it is used

contrary-minded
people for such conflicting pur¬
Yet that responsibility and obli¬
poses
that it becomes virtually
gation are firmly embedded in our impossible
to
understand..
The
Constitution. The preamble to the leaders of the Kremlin call their
Cites "General Welfare" Clause

Constitution states that

one

of the

principal objectives of the Federal
Government

"to

promote

many

of terror and exploitation
the people "Socialism". Nar¬

reign
of

the row-minded reactionaries in this

healthier

bodies

people!:-':..
To

who: have

our

Gov¬

the railroad

promote the general welfare. So industry - so
that
our- country
slow, that President Andrew Jack¬ could be expanded and developed?
son, a hundred years before the
Is it "Socialistic" for our Gov¬
New Deal, said:—"When the laws
ernment

blind

provide subsidies for
undertake to make the rich richer
big shipping interests so that we
and the potent more
powerful, the can have an
adequate merchant
humble members of society—the
marine?
farmers, the mechanics and labor¬
Can the subsidies paid by the
ers—have a right to
complain of Government to the
airlines, which
the injustices of
their Govern¬
have helped to build

ment."
A

century

later, President

Franklin D. Roosevelt echoed the
same

philosophy

when

de¬

clared:—"The test of our progress
is not whether we add more to the

abundance

those

who

have

•An address
ner

sary

by Mr. Meany at a din¬
commemorating
tbe 20th Anniver¬
of the Fair Labor Standards Act co-

Sponsored by the AFL-CIO and tbe Na-

Uonal
Consumers League, Washington.
D« C„ Dec. 4,\B&8.~
;-y

portation

system

nation in time of
be
Is

denounced
it

serves

war

and peace,

"Socialistic" for

our

ernment to pay billions of
to build a floor under farm

the

trade

union

Gov¬

dollars

prices?
move¬

—our
our

own

Government. funds

funds—to

strengthen

nation and safeguard its econ¬

reason

effective lobbying job in

favoritism

This

grown

real

sub¬

can

•

longer

justified. Big industries, with
incomes
rising into the

annual

millions, like the giant merchan¬

hotel chains, tele¬
companies and laundries
can
no
longer be permitted to
escape
their clear-obligation to
comply with minimum standards
on wages and hours.
*

unreasoning opposition
and all progressive meas¬

firms,

The issue of coverage must not

confused

sentimental

ap¬

peals in behalf of small business.
We ore not talking about or seek¬
ing legislation to include small

hypocritical at¬
going forward with
all our energy to support the drive business. The corner grocery store
for more progressive legislation and the
"Mom and Pop" shop
in the next Congress, including would still be exempted. It's big
amendments to bring the provi¬ business, hiding behind the cam¬
sions of the Fair Labor Standards ouflage
of small business,,,that
Act up to date.
must be included in the new law.
In this effort, the AFL-CIO is
Then there is the equally urgent
not
of
primarily; concerned w i t h need
raising
the
minimum
benefitting its own members. Let wage. It started back in 1938 at
me make that point emphatically
25 cents an hour and has been
clear. The vast majority of union raised by slow steps to $1. That
members earn far more, under is a
totally unrealistic amount
their collective bargaining agree¬ today. According to the Govern¬
ment's own figures, an income of
ments, than the present-day mini¬
mum
wage
and
their working $40 a week is less than half the
conditions are considerably in ad¬ amount necessary
to support a
vance
of the minimum require¬ family
in decency. In the last
ments of the law.
»
nine years, while average wages
re¬
organized labor's role in the in the nation rose by 74 cents an
campaign for broader coverage hour, the minimum wage has gone
and higher stanards of the Wage- up only 25 cents, a third as much.
Hours Law is that of merely one
$1.25 Hourly Minimum
liberal organization, among many
tacks.

and

are

believe, therefore, that we
the cause of progress. We are con¬ are being conservative when we
fident
that
all
forward-looking urge Congress to approve an in¬
groups in
the nation will join crease of the minimum wage to
with us, now as in the past, to win at least $1.25 an hour.
favorable
The question occurs: Why do
action
from Congress
and the White House.
we—private organizations—have
No
to urge and agitate for such ob¬
group
has done more'-to
the conscience

arouse

in this

sumers' League.
CIO

of America

viously

than the National Con¬

area

necessary

reforms?

doesn't the Government act

We in the AFL-

Why
on

its

motion?

own

The answer was
to be associated
supplied by
dedicated, pioneering President. Woodrow Wilson. He
organization in joint sponsorship told a group led by the late Flor¬
of this commemoration of the first ence Kelly, founder of the Nation¬
twenty years of progress under al Consumers'League:
the Fair Labor Standards Act.
"Most of the vitality of the pub¬

proud

are

with

this

It is not surprising that Women
have been the dominant influence

lic action

in the National Consumers' League

does, not originate. It responds

and have worked

tion

contributing
i
J
•/

the

welfare.

For it is the
enter the

mines

and

our coun¬

textile mills

old before their time;
have experienced at

grow

first hand the tragedies of sweat¬

shops,

industrial

homework

and

sheer poverty.

Many of these wretched condi¬
tions have been relieved. We have
raised

standards

America.
us

wealthy

Other

considerably in
regards

nations

land of
are

$2,000
How
our

families has to

income

a,.year?;..
can

and other progressive

ion in favor

the

people

up public

of programs

;

speak

we.

less

than

live

James

Burns

Blyth & Co., Inc.
Committee Chairmen include

—

John E. Fri¬

Education:

Member

Co.;

day, Jr. of Morgan Stanley &
Education:
William

Public

Ruane of Kidder,

Peabody & Co,;

Entertainment: Vincent C. Banker
of R. W.

Pressprich & Co.; Mem¬

bership: Arthur B. Treman, Jr., of

Dillon, Read & Co.; Program: J.
Stuart Lovejoy of Reynolds & Co.;
Publications and Publicity: Fred¬
erick S. Wonham of G. H. Walker

& Co.

Association,

Investmentf

The

formed 11 years ago

with 27 mem¬
bers, today has over 540 members,

all of whom are under 40 years of

These

age.
more

young

represent

men

than 160 investment banking

brokerage firms in the New
York area. The main public activ¬
and

ities

Association

the

its

are

sponsorship of lecture series by
experts in various economic fields;
the maintenance of a membership
Speakers Bureau, which in coop¬
eration with the New York Stock

Exchange,

investment

gives

in* the

tures

York

New

lec¬

approximately 7,000 persons
nually; and its work with
Joint

Committee *

which

each

for

ment

brings

year

an¬

the

Education

professors to Wall

3-week forum

area*

eco¬

Street

the invest¬

ii : -;.

banking business.

opin¬

Coast Exch. Member

Election of Edward F. Therieau

of Fairman &

Co.; to membership

eles Division

tion,
sive

result of the last elec¬

liberal and progres¬
candidates will
take
their
many

place in the next Congress. If we
do our job of building up public
support for the goals we share,

•

Ideal

Colo. —Seymour

Barbara
joined

Securities

A.
the

Rosenstaff

Company,

Broadway.' Mr. J Dolgin
.

the

was

Pacific

Coast

Stock

Ex¬

change through intrafirm transfer
of a membership in the Los Ang¬

formerly standing in
of the late Harry FairJr., has been announced by
Frank E. Naley, Exchange Board
the

name

man,

Chairman.
Mr. Therieau

rities

(Special to The financial Chronicle)

DENVER,

have

still

David

Cv.giark of Clark, Dodge & Co.;
Treasurer:

smugly of. berger

families

sub-standard

Peterkin

John

Fortunately, the prospects in the
year ahead
are
more
promising
than they have been in a long

and-

national wealth when 13 mil¬

American

Gregory & Sons; Secretary:

our

business

;

entered the
in

1927

;

secu¬

Los

'Angeles and has represented Fairman & Co., on the Exchange as its
Floor
Trader
since
September,
1943. He has recently been ap¬
pointed Assistant Secretary of the
firm and will become its

Exchange

Floor Member.
•.

r.'-

■

■ ■

2185
pre¬

housing, ; when
viously with Selected Investments,
older, retired citizens receive
Social Security checks averaging Inc.; Miss Rosenberger with with
only $66 a month, when we have Investment Service Co.
-

our;

Mayo-Smith of
Co., Incorporated; Vice-

President:

to help

country and
provide for the general welfare.

f Dolgin

*...

F. Burns

James

CiarK

or¬

Join Ideal Securities

How wealthy are we when one
an

Blair

nomics

wealth, just how
victory is in sight.
we? Let's take a look.-

out of every seven
on

opinion."

ganizations, to stir

How Wealthy Are We?

live

time.

who

women

Government

It is up to us,

groups

their children

seen

The

therefore, the trade
human unions, consumer leagues, women's

legisla¬
r..: -

women

try who have

public

from outside the

comes

Government.

hard for the

of all kinds of

David

dent: Worthington

nation, seeking to further

our

unpro¬

by its provisions.
For the simple

no ;$bwnd. or /logical dising
left to justify their phone

meaningless

these activities
of

has

not be deterred nor halted by such

lion

We regard
worthwhile in¬

the

thinking,

of
has

such

Labor Will Not Be Stopped

ment do not think so.

vestments

million

; Congress that they were exempted
from the law. v

The trade union movement will

the

"Socialistic"?

ures.

trans¬

that

_„

and

to any

•

and

some

uncovered

4 Why?

young

our

label

arguments

and

to subsidize

still

are

tected

stance. The- cry-of "Sopialism" Jba5
become the last refuge:'of those

became

Was it "Socialistic" for

way

"Socialism"

ernment

threadbare.

And in a later country call the mere building of
Congress is specifically badly
needed
schools for
our
given authority to enact laws "to children by the Federal Govern¬
promote the general welfare."
ment "Socialism".
It is true that our Government,
in the formative years before we
Subsidy Recipients

general welfare."

an industrial
nation, was
painfully slow in taking action to

There

the

our

enactment

section

1959. Presi-

officers for the year

that certain industries engaged in
inter-state commerce have done

day may
that twenty-five years ago there
were
no
Federal laws providing

en¬

gaged

of our young people to¬
find it difficult to believe

Many

in¬

dustries

to implement the gen¬
eral welfare clause, of the. Con¬
stitution.
! J
'
'
'
>

prohibition
against child
labor

6bvernmeht .undertook in

broad way

legal

Under the impact of

established
a

with

concerned

workers

America's
worst depression and under the
leadership of Franklin Roosevelt,

Government

our

elected

York, the following were

sons,; bur national defense: de¬
mands better education and

I Twenty years ago, a new,concept
history,

the

people?
Surely it is completely obvious
that, aside from humanitarian rea¬

health of

land.

become

organized tabor as another progressive step for
States, and that it will affect giant merchandising
chains, telephone companies and laundries — not
'"
V
': Fop" small businesses.

can

Act itself.

Standards

;

Annual Meeting of the
Investment
Association of New
At

important step on this road is the
great and urgent need for im¬
provement
in
the
Fair Labor

the

Let's get"<iown to cases.; The
"Socialism" for the
Government to wipe out disease- law, as it stands today, provides
ridden and crime-breeding slums, protection for only 24 million per¬
or to provide aid to- education or" sons
in the nation's labor force.

Why is

.was

Elects Officers

still have a long way
before we can consider the
job of "providing for the general
welfare" as a job well done. One

of milk and school lunches for im¬

poverished children?

N. Y. Investment Ass'n

Yes, we

human

it "Socialistic" for

Why is

V; Mr. Meany states this is being done for

dren?

Government to provide a free pint

;

Socialistic

not

of America?

resources

President, AFL-CIO

Organized labor J<*rill not be deterred nor halted by • • •
hypocritical attacks" of Socialism in driving for $1.2$ hourly
V1 minimum wage and coverage of 20 million still exempt from
;
the Fair Labor Standards Act. In making this assertion,

it Socialistic to protect the

failed to provide enough safe and
decent classrooms for our chil¬

develop and advance the material
resources of our country, why is

By GEORGE ME ANY*

;

Then

Fail Labor Standards Act
I

.'-J::

And most businessmen will

omy.

agree.

Charles S. Moore

Charles S. Moore, partner in D.
T. Moore & Co., New York

passed away Dec. 14.

City,

.Volume 189

Number 5808

The Commercial and Financial Chronicle

Continued, from page 3

in large part

centage, the result
a

higher—more specifically, from
local to state to Federal.
These

Indiana had the 24.3 per-

24.3%.
of

decided increase in the basic

rate of its

trends

profitable gross income

upward trend

moving with
instance
than

tax

remained

has

collections

15.3%

was

greater

1955^".;

V//; :v:",.;•••/.comparisons cannot end at
because such year-byyear changes in tax revenues for
the 48 states, contain the influ¬
ences
of
population growth as
well as shifts in price levels. Only
after adjustments have been made

this point

allow

such

for

residual

there

comes

about

•

"Are

rlod.

can

having more or less state
government?"' ,7 7 7 V $/;/,?,
we

One

reason for being concerned
population is the fact of a
positive correlation between the
size of a country's- population and
the size of 1 its governments. ;In

about

less

academic

terms:*, the

persons there-are in
the more government.
cause

there

Not

are some

form

does

the

have

hire

teachers and construct

basis takes

state

services

net

For

gen-

;

many

group

difference.

the

This

condition

serious

pretty

and

not

one

generally realized by the public,

class

Certain Specific Taxes
a

As far

the

actual

state tax collections
those

sources

11^

„*_4

are

concerned

sales, general and selective, continued to offer in fiscal

(and
on a
per capita
of the population

somewhat

1958

than half of

Mohan and John H.

•

. .

let it

And

further

assumed

that each of.us can exert some in-

collections
were

total, 58.6% to be exact, according to the Census report. Of
this percentage general sales contributed 23.5% with the selective

Philip V. Mohan

City, specialists in.United States
Government securities," and members of the New York and Ameri-

Stock Exchanges. The Quincey
organization was founded .in 1887.
Mr. Mohan was formerly a vice
president of The First Boston Corporation, having been associated
with that fiim for 22 years. .K" :"
' Mr,. Excoffier's admission to

can

partnership

sip

*nS conclusions result,
Another place a person has to
be careful in this field is in mak-

interstate .comparisons, and
this is especially so if state tax

does

a„aklst

have
il£Jvc

not
llUL

Ble

holder in

The

agerial and administrative posts,

including successively, poSltlO-lS a9

supportSf ig thig. to make Qur
weight felt in government will re¬
quire
time, hard
work,
and
money.
Man-for-man the lay¬
man

much

muci4

professional

the

reason

Chas.

with

Quincey & Co., where in his many
years of association he held man-

which have strong factual

liis

with

coincides

8th", anniversary

anmo

Jess some oi are avmHPrl in interniPiinrr data the pitfalls mislftadpreting data
avoided mislead

H. Excoffier

John

Co., 25 Broad Street* New York

in the case of Pennsylvania the those who run it both for their
1957 sum for licenses in general statutory salaries and rewards as
obtained
by
corporations w a s .well as for the non-statutory perdouble the usual amount (there quisites of office which in some
was
no
explanation), thus the cases have brought fortunes to
drop from 1957 to 1958 collections those in actual control. And third,
from this source was an appreci- the practitioners of government,
able one..- These statistical va- jn more popular terms the progaries are more than points of fessional politicians, have chosen
interest just to students of fi- or accepted such work as lifetime
nance.
As mentioned before in- careers or occupations.
dividuals naturally want to know
For the laymen, i.e. for most of
how their state is doing, and unin0
frolic in i,->w~
us> t,ie sum of the at)ove observa-

the

growth factor in pretty good fash¬
ion, though such results can be

in these V two states will currently have a budget pf
off, but for one of Virginia's around* $100,000, and New York
important tax bases the Census City is running close to one and
figure for 1957 combined 1956 and one-half billion dollars in just tax
1957 collections, so the 1958 sum
collections.)7 Second, "government
almost necessarily was less. 7And ;Can be -a- profitable business for

lor certain services have made up

in.

Philip

Excoffier have been admitted to
general partnership in the investment tiirm of Chas. E. Quincey &

flueiice,
slight
or 7 appreciable", upon the rate of change. Now tie;
these
assumptions T to 7,the 7next
off 18.7% and Pennsylvania 9.9%. three statements which need very"
But these figures illustrate the little if any qualifications,
caution needed in handling statis- 7 First, government is big busitics.... In absolute dollars the tax ness. (Even, a small municipality

years the
just have not
raised enough money from their
own taxes to cover expenditures;
debts, Federal grants, and charges
as

•

The two states which wore re-

ported by Census as having the
greatest declines in tax revenues
from 1957 to 1958 were,-Virginia

since World War II reach-

states

collections

care

that

published.

boards.

put tax
similar figures

not

pcrity.

ing $11.8 billion in fiscal 1957, a
figure which probably will be exceeded when the 1958 data are

rooms.
If we want our private
property protected we must ex*
pand the police force; if we,?find
parks desirable, we will get park

did

states

some

48-state

crease

that the

long-term debt
(the short-term is not too important) has shown an unbroken in-

schools

•_

not"'

must

when things get tight* as
private:: enterprise.: Indeed

does

be¬

set

mean

Admits Two Partners

slightly
than 16%, Delaware showimprovements from most of it also be assumed that none of
its
tax
Florida us is inclined to take an attitude
sources, : and
through its general sales tax reap- of resigned acceptance of the rate
ing the benefits of sustained pros- of change involved in these trends,

money

economies in

another

Co.

ing

state officials may and do borrow

the people demand that our
children be educated
in public
If

v •,

■,.•••

appreciably. Nor must it be

assumed

size, but in time multiplication in
one

Delaware and Florida siood

erally contracted slightly, because

a one-

sure

bill

grow

country,

to, be.

relation

for-one

above Tesult

the

interpreted

tax

which

one

But
be

answering: the v question:

get

influences

figure

near as

next in line with gains of

can be proved
disproved by statistical manipulation, the operations of the 48state
governments as
a
group
were, if anything, somewhat less
burdensome tax-wise in the past
year than in the prior fiscal pe-

But

fuels.

though
uneven rate; for

1956

plus a substantial jump in receipts from the levy on motor

tortions, and much

unbroken

Chas. E. Quincey &

important enough to be

are

commented on briefly:
For the sake of analysis let the
presence of the above trends be
assumed (though the factual evidence is adequate)
whether we
individually like them or not. Let

tax
-

(21)

assistant

cashier

cashier,

ahd

assistant office manager.

chance
uumu;c

A. G. Widmann, Partner

office-

political arena be-

In Walter,

'ueff^hiriachhel-

Woody Co.

cause " is a case of a Part"time
lor cauuon aies^inmis^ iaci,; sei^ amateur versus a full-time proamateur versus a full-time pro
pi™,
if
„7in
the
riictriiwi™
CINCINNATI, Ohio — It is an^,,4.
^41
with 19.6. None of the other in- com if ever will the distribution
of toial services between the state iessi°nal.
But the old adage still nouiiced that effective January-1,
per person compared with $85 in dividual selective sales taxes even
1
o al
between^stete holds. lavmen and lavwomen (to 9 g Alb c widmann has been
jn union there ls strength.
1957, an increase of 0.9% com¬ on such widely used objects as al- fna,,lls 10cai
01
When
«0«0voi7n,.tnW in
pared with
an
unadjusted in¬ coholic
beverages
and
tobacco be *he same within state A as in
admitted as a general investment
the partner in

further

refined.

For

fiscal

this adjustment works

1958

levy

:
motor fuels coming next

out to $86

*•

14.

.>0

crease

This

2.6%.

weight

products

population can be seen even more
clearly by taking a somewhat
longer period.
The
unadjusted
"1958

state

collections

tax

for

terval

were

in¬

the

country's population
had grown rapidly, so on a per
capita basis state tax collections
in 1958

"fiscal

1950.

$300 million

adjustment in straight
tajc, data must be made.

'When it is remembered that
ernments

When

gov¬

paper

•with

heat

for

and

institutions.

state

"State

State

The

1953."

somewhat over

taxes

and

col-

science, art, acumen and of poland practices
itics
the

per¬

local

taxes,
is from 25.9%

range

shown
then

their

ability
lives,

Dixie Termin¬

be estab-

The firm of

everyday

better balance

can

TcrVvIn 78 q% "for New lished in government. This will be
New Jersey to 78.9 % tor New tmr, lwra„sp the nrofessional doINeediess to say the citi- *™e because the professional pol-

Illinois and Mich-

income taxation

io?i? provided
1958

with food
The shop¬

ping list for supplies is a long one
are roughly 1.4 million
persons on state payrolls includ¬
ing teachers in state colleges, etc.
;Thus even
though a state may

of New Jersey are not

being

deprived of governmental services
such
as
schools,
roads, public

Building.

Walter, Woody
&

Mexico.
zens

Walter,

Wood y.
&
Heimerdingcr,

equivalent and then bring to the

J^cians then will be willing to
lls^en, bargain, and even concede,

•

Heimer-

dinger, organ¬
ized, in 1922,

hospitals, penal institutions, general welfare while the residents

is men¬

ann

personnel,

offices,

clips

for

titled

cent

securities firm
of

big businesses or big
households, the matter of price
level becomes
important. The
numerous departments of each of
our
states have to
be supplied
are

-with

in the last table

umn

most

the

for

drawn

„

wit, the League of Women Voters)
organize in economy leagues, or
taxpayer associations, or the

specializes in
Such activity by substantial citthe underwrit¬
izens (if the phrase is not too
trite) is necessary particularly if
ing and sale
tioned the Federal individual and
of
of New
Mexico are being sur- the growth of governmental funcmunicipal
corporate levies usually are in feited. The contrast arises from tions is to be slowed and if there
bonds, a field
Albert C. Widm
mind; however, all but 13 of the the fact that in New Jersey local is to be a retention of some deof investment
48 states use one or the other or
governments assume the bulk of gree o;£ home rule and states' to which Mr. Widmann has excluboth income taxes. The total revcosts 0f many of such services, rights. If, on the other hand, one sively devoted his 35 years in the

Another

dollar

are

part has

igan, and from around $200 to
$220 million in Ohio, Pennsyl¬
vania, and the state of Wash¬
ington.

ahead of

only 63%

were

lion in California

article

^ ^ .

which the data in this

port from

though taxation of sales in gen¬
eral
(or the equivalent tax on
gross receipts) is used by just 33
states, its generality provides very
substantial amounts, e.g. $603 mil-

this

But

1950.

—ofates B C D etc
more than states B, c, L>, etc.

4.1% of the total of all taxes. ' Al

88% greater than the sum of $7.9
•billion

brought

c+ofn whereas

ai ^

17.2% of total state

the

that

individual

broughtJnderidediy
than

the

tax

income

with

similar

(and favors
high

the

ex-

penses for the most part and
lects the necessary taxes.
7

col-

underwrites

more money

corporate.

Licenses

Mexico

New

]>ercentagcs in the Census column) the state government itself

cral Government the states found

•and there

states

other

assumes

government

more centralization

and investment business,

of such gov-

Until

recently

-.7

Mr.

Widmann

™nment at higher levels, then hcaded

the. Investment firm .0*.
one can go with the tide and Widmann and Company of Cincmperhaps even accelerate it.- But nati which was originally organ-

unless history reverses itself decisions in favor of larger governments more remote from the peopie will mean among other things
larger tax bills and mounting
debts. Furthermore—and this is
m°st vital—in time with such; a
growth of government there will
be a lessening of basic personal
liberties which are constantly en-■
loyed by the great majority of
persons m this country, but wmch
too many of us take as matters of

ize(j in 1932 and also specializerl
the
handling
of
municipal

group stood third
Although
the, distribution of
j)on(is
'
7 '7 '
'
7 " 7
in line with 14.7%; of the licenses
governmental functions between
Mr. Widmann is a memberso^
,those from motor vehicle and op- the state and local units varies
the Bankers^ Club of Cincinnati,
employees over a
time period
erators were by far most importremendously among our 48 states
the Cincinnati Stock and Boiic!
(rather
improbable),
and
no
tant. State taxes on property, on
according to influences such as the
Clu5
the Cincinnati Municipal
change in the quantity or quality
severances
(mining, oil, timber, stage of development, tradition,
Bond Dealers Group,; and 7,alsa
of its services, if prices have been
and
on
bequests
(death and political pressures,* for the
president and. Director of Th»
'-spiraling
upward
and
expend¬ etc.),
duties and gilts) brought in sums
states as a gr0up in 1958 the dis,Parara0wlt
Savings
and . Loan
itures of the state also will spiral.
from $350 to $533 million cer- tribution was
just about 50/50. It
: And such added costs must be met
Company of Cincinnati;
"
tamly appreciable, but* percentmost probable that the long*
•"
.'either by increased taxes or more
agewise only 2.4 to 3.6 of the total time trend will show more cen-;
CJ7 '
borrowing, or both. Put in an¬
-of all state taxes.
/
7
tralization of services
taxes
and
right and not as privileges. - • t
IVIldweSt CaXCH. lVlemDers
other way, a certain part of the
long-term growth in state tax col\ lection dollars must be ascribed to
T
I'upoitant as are the above data i - Taxes and Personal Liberties
local)
finances ; into
the - total Exchange has annoupced the;clcc: higher
wages for personnel and
probably
c higher prices for supplies.
Valid
moje interest for Ithe mif an individual is rather indif- fabric of daily living.: And the tion of the following individual*
dividual is focused on the position
t to state taxes and similar pattern of these finances, such as to membership in the Exchange:
comparisons over
a
period
of
or
Stflte-hV^
{tn+fii-ic-lrt
-r
T-.
••
years, therefore, must take such
price changes into account.

have

increase in the number of

Comparisons .7

control on the state level.

•

When

state

tax

put in terms of
"stable

dollar

—

collections
per

thus

lione7here!UAli°except1 five

eliminating

prices—the results are
these: adjusted collections in fis¬
cal 1958 were about 2% less than
increase

for

•See

f
.?

than

accounted

for

-due allowances for statistical dis-

Tax

Collections,

Division,

Bureau

1958,

the

oxalate fSanS?
collected.

•

With Andersen,
'"'

(Specidl to The

Randolph

f^nanAal

Fairman

& ."Co.;-; 210

West

DENVERv Colo,

CinibNici,e) ' '

Kenneth D.

end, a shift in the offering of such Seventh Street, members of the Adams: is- with Andersen,7Rahfunctions (together with differ- Facific Coast Stock Exchange.^^He dolph & Co., First National Bank

?958SPhave ent
*•

Adds to Staff

Census, Department of Commerce, Wash¬
The
ington, D. C.
thSe"cof^p€^dium of state Government
Finances
which
will
be
published
by

been

Ohio; and William C. Porter, DitU
mar
& Company, Inc., San An~
tonio, Texas.
7
:
7,

First, an increase in the
(Special to The Financial Chronicle)
proportion of goods and services
LOS ANGELES, Calif.—Milton
of daily living which come from
or
depend
upon
government Reich has been added to the staff

°de«i?th!erCreeprrtS^i» rather than private activity. Sec- of

by the

growth of population and an increase in 'consumer prices. With

State

and there government.
affect7'ach ^Fairman

citizen:

1957, the gain was from 0.1 to

Governments

2.6%

during the 12
months ending June 30, 1958, was
mere

o/-.

of ^e|^

tax collections for fiscal 1958 than

Thus the absolute dollar
of

are

ulation and

in 1957.

captia and

the influences of changes in pop'

degrees

lower

control)

from was formerly with Bennett-Man-; Building. He was previously Witlv

levels * of; government

to ning Company.

* '*•

Investment Sales, Inc.

The Commercial and Financial Chronicle

(22)

ment he

Continued from first page

the

givings that their ideas do not differ essentially from
those of Mr. Keyserling. There are some members of Con¬
gress who have always bridled at the mere thought of a
balanced budget, apparently having the settled opinion
that it is a sort of fetish of yesteryear and best forgotten.
It may be taken for granted that any budget that the Presi¬
dent presents as a "balanced budget" will meet violent
opposition, not to say scorn, in such quarters. What is
worse, others who pay lip service to sound fiscal manage¬
ment, including balanced budgets, lose interest when pet
projects are endangered—and the Lord knows there are
enough pet projects around.
Results Count

There

are

those, of

who assert that the Presi¬
this time, and quite possibly the

time,

should be less than frank if

progress toward a budgetary situation conducive to eco¬
nomic health. The President says that "a balanced budget
will be an important and welcome assurance of the

people

country and the world that

is
determined to live within its means, thereby doing its part
to prevent-inflation, to encourage economic expansion,
and to fulfill American responsibilities of world leader¬
ship."
our

government

A balanced

budget—a sizable surplus would be better,
of course—achieved by substantial, even drastic reduction
in outlays, would without doubt have the effect indicated
by the President. We can only hope that the details of the
President's budget, when they are made public after the
turn of the year, will give more convincing evidence that
some such
good fortune is in store for us than what he
has had to say now has done. The "balance" he
promises
admittedly depends upon a large increase in tax receipts,
based largely upon proceeds of income taxes from cor¬
porations. Precisely what basis the Treasury has for such
implied forecasts of corporate profits we have no way of
knowing, and we certainly should not undertake to replace
the Treasury's conclusions
by any of our own. We must
say, -though, in all frankness and with emphasis that a
budget balanced only by reason of larger revenues is cer¬
tainly far less reassuring and heartening than would be
a balanced
budget resting primarily, if not wholly, upon
reduced outlays. Better still would be a
prospect for sub¬
stantial surpluses
stemming from reduced outlays and
larger tax collections resulting solely from more active
and

business.

prosperous

Little Assurance
can

re¬

proposed—largely apparently

by refusal to continue temporary programs* which auto¬
matically come to an end in time to relieve the 1960
budget of the burdens they have imposed this year. As
to any other reductions
of saying almost

the President is vague to the point

nothing. This much, though,

$9 billion increase

millions,

revenues

budget for next
yes^ even

budget
or

can

be said:

than

year, a

are

still left intact. Far

urgently needed.

anything approaching it, to the

in any event be
provided only by a longer look ahead than
the President appears to have taken. We have
no doubt
that more could be cut out of the 1960

budget than the

:1: of this sort, and are determined to do something real and
substantial about the recklessness with which the tax¬

payers' funds
but

are

wasted,

arrives for

year

formulating the budgets for

those years that the amount of curtailment
is limited

legislation enacted and

programs initiated years before.
If the President has any such desirable but drastic

plans in mind for the fiscal affairs

wish

the

consider

ad¬

$1,000

carryover

more,
with
similar
privileges,
for
losses

sustained in the sale of U. S. Gov4
ernment
securitiesMssued
after

yet appeared.

1, * 195.9. " Td'^ricourage the
continuing interest of individuals
in the market for Treasury securi-~
ties, however, it should be pro¬
Jan.

Continued

from

page

future

selves

vantages of a possible market re¬
duction in the price of forward

desirable, are a necessary
price for managing the huge Fed¬
debt

eral

contribute

contracts

the prevention of inflation and of

growth.

Market

likewise

instability

considered

with

may

securities

investors, of course, rest more
comfortably when markets
are
stable and risks are reduced, but
this peace of mind is a luxury that

time

the other

hand, that

tionary
ferral

will

interest

relieve

the

rates

pressure

the

ury

corporate and mortgage

mination

funds

these

price,

course

oc¬

■

redemption
limited -to

device
note

con¬

and

again after five

deemable

com¬

years.

this

respect, the offering

securities

than
of

with

conversion

having
tive

Treasury

Loan, there is

however,
.

Another

higher

was

commitment tech¬
used by the Treasury

conditions—with

tion of

the

fering of 3% bonds due in 1995.
Not many institutional or other

suited

This
may

not

or
that the
appropriately

modest

the

might be

payment

commitment

Treasury.
would be

Such
an

into
to

fee
by the
fee to investors

added inducement to
contracts

offset

part

and

the

With

to the feasibility * of an
advance
refunding of issues
mature

inlater

particularly the more than
$28 billion of 2 ¥2% war-time is¬

Tax Benefits Technique

An approach of a different

directed

towards

increasing

ties,

might

benefits.

operate

securi¬

through

tax

associated

Certain issues which
at

are

available

discounts, for example,

used

payment

certain

obligations at face value.

would

sues

selling

disad¬

over,

offer

some

may

discounts,

be
tax

All is¬
more¬

tax advantage in

little

ing

the

now

refunding
problems

1967-72

present

Treasury,
ease

maturities. There
between"

seem

in
be

the

^uch an action. These

issues, do not

lem

maturities

advantage

practical

Treasury in

their

there would

1967-72,
.

final

with

sues

sort,
the

Tax exemption per se

advantages

One refinement which

tions in the capital markets.

•

scheduled

with U. S. Government securities.

considered

re>-

tractive yields, and current condi¬

longer period.

ployed.

advance

redemption at the end of .respect

Government

did

it.

undertake

their large volume, relatively at¬

op¬

suggests that the
participation of individuals in the
not have been well market for

investors,

Treasury

publicize

1959-61,* it does not appear feasi¬
ble

-years,

types

however.

hardly

funding of these issues considering

the

action is

While
the ' near-term
problem
confronting the Treasury concerns
the issues maturing in the period

depending

.to be recommended.

long-

the earlier period or retention for

in 1955 in connection with its of¬

of investors subscribed for
this issue on a commitment basis,

lower

such

this time

any

rate

refunding

operation to the United States. At

possi¬

serious question

applicability of this type

of large-scale, dramatic

life,

interest in the early years different from that in the later years—
market

Actually,

about the

years,

investors.

of the Canada Conversion

.success

securities

bility would be to offer
term security bearing a

corpo¬

Refunding,

considerable inr

created

from considerations of the relative

maturity, of say, more
might be attrac¬

than five

the
length of time covered by
commitments has been generally

nique

issue

new

has

terest.with regard to the feasibil¬

rather

years of its
convertible
into

of Advance

The Canada Conversion Loan of

ity of a similar advance refunding
operation in this country. Apart

redemption privileges
The offering
long-term bond which, for
be

Aspects

1958

cash

would

ket, for example, would be
inappropriate in the Government

market,

accomplished
necessarily going into the

longest maturities. In this respect,maturity
issues. -range / would
contribute? impor-'

cash, a fact which
might
be
inconvenieht
to
the
Treasury or blunt monetary policy
at redemption dates.

modifications, would, of
be necbssary. The extend¬

securities

r
,

issues in the 10 to 15 year

need

■

course,
ed period of time covered by com¬
mitments in the mortgage mar¬

tend

definite \ They Treasury is undoubtedly
given .aware that an orderly scheduling

the first several

rate

aver¬

were

disadvantage of this type of
security is, of course, that it is re¬

ment securities.

the

tendency at times,

to overemphasize

maturity statistics., without
solving
the
basic
problems of
Treasury financing. For example,
the average outstanding maturity
of the debt may be lengthened
without materially reducing the
problem / of refinancing'imhiedi^
ately-maturing issues.
/

be adaptable to
might be preferable.
marketing of U. S. Govern¬

makes

of maturities can be

may

market.

that

age v

These notes,

recalled,-had

midpoint of their
maturity.
r
;
:

years

widely
used
in
the
of mortgages and in
the direct placement of corporate

enter

of the Federal Govern¬

however,

The

also,

marketing

Basic

seems

the

extent

orderly marketing of

obligations and contributes to the
fight - against
inflation. '■There

cases,

manage¬

from

the

there might be one or tantly to bringing about a "better.'
optional redemption dates. .spacing of outstanding obligations.
For example, the Treasury might
As market conditions permit, it
offer a 30-year bond, giving the would be desirable to have fre^
holder the right of redemption on
quent, but relatively smaU
a
fixed
date,/after appropriate amounts of, long term offerings
'■},
.notice, perhaps at the end of two both for cash and refunding.

given
careful
consideration.
Among these techniques, the fol¬
lowing might be considered.

the

necessary

offered in 1957.

not

securities,

for

Further,

techniques for offering new, and
refunding outstanding U. S. Gov¬

should,

brief

for capital
market must

securities

transferred

This

be the chief factor in a successful
debt management program, other
factors
relating
principally
to

ernment

debt

without

' V''

open

outstanding debt is imporT

the right to redeem them at par at

compete

the

for

tant

will

tract'

willingness and deter¬

•-.•>

offer

about: the

Treasury Market Techniques
While

considered.

maturities but holders

only if it is willing to
compete on the basis Pf rates and
'

sues

sectors,

terms.

of the

order to attract new
groups of investors. Privileges of
redemption were-granted in con¬
nection with the two 4% note is¬

successfully draw funds
from marginal borrowers in

the

may

can

both

initiative

casion,

the

liite

'
Orderly

and

Marketing

would

securi4-

ury objectives of debt lengthen¬
.and
orderly
marketing.*
Lengthening the average maturity

is to be avoided when possible but

in¬

comment about the general Treas--

privileges,

Treasury to investors. This

supply of capital funds. In
expanding economy the Treas¬

away

might

ment

rise,

conversion

disadvantage
of
techniques is that, in most

limited
an

available

limited

de¬

plans for increased

vestment

other

are

and

which

anti-infla¬

corporate, hold¬

Government

ing

tion
on

non-bank

Debt' Lengthening

marketing tech¬
niques,^, associated with redemp¬

principal

Moreover,

program.

become

ties.'

savings, insurance premiums,

There

higher level
of interest rates—which might re¬
sult from vigorous Treasury com¬
petition—may well stimulate an
increased flow of savings, an
an

be
the

limited period of

Consideration

ers

etc..

essential element of

over

funds

from

must at times be sacrificed in the

internal enemy—inflation.
It must not be overlooked,

will

Treas¬

might
also
be
given to similar limited tax bene4

technique

there

overcome,

current

from
earned

fits

advantages-both to
Treasury and to investors of per¬
mitting payment for Government

that must be paid to prevent eco¬
nomic excesses. Bankers and other

nation's battle against its

commitment

distinct

price

the

can

only

interest

securities.

ury.

.-■/

after the closing of

If the problems associated

books.

unsustainable rate of economic

soon

is
any event, the not considered to be
good public
commitment device will have to
policy, and rightfully so. This is
be studied more carefully and re¬
not to say, however,
that there
fined before it can again be em¬
are no
tax

present circum¬
for its accomplish¬
ment. Now is
definitely the time to begin reducing outlays
in the 1961, the 1962 and even
the 1963
budgets. In point
of fact if such
steps are not taken now it will be found
the time

for

Govern¬

to deduct from taxes an additional

feel constrained to await better evidence than has

stances demands

when

in U.

vantages of broadening this priv-r
ilege
by
permitting individual.^

should be the first to applaud,

technique

one

SI,000

excess

and other types of securities',.
this connection the Treasury

to grips with facts

come

President proposes, but the fact is that the
type of expen¬
diture reduction that is required in the
than

sustained

might

have really

shorter.

American -people and to -the
world, that this country is
really determined to put its financial house in order could

losses

tax

is permitted,
privileges of

$1,000

carryover

amounts

leaders of his party

securities

curtailfhent of expenditures is

-Full assurance,

can

great many hundreds
billions of expenditures which should

be pruned out of the

with

ment

mitments,

not find much assurance of this sort in what

the President has had to
say so far. To be sure, some
duction in expenditures is

balance the

deduction

makes future reductions in expenditures doubly difficult.
Should it presently prove that the President and the other

The technique of forward

regarded

potential capital gain.
the case of individuals,

deductible

did not say that the information so far vouchsafed by
the President affords less than full assurance of great

the

that the discount may be

course,

dent's announcement at

same

Thursday, January 1, 1959

vided that additional tax losses be

;

budget itself, are to be regarded as moves in the current
political chess game. For our part we welcome any move,
political or other, which contributes to the cause of our
fiscal salvation. All the more power to the President if he
can in this or
any other way promote reduction in expendi¬
tures. At the

no indication of them as yet. Most
the Democratic party, and with

given

deep
regret be it said, more than one member of the President's
own
party are now and have been regularly in recent
years much more interested in enacting legislation which

As We See It

has

members

dates

range

are

nor

prob¬
would

the refinanc¬
the
1959-61
enough "in-

available

the

to accomplish such

refinancing in this maturity area
if
desired,
when
the .time
is

appropriate.

Finally, it is
whether

war-time

bonds

open to question
conversion of the 2^2%

issues

bearing

into
long term
higher
interest

189

Volume

5808

Number

The Commercial and Financial Chronicle

(23)

V
reduce sales, from in¬

rates would

portfolios. At current
prices, holders of the 2,j>'s are

low

reluctant

take

substantial

the

sale.

attendant upon

losses

T-

maturity value. * If the cost were
to
be reduced
to five-eights of
maturity value, then the term
could be adjusted to provide - a
3%% return. For example, a $100

vestment

Con¬
higher

Conclusion

The

highest order of economic
intelligence and political states¬

yields instead of making for more
"permanent holders," might result
in increased net selling as losses
were
reduced or perhaps con¬

costing $62.50 would give a
return
of
3.75%
compounded
semi-annualy at a maturity of 12
years and eight months.
A price reduction, as suggested

verted to gains.

above,

would give the Treasury
opportunity to eliminate -the
$25 denomination and make the

tribution" it

an;

achieving

$50 denomination the smallest is¬

ity.

No matter the difficulties

the

so-called

with

to securities

version

For all of these reasons,

of outstanding

refunding

riot

ties does

advance

appropriate at

seem

Because

this time.

securi¬
re¬

orderly scheduling of maturi¬

that the
question should be kept under
continuing study in the event that
undertake

operation.

;

such

the

policy must - have as its
primary long run aim the con¬
make

can

towards

sustained
> economic
growth and relative price stabil¬

ad¬

practical problems
of Federal finance, all other con¬
siderations must be subordinated
these basic

nation's

objectives, lest the

economic

dermined.

health

un¬

the

Reporter

Governments

posits, and by most savings

belief

ac¬

indication

clear

The

counts.

volume.

kind

longer-term

the

longer-term issues should be

V//

new

able

air of

raising

bought by

'V—

■

the

obligation

money

conjecture.

that

purposes

Nonetheless, the opinions

for, its
matter of consider¬
use

4 Ik %

issue,

with

are

maturity

desirable, the general rise in in¬

spite of President Eisenhower's recommendation that the
budget' be balanced in the 1959-1960 fiscal yeaf, there does not
appear to be any abundance of confidence in the money market
a revision in savings
bond terms. ?
that this will be the case. It is evident that the spending pro¬
The 3 % % Series. E Bond was
posals which the new Congress is bringing with it is not going to
first offered to the public in February 1957. Since that time yields 7 put the budget in' balance unless there is a substantial increase in
taxes which is not looked for by most followers of the money
on
U. S.' Government securities '
that has

rates

occurred^* in "

suggests the need "for

advanced

have

'iVi%'i

•

approximately-is¬

market.

/•/,' ■•■/'/ -!
™
,/
also indicated for the fiscal

.-v..

unbalanced

Rates on newly offered

budget

year

and state arid ; ending June, 195.9, with the size of the deficit estimated all the
way from $5 billion to $12 billion. The feeling is growing that the
municipal securities have also ad¬
vanced by
about l'z%
or
more :• excess of outgo over income will tend to be decreased with the
passing of time because of the improvement in the economic pic¬
during the intervening period. The
maximum rate on savings bonds - ture. Nonetheless, by no stretch of the imagination, will there
be a balance in the 1959 Federal budget. The inflationary impli¬
is; set by Congress and it may be
cations of continued Federal deficits is not going to have a favor¬
February or March of 1959 before
of

sues

corporate,

Congressional action
the

competitive position of savings
bonds, therefore, if would seem
reasonable to have the yield - on

shift

establish¬

responsibility for

interest

rate

revision

should

there

terms

and

vances

shortening of

3V>%

froni nine

eight months to eight

years
years

and

^J.[months. The price at which the
remained

un-

of ultimate

ma-

offered

was

changed

75%

turity value. In revising the
ent rate to

i In

3J^

nection

with

issuance

maturity
achieve

done

the

bond be

its

ultiriiate

their

round

fraction

The

present and older Series E Bonds,
you

price

when

communities

was

division

much

273

serves

northern

Illinois

The recent recession had

28£.

only

slight effect

firm indus¬

trial sales.
Illinois

Northern

has

Gas

been

trying to obtain additional gas but
several
plans have not worked
out, such as the Beatrice Project
to bring gas from Colorado Inter¬
state's
large
western ; reserves.
Plans for the proposed Midwest¬
ern
Gas- Pipeline are not yet
finalized—this would bring a>sub-

(general) accounts for stantial supply of gas from. Tenresidential nessee, with possible later imports
from Canada.^ However, Northern
Illinois Gas will ; get additional
supplies from Natural Gas Pipeline Company wheri construction
Population in the service area of new facilities by that company

has

increased

about

50%

since

whole;

some

cities have

grown much faster—Stokie's pop¬
ulation is now more than three-

and-a-half times that of 1950. Re-

fleeting
Illinois

this

1953

have

customers

in-

fast since

for the U. S. gas industry,

Revenues

nearly

Northern

growth,

Gas*

gaining
previous

currently

are

10%

over

the

Other plans are

also under way
is working on
If all
these projects work out successfully, the company should be able,
to increase its supply about 50%,
which would permit substantial
gains irt the heating load; While
the new gas may cost more, the
company has a purchased gas adjustment clause in its rate strucr
and

rapid

New waterways

projects promise
great importance in the
development of the service
Chicago is the only city on

expressway

to be

the

expected to continue

pace.

which has

Great Lakes

rect

connection

between

di¬

the

difficulties arising
Memphis case
The

expanded program.

lished in Lake Calumet.

permit

This will

larger flow of water traffie between the Mississippi River
a

Northern. Illinois Gas expects

the

company

wRl continue to gam experience
ki this field before developing any

Seaway and the Missis¬
sippi River System. To implement
the St. Lawrence Seaway Project,
a Port of Chicago has been estab¬
.

out

is engaged in a
modest exploration program and

Lawrence
il

company

It does not have any current

ture.

Growth is

and

the

additional storage facilities.

period.
at

completed.

are

1950, compared with) 16% for the
U. S.

spend some $158 million for con-

structiort -Vitnte the rdiafl nKnnt t1l!i
over
next five years,
onH
lA
and wimr
may

have to raise about $115
bank loans or sale

from

million

The

securities.

ratio

only 43%

present

debt

and in future

the company contemplates a setSystem, the Great Lakes and the UP pf about 45-10-45.
St. Lawrence Seafcfty than is Wow' V Share:/earnings increased from
possible. The Seaway is scheduled ,95# a share in 1954 to-$1.22 in-1955
for completion in the spring of anc* $1.44 in 1956.
In 1957 ,there
was a slight setback to $1.36, and
1959.
about

The

"Chicagoland"

new

ex¬

system is now almost
completed and the toll road sys¬
tem (outside of Chicago) is sub¬
stantially completed. Everything
pressway

points to a realignment of com¬
munity and industrial
growth
along the expressways as con¬
trasted with former growth along
of

ment

industry

into this suburban area and away
from

Chicago is expected.

The company's

big expansion, as
future potential,
is
space-heating. Unfor¬
tunately, it has been unable to
increase its main supply of gas

well

its

mainly in

gr&atly since 1951.

very

Never¬
minor increases

theless, with

some

with

one-third

big

interest

$1.40 is anticipated for cal¬
The current dividend

endar 1958.

rate

88£.

stock has been

The

quoted recently over-counter
271/2 bid, to yield 3.2%.

Maclin Partner of

Paine, Webber Firm

A continued move¬

population and

the

that

know, were offered
of

three-fourths

their

available

business better¬
for its new

used

in short-term

for

these

purposes

are

there

that those who have had funds for

Governments will be needing them

likely to

the

Maclin

Luttrell

became

gen-t

eral

partner in Paine, Webber,
Jackson & Curtis, 25 Broad Street,
New

York

City, on Jan.
to

according

ly 1959,

announce¬

ment

by Lloyd

Mason,
executive

partner,
Mr.
Maclin,

Storage

who

has been

Project (plus the use of propane)
it has been able to increase the

with

the firm

number of

director of ad¬

ers over

vertising

Herscher

Dome

by the Treasury,
been trying to

distant obligations has

In order to

hands of the ultimate investor there
high enough to attract the limited supply

get such a security into the
-

will have
of
is

funds

that

rate

available

for such

being predicted that the Treasury

in its impending new money

raising venture will offer a medium-term
call and conversion feature.

Accordingly, it

offering.

bond, with an option
^

space-heating custom¬
six times in the past dec¬

around 262,000. Houseproduces over 40%
of
revenue
and
by next
summer
saturation may approach 47%.
Substantially all new homes built
in the area desire gas for heating..
Oil for heating costs about 55%

ade, to
heating

than gas.

since

1951

and

public rela¬
w i H

tion s,

head the new-

established
Luttrelt Maclin

department of
business

de-

velopment.. This department will
encompass all of the firm's sales

building activities:, statistical services, advertisings public relations
and sales training.
\
carries on an aggressive and exMr. Maclin began-his Wall Street
tensive advertising
campaign to career as a financial reporter and
sell appliances. It is getting a very was
formerly assistant to the
substantial part of the cooking president of • the
Association of
load
and
practically all of the-Stock Exchange Firms.
water-heating
load,
aided
by
Paine, Webber, Jackson & Cur¬
Other appliances are

also doipg

well, including the clothes dryer
and

token offering of a longer

going to be done early this month.

discount what is

for

Projected Financing
be

maturity than has been used in the recent past
for

quite likely to

because of the improvement in business.

purposes

market

large extent, the cost of taking

due will also rise since the available

come

is indicated

also.

own

they

can

Because

the

provided for, and even though this may still

Market Guessing on

and

expenses.

maturity.

keen for

operations of the powers that be, it

short maturity basis

of issues

decline

desirable, also, that the cost

that the Treasury will have to pay more

investment

must

reduction

borrowing. Then there are the refunding operations which

money

funds

bonds, however,
be
given to
extension in order to

consideration

likely

competition

the credit firming

is believed

care

pres¬

turnover of these

credit available to the money market so that a
This probably does not mean such drastic

develop.

the

ment and

view of the expense

It is

1949,

Commonwealth.

the railroads.

Board,

supply of money and credit in 1959, because of the

incurred
by the U. S. Government in con.

Reserve

Treasury Borrowing Costs to Increase

•

will have
*,

3%%, a similar
device might, be employed and an
effective rate change achieved by
a] corresponding reduction in the
maturity.
'

any

increasing

With

the rate , on \
raised from
in 1957r the maturity .

reduced

bond

and

money

ma¬

turities.. Thus, when
Series E Bonds, was
w-ars

times

...

achieved

three

and

of
ad¬

bonds;
Heretofore,
in 1 rates 1 have
been

savings

the reserve acquirements of the member
banks, but it most likely will result in these banks again operat¬
ing with negative reserves and this usually results in the discount
rate being increased, with the prospects good that the prime rate
will also be upped.

prices

1959,

according to the statements of
Chairman Martin, is very much concerned with the inflation bias,
and with business in a strong comeback there will most likely be

action
J

market in

Higher Discount Rate Probable

•

boom does not

Treasury, which could administer
.the
rate
in
accordance
with

-Accompanying this revision

Federal

The

less

ing the rate from Congress to the

market needs.

Government bond

for that matter.

33,4%. It is also desirable to

influence

year

;

Series E Bonds raised from 3*4 to

3V2

the

able

be taken

can

In order to restore

this matter.

over

area.

7The Government market closed out the year still 011 the de¬
fensive because the money market continues to be faced with a
strong inflation psychology, an unbalanced Federal budget* siz¬
able Treasury borrowings, as well as large refunding operations.

large-scale

recent years

repre¬

February, 1954.
The
company
now
has annual
revenues
of
about
$91 million,

future

Little Confidence Budget Will Be Balanced

expansion of
savings bond sales does not appear
feasible, nor in. fact economically
terest

wealth Edison

creased about twice

Treasury will

evidently strong
running from 10
years to 15 years, plus an option call date as well as some kind
of a conversion privilege, is in more than the "open mouth"
operation stage. But, the Treasury has the last word and they
usually surprise the money market.

the convenience
ana
flexibility of savings and
share accoiUrfe, and the protection
of life insurance to ownership of
savings bonds. Only in time of
war does if seem possible to sell
U. S. Savings Bonds readily and
While

What

that savers prefer

in- large

that

ultimate investors.

and

anticipation, because it knows the Treasury will be making avail¬
able its new money raising terms in the next week or so. It is
evident from the talk which is being heard that the Treasury
will offer a longer-term issue, most likely one with a bond ma¬
turity. The reason for this is that there is not only the desire to
move out the
maturity of the Federal debt but there is also the

paid by mutual savirigs banks and

Gas

"split off" from Common¬

(with heating) j53%, commercial
5%, firm industrial 10%, interruptible and boiler fuel 15%, and
miscellaneous 1%.

By JOHN T. CHIPPENDALE, JR.

commercial banks on savings de¬
associations

population of over 2.2 mil¬
lion; it has over 600,000 customers
and is adding 30-35,000 a year.

The money market is entering the New Year with

public appeal of savings bonds has
been
considerably reduced even
though the rate of return on these
bonds, when held to maturity, has
at times equalled or exceeded that

loan

sented

Illinois

about 16% of vrey,enues,

Our

war,

Northern Illinois Gas Company
Northern

Residential

tf.: $. Savings
of

By OWEN ELY

with

•'/".

Bond Erogram

Since the end

Utility Securities

na¬

ment

costs

Modification

tion's economic life, debt manage¬

program

subsequent market changes make
feasible

the

reduce

fundamental influence

of the saving?
considerably. Cor¬
responding modifications should
be. made in the yield, price, and
terms of the Series H Bonds.
bond

ties, I do feel, however,

would

ministrative

funding
on
a
relatively small
scale, offers important advantages
with respect to debt lengthening
and

This

sue.

advance

Public

manship must be brought to bear
on the complexities of debt man¬
agement problems. Because of its

bond

incinerator.

The

company

lower cost.
For

the

tis is
12 months

ended

Sep¬

tember, 63% of the firm's gas was
sold on a firm basis at an average

one

largest
broker¬

of the oldest and

investment

banking and

firms .in the United States.
Founded in 1878, it engages in all
age

price of 96£ per mcf and the phases of the securities and com37% to some 60 large modities business and operates 42
customers on an inter- offices located in 39 cities from

remaining
industrial

ruptible basis at an average rate

coast-to-coast.

Continued from page

Administration

for making good
guarantee. Successful fi¬
nancing proved impossible under

their

rthe

Possible Solutions to Railroad

conditions

above

because

this

industry.; V'

bor-

against this equipment on a
negative pledge basis.
as
a
price for obtaining the
row

necessary debt financing, the airlines, virtually without exception,
hawfc' had to enter into rather

credit

strict

agreements

and/or

which:

indentures

limit the
have
in relation both to equity and to
of

amount

(a)
they

debt

may

steamship

Flag

lines,

several

went to the Congress
of the United States for help.
Their search for help—aided by
well-worded legislation—was successl'ul and took the form of what
ago,

years

is known

Title XI—an amend-

ment to the Merchant Marine Act

The

1936'.

key points

this

Act, which should be of interest
(since an obvious comparison to
the loan guarantee provisions of

depreciated book value of
portation Act of 1958 is
revenue
equipment; (b) prevent the Transportation Act of 1958 is
them from
incurring any large indicated) are as follows:
3ea.se obligations for the rent of
(i) Up to a total amount of $1
-equipment;' and (c) require them billion, the Maritime Administra-

"aiet

substantial amount
current assets—with the

to maintain
of

net

usually related to, and
increasing with, the volume of
their operations.
Such airline financing has (a)
r—
,
,
amount

„

uriderlined to

financial

the

com-

unity the far greater importance

flow than net in-

of overall cash

come; (b) made us think of lease
rentals as the equivalent of debt
maturities
and has
pointed up
of the

some

weaknesses

leases

financial medium since

ver se as a

leases do not give the lender the

equivalent
control

credit

the

over

of the borrower

agreement

financial

old

and/or

what

obsolete

one

upon

equipment
knowledge, there is
today who can predict

Since, to
no

attention

DC-7

aircraft

will

worth in I960 and there
who

are

many

than the market value

of the scrap

metal in it.

;

course,

of ship, etc., is emissue its guarantee

of the U. S. Government for

first preferred

100%

ship mortgage

•

Now let

Any U.

(2)

citizen building

American Flag

ship in a U. S.
yard is eligible to apply for this
an

insurance.
He is charged a fee
ranging between V-> of 1% and 1%
per annum for it by the Maritime
Administration and does not have

show

that he

could

not

obtain

the credit elsewhere for the

same

at reasonable rates.
(3) There is no limit to the pcduring which the Maritime

purposes

riod

guarantees.
(4)
The

cussion
the

the

Approach

turn to

brief dis-

financial

American

shipping lines.

program

Flag subsidized

In discussing this

segment of the transportation in¬
dustry it might be well to em-

was

issue

may

restrictions

such

imposed

dividends is

not forbid-

(5^
tant

probably the most importeeth

this

law

from

the

viewpoint of using it as a basis
for successful financing at excellent rates were put in by legislation
passed
especially for this
purpose in the summer of 1958.
This legislation covered by Public

for beyond its present cut-off date of
and March 31,196Ir. * •*" - :
the growing feeling in the bank¬
(2) The law at present indicates
ing community that loans against a guarantee of collection only
leases

are

not quite as good, cred-

which requires

direct loans to the ac¬
equip¬

tion

itwise,

tual owner and user of the

(b) To

field

whole

very

4.25%

basis, went out the winc|ow
anc| are
now
selling at a
premium to yield 4.16%.
The
American Flag shinning ir
American Flag shipping industry
with, of course, the substantial
help of the U. S. Government, is
becoming almost as successful a
competitor for money as the raila

road

banker looking at the
of corporate finance,
more reason why the
railroad company has

common

the

sible

„

^ax *ree Reserve Funds
Another facet of the subsidized

ships

be used for the

toward

the

re¬

such

purchase

price
and into

of replacement vessels
the general funds of the company
in the event of working capital
emergencies. The real reason you
may be interested in these things

is that the shipping company may
voluntarily put into these reserve

funds
come

100%

of its net

without paying

any

jntial subsidy, the U. S. Flag in- der the

in-

income

in order to

government which is equal to the
difference between the
cost
of

Commerce

building

ship in

S. ship-

yard and the cost of building the
Bame
ship m-a foreign shipyard,
At the moment, this construction
subsidy approximates 50% of the
cotal

provide the funds to

advanced

for

the
such

Secretary of

guaranteed

payments.
These

provisions

are,

of course,

in sharp contrast to the
payment
provisions of the railroad guaranteed loan
legislation.
In the
latter

case,

the

Secretary of the

the subsidized shipping industry combined. Railroad
far

better

than

bankers whether there is any
merit in what your colleagues in

the transportation industry have
done but I would like to outline
a few thoughts which railroaders
might want to consider in view of
the fact they are directly competing for money with these other

building cost of the Treasury has no sure source of
Pl,
funds with which to make these segments of the transportation inAlthough these steamship lines,
payments since he must wait until dustry.

•,

,,,

:aritive' and^ornnimfJn

Am^lan ?."eh fundsAfre appropriated by
Flaa merchant and nawnwfihS Congress. Also, the Railroad Act
fieei have had to he s^hsmmiil S !las "° provisions expressly recitsubsidised wtheit «thid the ful1 falth alld credit
ment

in'terestina

it is

Sithem line?
are

stHl

verv

owned and

without

anv

def

are

iSte mSt

without

nltciv

nermfttef

recaoture

"onrn

thp nnri

' (a) It would

seem advantageous
to the railroads in most future re-

of mortgage

s "sis r»"»»»is

■„
To raisp tho «tl

sary

for

Sacement
IMdc
t

their

<fc9

kilii™

Vrf tp~

comin

nrocram
the
p ogram, the

American

course,

capital

working

divi¬

already been mentioned.

This could, of course, raise serious

problems with respect to preferred

market

their

and

has

good E. T. C.

relieved

them

the

remedies against

the
proceeding
against the government, these ex¬
penses might be considered.
borrower

internal

own

the

The expenses of the lender

exhaust his

com¬

before

necessity for seeking new equity
capital
for
capital expenditure
programs.
This happy combina¬

<5) Most importantly, no money
this statute and
any funds to pay
the guarantee
must first be authorized by.Con¬

tion of circumstance may not al¬

gress.

ways

be the

is appropriated by

(c) Since, more and more, are
going to have to tell and sell finan¬
story to loaning officers not
completely railroad experts, you
might give some real thought to
the importance of telling this fi¬
nancial story in language more
understandable to him emphasiz¬
ing points he has found impor¬

Administrative News, No. 12 p.
2533, made at the time legislation
was
being sought to correct this
defect in the Ship Mortgage Act;

cial

tant

ample,

other

industries,

For

"where

future

credit

extended

of minimum

net

current assets.

(e) Since the U. S. Government
—to the extent of

least—has
has

$500 million at

recently shown that it

not

completely forgotten the
railroad industry and that it be¬
lieves this industry is as entitled
to direct government
help as are
other segments of the transporta¬
tion world,
it would seem ap¬
propriate for the railroads to work
jtowards achieving such govern¬
ment

support

basis

than

anteed

loan

provisions

guar¬

the

very
we

few of these weaknesses and

have

the

necessary funds to pay
unpaid principal and in¬

terest of

defaulted insured mort¬

will be available without de¬
lay investors in public issues of

gage

bonds secured by a Government
insured ship mortgage do not find
such issues attractive except at

relatively high interest rates."
It

might be well worth while to

the railroads to institute

legisla¬

tive program working towards the

tying

M the loopholes

some

outlined above.

Many
will
undoubtedly
other chances to apply

see

many

financial

media

the

new

railroads'

problem and many will undoubt¬
edly see, more clearly than I can,
possible insurmountable obstacles

trying to apply to the railroads
of the concepts I have listed.
only one works, we non-rail¬
road experts may have contrib¬
uted something towards a solu¬

111

some

tion to rail financial problems and

will

everything * in our
finding the best

towards
out.

power
way

W. H. Newboid's Son & Co.

Opens Haverford Branch
HAVERFORD, Pa.—W. H. New¬
boid's Son & Co., members of the
New York Stock
Exchange and
other

leading exchanges has

nounced

the

removal

Ardmore, Pa. office to

an¬

their

and

new

enlarged quarters at 354 Lancaster

Avenue, Haverford, Pa., effective
January 2, 1959.
George I. MacLeod will be man¬
ager of the office.
W. H. Newboid's
founded

Son &
Co.,
is the only in¬

1844,

vestment

securities

complete

brokerage

firm

with

facilities

the Main Line.

The

workable

on a more

the government

In the absence of certainty

that

accrued

ex¬

emphasis 011 the
got-where gone"
state¬

In this connection, I would

like to quote the following com¬
ments from House Report No. 1953,
1958 U. S. Code, Congressional and

case.

debt

szxs&sgsasxi

(4)

years

dramatize this fact since the
flow

stock.

have not hud to

Mr.
four

new office, in
addition to
MacLeod, will be staffed by
registered representatives, all

residents
ties.

They

Walter

suburban

communi¬

Leslie A. Bryant;
Heed; Donald C. Esty

are:

and R. G. Kellett.

Joins
■

Shaw, Hooker

(Special to The Financial Chronicle)

SAN
rett

FRANCISCO, Calif.—Bar¬
Sumski

has

been

added

already seen how well to the staff of
Shaw, Hooker & j
.' Co., 1
and contained no pro- : cases pay dividends in financial- that act is working).
Montgomery Street, mem¬
Visions
<1) The authority to make guar¬ bers of the Pacifie Coast Stock,'
P™yM*~lW»ntetably the flexibility and even in rate. This
of funds to the Maritime whole
concept seems significant in antees might well be extended Exchange.
^ /0

revenue equipmeui migfll in SOffl€

sources

restriction

Since the lender must

rails, of

many

stats

The

dends has

are not covered by the

For

cause.

to Transportation Act of 1958 seem
work towards the elimination of, to provide.. Our lawyers have
1
,1C United States Government or at least the weakening of, "after picked up some typical areas
£i?eel. pl:lced behind the credit, acquired property clauses". To a where this guarantee provision
.The, American Flag ship oper- non-rail financial expert, it seems might be strengthened from the
?n°rS learn.cd the hard waY about somewhat strange that most rail- viewpoint of insuring ease of fi¬
provisions necessary in gov- roads cannot own their own equip- nancing under it at good rates. I
shall list a few: (the Ship Guar¬
antee Act, as now written, has

financings

commodity
also.

guarantee.

iture

know

maintenance

It might be well to permit
loans for the all important

apparently

and

tions to their

treasurers

investment

such

not

ment
(i. e. overall cash flow)
taxes on the net income thus alwould be appreciated by many of
located. I believe people who have us
since more and more from a
read Mr. Symes' testimony before
lender's point of view we tend to
the
Congressional
committees
j u d g e creditworthiness by the
early this year will hear a bell
margin between a company's total
ringing since an important part
cash
flow and his annual debt
of his testimony dealt with the
maturities plus capital expendi¬
railroads' special problem of findture requirements. From a lender's
ing funds for betterments and one
viewpoint, this is far more impor¬
of his key suggestions was that a
tant than the accounting term net
certain portion of a railroad's inincome or net operating income.
come be exempt from taxes on
Net income, of course, will remain
the condition it be placed in an
of
vital
concern
to
the
equity
Improvement Reserve
and used
holder.
In this connection, it is
for capital purposes.
interesting to note that one of the
In the foregoing manner then
age-old tests of credit "times in¬
have two important segments of
terest earned" is no longer such
the transportation industry — the
a good test to most of us.
airlines and the subsidized ship(d) It seems possible that more
ping
pmg lines—found workable solu-

Second Liberty Bond Act dustry and

ternational shipping lines receive
ft
direct cash subsidy from the

allows

upon any

and in statements
before p u b 1 i c
bodies
related
to
rate
making
might be very helpful to the in¬

bination

debt

ital

only.

zation of this fact in public rela¬

cash

capital and special

can

which

(3) The purpose of the loans
eligible for guarantee is for cap¬

tions programs
arid
arguments

is known

payment

default of the borrower.)

pos¬

are

covered by a guar¬

now

immediately responsible

close to

even

ture of probable interest is what

tirement

antee

dustry's

roads.

proof

railroads

remedies

its

the lender to hold the government

a fair return
their investment. The dramati¬

earning
on

the

own capital expendto the railroads will have as its
financing requirements.
I
jphasize, as probably most of you
have exposed these industries' fi- price some credit restrictions nor¬
mal in most term loan agreements
jknow, that an annual subsidy— Laws 85-469 and 85-520 provides nancial modus
operandi in the
which the steamship lines admit that the
Secretary of Commerce thought and the hope that some and indentures. Even equipment
politically at least, is not the best may issue notes to the Secretary of these
trust certificates might have such
financing concepts may
word in the English language—is of the
Treasury which the Secre- be applicable now or may be restrictions.
Typical ones would
paid purely to neutralize the tre- tary of the Treasury must buy at made
be restrictions on total debt, on
applicable to the railroads
mendous crew wage cost differdividends and on maximum per¬
par for the full amount necessary in solving their own
capital exential between U. S. seamen and to
mitted
annual
debt
maturities
pay in lull any defaulted guar- penditure financing
requirements
the seamen of
virtually any other anteed mortgages.
Additionally, which even over the next three and/or equipment obligations. In
country of the world. In addition the Secretary of the Treasury is
years will probably be as large or addition, there might well be cov¬
to this so-called operating differ- authorized to
issue securities un- larger than those of the airline in- enants requiring the maintenance
.

loans are

and preferred stocks

dramatic

most

that

lending institu¬

exhaust

against the borrowing railroad be¬
fore it can hold the government
to its guarantee.
(Ship mortgage

ment financed.

ob¬

became

certificates

trust

rich and acceptable piece there is no
of
investment paper.
This was equity of a
Shown
by the recent successful to sell farther below book value
public sale
underwritten , by a than the equities of almost any
group of investment bankers of other industry in our free enter¬
$9,000,000 of Grace Line govern¬ prise economy.
To us, the low
ment
guaranteed ship mortgage relationship between the market
bonds. These came to market oh value to the book value of rail¬
a

This cash

year.

den.

Lines'

bonds

reserve funds. Into these funds go
in the form of cash and/or govflying the American Flag. It ernments or other permitted semay also issue such a guarantee
curities all depreciation cash decovering 75% of the cost of the rived from subsidized ships plus
ship during its construction pc- earnings in excess of 10% of the
riod which
is usually
about a company's capital investment.

ment
.

Shipping

legislation
ship

and

force many airlines upon the borrower by the Marito" raise equity capital at whatever' time Administration as a "price"
price is feasible in the public for this guarantee are not parmarker arid this has focused at- "ticuffirly onerous?' from
a
going
ten tion upon the evils of having concern point of view. The mainto sell equity at below book value tenance of minimum working capsince, without exception, airline ital at a figure about equal to one
etocks,
until
recently
at
least, year's total debt service is usually
have been selling at well below required as a covenant but pay!

these

covering up to 87fe% of the cost
0f any ship built in a U. S. yard

probability,

book.

tained,

backed by the full faith and credit shipping industry's financial pic-

Administration

The
debt-equity ratio provi¬
sions in this financing will, in all

function, of

ICC) once it and the DeDepartment have approved

the

type
powered to

predict that it will be worth

little

the

fense

future

lessee; and (c)
the tremendous
difficulty involved in
marketing for U. S. dollar cash

focused

lion (similar in

was

legisla¬

£r^i-'f-

.•■■■

Once proper

have been able to

and
the

tion ;;passed
this
summer
was
sought by tlje subsidized shipping

Financial Problems
jnent and

that

view of the shrinking market

equipment

Number 5800

189

Volume

Continued from page

The Commercial and Financial Chronicle

their

tional

dustrial Average, fewer and fewer

making

been

have

running

Time

1959.

1954

out on the
steady rises

usually da not last over one year
without a serious setback.
extreme
weakness mfthe bond

drag

1930.

tKa

States.

and

e/fer lasted

history

has
in the fa

f
i

The

been

raflroad

vorable

'Y,?f.

then

the

not

hone

income

selling

now

are

as-fa-

are

atoi-s

are

which

Drosnects
suecu

why

40
in

into
the

the

The

takes

the

which

These

When

the problems of today

The

"Mr.

Tight

man

Pbila. Sees, flss'n
Receives Slate
PHILADELPHIA, Pa.—Spencer

that tried to

Re¬
a

when
making it extremely

He will be forced to change
present tight money policy and
over

...

com-

Associa¬

ties

us.

few

to the opposite ex¬
result, good bonds to-

day are selling at around their lowest level in the past 25 years. We
expect a great boom in bonds and

UNDONE

there

the

man's life.

How

us.

is not raised.

achieve the satisfaction that

Kerr-Addison Gold Mines is the

gold

producer in Canada
big attraction here is their
which are getting

and the

huge

reserves

considerably richer at depth.
.:

which

sells

around

for

has

validity-we

from,

who

man

well

does
man

who

fellow

were:

the-ll

year
Albert

Wenzel

who

and

duPont &
Wrigni,

comes

Townsend,

Crouter & Bodine,. treasurer,

and

in this business

Philadelphia
Securities Co., Inc., secretary.
Mr., Mclllvaine has been nomi¬

of it. A

nated for the Board of Governors

the

success

Warren V. Musser of

greatest po¬

for

effort not only

10%

of DeHaven

Webb

could do it than the

himself

hurt

Co.,

president;

vice

William

creativity.
I
security sales¬
his modest job as

only used 10%

with

man

will

Francis '.\t

had

the

for

coming

never

can

.nominat¬

purposeful

would- rather be

tential for

Giant Yellowknife Gold Mines
an excellent low-priced specu-

lation

we||

feel that what we}

we can

;

offi¬

Other
cers

Unless

Co.,

expiring.

live is up to

that will double their
earnings even if the price of gold

whose term is

the first to know when

are

knows™™*18' ^ tfen'

world

Sachs

can

one

years

largest

and

we have lived right and when

The great added attraction
in

the

live for

that they- are*-bringing in large

mines

contacts

all

are
are

tion

An excellent investment at this
^\mng' which

uranium

the

poorer for it.
Self- v
discipline is the bed-rock founda- \

Suggests Gold Shares

easy.

treme. As a

should have

Wright, III, of Wright, Wood &

Co., has been nominated for presi¬
dent of the Philadelphia ^Securi¬

gold.

pleted,

^d ^Sy

made

one

Mclllvaine

blunder in tightening money
he should be

the research

heavy
prove
to

wrong

•

-Goldman,

Blunder"«

Federal

has

end,

the

was

forgets."

of the
more

once

bitter

that

When
'

and;.,
;be
repeating ...
postwar recon-

Money

the

to
is

one

took

looks

fact

right

collapsing

now

may

great

Martin

serve

Washingpublic relations de-

main regrets:

was

the dollar based on $35 an ounce

given

JrfRie ^ast^

Charges

"Rosy";Economy

himself, for

remembered,

No man can successfully build

chance of the

any

^€ar i9

fade away>

he lives

tion, -succeed¬
ing
Leightori

the

are

has

*i.

should,,
withdrawals
of
gold
have made, the letter we should 4
sophisticates that doubt exists on have written, the short-cut we r;

new

present state of economy is

and

impetus

must
the

struction boomis '-oyer ,and<

far from being as rosy as
-ton

but

time the slump resumes

1930s

swing
Not So

they

recovery

history of the late 1920s

early;
again.

false

present

market

stock

crash

that

all its publicity has con- enduring. He must be honest with

stantly denied

renewed business slump. At

same

further

amount owed in the stock market

after-the

learned

dollar devaluation hedge,

into the ment

in 1959 the downside will be

public ovves'tod^, between brok¬
er's loans and bank loans, nearly
$5 billion on securities purchased
on
margin.
This is the highest
right,

can take yesterday's lessons
appl

thtf

^
*

n0V>
about to

ourselves

present continuing decline

the

turn

The

•

flop of the 1959 automobiles will

that sophisticated investors
,do not believe'that the railroad
.future prospects are too good.: ."
The present wild boom in lowpriced stocks is typical of the
.final stages of a bull market and
how they have dipped down to
•Graham Paige; Avco, Hupp, Ser>el and Electrical Musical Industries
being the leaders in the
stock market.> The leadership in
"the market has deteriorated to the

'1929.

will tend to wants

£,?uld ?er~ unknown author of the-following

rise in the price of gold or the fool himself ever succeeded. The
exports, capital goods, and the devaluation of the dollar. This job left undone stays to plague us;

The

:means

-since

can

depression.

bottom of the - barrel.

in buying over-

not

; And with the permission- of

shut out 0Ur "VgZ°dS be will now find the gold stocks an investment clientele of loyal
Sve,"
S°:
193® the sh?ip seUlnS ft .low prices. This is be- and satisfied accounts without cer?,eclln?„ 7 v,T ,1expi?,rts
$e cause the United States Govern- tain qualities of character that are

points under par showing more
strength? : Relative : 1 a c k
of
strength in railroad income bonds

very

dollar is

next year.- mine; stocks with large reserves,
they when the new Euro-% Fortunately, for the investor who

l^ j? thing that helped pull
bonds
to

investor has who
and

a
an
against the coming devaluation of
the

teaches

able^nventions T^Smto

keep score

Pea" common market

nv
by

m
backed

The only hedge

life

^as'one' o/mant most^alS" Year'^ ^

dar

to devalue the

time in 1960.

some

that

Y1?^

?u-r i

This in turn will

force

dollar

lesson

one

us seri<>usly enough to apply it in

economy

exports will pick

our

railroad

the

not

take

nnT? mL! hS

most

Thoughts

Most of us know what we should anger may appear, no man cart afof us do it. If we could ford it.

"TT«i^

fifty-nine

We do not believe valued stocks but instead in buy- will progress in every facet of his
rOSe f° °n
statements that ing some good high-yielding gold life. Such a man grows as long as

very

strength in railroad income bonds
•If

the

Some Year-End

"a run oTthe dollar'and will
likely

thing
further drag

this is adding a

How

strength
have

stocks

•

The ra^idisdecline serious
thi.s
exports
a very

market.

bond

our

collansina
collapsing

a
a

downward.

By JOHN DUTTON
t

th1 PS* d0> but few
then

Nineteen

hJfifnpii

booming capital goods pro-

and

2KL

Salesma

Securities

de¬

to protect themselves against the
coming devaluation, will try to get

^The out of m capital goods will help
the recession^In Wa
slump

market has always meant

will

run

cated American investors in order

capital

1949

by industry helped pull us market decline

gram

trouble
later for the stock market. Weak
bond
bond market* usuallv urecede a
markets usually precede a
stock market crasn by about six
months or more. No bull market

did

that

the

dollar, especially
when our economy starts to turn
down again. Also, many sophistivelop

spending continues down¬
ward, it will drag the whole econ¬
omy with it in a new slump just

This is typical of a broad
distribution top of a bull market.
stock market as most

14%

believe

goods

new

highs.

Predicts Business Decline

Hedge in Ovez-Valued Shaies
And a Not So Rosy Economy

long

claims

long-term

billion.

stocks

(25)

but, in

term expiring in 1960.

following

busi-

have

The

nominated

been

This is a new negg where you are dealing with for the ^oard of Governors for
mine with extremely large, rich people's lifetime savings, you can terms expiring in 1961: Harry L.
flop than-from low yielding stocks to high ore ^reserves in the tar north of hurt them too.
Heffelfinger of Samuel K. PhilCanada. Costs are high so a great
lips & Co.; Mr. Musser; Thomas P.
the
bad
selling *1958 vlirie that yielding bonds.:
leverage exists in case of a gold
Time is the most precious asset Stovell of Provident Tradesmena
-dragged the economy down-last:
The great withdrawals of gold
price rise.
every living being either uses or
Bank & Trust Co., and Mr. Wen-year, Retail sales of 1959 automofrom'the United States, in our
high

apartments out of Madison Avenue
would like us to think. First of all,
the 1959

-biles

the month

for

of November

;
•

:
-

-ntTA

...

•"—

total of 500,000. In 1954 the
average monthly payment in buy-

to
r

ing
a

to around $55
the average

Today

monthly 1 payment on
the new
high-priced monsters comes to $80
a
month. The price of the cars

sharply, the insurlance rates have doubled and carhave

come up

L: «-L

—..^"L

—•

while in

position. The price of gold at $35
an ounce was set in 1934.
Since
that time, the actual purchasing

Germany they get
oniy 55 eents an hour. Our costs
0f production, due to ever increasjng labor demands, have put us in
a very bad worldwide competitive

hour

a new car came

month.

—

in the United States gets $2.05 an

stocks

opinion, represent our present inability to compete with our high
labor costs, in a highly competftive world market. Industrial labor

last year's bad
t figures.
Inventories in November
-took a sharp jump of 130,000 cars
below

14%

jwere

preferred

grade

and, yields .5%.

1959. This is a good time to switch

cars are a worse

v»

11-

1 •

Campbell Red Lake Mines is a

growing rich gold mine
discovering exceptionally

rapidly
that

ri,c!1

one

rpppntiv

hn«
has

HiviHpnH
dividend

in-

hppn

recently

The

the richest mines in Canada.

been

in¬

creased.

The annual meeting and dinner
of the Association will be held on

into years. To
is to hold the

time

your

when to

there

who
are

want

^on

specu-

imp0rtant to living well
to concentrate

to be able

intensely

creative activity.

legitimate

many

Warwick
Hotel,,
Philadelphia^
Members will vote on various
amendments to the Association's
constitution, including £ proposal
to increase the active membership
to 300 from 275.
>

rest, to refresh your mind

body with energizing recrea-

and

those

For

waste

zel.

the minutes tick into hours

and the days turn

deeper levels, -gift 0f life in contempt. To know Thursday, January 15,1959, at the

ore,

This could turn out to be

late

loses

gold stocks.that have large

diSC0Veries about the human body

penny■nr»A/4iiAnt»n nvi/1 rf/\ would 1 begold prospects +a /I a1 <r%

The following have been elected
to membership in the Association:

Medical science is makinc ereat

These

d the relationship between phys-

penny

but

reserves

are

inactive.

Samuel M. Kennedy of MoTohilll
YarnalJ,
Pa •
lAr

T> 4 aT A1

rying charges
With the

Co.;

living the
? longer afford

The

•

also

economy.
'

fused

Sees Gold Prevalued to $70

next
>

drag on the

The

$70 an ounce. The shrewd finan-

America^ public is so

cial

over-loaded with, consumer debt
.and now, with the cost of Jiving

interests ■

Europe

are

their gold out of the United States

gold

increasing, he can no longer in- at $35 art ounce as quickly and
) grease his debt burden and, there- unobtrusively as possible with the

•

more.

baek to

prosperity. Phila-

delphia is qOlisidered a key repreJ
area
in -- the
United

irsemtative

-^States.'As
=-,-:goes

the

Philadelphia

economy.

goes,

The latest sur-

Philadelphia

this

area

shows

will

cut

capital goods spending by

States

dollar and

Africa

are

President
.

more or

*!? ' d°

that fashioned
all

things

ton

master pat¬

spiration

and

lion against this gold reserve plus

Co.; and Edgar J.
Co.

security and doubt come to them;

Joins

his doubts, but
a

DENVER, Colo.

such men have had

Barkdoll' has

well-spring of faith upon which

with

Our, emotions

are

;

the

was

Chuonicle)

—■

become

Savings

Ronald L.

Dempsey-Tegeler

Midland

theyrelied that made them strong.
•

Dempsey-Tegeler

(Special to The financial

has been without his failures and
.

Loftus Of W,

E. Hutton &

No man who has lived a good life
u.

C. Bendere, Jr? ofj
Dillon, Union Securities

Edward

Eastman

existence, can
of in¬
courage when in¬
in

Peabody &

Moyer of Kidder,

Co.;

this universe

affiliate
& Co.,

Building.^

formerly with Walter* & Co.

driving

less and would continue
.evert in a business

and

the

1<t

throttle

with which

our

and

common

sense

should

Following the crowd has never
off in either investing or
forecasting business; The present
paid

— Pat
affiliated
Securities

COLUMBUS, Ohio
has

Denardo
reason

1958

withdrew the largest
amount of gold ever taken out of
the United States in one year. Our

addi-

Smith, Bar-

Russell C. Shuler of

producing uranium mines, plus
i_
With Commonwealth bees.
baking companies, are all pres-- force behind us, but' our experi
(Special to The financial chronicle)
ence and memory
are the switch
ently on the bargain counter
- - ■"
^
A~1

foreigners

their

that firms
back

United

tern

the

gold reserve is-now dovin to .only
billion.
Foreigners
around 20V2
have short-term claims of $14 bil-

:J vOy of the Federal Reserve Bank
in

Confidence is sinking fast in

South

The natural gas stocks, the good

Geduld and

Free State.

We in the United States for

is in a -a decade have squandered our resigns of sources on a world-wide'basis, and
recovery despite all the optimistic
those who received our charity
statements
from
our
Commerce are starting to desert our financial
ship bv withdrawing gold.
Department,-who think they can

Capital goods spending
continued shimp with~no'

talk

mines

Hrand. These are both high grade
new Pr°ducers in the. .Orange

fore, the basis for art increase in;- hope of later selling it back to
".demand
ifor' consumer
durables "uncle sucker'" at $70 an ounce, or
.

gold stocks
the bargain counter pay-

FreeState

African

j®« ^S^d1 ^stesf growth

.does not exist;''*

now

realise this and are trying to get

have faith in the great

call upon their own source

South

_j.;

geoVis'lhan""ySu"were' a"t'ither The First Boston CorporaUon; B.
fimes. There is much we have to Palmer Woodcock of Woodcock,
,
bou{ ourselves. Those who
Hess Moyer & Co In^; F Stanand

undeveloped gold

Canada.

the price of gold* raised to at least

■

that the

dated Mosher which has the larg-

Consumer credit has re- just a matter of time before the
increase like it. didv dollar is formally devalued and

sharply in the early stages of the
J 1949 and 1954 recovery. Could it
be

Giant Yellowknife, H

Mines which is next to
Campbell Red Lake and Consoli-

We believe, therefore, that it is

■

;

Yel'awknife

Young

An Ounce

credit is

consumer

proving to be

which

Akaiteho

over-priced auto-

•

lag

„

over-grown and

) mobiles.

Marshall

Hornblower & Weeks;
Pearson of

with

become

Commonwealth

guide-"us -in our decisions,..Jthe- Corporation, 30 East Town Stree

spoken word, and the deeds we
perform. Anger is a normal reac-

nearly 100% bullish consensus of
our
leading
economic experts
shoUid
be
in
itself a warning

tion

signal.

eous apger.

Ariitfifiv'e"man' and

sa^ ^ei£ is

thev

Guy M. Todd
Guy M;

Todd, limited partner

such a thing as right- in Dominick & Dominick,
No matter how right away December 17tn.

passed

(26 >

The Commercial and Financial Chronicle

Thursday, January 1, 1959

With

time.

huge

volume of

short-term credit injected into

the
place, it is not surprising

market

cantly affected. Had expectations
less

been

the

curate,
and

extreme

changes

that
money
market
rates con¬
tinued. to sag even after business

would have been

activity had turned the corner.

but

The

Reviewing 1958 and Looking Ahead to 1959
The nation's railroads in 1958 had

of their poorest earnings years
since before World War II. Gross
one

for

revenues

the

The

new

whs

diesels

the

and

freight cars,
profitable West

and Southwest.
In 1958, the

esti¬

carriers did receive
mated at around $9.6 billion, a some relief from Congress through
drop of some $900 million under the Transportation Act of 1958.
those of 1957.
Lifting of the 3% Federal excise
The 1958 net railway operating tax on freight shipments was of
income, according to estimates of some help and the means of ob¬
the Association of American Rail¬ taining permission to abandon un¬
roads, was about $750,000,000, a profitable passenger service was
year

are

decrease

about

19%

the

from

made easier and faster.

The railroads are expected to
$922,000,000 reported in 1957. Net
income, after taxes and charges, make renewed and strenuous ef¬
is placed at $590,000,000. a decline forts to obtain additional remedial
ol some 20% under the 1957 figure. legislation.
Daniel
P.
Loomis,
The hardest hit roads were those

in the Eastern section of the

try and in New England.
the

Western

and

coun¬

Some of

Southwestern

carriers actually showed some im¬

provement over 1957 or just about
matched the preceding year's re¬
sults.

Recently most roads have been

still

fairly high levels.

With

carloadings down for the
about 15%, and passenger
traffic off 10%, the lower 1958 net
year

income reduced the rate of return
on

net investment to 2.7% as com¬

pared with the postwar

average

•

Capital

tax

come

for

spent

treatment
new

money

railroad plant, fa¬

cilities and train equipment.
(5)

discrimination

Remove

against public carriers and travel¬
ers
using these carriers through
repeal of the Federal excise tax of
on

tickets.

passenger

Strenuous opposition to the fore¬
in most
sharply, except in going proposals is expected from
p. few instances. Many of the roads
other common carriers, although
attempted to keep equipment in they probably will go along with
good repair, but even this main¬ the rails in their efforts to obtain
cases

expenditures
cut

were

tenance

reduced.

was

equipment

new

Continued

Most of the

purchases,

from first

both

repeal of the 10%

passenger

ex¬

cise tax.

will

nonetheless

with

some

con¬

troublesome

Credit,
loans

the

The business recession

the

our

one

modern

Recovery,
broad

1957-

years,
of the shortest

economic

history.

has

moreover,

and

vigorous.

and, especially, loans

following

on se¬

aggressively
credit policy. From Novem¬

was

sharpest in 20

also

was

been

Although

ber

1957

through June

1958, .the

Federal Reserve released

over

$3.6

billion of

reserves to the banking
through open market
operations and reductions in re¬

requirements.

serve

been

than neutral

recovery,

far

the rebound

in interest rates after
midyear was
even more

rapid than the previous
decline, and this may have, some
bearing upon the outlook.
.

Recession, and

Ease

activity reached its
low point in April and turned
up
sharply thereafter, but credit con¬

persistent outflow of gold which
began in February, and another
$750 million was used to reduce

demands
were

Reserve

for

were

two-

short-term

slack and the Federal

was

continuing its policy

of credit ease.

The bulk of the decline in bank
loans was in loans to

business,

which dropped off
considerably in
the
first
few
months
of
1958.
Particular weakness was evident
in loans to metal,

chemical,

petroleum, coal,
utility,- railroad
and

sales finance

companies, but most

other categories of business loans
also declined. This helped

impart

easier

vironment.

tone
even

the

credit

en¬

though real estate

con¬

suggests that alter due weight has
been given to the imponderables

Reserve

policy in fact
turned less easy after the middle
of .1958. Reflecting the sharp rise
in money market rates, the dis¬
count rate

public sentiment in appraising
outlook, we may continue to

the

look to basic economic factors
the

determinants

key

trends

and

market

credit

prospects.

raised in two steps

was

the

generally expected
of 5Vz to 6

range

million in 1959,

4l/2

million

this would
record

1959 may

crease

1958,

for

far below

million

7.2

while

compared with the

estimated
still

1955.

the

Thus,

show a large in¬
credit, the in¬
fall
considerably

consumer

and the bank-held

Reserve.

fore
was
unlikely to be eased
further, and by a resurgence of
inflationary psychology.

credit

short

from

were

credit

into

ease

neutral

position.

should

crease

the

$5.4 billion of 1955,
portion should

advance by a smaller amount than
the $2.3 billion rise registered in

that year.
Prices
The course of

prices is a further
important factor in the credit out¬
look.

Indeed, since the gross
working capital of corporate busi¬
ness
alone is currently estimated
at more than $236 billion, a 1%
advance in prices and costs may
add close to $2^2 billion to such
requirements.

Nor

activity

have

demands

for

short-

Bank

covery.

advanced

robust re¬
to
business

loans
the

second

half

mands for short-term credit. How¬

1958, in contrast to the decline in

the extent to which this will
apply to the year ahead cannot be

the comparable

measured

period of 1957, but
in large part

this

has

smaller decrease

been

due

in loans

sales finance

companies. It is only
companies and so-called

for food

"miscellaneous"

business

that loan demands

ers

borrow¬

have been

notably stronger than in the
responding period of 1957.

cor¬

Money market rates and bond
yields, however, have outdistanced
the

relatively moderate changes in
credit policy and credit require¬
ments. A

easing. The rapid ad¬

interest rates took place

with

price trends, liquidity,
policy and alternative ave¬

credit

financing—are too numer¬
too complex for quanti¬
tative analysis and forecast/Some
general notions, however, may be
gleaned by comparing the present

nues

situation with conditions that pre¬
vailed four years ago, when the
economy

also emerging from

was

recession.
Pattern

;'c:

bear

striking

parable

with

eral Reserve and the Treasury. At
the end of 1958, most rates and

followed

yields

that

were

the

but.

year.

high

1957.

Expectations

Reality

vs.

The record of 1958 supports two

pertinent
that

observations.

market

powerful effect
of

interest

The

sentiment
In

had

vigor

and

efficacy of the

Reserve's

easy

credit

policy in this period is strikingly
illustrated by the phenomenal ex¬
pansion in total bank loans and

interest
some

credit

first

has

November

rates

time to

1958,

would

come.

newed

tight

inflation
credit.

the

four

months from the

be¬

bank

borrowings

had

been

re¬

duced to nominal levels—through
June, bank loans and investments
in the aggregate increased by over

$11
the

billion, or about 7%. This is
largest and fastest rise in bank

credit

ever

registered

peace¬

low
for

In the

summer

unexpected vigor, the pre¬
vailing expectation was for re¬

made available to the
economy
the commercial

ginning of March—when member

very

prevail

the economy resurged

noted,

banking

Federal

with

investments—the most meaningful
measure of the amount of credit

by
system.

the

market
accentuated by

and

return

both

phases, as
fluctuations were
the

consequences

speculation in treasury obliga¬

tions.

year

second

observation

been

build-up
1955

a troubled labor scene
provide added incentive to
stock up in the months to
come,
giving a concomitant boost to the
borrowing needs of business. Total

may

construction activity is also rising,
as it did in the
previous recovery

period.
In

other

outlook

respects,

years

this

plant

of credit

talk

and

capacity,

the

founda¬

ensuing sharp rise in

equipment
an

needs

outlays
important source

the

investment

hold. Today,

raw

ma¬

are

utilized

less

designed

but

intensively.

modernize

improve efficiency

some

for

lay

abundant

industrial

was

scarcities

plentiful, while indus¬
capacity is not only much

trial

and

materials

helped

took

terials

Then, there

ago.

raw

and

boom

however, the

today differs from that of

considerable

being
Outlays
facilities

show

may

strength in 1959, but there is

evidence

spread

The

now,

Today, too, some ac¬
anticipated for the
ahead,
especially
as
the

cumulation

which became

The

earlier

renewed

couraged the belief that

use.

the

gained momentum

tion lor the

Then,

liquidated
sizable scale; this phase was

which

the behavior

upon

rates.

inventories

Reserve: moreover, the severity of
the drop in business activity en¬

reserves

prospect of

bond yield« ^ad reached the

marks, of

period.

and

banks, and the banking system
rapidly
a n d
energetically
put

resemblance

progressed.

substantially above
midyear lows; money rates
still well below their peaks

yet

desire

additions

of any wide¬
increase outlays

capacity.

Thus,

important. Although the
amplitude of the swing in interest

while

rates

point in the future, it is doubtful

less

greatly enhanced in
by exaggerated
expectations regarding the future,
neither the timing nor the direc¬
both

tion

was

directions

movements

rates appear to have been

renewal

the

business

investment boom is likely at some
that this will
to affect

develop

credit needs

soon enough

importantly

1959.

slackens, however, the
productivity must be ex¬
pected to slow clown, while capac¬
ity should gradually become more

recovery

fully utilized.
In

addition, there is

every pros¬

pect of further pressure from the
side of the

Large

wage-cost-price spiral.

and

costly wage demands
ahead, and while it is not
possible to forecast the extent to
loom

which

they

will

met

the

extent to which

prices will be in¬
creased as a result, it seems rea¬
sonable to expect that the trend
of costs and prices—and hence of
financing requirements from this
source—will

upward.

the

Liquidity
Yet another

ation

has

that

important differnce is

prospective

demand

for

pertinent consider¬
business

the

entered

enterprise

current

recovery

1954

less

far

liquid position than
or, for that matter, than
at the start of any previous busi¬
ness
upturn in recent history. In
middle

the

1954, the liquidity
corporations
—that is, the ratio of cash and
government securities to current
ratio

nonfinancial

liabilities—was about 52%.

How¬

liquidty continued on the
generally declining trend it had
been following in the postwar era
ever,

reached a low of 39.0%
in
September 1957. Only slight im¬
provement was achieved during
the recession; the ratio in Septem¬

and

ber 1958

was

42.5%. Some further

has

increase

apparently
taken
place in recent months, but cor¬
porate liquidity is still well below
the average of recent years.
Assuredly,
standard

there

fixed

corporate

liquidity
maintained; liquid¬
conceivably decline to

which must be

ity

could

lows without unsettlement to

new

business

credit conditions.

Also,
are
increasing with
profits and rising noncash
expenses. Nevertheless, it is dif¬
cash

flows

better

ficult to avoid the conclusion that

business in

general is less plenti¬

fully provided with the
for

financing

crease

bles,

another

resources

large

in¬

in inventories and receiva¬

the

usual

panding

corollaries

business.

economic

therefore,

trend

ex¬

Should

the

continue

would

upward,
that

appear

business enterprise sooner or later
will
have
to
place considerable
reliance

upon

including

Another

interest

signifi¬

speedy advance in output that is
characteristic of the first phase of

early 1955. The rise in in¬
dustrial production in recent
months has been generally com¬
recovery

their

unused industrial capacity. As the

that of

shortages

additional

Activity

In many ways, the current eco¬
nomic
environment does
indeed

easing

Business

similar experience lies ahead is

currently a subject of debate, so
far, prices have been restrained by
the swift improvement in produc¬
tivity and the presence of large

and

ous

despite support purchases in June
and July of nearly $2 billion of

were

busi-1 rise

and

ness

billion

as¬

The variables that affect

surance.

important

support the acquisition
Treasury securities and other
investments by the commercial

degree of

any

credit requirements—such

contributing factor

un¬
doubtedly was the liquidation of
speculative purchases of govern¬
ment securities, many
of which

ever,

began to reflect the wide¬
spread expectation of an aggressive

Sl^jj

lor

prospect

Economic expansion is
almost
always associated with rising de¬

ket

almost

are

1959.

term credit shown any

about 8%. Whether

and

inal

bank.borrowings to nom¬
levels. However, this still left

Federal

reasons

rates

bile sales. While sales of new pas¬
senger cars are

the Federal

member

midyear.

The

interest

credit, which is closely

consumer

linked to the outlook for automo¬

conditions,
Treasury debt
management, and the policies of

four

these additional

credit

tinued to respond to general busi¬

1957, spurred by the first reduc¬
tion in the discount rate, the mar¬

tinued easy and most
money rates
drifted
downward until around

direction

ness'

reserves to

Credit

Business

foldr

ably not have differed very much.
Despite the unusually strong ef¬
fects of psychological factors, the

This conclusion is reassuring; it

Assuredly,

policy
was
aggressively nearly $1*2 billion of the reserves
during the recession and has so provided went to offset the

during the

moderate,

there¬

Federal

that

system

credit
easy

recovering, by

was

realization

od of credit

curities increased.

easy
was

business

that

vance

In addition, the Federal Reserve

The Lessons of 1958

but it

was

bond

presumably

basic trends would prob¬

the

government securities by the Fed¬

problems in the year ahead.

1958

trend

1958, when prospects
seemed to favor a protracted peri¬

interest Rates and Business

previous de¬

the

had been acquired on very thin
margins in late 1957 and the first

page

The Outlook (or
iever.

the
in

sparked by the growing evidence

half

fronted

stronger

even

was

than
shift

The

rates,

the

ac¬

—

10%

8.7%,

cline.

interest

markets

money

Business Prospects and
1% to 2'0% and reserves
Credit Needs
provided much less freely
President of the Association of than in the early part of the year.
Unlike a year ago, the economic
American Railroads, recently rec¬ Despite the recoil of business from trend
today is clearly pointing
ommended
five
major policy the trough of the recession, how¬ upward. The n>ajor factors that
Since
midsummer,
the
price
changes in the Federal Govern¬ ever, credit policy has not yet re¬ contributed to the steepness of the index of industrial products has
traced its course in any substantial
ment's position with respect to the
recession
liquidation of inven¬ been inching upward—reminiscent
railroads. These changes include: way. At no time through the end tories, cutbacks in business invest¬ of its
behavior in the early stages
of
1958
could
Federal
Reserve ment
outlays, the drop in auto-' of the 1954-55 business recovery.
(1) Grant railroads the same
policy be described as tight or re¬ mobile sales and the downtrend in About
opportunity to provide transporta¬
mid-1955,
however,
the
tion services by truck, airplane strictive; at most, one may say home building-—-have spent their price rise began to quicken, and
that
the
Federal
Reserve
has force and
and barges on the same terms as
appear to be reversing by the end of 1956, this index had
backed
away
from, aggressive themselves. New peaks of output
anyone else.
increased

Showing
some
improvement
in'
Earnings. This has been due to a
pickup in traffic, coupled with
(2) Apply adequate user charges
better control of expenses. With on commercial carriers
using taxexpenditures reduced, a further built and tax-free
highways,
increase in carloadings should be
waterways, airports and airways.
reflected in improved income and
(3) Lighten the load of burden¬
comparisons in the early months some taxes on railroad
properties.
of 1959 should show marked gains
(4) Accord more realistic in¬
Over 1958 when
expenses were

it came,

faster

and

rebound

when

for

Recovery

and

for

the

needs.

the

the credit markets,
commercial banks,

financing to

These

needs

cover

would

these

en-

Jfolume 189

Number 5808

The Commercial and Financial Chronicle

hanced

ered only slightly to about 15.0%

and

if, as seems possible, costs
prices also resume their up-

ward

the

course.

case

ratios,

Financing the Treasury
Adding
mands
1959

short-term

for

the

are

prospective

the

financing
These

likely

to be far more troublesome under

current conditions of a substantial

budget deficit than in the calendar years

budget

1955 and 1956, when the
running a surplus,

was

dimensions

The

the

problem

depend upon the size of Treasury
receipts and expenditures, which
some

reasonable

that

guess

1959. In addition,
billion of marketable

entail

will

cash

some

lesson of the

namely, that
again
faces

booming

1954-57

when the

goods

cycle,

economy

combination

activity

durable

and

consumer

broad

ad-

in business investment, as it
surely will one day, demands for

vance

-Here again, the ratio by itself is short-term credit will rise rapidnot

attri-

very

meaningful: it has been

and

materially, unless

mean-

rising for many years and is still while; in some way not clearly
There is little disagreement that significantly
lower than it .was discernible today, we shall have
in an inflationary environment, prior to
the Great Depression, succeeded in halting the persistent
the Treasury should do as much However, here again there is sup- rise in wages, costs and prices,
financing as possible outside the port for the thesis that lending
banking system and place mini- policy is likely to be less aggresWith Hathaway Inv.
mum
reliance
upon
short-term sive than it was four years ago.
tion.

obligations. In recent months, the
Treasury has succeeded in lodging
a

respectable amount of

("Special to The Financial Chronicle)

Liquidity of Banks

new secu-

Additional

rities outside the banking system,
albeit at short term. Business cor-

evident

bolster

this

general conclusion is
vided
by
the
relatively

pro-

low

DENVER, Colo.—Francis S. Beal
has been added to the staff of

Hathaway Investment Corporation, 1845 Sherman Street,

porations, which in recent months liquidity of the commercial banks

£?VG ^r0^d

through the sharp

-eir

•

rise

liqui^.1.ty

profits,

have been important buyers. Also,
the rise in interest rates has

as a group.

The banking system

added

$9 billion

some

its

RuccaII Inv

Cry

ArlrU

KUSSeil lnV. CO. Adds

in-

Some further increase in hon-

bank holdings of Treasury obligations in 1959 is a reasonable ex¬

pectation. Tf the improvement in
profits persists, business corporations will probably continue' to

Government

obligaliquidity has

tions in 1958, and its

and

deposits, are still lower than
postwar year prior to 1955.

Graham &

King Adds

(Special to TnE Financial Chronicle)

Implications and Conclusions

BOSTON,
* w.,.

Mass.— Theodore

This brief review of salient fac- christo has been added to the
Governments,'^al- tors and prospects in the credit staff of Graham & King, Inc., 16
though not at the rate of recent markets leads to some conclu- court; Street,
months; the margin between tax sions that are not altogether comv
accruals and payments may be forting, and raises some vexing
With Hutchins, Mixter
expected to narrow while outlays questions.
add

their

for inventories and for plant and

be advancing,' at
least moderately. It may be possible

(Special to The financial Chronicle)

(1) If, as appears probable, the
cyclical rise in business activity
carries through 1959, the demand

for bank loans will assuredly ad-

equipment

may

BOSTON, Mass.

—

Howard A.

Smith is associated with Hutchins,
Mixter & Parkinson, 10
Post
modest amount of Treasury bonds vance.
At present, the prospects Office Square, members of the
among savings institutions as a for automobile sales and business New
York
and Boston Stock,
group, and if the interest rates are capital expenditures suggest that Exchanges,
also

find

market for

attractive,
other investors,
too,
may
increase
their
portfolios,

Nevertheless, it
rely

that the

appears

Treasury will find it

necessary

the commercial

upon

to absorb

banks

prospect

substantial part of the
increase in its debt in 1959. This

the
rise
may 'be
considerably
smaller than in the record year
1955 — perhaps, as a stab in the
dark, one may guess a figure
about half as large as the $12 billion
expansion
in
commercial
bank loans that took place in 1955.

Joins

(Special to The Financial Chronicle)

Peter J.

—

iun

Industry

backlogs,

Meanwhile, "The Iron Age" stated the coming

big

year

will be a

for the steel industry if it can get by without a strike.
The upturn in the economy has brightened the market outlook
for the mills.
Market analysts are predicting the industry will
one

turn out

much

be the third best year

115,000,000 ingot tons ill 1959. This would
in history. It compares with 1958 output of

85,000,000 tons, which

twelfth

thirteenth best.
ointment, according to "The
possibility of a strike will make the first
half of 1959 look better than it really is due to hedge buying prior
to expiration of labor pacts on July 1. Production may hit nearcapacity levels during this period, probably late in the second
quarter. A prolonged strike would wipe out all the gains of the' :
first half, it warned.
'
•
-ivv::-.';
vJ\'-:
: i
Iron

labor

Age."

was
the fly

The

the

mere

Stressing overtime in its operations, the auto industry sched¬
its Christmas week production 30.9% above the same holi¬
day week last year, "Ward's Automotive Reports," noted 011 Friday

uled

of the past week.

;

Reporting a decline in car and truck output to 120,953 ve¬
hicles from 159,369 two weeks ago, it noted that all manufactures
shoved their factory output above the same week last year as a
prelude to an increased manufacturing tempo in 1959.
Highlighting last week's operations was the return to assem¬
bly by Chrysler Corp. following an 18-day strike at Dodge Main
in Detroit which resulted in a 35,000-unit production loss for the
company.
On the truck front International Harvester remains
strike-bound.
The statistical service observed that the past week's Thurs¬
day holiday was followed by extensive overtime manufacturing
Friday and Saturday, resulting in production of the industry's
5,000,000th United States car or truck of the year.
It added that the post-introductory period demand for 1959
continued to increase in the Dec. 11-20

period, bright¬
500,000-unit sales volume this month.
Plans are, "Ward's" declared, to enter calendar year 1959
with United States passenger car production geared near the
550,000-unit level, equivalent to a better than 6,000,000-unit
annual rate that promises substantial factory employment as the
cars

ening hopes for

year opens.

•

November volume of building permits was
ably from the prior month, but a noticeable rise
month

1957

down
over

consider¬

the similar

occurred, Dun & Bradstreet, Inc., reports. The total
including New York was $485,756,268, or a gain of
of November 1957, but 23.3% below

for 217 cities

27.6%
the

prior month's total of $632,860,417.

below

the $380,817,963

over

the record

1956.

November

level

The current level was.0.8%

$489,401,866 that occurred

Building

values in the 217 cities for - the first 11
months of this year came to $6,440,553,713, a record for the cumu¬
lative period. The total was 14.7% higher than the $5,613,182,244
of the comparable 1957 period and up 10.8% over the $5,810,528,993

Steel

permit

1956, the previous record.

Output Set to Rebound to 75.8% of Ingot Capacity
in Post-Christmas Week

Leavitt, Spooner

BOSTON, Mass.
„

page

however, are expected to show steady
improvement throughout the coming year. The predicted higher
sales volume will result in lengthening
delivery times and a re¬
turn to more normal backlogs and schedules

new

jn any

„

Order

model

(special to the financial chronicle)
DENVER, Colo. -— Kenneth E.
short-term Treasury
obligations improved somewhat as a result, Stephen has been added to the
attractive once again to foreign but
holdings of short-term Treas- staff of Russell Investment Cornbanks and other
investors.^ ^
ury securities, relative to assets Pany> Bbktoii Building.
in

vestment

from

The State of Txade and
time.

Steel

(5) As regards the longer term,
^ would be well to keep in mind

the

Continued

generous

The Treasury, in turn, will
presumably adapt its financing to
conditions in the credit market

Treasury
securities
(excluding
weekly bills) will require refinancing in the course of the year,
and

banks; however,
not likely to be

are

available

terms.

ness exPansion,
A. related consideration is the
fact? that loans now comprise a
substantially larger proportion of
deposits—some 47%—than at the
end of the 1954 recession, when
the ratio had been about 39%.

year

$48.6

some

significance

4ar>lyJ|n the term loan field, than
was *"e
in *"e Prevl°us busi-

budget deficit of about $5 to $6
billion may be in store for the
calendar

particular

reserves

made

|n their lending policies, particu- tive anti-inflationary policy,

not become discernible for
months, but as of today it

may

corporate

commercial

such

numbers, especially since
this
has heen in a declining trend and will not look to the Federal
^-or several decades. Nonetheless, Reserve to facilitate its task by
hanks are reluctant to allow their easy credit policies, inappropriate
ratios to deviate materially from in an environment of expanding
those of their competitors and the business and rising prices. The rebanking system in general. This suit of this combination may well
situation is not likely to inhibit a be a generally firm level of interfurther rise in bank loans in 1959, est rates but nevertheless a greathut it noes suggest that commer- er-expansion in the money supply
^ual banks will be l^ss aggiessive than is consistent with an effec-

de_

problems
are

the

in
financial
as

should be attached to any specific

credit

of the Treasury.

Assuredly,

of mid-1958.

(27)

„f

J*" bermjan has j<aimed the staff of
Leavitt, Spoonei & Company, 585

sharp upturn in steelmaking after the holidays was pre¬
dicted on Monday last by "Steel" magazine.
As business activity improves, consumers will start using
steel at a) faster rate, the metalworking weekly commented. Since
their inventories are low, they will have to offset faster con¬

ahead, in contrast to their
large liquidation of such securities

h. Roulston ii has been added to

sumption with increased buying.
Although steel buyers can still obtain most products within
three or four weeks, they face extended deliveries on cold-rolled
sheets.
Most mills require six weeks' leadtime and at least one
is sold out through February.
If the automakers come into the market for bigger tonnages,
lesser buyers may have to wait for two months. Demand for gal¬
vanized and aluminum coated sheets is so strong that several

the staff of

producers have closed

The commercial banking system
enters 1959 with the amount of

in 1955. Hence aggregate demands

son

for bank credit in the

Building,

bank credit and deposits at record

will probably exceed considerably
those of 1955.

striking

contrast

(2) Partly because of the budget
with the experience in 1955, when deficit and the
financing problems
the commercial banks offset some of
the
Treasury, however, the
60% of the rise in their loans and commercial banks may be expectother securities through liquida- ed to add to their
holdings of
tion of Treasury obligations.
Government
obligations in
the
year

The Commercial Banks

•

heights,

and

year ago.

materially above a
The ability of the com-

mercial banks in the aggregate to
add to their Government security

portfolios

depends

policy, that is,
bank

ahead

(3) The experience of the past
year
has
emphatically demonstrated the folly of attempting to

credit outguess market expectations and
the volume of their impact upon rates and yields.
upon

upon

made

reserves

year

available

the Federal Reserve System.

The

prospect of large credit dein the aggregate and of
cost and price inflation

further

factors which merit comment.

tional

the likelihood of addi.upward' pressures;, .upon

support

short-term
apacity;
\ Lending Capacity

mated

21 u-iT?1
billion

have
or

esti-

1958

year ago.

orrCr^s

commercial
the

relatively

tion
ratio

risk

v*3"8

ab°ve

highly

between
assets.

banks

business

further

—

Thomas

Paine, Webber Jack-

Curtis,

Union

Commerce

(4)

This

combination

While

some

their first quarter books.
^ ;
are boosting their purchases for im¬

consumers

consumption, others will be looking to the future. If
a steel strike is inevitable, they will jack up their

mediate

they think

Joins Central States
(Special to The Financial Chronicle)

Ohio—Robert P.

MANSFIELD,
,

with

Central States Investment
Co., Walpark Building.
#

McCormick Opens Branch
cam

PRAwnurn

nai;r

McL°rmicJc & uq. nas opened a

}

inventories.

Market

analysts think the inventory buildup

™

Forrest Lee.

mana„ement of

fell
69% of capacity. Production was about
1,835,000 net tons of steel. District rates follow: Chicago at 86%
of capacity, up 1 point; Detroit at 86, down 8 points; Cincinnati
at 82, down 0.5 point; Western district at 79, down 0.5 point; St.
Louis at 73, down 21 points;.Birmingham at 71.5; up 4.9'points;
Wheeling at 71, down 14 points; Cleveland.! at-, 66,; down 7 points;
Buffalo at 66, no change; Pittsburgh at 63, down 7 points; Eastern
district at 57, down 15 points and Youngstown at 50, down 12
points.
/
Vv;.
' V
en*
r
Because of the Christmas holiday, steelmaking operations

points

last

week

H. Carroll Brown

was
8,600,000 tons.* Production in the
26,000,000 tons. The total for 1958 was almost
;
1
85,000,000 ingot tons. ,

December's

ex-

will be about

4,000,000 tons, all in the first half. If there is a strike, inventories
be reduced by about 6,000,000 tons a month.

will

Weisberger has become connected

output

fourth quarter was

Carroll Brown

passed «w«.y
away
pU.Mvu

in
posiby the

recovery

capital

funds

ratio

and

stood

16.2%
in
mid-1954, dropped to
14.7% in mid-1956, and had recov-

deficit financing greatly com- in the past had for many years
plica tes' the task of the Federal been a member of the New York

in prices of steelmaking scrap last week may
presage the anticipated pickup (1in steel operations.
"Steel's" price
composite was up 49 cents to $39.66 a gross ton, the first advance
since the week ended Nov. 5. The improvement reflected an order
from

fiationary psychology and Treas-

Dec. 28 at the age of 84. Mr. Brown

ury

Stock Exchange.

have, liquidity of business and banking,

loaned

indicated

This

CLEVELAND, Ohio

Reserve, even though the reduced

above

*7^2!?' or

That

(Special to The Financial Chronicle)

...

a ni?W recon*> some panding business, widespread in-

the close of 1954.

entered

1959.

less anticipated these possibilities
to some extent.
!'

are

increased

However, the rapid rebound of interest rates after mid-1958 doubt-

re-

hank loans in the recent brief

cession, total bank loans

interest rates

contraction

some

Exchange

Paine, Webber Adds
|

mands

expansion of bank loans, however,
may
be affected by additional

Despite

^ewtork sfock

compared
may

with

help make
effective.

four * years

ago,

the

Clarence H.

Young

Clarence H. Young passed away

Dec. 26 at the age of 76 following
Treasury's financing prob- a long illness. He had been a spewhich presumably means cial partner in Joseph Walker &

lems,
supplying

additional

reserves

upturn

Pittsburgh mill for substantial first quarter tonnage. Many

industry observers look upon scrap as a barometer of steel pro¬

restrictive policy

Credit policy may
be expected to remain cognizant

Sons.

duction.

;

Machine tool builders expect a

slow, gradual upturn iii new

but the pickup will not equal
the boom of the mid-fifties, "Steel" added.
With well over $1,-

orders

over

the

two

years,

000,000,000 a year capacity, the industry sputtered through 1958

Continued

page

(28)

The Commercial and Financial Chronicle

Form Oil

Properties Inc.

Continued from

MATT.OON, 111.—Oil Properties,
Inc., is engaging in a securities
business from offices in the Petro¬
leum Building.
ard

Gray,
J.

Vice-President;

Stark,

Rich¬

are

and

$360,000,000 in new orders, roughly 35% of capacity. Now
upturn, but they are afraid they will
going at less than 50% of capacity in 1959 and 1960.
Here is the outlook as seen by 78 builders who
reported their
opinions to "Steel": 1959 new orders will reach $455,000,000. In
the builders expect a modest

Betty

Secretary.

1960, they will climb
The

(Special to The Financial Chronicle)

364

North

Kurtz

was

Company,

Drive.

Mr.

Camden
formerly

Institute

announced

that

week ago.

the week

Wilcox, -partner in
Co., New York City,
passed away Dec. 28 at the age of
80 following a long illness.

month ago the rate

year

placed at 1,501,000 tons

Wholesale

*123.6% and

was

with 274.70

pro¬

93.4%.

declined

week -ended

Dec.

27,

freight in the week ended Dec. 20, 1958
3.0% -below the preceding week.
ended

Dec.

20, 1958

totaled

570,927

decrease of 19,387 cars, or 3.3% under the corresponding
week, and a decrease of 127,497 cars, or 18.3% below the
corresponding week in 1956.
■"•V
44 '4:.4;v 4 4444"444.44'4-44 444\\^4'4i44.
cars, a

1957

Car and Truck Output Cut

Day

and

was

followed

by extensive

overtime

work

Friday

Saturday, resulting in the output of the industry's' 5,000,000th
car ,or

truck of the year.

tion

}

week's ear output totaled 106,088 units and
compared
135,964 (revised) in the previous week. The past week's
production total of cars and trucks amounted to 120,953 units, or

nriffc

clirmfwl

;

during

trading;- Domestic con sump-

■

cotton

T:444>V,4,',,;'4

:-V

Trade Volume Reached fa RecoH Le vel
There

was

week ago

111

4i444/-'>4

Christmas Week:

an:mpsur.g^;:in lastTniinute;, Christmas shopping

boosting the ? total;: 6olprj^pldpie.^ of retail Trade for the i
C^ entire Christmas

sdlling1season|t6rairqeor^

the previous

high:/(set^Hast;Vear. ?Shoppm;a>
fasiiiGh/accessories, meai!s\fhrnishings, traditional [
gifts; toys, glaisswar^ aM-Jipliday; fpqd^spgeialties.v A inarked rise I
in sales at suburban stofesiiri'
many^areasjqifset the effects of bad ;
ested in women's

44344 *•:' ■'

-4:--

4 ago. United Btatesrexiyorts of? cotton in October came ^to 181,000 y
bales« against>2123066'n biaies lin :' September : and 484^006 .bales in f
October 1957. 44
444 44
,44;:''44

decrease of 38,416 units below that of the previous week's out¬

4\'44^4 4/;. 4.-'4 V4

•
*

averaged :'33,600''-bales : per day ; in November',
compared with- 33;300 in -October;and 32,600 in November a year 1

Last

put, states "Ward's."

comparable date

Cotton prices on/the New York Cotton Exchange were close to

•'4'■

with

;

'*4
-;V 444/44444^44 t
slight irise in the salable receipts ^of cattle in *
Chicago the past week. Wholesale buying showed .noticeable ex- *
pansion. Prices on steers climbed appreciably over *the prior week. »'
Hog prices rose considerably *as trading picked up with supplies <:
close to those of a week earlier. A slight dip in lamb prices oc- C
curred during the week, but
^buying was unchanged. Following i
the trend in hog prices, lard' prices at wholesale advanced some- :
what during the week.4444S'.•■■■'! ZZZZ-ZZ^-'44,4;4;;'4-4.
J
was

those of the prior week,-in slackened

Sharply in Christmas Week

Passenger car production for the week ended Dec. 26, 1958,
according to "Ward's Automotive Reports," was sharply curtailed
chiefly as a result of the Christmas holidays. However, Christ¬

United, States

■

revenue

week

the

coffee transactions along within flight •'increase-, in' prices
the week.
v..44

Loadings Dropped 3.0% Under Preceding Week.

Loadings for the

mas

New

somevyhat - prices held steady.f Trading in corn fell mqd- 4

There

week earlier and" 278.44-on

Qrvnrpr'inhlf imnivnvpmt4>sin frear

xr(*r{

1956.

cars

Set

It lie Past iWeek

erately as well as prices.-41, ,
•
44 " 4 '
-3
*"
Although transactions in 'flour lagged the past week, prices r
moved up as supplies in sonae markets were light. The buying of rice strengthened and supplies were reduced.> Further reductions 4
in rice stocks are anticipated ' as^export buying picks up;
Rice 4
prices were unchanged froni the pricr week.
%
While turnover in cocoa was the, same as a week earlier/ prices *

1958 output decreased-,.by
1,155,000,000 kwh. below that of the previous week but-increased
by 1,161,000,000 kwh. above that of the comparable 1957 week
and by 1,183,000,000 kwh. above that of the week ended Dee.
29,

17,920

Commodity^ Price Index

moved up slightly. Purchases of rye were steady with prices fractionally higher than a week earlier. Although volume in soybeans

the electric light
industry for the week ended Saturday, Dec. 27, 1958
at 12,379,000,000 kwh., according to
the Edison
Electric Institute. Output the past week receded frdih the new
all-time high record set in the preceding week.

were

TrJv

total of the price per .pound of

estimated

Loadings of

sum

The week-to^week rise was due to higher prices of
most grains, livestock,jmbbgr.and coffee. <- .* ]
There was a slight rise in both1 domestic and export buying
of wheat during the week. Supplies were light and wheat prices

The amount of electric energy distributed
by

Car

•.:

ago.

year

the actual weekly production

ago

Output in Christmas Week Receded froni

the

,4'4 ZCv

Although the Daily Wholesale Commodity Price Index, compiled by Dun & Bradstreet, Inc., fell to 273.90 another new 1958
on Dec. 19, it moved dip to'275.50 on Dec. 22.
This compared

and power

For

4C:"

1958

All-Time High Record of Prior Week

was

'''ZZ-

represents,*the.

•

s:Tndex of production is based on average weekly
production
for 1947-1949.

Electric

4,;.4-

low

duction 1,985,000 tons.
was

...4 4... V'v' "44

ago.

year

The index

before.

For the like week

and cottonseed oil.

the

Output for the week beginning Dec. 29, 1958 is equal to about
75.8% of the utilization of the Jan. 1, 1958 annual capacity of
140,742,570 net tons compared with actual production of 68.2%

Thomas F. Wilcox
Thomas

Steel

and

Higher in wholesale cost the past week were flouxyhams, lard,
cocoa and steers.
On the doxvn side were wheat, oats, "butter, sugar

$580,000,000.

capacity, and 1,840,000 tons

Huey Co. in Denver,

and Carroll & Co. in Beverly Hills.

Wilcox

Iron

date

operating rate of steel companies will average *127.3% of steel
capacity for the week beginning Dec. 29, 1958, equivalent to 2,045,000 tons of ingot and steel castings (based on
average weekly pro¬
duction for 1947-49) as compared with an actual rate of
*114.5%

BEVERLY HILLS, CaL—Bobbe
P. Kurtz has joined Lloyd Arnold

with L. A.

American

Following three cons*ecutive weeks of declines, the' wholesale
food price index, compiled by T)un & Bradstreet, Inc„ rose frac¬
tionally last week aild^Was "slightly higher than a year • ago.
The index for Dec. 22 Avas $6.38;" up 6.3% from the $6.36 of a
week earlier, and 1.1% "highbr than the $6.31 of the-comparable

with

With Lloyd Arnold

Officers

Higher the Past Week

The State of Trade and industry

Gray, President; Hazel L.

Thursday, January 1, 1959

Wholesale Food Price Index ?Moved Fractionally

page

Last week's

car output dropped
under that of the previous
by 29,876 units, while truck output declined by 8,540
vehicles during the week.
In the corresponding week last year
79,945 cars and 12,397 trucks were assembled.
<

week

weather and the

riewsp^per'|s|^

Last

\y$ek the agency reported there

were 14,865 trucks made
This compared with 23,405 in the previous

in the United States.
week and

12,397

Lumber

a year ago.

444->44443444

•

Shipments Fell 0.5% Below Output in the
Week Ended Dec. 20, 1958
i

Lumber
Dec.

shipments of 464 reporting mills in the week ended
were 0.5% below production, according to the "Na¬
Lumber Trade Barometer." In the same period new orders

20, 1958

tional
were

8.6%

of stocks.

above production.

orders

new

Unfilled orders amounted to 35%
1.6% below; shipments 1.8% above and
4.7% below the previous week and 21.4% above

Production
were

was

have
a

Business

once

year? Or-do you put it off

because youfre afraid your
doctor might find some¬

and the

All of

If it's

you're worried

cancer

are

cancers

curing
than

many more

they could ten

years ago.£OQ,000 Ameri¬
cans are

alive

of cancer..

today, cured

many of them

because they'had made a

habit of

checkups

having annual
no matter how

well they felt... all of

them because they went

to their doctors in time!

Mafce annual
a

checkups cb

habit... for life!

'f®

174 in

1956.

Failures

Holiday Week

fell

185

the

week

'.and

were

fewer than in

decrease

was

or more

among failures

which dropped to 153 from
142 of this size

Small casualties under $5,000, rose to 32 from 20 last,
week and 24 in the similar week of 1957. Liabilities
ranged above
$100,000 for 21 of the week's failures as against 25 in the preced¬
year ago.

ing week.

111,

ers,

contractors

and

service

service to 16 from 22.
concerns

succumbed

More retail¬
than

♦

■

their buying of linens during the week and volume ;
a year ago.
The call for draperies andTloor cover- 3

ings dipped from the prior week.

Sales of housewares, glassware '
utensils were down appreciably.
While volume in :
appliances dipped during the week, the-buying of f
lamps, lighting fixtures and television sets remained close to that 1
kitchen

most

major

week

earlier.

•

There
.»

was

a
-

decline

moderate
»

furniture

Although there was a moderate decline in orders, for frozen 4
vegetables and citrus juice concentrate's, wholesale stocks were still *
limited.
There were further gains *in-pwrehases of ifioliday food
specialties, poultry, fresh meats, nuts^and candy. r.
>
r •• • - ^

manu¬

facturing to 33 from 47, construction to 28 from 41, wholesaling
to 21 from 30 and commercial

oc-

i'ur- 3*

matched that of

orders;

Fewer businesses failed during the week in all
industry and
trade groups. The retailing toll declined to 87 from

;

preparation'for post-Christmas sales promotions, retailers

stepped
*

the

and

concentrated

b.
4

in^women's-'^apparel^asUw.eefcwere sportswear,
accessories^'dresses,^lingerie arid; cosmetics andrsales were

slacks.
In

when they totalled 190.

the week's

involving liabilities of $5,000

the

Department

store

sales

country-wide

from the Federal Reserve Board's index

basis

taken

for the week ended Dec.

20, 1958 advanced 3% above the like period last year. In the preceding week, Dec. 13, 1958 an increase of 3% was reported. For '
the four weeks ended Dec. 20, 1958 a gain of 3% was registered.
;
For the period Jan.
1, 1958 to Dec. 20, 1958 no change was 3
recorded from that of the 1957 period.
*
3
.

comparable week last year. Wholesaling mortality held even with
1957, while the toll among manufacturers dipped slightly from
a

year ago.

All geographic regions
except the West North Central States
reported a holiday downturn in casualties. There was a
slight dip
in the Pacific States to 57 from
60; a stronger decline prevailed

in the Middle Atlantic

States, off to 66 from 89 and in the East
North Central States, down to 29 from 37. Five of
the nine major
regions suffered more failures than last year. The most noticeable
rise from 1957 took
place in the Pacific States, while moderate in¬
creases

AMERICAN CANCER SOCIETY

Lower
failures

231 in the previous week but remained above the
a

tors

Were

industrial

preceding week, Dun & Bradstreet,
Inc., reports. Despite this Christmas decline, however, casualties
exceeded moderately the 166 occurring in the similar week last
prewar 1939

about, remember that doc¬

and

ended Dec. 25 from 251 in the

year

thing wrong?

Failures

Commercial

!
*

nishings and hats stepped-up over-all : volumedn mes^s apparel to ';
slightly exceed that of. a year ago. Interest in meri's suits and '
topcoats was close to that of the similar period last year. Apparel
stores reported appreciable gains from a year ago in children's
clothing, especially girls' sweaters and skirts and boys' shirtsn

really too busy to

health.checkup

"...

Best-sellers

..;

fashion

4 up substantially over fa year ago.tjsiight4'year-to-year" gains
4 curred in furs and- winter coats.Hlncfeased buying bf';men's

the like week in 1957.

Are you

Wednesday of last week vvas unchanged- to ;4 % higher than a year
estimates collected ibyj;Dun$& ^.Bradstreet, Ine; -show.
Regional estimates varied from 4he comparable 1957 levels by the
following percentages: East North Central, East South Central and
Mountain States -f 1 to'fh5%; West North1 Central 0 to 4-4;. Middle
Atlantic, South Atlantic, West South Central and Pacific Coast —1
to +3 and New
England"Btates'..£f-2'r;to -'4^2%r':r4'' •
ago,"-spot

Four

occurred in

the

regions had lower

North

tolls

Central and

than

last

South

year.

Central

States.

According to the Federal Reserve Board's index, department
New York City for the week ended Dee. 20, 1958

store sales, in
showed
In the

decrease of 3%

-»

from that of the like period last year.

preceding week, Dec. 13, 1958 an increase of 5% was reported. For the four weeks ended Dec. 20, 1958 an increase of
3% was noted. For the period Jan. 1, 1958 to Dec/20, 1958 an
increase of 2% was registered above that of the corresponding
period in 1957.

•

;

•

V"'
Number 5808

189

Volume

Continued from page

Market Mirrors

Major Problems
equities.
It also serves to dis¬
of
individuals
much, then, for the myths courage a mass
from investing—at a time when
of
the
market.
Clearing them
their investments should be en¬
away will help us illuminate and
then come to grips with some of couraged.
the immediate, short-term- prob¬
The Investing Public Looks to
lems that are indicated by the
Congress
market's activity.
What I have
enumerated, in
The first of these is inflation.
change - are, at piesent,sell
brief, are our present problems
^
have seen
cruei way it
below their-1946 highs,
—the threat of inflation, a con¬
j
{ purchasing
statistic I know of emphasizes so
tracted supply of available stock,
In
as It were
more
clearly the nsks-as well as the
d
more
&l;d
have
b|d fol. and an unworkable tax structure
rewards
that go with shareownavailable stock supplies, in the that discourages a desirable vol¬
crampume
of
equity
financing
and
hope that such investments will
The
second
equity investments. These prob¬
keep up with the cost of
stress is sometiimg every mvestqiv- help
lems present, it seems to me, a
^
Conversely
falline
bond
,should know - particularly ■ at .a
major burden and a great respon¬
Vthne when more people appear to
sibility for . the incoming- 86th
So

Today's Stock Market—
The Myths and the Facts
.

the market of

then the entry into

people of average means is an un¬
healthy development.
The enormity of this fallacy is so

great it is difficult to know where
to strike it first. There is no way,

example, to ignore the real in¬

for

gredient of our economic growth.
Throughout
our
history, people
have willingly, and in their own
"self-interest* risked the money we
"needed for new plants, new tools,
"new jobs and new products,

because

orices

Wit'^'tlm^helD ^f
help
of
broker: whether

people - in the middle-income
ranges.
Our serveys tell us that
between 1952r and 1956 the shareto

'.them

$7,500.

under

.incomes

They

in the market for the
They appreciate the
risks they have taken. And they
are

oi a p

reoutaWe

aJ?p^p.

the., stock meets
that

Tile

our

is the essential
Firms,

Member

in the. business of pro-

are

service—and

viding

documenting the fact that the
/man-in-the-street can, indeed, di¬
rectly own. the plants and tools
which he works.

assets is

,are

with

guidance

function

Most

par-

^ personal ^eeds. race
T
most investors

Such

term.

long

ubiquitous and untraceable "hot
tip." Their best friend is a broker
who provides full facts and measuied judgments.

Two-

capitalists have

today's

substitute

enemy
-

one-

million.

3.6

over

thirds

jumped

population

owning
third

one

millions

is^no

witnthe

decisively.

broadened

has

This "base" now includes

There

forSd^ne ihe^merlte
ipr studying the merits

•investing and the base of owner¬
ship

ard risine is rarely a sound

teehniaue

their

Exchange and

its Member

Firms in recent years have
'

dedi-

iituch of their efforts to the

cated

idea

;

chief

satisfied customer.

that

shareownership

judgment: that with Congress. And if the Congress has
been following stock market ac¬
consumer
the prospect of rising.
tivity with the same interest as
pnces and greater deficit spend- their institutions, I believe it will
ing' the dollars payable in a few recognize three messages that the
years simply wiU not be as attrac- stock ticker is trying to spell out.
tive as they once were. The fear

popular

broadened

100 million
-;i indirect 'shareowners through their investments
"in insurance and pension pro¬
some

the results of

a new

sound basis

can

that

not such fear is unreasonable, as
government

exnerts

economfsts would have
fsC°Kedde th^ pohd
doeg exist and p will

believe

Such
take

fear
more

than words to alleviate it.

investment

the billions

objectives,

the rise of shareownership

traces

keeping

reserve
of cash and government
It bonds for life's
emergencies and
add further evi¬
.getting the facts and good advice,
dence that we are emerging as a
With these guideposts in mind, a
nation of sbareovmers. 1,,
ulation of investors can make sig~
•'
"ft'
:
niftcUnt progress in meeting their
| Public Is Investment-Minded;
own and the country's long-range
Institutions Are Playing a
economic requirements.

1956 and the present.

between

expect,

will,

...

«.

Key-"Role

•

Market" Using

number four holds that

Myth

get-rich-quick

Credit;

Economic Growth

this

binge—and

Modest

five

number

Myth

rather

than

to 20%.

You

might

wonder what

well

the prospects are for

achieving the
changes and disciplines I've sug¬
gested.
I won't venture a pro¬
phecy, but I am convinced, as one
American writer was, that "ifyod
Want something, you should pray
for it as if you had no hope on
earth, and work for it, as it yon
expected no help from heaven.'? t

Thus, Congress—and the Adminis¬
tration

must

—

look at the

subscribe to

must

In summary I have wanted

to stress these points:
,

Firstbears

)

the stock market has

—

much

been

take

merciless

the

little

news*

relation

but it

the

old

its strength from millions of mid¬
dle - income Americans and from

anticipated $80 billion the* financial institutions
represent them.

Federal Budget and provide only
for those expenses that are ur¬

billion

well

which

<
Second—the market is not set¬

five

listed

—

billion

shares that are
and the floating supply

that is available. And the maket's

stitutions who have confidence in

ability to grow and who are
also hedging against inflation. For

continued

fear

inflation

welL

Thus, one of the biggest
face in the inflation fight

rently being diminished, at least
in part, by the application of tax
laws that "lock'* investors into

will

come

new

government

rushing

form

the

massive

Its floating supply of stock is cur¬

tests

absorb

fi¬

can

tained at

the

one

literal sense, of course, shares

of stock

must

shortage may
amounts
of the great
nancing.
about the market,

contradictions

which

this

to be

seem

the

shortly

Federal

their

holdings
and
discourage
companies from issuing new equi¬
And the only answer to infla¬ ties in the quantities our growth
tion is fiscal responsibility. Such requires.
%
Third — I believe that for the
responsibility, I might add, is by
new

Budget.

limited to Congress and
We must ex¬

means

the Administration.

pect it equally in the private sec¬
tors of our economy, where the
drive
to
keep consumer prices
down runs up against mounting
costs, including that of labor. It is
clear, L think, Jthat when higher
wages
serve
to
create
higher
prices, the only thing we really
achieve is still

immediate future we must impress

government authorities, at all
levels, our sense of shock at high¬
er and higher spending, and our
on

insistence

fiscal responsibility.

And this must carry over

into the
private sectors of^ur economy as

welhi^wbera^-we ...ixujst -recognize
that

the

wages.

No matter which role

efficient production is

sound means of raising

only

inflation, and
danger that we'll
price ourselves out of the market.
the

often

employees
ought to

•

I believe we must put

Finally,
reforms

a/basic package of tax
which
encourages
the

kind

growth,

sharehave the

mass

fill several—it

that

real

very

our

contends

think

that.

gently required. Any other course ting the pace for the economy* but
yhe second problem the market
will make the attempt to control
merely reflects what is occurring
a shortage
inflation a hollow one, and will elsewhere. It is being influenced
0f
stock
presently available to
be reflected iH the stock market not only by those with confidence
meet
investor needs.
With
the
as
well as in the bond market in the future, but by those who
Exchange's stock list at about five

action, which sometimes registers
wide price movements on a mod¬
crate
volume
of
transactions,
makes it evident that the floating
supply has indeed contracted,
You might wonder why.
For
one
thing, there is the demand
^ evidenced by individuals and in¬

Latter Must Keep Pace With

today's market is overly-specula¬
tive. It says that, investors are on
a

lies in freeing the first
dividends from taxation
the present $50, and
in raising the dividend tax credit
from 4% to 10%—and eventually

$100

mirrors is that there is

•

which

census

the nation can obtain

are

the

partial

dividends. A

myths that surround it. It is a
The first is that fear of. govern¬ people's
stock market, oriented
<* lnflatio"' in other words, is ment-manufactured deficits and largely towards long-term invest¬
very real on the part of many
of rising unit costs forces people ments,
and using only modest
infoymed inyeSt6rs Whether or
into making inflationary moves. amounts of credit. It is drawing

almost always be obprice. Someone wantof
dollars of growth money it ing to buy 1,000 shares of a wellneeds. We have stressed the need known security, for example, can
for
undertanding and tailoring certainly have his order filled
grams, banks and other financial risks to what the individual can if he is
willing to pay more,
institutions which own stock. Next
afford. We have emphasized the.
My point, however, is that there
spring, incidentally, we shall have necessity *- for determining one's is a world of difference between

addition,

Americans

represented

solution

mcwv^^nose of govern

greatly-intensified but
ijuiet economic:? revolution. The
•mystery' has- been. taken- out of
through

^-defense,

harsh

is. that over , the
America has gone

decade

p0*elv

P0"«t, '

fact

the

And

barrier

double tax

„

^ single

last

the

(29)

The Commercial and Financial Chronicle

fill—and
seems

together
of

expansion

and

investment we have a right

And we must do this
has caused stock prices to move there is too much credit in the another, our antiquated and tosingle-minded determination not while recognizing — as a philoso¬
upward."''
r '•% %
mnrket and this excess is dan- tally unrealistic tax laws, par- to
increase labor costs unless and pher of old did—that delay is dan¬
The "argument continues tieularly the capital gains levy, until we can correspondingly in¬
What are the facts?
Late 'last •gerous.
gerous, and there will never be a
September we
took
our
latest that buyihg oil credit, or margin, have caused investors to lock up crease output, and thus experience perfect time for any undertaking.
•
billions of dollars worth of stock, no increase in unit costs.
Public Transaction Study—a por¬ is inherently wrong.
owners

expect.

will die hard, but
have to be considered,
To
begin with, today's market
rests
largely on a cash foundation. .In our recent study, margin

Most of

the

two

studied

days

they either had kept,

indicated
intended

to keep, their securities for more

Even more sig¬

thgn six months.

nificant,

found

sharp rise in

vA third immediate problem refleeted in the market is that com-

the

panies
have
from issuing

myth

the, facts

the

bought and sold

people, who

that

This

Though market volume had
risen substantially we found
a
majority of the public was still
investment-oriented.

rather than pay the whopping
capital gains tax penalty leveled
against successful investments,

transastions by

the market and

who's in

trait of

why.

public individuals
accounted for only 22% of total
volufne.
And if past experience
is a guide, most of these transactions were for the purpose of
making long-term investments. In

the number of shares bought and

dollars

$ola

New

and

customers of
Exchange firms
had borrowed $3.3 billion as of
17.8 million shares traded.
And mid-October—against a total stock
it is safe to say, I think, that list worth about $250 biilion. This
along with most people in the represents, only 1.3% of the total
market, our great, institutions are market value of listed stocks—a
hardly susceptible to a get-rich- ratio that'.' has shown relatively
quick psychology.
They are in little change for several years.
the market for the long run. And
Stock market credit, however,
they appreciate—along with most is such a complex subject that in

by .institutions.

accounted

of the

for 4.1

The

latter

million

public—a central fact about

current economy; we are faced

our

with

serious- threats

ther

inflation.

vestors

who

nesses, are

still

fur¬

Accordingly,
confident

are

the future of

our

in¬

about

corporate busi¬

increasingly seeking to
future
purchasing

protect

their

power..

While

proof
the

hedge

course

there

against
Of

our

cost

to keep

make

clear.
as

pace

with

the

time, I should like
things

abundantly

The first is that the market

than

been

much

the! popular

indicate.. Some 40%

common

stocks

years we have overlooked
the fact that in the securities in-

tries—credit fills

listed

vital role.

stock

The

fi-

fact is

needed.
But the record shows that cor-

porations, rather than follow the
have also ignored the fact that as more conservative path of floating
our economy grows, stock market
new stock issues, have tended to
credit can reasonably be expected meet their external need for new
to grow with it. Such credit, how- money by relying on debt financa

needs

economic paradox,
happily encourage people to
buy—90% for
a
house, up to 75% for an automobile, 100% for a washing ma■?
chine—but we virtually prohibit
borrowing for
the
purpose
of
saving and investing in the companies that produce these prodextraordinary
We

aver¬

of
the

the
Ex-

ucts.

be unlocked to meet
a

people willing to

One critical place to start

revising the capital gains
levy so that the holding period is
cut from six months to three, and
the penalty on successful invest¬
ing slashed from a top of 25% to
12 % %. Another step we ought to
consider is allowing the individual
taxpayer—at his option—to sell a
stock in which he has a long-term
by

Keenan &

Clary Branches

MINNEAPOLIS* Minn. — Kee¬
nan & Clary, Inc., has opened a
branch

office

Silver

Lake,

Minn., under the management of
Frank
Bandas, and at Algona,
Iowa under the direction of Paul

that each year billions of dollars
M. Seeley.
of hew money are needed for
plants and equipment.
A large
Milwaukee Co. Branches
proportion of this must be raised
externally—via borrowing, or the
MILWAUKEE, Wis. — The Mil¬
issuance of new stock. And when
waukee Company has opened^ a
it comes to new stock issues, cor- capital gain without incurring an branch office in Appleton, Wis.,
porations must turn increasingly immediate tax, if he fully rein¬ under the management of John
to the great masses of people. For vests the proceeds in a single Day; Janesville, Wis., under the
even after allowing for the money stock investment within 30
days. management of Addison Hauganj
that our institutions can venture The
long - run
stimulus
these in Racine under the direction of
on common stocks, it is only the measures will provide the econ¬ William F. Rayne; and in West
^ass of middle-income Americans omy—and the shares that such a Bend under the management of
who can furnish the equity dollars move can bring to market—will Burns B. Nelthorpe.
we need in the amounts that are far outweigh any short-term loss

fedustr'y—as in most other indus-

borrow in order to

whole has

selective
ages

two

recent

shares must
invest.

second message

quantities} of existing

of income.

The

ticker's

third

corporate dividends. This tax
works in such a way that a company raising venture money finds
it costs twice as much to return
a
dollar to shareowners,
than
would be required if the company
went into debt—since interest on
the debt is tax-deductible. • The
result is that this tax not only
discourages
the
flow
of
new

message

despite temporary uncertain¬
ties,
the country's economy is
moving upward. If we are to en¬
courage expansion and employ¬
ment in a society as complex as
that

fool¬

living.

At the same

cents,

Stock

their growth.

discouraged

ticker's

great

ever, has not kept pace.
And in ing—a course that plunges them ours, the capital
inflation, in the process of looking askance at deeper into debt. The villain in
people must be
history, the market credit we have created an this situation is the double tax form where it is

value of shares of stock has had

tendency

York

the

nance

been

The

flow from

Payson Opens Branches
PORTLAND,

places
a minimum of inter¬

To Be Hutton Partners

This poses a double prob¬

persuading more corpora¬
tions to plan a healthier growth
by raising more equity money,
and persuading
more people to
take the risks of investing. One of
lem:

the

—

WaterviUe, Maine under the di¬
rection of Adrian, L. Asherman,
of millions of and at 177 Main Street, Berlin,
encouraged to N. H. under the direction of Ralph
needed, and to W. Bradeen.
where it is hot

needed with
ference.

Maine

& Co., has opened
a
branch office at 72 Silver Street,
Payson

Congress' most effective steps

in this area would be to tear down

Hutton

Co.,

14 Wall

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

January 8th will admit

Iglehart French and
Iglehart Purinton to limited
arine

nershin.

Kath¬
Jane

part*

(30;

The Commercial and Financial
Chronicle

Securities
Advanced

Dec,

Research

filed 400,000

Price—$6

cents).

(par live

135

Registration
of

owner

stock

common

share. Proceeds—For research and

Publishers,

Inc.,

Portland, Ore.
Nov. 28 (letter of notification) 22,000 shares of common
stock (par SI).
Price—$8.50 per share. Proceeds—For
general corporate purposes. Office—665 S. Ankeny St.
Portland 14, Ore. Underwriter—First Pacific Investment
Corp., Portland, Ore.

Dec.

ment effective Dec. 3.

Bankers

Dec. 29 filed 685,734 shares of capital stock (par
$1) to
be offered for subscription bv^ stockholders at the rate
of 1% new shares for each share held.
Price—$2 per
chare.
Proceeds—For additional working capital and
new

acquisitions,

Floral

Park, N.

etc.
Office —30 Verbena
Underwriter—None.

Avenue,

;

Office—Magsaysay Building, San Luis, Ermita, Manila,
Republic of Philippines. Underwriter
Gaberman &
Hagedorn, Inc., Manila, Republic of Philippines.
—

American Buyers Credit Co.

Nov. 13 filed 5,000,000 shares of common

slock, of which

4,545,455 shares of this stock are to be offered for public
tale at $1.75 per share. [Shares have been issued or are
Issuable under agreements with various policy holders
In American Buyers Life Insurance Co. and American.
Life Assurance

Co.

(both of Phoenix) permitting them

to purchase stock at $1.25 per share.
Sales personnel
have been given the right to purchase stock at
$1.25

per share up to the amount of commission they receive
on stock sales made by
them.J Proceeds—For the opera¬
tion of other branch offices, both in Arizona and in other
States. Office—2001 East Roosevelt,
Phoenix, Ariz. Un¬

derwriter—None.

—

•

American

Enterprise Fund, Inc., New York
Oct. 30 filed 487,897 shares of commpn stock. Price—At
market.

Proceeds—For

ward A. Viner &

investment.

Distributor—Ed¬

Co., Inc., New York.

subscription

agreements.

Bargain Centers, Inc.
20
(letter of notification)

30,000

Office—Denver, Colo.

American Growth Fund,
Inc.,
Nov. 17 filed 1,000,000 shares of

Denver/Colo.
(par one
investment.
Colo.
Under¬

Price—At market.
Proceeds—For
Office—800 Security Building,

Denver,

writer—American Growth Fund
Sponsors, Inc., 800

Se¬

curity Bldg., Denver 2, Colo.
American Mutual Investment
Co., Inc.
Dec. 17, 1957, filed 490,000 shares of capital stock. Price
—$10.20 per share. Proceeds
For investment in first
trust notes, second trust notes and
construction loans.
—

Company

develop shopping menters and build or
buildings. Office—900 Woodward Bldg.,
Washington. D. C. Underwriter—None. Sheldon
Maga¬
zine, 1201 Highland Drive, Silver Spring, Md.. is Presi¬
may
purchase office

dent.

• American
Telemai! Service, Inc.
Feb. 17 filed 375,000 shares of common
stock
.Frice—$4 per share. Proceeds—To purchase

(par $1).
equipment

And

supplies and for working capital and other
corporate
Office—Salt Lake City, Utah
UnderwriterAmos Treat & Co., Inc., of New York.
Change in Name
•—Formerly United States Telemail Service, Inc.
Offering
Expected early in 1959.

/iArcoa

Inc.

pec. 29 filed $5,000,000
corporation

iutch.

of U-Haul Fleet Owner

Con-

to any
person, group of persons

Rental

Proceeds
for

—

rent

System.

increase

the

number

trailers

the
company's U-Haul Trailer
Office—4707 S. E. Hawthorne Boule¬

vard, Portland, Ore., Underwriter—None.
Associated

Bowling Centers, Inc.
Nov. 24 filed 300,000 shares of
20-cent cumulative con¬
vertible preferred stock
(par one cent) and 50,000 out¬
standing shares of common stock (par one
cent)
The
preferred shares are to be offered for
public sale for the

Account

the

company and the common shares will
f>e offered for the account of a
selling stockholder. Price
To be supplied by
amendment.
*

pew

bowling centers

Proceeds—To acquire

and increase
working capital (part
of acquisition of stock of

>jbo be used in defraying cost

and

lor

new

warehouse

★ Bargain City, U. S. A., Inc.
filed 5,000,000 shares of class A common stock.
Price—$3 per share. Proceeds—For expansion ana ac¬
quisition or leasing of new sites. Office—2210 Walnut
Dec. 29

Underwriter—None.

Bellechasse Mining Corp. Ltd.
Oct. 29 filed 800,000 shares of common

stock.

Price—

Related to the market

price on the Canadian Stock Ex¬
change, at the time the offering is made. Proceeds—To
applied

over

the balance of 1958 and the next three

years as follows: for annual assessment work

the

com¬

pany's properties (other than mining claims in the Mt.
Wright area in Quebec); for general prospecting costs;
and for general administration
expenses.
Office—Mont¬
real, Canada. Underwriters—Nicholas Modinos & Co.
((Washington, D. C.) in the United States and by Forget
vc Forget in
Canada.

—■

Berry &

Arizona, Inc.

notification) 300,000 shares of common
(par 25 cents). Price-—$1 per share. Proceeds—
For working capital.
Address—P. O. Box 1849, 3720 E.
32nd Street, Yuma, Ariz. Underwriter—L. A. Huey
Co.,
!

^Central Illinois Public Service Co.

(1/27)

Dec. 31 filed $12,000,000 first-mortgage bonds, series H,
due Jan. 1, 1989.
Proceeds—For construction program.
Underwriter—To be determined by competitive bidding.

10 shares of

working capital. Office—
c/o Edward H. Altschull, President, 1027 Jefferson Cir¬
cle, Martinsville, W. Va. Underwriter—Securities Trad¬
ing Corp., Jersey City, N. J.

Street, Philadelphia, Pa.

Underwriter

stock

sub¬

and

(1/15)

Nov. 17 (letter of

1, 1969 and
cents) to be

Price—$100 per unit. Proceeds—For equipping
decorating a new store and acquisition of real estate

and

Probable bidders: Halsey, Stuart & Co. Inc.;. Blyth &
Co., Inc., Kidder, Peabody & Co. and Merrill Lynch,
Pierce, Fenner & Smith (jointly); Eastman Dillon,
Union Securities & Co. and Equitable Securities Corp.
(jointly); Salomon Bros. & Hutzler. Bids—Expected to
be received

Jan. 27.

Champion Paper & Fibre Co. (1/15)
Dec. 19 filed $20,036,400 of convertible subordinate de¬
bentures due Jan. 15, 1984, to be offered for subscription
by common stockholders of record Jan. 14, 1959 at the
rale of $100 of debentures for each 22 shares then held;
rights to expire on or about Jan. 29, 1959. Price—To be
supplied by amendment. Proceeds—To repay outstand¬
ing bank loans and for general corporate purposes, in¬
cluding additional working capital and future capital
expenditures. Underwriter—Goldman, Sachs & Co., New
York.

„

* Charter Oak Life Insurance Co.
Dee. 15 (letter of notification) 46,031 shares of common
stock (par $1). This offering represents the unsold bal¬
ance

Dec.

31,

150,000

Price—$2

common

stock which

began

share. Proceeds—For sur¬
plus account and working capital.
Office—411 North
Central Avenue, Phoenix, Ariz. Underwriter—None.
1955.

per

Big Bromley, Inc., Manchester, Vt.
filed 6,000 shares of common stock,
$300,000 of
5% debentures due April 1, 1979, and $100,000 of 6%
notes due April 1,
1980, the common stock and deben¬

Nov. 24 filed 210,000 shares of class "A" voting common
stock and 210,000 warrants to subscribe to a like number

tures

of shares

five

offered

common

shares.

units of $250 of debentures and

Price—Of

units, $500 each, and of

Proceeds—For general corporate purposes.
Business—A ski lift and school. Underwriter—None.
par.

ir Blossman Hydratane Gas, Inc.
filed $1,200,000 of 5% subordinated convertible
debentures due Dec. 31, 1978 and 120,000 shares of com¬
mon
stock (par $1) to be offered in units of
$500 of
Dec. 29

debentures

and

common

stock.

Price—To

Fire & Casualty Insurance Co.

Chemical

chasers

class "B" non-voting common stock.

the

"A"

class

shares will receive with

Pur¬
each

purchased a warrant granting the right to purchase
for $10 per share one shares of class "B" stock for a
period of 18 months after the company receives permis¬
sion to write insurance.
Price—$10 per share. Proceeds
—For working capital. Office—2807 Sterick Bldg., Mem¬

phis, Tenn.
C.

Dec.

Underwriter—None.
Financial

I. T.

Corp.

(1/8)

16 filed $75,000,000 of

bution

debentures due Jan. 1, 1979.
priCe—To be supplied by amendment.
Proceeds—To
provide additional working funds for the corporation
and its subsidiaries, to be used in the ordinary course of

La.

business

supplied by amendment.

Proceeds—To retire short-

term bank

loans, and for working capital to be used for
general corporate purposes. Business—Bale and distri¬

•

of liquified petroleum
gas.
Office—Covington,
Underwriter—S. D. Fuller & Co., New York.

Borman Food Stores, Inc., Detroit, Mich.

(1/21)

Dec. 24 filed 404,900 shares of common stock
(par $1),
of which 304,900 shares would be sold for account of
stockholders and 100,000 shares for account of the com¬

Price—To be supplied by amendment. Proceeds
—For general corporate purposes. Underwriter—Shields
pany.

Co., New York.
Boston

Garden-Arena Corp.
(letter of notification) 2,150 shares of common
(par $1). Price—At-the-market (estimated at $23
share).
Proceeds — To go to selling stockholders.

Nov. 24
stock
per

Weston W. Adams & Co.,

having the legal ownership of a fleet of
trailers each
accompanied by a clamp-on
bumper

available
"l

(par

Office—North Station, Boston

,,tracts, to be offered
rental

of common stock

offered in units of $100 of debentures

purposes.

V„

Ada, Okla.

Denver, Colo.
$300,000

debentures due Jan.

stock.

notes, at

capital swek

^eent).

corporate purposes.
Cemex of

ville, Ky.

ordinated convertible

Carraco Oil Co.,

Nov. 10 (letter of notification) 200,000 shares of common
stock. Price—$1.50 per share. Proceeds — For general

Inc.

April 14 filed 8,934 shares of common stock. Price—At
($100 per share). Proceeds—For general corporate
purposes.
Underwriter — Bankers Bond Co., Louis¬
par

Dec. 9

American Founders Life Insurance Co.
Dec. 29* filed 188,689 shares of common stock to be
issued
upon payment of balances due on prior

—

Management Corp.
Feb. 10 filed 400,000 shares of common stock (par 25
cents.) Price—$1 per share.
Proceeds—To reduce out¬
standing indebtedness and for working capital. Office—
1404 Main St.,
Houston, Texas. Underwriter—McDonald,
Kaiser & Co., Inc. (formerly McDonald, Holman &
Co.,
Inc.), New York. •'

American-Caribbean Oil Co, (N.
^
r
Feb. 28 filed 500,000 shares of common stock
(par 200).
Price—To be supplied by amendment. Proceeds
To
discharge current liabilities and to drill ten wells. Un¬
derwriters—To be named by amendment.

Perkins, Inc., Detroit, Mich.
100,000 shares of comomn stock (par $1).
Price—$7 per share.
Proceeds—To complete the com¬
pany's commitment to purchase at par 5,000 shares of
the $100 par common stock of Alabama
Metallurgical
Corp.; and the balance for general corporate purposes.
Business
Rolling and fabrication of magnesium and
magnesium alloys, etc. Underwriter—Watling, Lerchen
& Co., Detroit, Mich.
Statement effective Dec. 30.

Bankers

Bankers Southern,

Brooks &

Nov. 26 filed

of which

Nov.

American Asiatic Oil Corp.
Nov. 24 filed 100,000,000 shares of capital stock. Price—
Two cents per share. Proceeds—To selling stockholders.

•

Feb. 28 filed

:ik All-State Properties Inc.

plan. Office—176 Remsen St., Brook¬
Underwriter—None.

convertible

Fidelity Life Insurance Co.
258,740 shares of common stock (par $1),
125,000 shares are to be offered publicly and
133,740 shares to employees pursuant to stock purchase
options. PrfCe—To public, $6 per share. Proceeds—For
expansion and other corporate purposes.
Office — At¬
lanta, Ga. Underwriter—None.

Allied

ISSUE

Brookridge Development Corp.
19 (letter of notification)
$2o0,000 of 6% 15-year
debentures. Price—At par ($500 per unit).
Proceeds—Foi" expansion and
working capital. Office—
901 Seneca Ave., Brooktyn 27, N. Y.
Underwriter —
Sano & Co., 15 William
St., New York, N. Y.

Autosurance Co. of America
Oct. 16 filed 250,000 shares of common stock (par $2.50).

+ Alaska Juneau Gold Mining Co.
29
filed
640,660 outstanding shares of common
Stock, of which 300,000 shares are to be offered cur¬
rently and the remaining 340,660 shares in the future.
Price—To be supplied by amendment.
Proceeds—To
selling stockholders. Office—45327 Santa Monica Boule¬
vard, Los Angeles, Calif.
Underwriter—Lester, Hyons
& Co., Los Angeles, Calif.
Dec.

REVISED

to be used for the

lyn 1, N. Y.

Price—$5 per share. Proceeds—To increase capital and
surplus. Office—Atlanta, Ga. Underwriter—None. State¬

—

AD DITION 3

ITEMS

•

Brooklyn (N.Y.) bowling center.
Office—
Y.
Underwriter — To be named by
Offering—Expected any day.

Underwriters
Wesley Zaugg & Co., Kensington, Md.,
Williams, Widmayer Inc., Washington, D. C. Offer¬
ing—Expected in January.

and

Thursday, January 1, 1959

SINCE

Front St., N.

amendment.

development program; and for equipment and working
capital. Office — 4130 Howard Ave., Kensington, Md.

* IN DICATES

Associates, Inc.

shares of

per

Now

14, Mass.
Boston, Mass.

Underwriter—

Bridgehampton Road Races Corp.

reduce

Clute Corp.
Aug. 21 (letter of notification) 300,000 shares of common
stock (par one cent). Price—$1 per share. Proceeds—To
pay additional costs of construction; and for retirement
of obligations and working capital.
Office — c/o John
Harlan Lowell, 2200 Kenton, Aurora, Colo. Underwriter
—Lowell. Murphy & Co., Inc., Denver, Colo.
•
Combustion Engineering,

stock of General Nuclear

at the rate of

payment of all
part of claims, at the rate of one share for each $4
of claims
discharged; rights to expire about two weeks
after
To

mailing of offer.

pay

current

Price—$4 peF share.

creditors.

Bridgehampton, L. I., N. Y.

Address

Proceeds—
O.

Box-506,
Underwriter—None.
—

it Brooklyn Union Gas Co.
Dec. 29 (letter of
notification) 6,000 shares of common
capital stock (par $10) to be offered to employee's under
an

Employers'

determined

Exchange.

Stock

Purchase

market value

Plan.

the

Price

New

Proceeds—Aggregate not to

—

York

exceed

Stock

$300,000

Inc.

Dec. 19 filed 64,011 shares of capital stock to be offered
in exchange for 81,002 shares of the outstanding common
stock and for 2,131 shares of the outstanding $100 par

preferred

incurred for

York.

stock

holders of record Nov. 1, 1958 on the basis of one new
share for each four shares
held; unsubscribed shares
will be offered to current creditors in

borrowings

receivable and for other cor¬
porate purposes. Underwriter—Dillon, Read & Co. Inc.j
Kuhn, Loeb & Co. and Lehman Brothers, all of New

Oct. 23

(letter or notification) 15,000 shares of common
(par $1) to be offered for subscription by stock¬

short-term

the purpose of purchasing

seven

Engineering Corp.,

shares and 3.4302 shares of Combus¬

tion

Engineering stock lor each 10 shares of common
each share of preferred stock, respectively, of
General Nuclear Engineering (of Dunedin, Fla.).
stock and

Commerce Oil Refining Corp.
Dec.

16,1957 filed $25,000,000 of first mortgage bonds due
Sept. 1, 1968, $20,000,00 of subordinated debentures due
Oct. 1, 1968 and 3,000,000 shares it common stock to be
offered in units as follows: $1,000 of bonds and 48 share*
of stock and $100 of debentures
nine shares of stock.
Price—To be supplied by amendment.
Proceeds — To
construct refinery. Underwriter—Lehman Brothers, New
York. Offering—Indefinite.
Commercial Investors Corp.
28 (letter of notification) 900,000

Nov.

shares of

com-

Number 5808

189.

Volume

Price—At

stock.*

mon

;

The Commercial and Financial Chronicle

(10

par

cents per share). Pro¬
So.;: Main St., Salt

investments Office—450

ceeds—For.
Lake

City, Utah. Underwriter—Earl J. Knudson & Co.;
Lake City, Utah.
•

Salt
1

Commonwealth

,vr?

property

additions and improvements.; Underwriter—To be deter¬

Corp.

Bids—Expected to. be received up to 10:30
Jan. 13 at Room 1820, 72, West Adams
Chicago 90, HI.
;
::

a.m.

Consolidated Edison

Co.

New

York,

St.,

Inc.

(1/27).

Dec.

23 filed a maximum of $59,778,600 of convertible
debentures due Aug. 15,, 1973,. tos be offered for sub¬
scription by common- stockholders at the rate* of $100
.principal amount of j debentures for each 25 shares of
,

stock

held

record

Jan.

26,

Price—100% (flat). * Proceeds—To repay
notes, and for additions to utility plant.
Underwriters—Morgan Stanley & Co; and The First Bos¬
ton Corp., both of New York.

1959; rights to expire

provement of service facilities,

January

City, Mo.
Oct. 29 filed $6,000,000 of 5Vz% 25-year subordinated
certificates of indebtedness, and 60,000 shares of 5^2%
preferred stock (cumulative to extent earned before
patronage refunds). Price—For certificates at $100 per
unit; and the preferred stock at $25 per share. Proceeds

Louis.

of maturing certificates of indebted¬
redemptions on request of certificates of indebted¬
ness prior to
maturity and of 5^% preferred stock; the
possible improvement and expansion of present facili¬
ties; and the acquisition of manufacturing plants and

Power

Silicon Transistor Corp.>__
:

;'V

,No uJKlev^j'iter ) SUOO.OOO

United Asbestos

Edgcomb Steel of New England, Inc.
5 (letter of notification) 30,000 shares of class A
stock (par $5). Price -$10 per share. Proceeds
—To pay off current notes payable to bank and to in¬
crease
working capital. Office — 950 Bridgeport Ave;,
Milford, Conn. Underwriter—None.

Co.)

1,000,000

Common v

Gulf

States Utilities

January 6- (Tuesday)
^

(Bids noon

CSTi

Equip. Trust Ctfs.

$3,300,000

v- ( Offering-

'V-

to stockholders—to

'■

Mechmetal-Tronics Inc. _-__l__l^___^__£_Commoii
v(Charles Plolm & Co.) $247,500-'
'

(The First Boston Corp.

(Greenfield

&„ Co., Inc.) $300,000

Vita, Food, Products/ Inc.Iz
•••

:::

-v.

;

(Offering to
Co.;

(Wednesday) ; .
Telephone Co. of California-L.llPref erred

(Paine, Webber, Jackson & Curtis and Mitehum, Jones &

v'l'-:

Templetoni

Household Finance
(Lee

Co.)

and- William

$30,000,000

Rohr Aircraft
'

Blair

;

Service

Co.

Debentures &

(Bids

Nov.

Poabody

Co.,

Inc.)* $200,000

Common
Bonds

EST)

a.m.

$35,000,000

(Wednesday)

Dec.

and 40,000 common shares

Boiman Food Stores, Inc

•

V'ZY:,'/-"

Pennsylvania Power & Light Co._____i__Common

Sire Plan of Elmsford, Inc
(Sire

Plan

'•/}

" /.■■*'

January 8
(Dillon,

Read

(Thursday)

Lehman

San Diego

Inc.;

Kuhn,

Brothers)

January 23

Woodward & Lothrop Inc
(Alex.

Brown

& Sons)

Central

Illinois Public

(Bids

Debentures

Boston
Loeb,

Southern
(Bids 11

Witter

Co.)

Co.;-and Carl M.
shares

500,000

Rochester Telephone Corp

Spur Oil Co

1,000,000

Corp.)

Supply Co

January 13
10:30

Gulf

April 30
Alabama

by Merrill
Pierce, Fenner & Smith) $2,700,000

Gulf States Utilities Co

;

'"*'*$■

Lynch,

(Bids

Pacific National Bank ;of San Francisco—Common
Offering- to

stockholders—underwritten

J'and/Blworthy

by: Blyth

&. Co.).. 74,511

if: Co.,
.

Inc

Southern California Water Co
(Dean.Witter & Co.

t.i..

7
1

(Paine,

and

Smith

January 14

Webber,'Jackson

Corp.

and

(<The First

Co.)

(Harriman. Ripley
-

Stone

(Bids

Co.,

Inc.

and

January

;

Gundy

(Morgan Stanley & Co.)

Michigan

Co.,

Bell

(Bids

Inc. i

Montana

Power
(Bids

Common

$20,036,400

by Goldman, Sachs
-

$15,000,000

invited)

$40,000,000

•

general funds.

Office

—

Fort

(letter of notification) 45,250 shares of common
(par $1) of which 16,900 shares are to be offered
the remainder to the public. Pric*—
To employees, $1.1805 per share.
Proceeds—To purchase
and install machinery and equipment.
Office—367-405

(Bids

Southwestern

West

Debentures

First

Prescott &

St., Boston, Mass,
Co., Boston, Mass.

Underwriter—William S.
...

Bonds

be invited)

$20,000,000

and

General Aniline A Film Corp., New York
Jan. 14, 1957 filed 426.988 shares of common A

Bonds

par)

Lehman Brothers) $24,000,000

Pennsylvania Power Co

'
•

Co.;

(Kuhn, Loeb & Co

Champion Paper & Fibre Co.__"_1____r_ -Debentures
&

Telephone

Moore-McCormack Lines, Inc

added

to employees and

Preferred

Consumers Power Co

;

(Berry &vCo.) $300,000

rest

$18,000,000

Postponed Financing

Securities

$12,000,000

(Thursday)

(Offering to stockholders—underwritten

-Bonds

...

and

Pierce, Fla. Underwriter—Frank B. Bateman, Ltd., Palm
Beach, Fla.
$

stock

Debentures

Wood,

Carraco Oil Co._r_
i'

;

(par $1).

Price—$1.25 per share.
Proceeds—To pay short-term
loaffe and for completing company's Port Development

General Alloys Co.

•

$5,000,000

to be invited)

Pierce Port & Terminal Co.

Nov. 17

-_i_Common

Corp. f 275,000

$75,000,000

Bonds

(Thursday)

Georgia Power Co

Price—$2.25 per share. Proceed»rOffice—4334 S. E. 74th Ave., Port¬
— Ross Securities Inc., New

Underwriter

★ Fort Cheyenne Development Co., Inc.
Dec. 17 (letter of notification) 232,000 shares of pre¬
ferred stock and 58,000 shares of common stock. Price
—At par ($1 per share). Proceeds—For working capi¬
tal. Office—Pioneer Hotel, 211 West 17th Street, Chey¬
enne, Wyo. Underwriter—None.
Fort

—1
invited)

development of sub¬

Nov. 25 filed 2,138,500 shares of common stock

(Thursday)

$2,000,000

Webster

Templeton)

Boston

—___-Bonds

$25,000,000

—:

Ontario (Province of), Canada.^.
•

invited)

6, Ore.
York, N. Y.

Plan

Debentures

Polian

(Wednesday

Curtif-;

Mitehum,.. Jones

Kansas Power & Light
,

September 10

General Telephone Co. of Florida.-Preferred 1

(Thursday)

Generating Co
to

•

$20,000,000

Mississippi Power Co.
(Bids

Smith-Corona Marchantr Iiic.__l__i____Debeutures.
(Offering' to. stockholders-p-UnderwritterL byl Lehman Brothers)
. ;
$7,443,100
- "
"

(Thursday)

invited)

June 25

!.;■

May 28

v(Bios 11 a.m. EST;-) $10,000 ,000

»:

$7,000,000

Bonds

(par 25 cents).

For mining expenses.
land

Southern Electric

Preferred

;

Power
(Bids

Common

—

stockholders—underwritten

Proceeds—For purchase and

Fluorspar Corp. of America
stock

-Bonds
invited)

stock,

Oct. 14 (letter of notification) 133,333 shares of common

-Bonds
$50,000,000

(Thursday)

Builders, Inc.
$4,000,000 of 6% 15-year sinking fund sub¬

land, including shopping site; for new equip¬
ment
and
project site facilities; for financing ex¬
pansion program; and for liquidation of bank loans and
other corporate purposes.
Office—700 43rd St., South,
St. Petersburg, Fla. Underwriter—None.

Bonds

$20,000,000

■

(Offering

Power

•

division

(Wednesday)

invited)

Debentures

a.nCC^T)

unit.

■■

(Tuesday)

First National Bank & Trust Co., Tulsa,
Okla.
.

April 2
(Bids

Edison

(Bids

a;.'

-v

to be offered in units of $100 principal amount of deben¬
tures and one share of common stock. Price — $110 per

$25,000,000

Common'

r:V<Dempsey-Tegeler & Co.) 480,000 shares

Commonwealth

invited)

—

ordinated debentures and 40,000 shares of common

(Tuesday)

Illinois Bell Telephone Co

(Bids

Tractor

For

Industry, Inc.
200,000 shares of class A common, stock.
($1.50 per share). Proceeds—For working
Office—508 Ainsley Bldg., Miami, Fla. Under¬
R. F. Campeau Co., Penobscot Bldg., Detroit,

Florida

Indiana, Inc

February 25

Common

ibi

.(Equitable Securities

Dec. 1 filed

Debs.

Common

(Bids

> u

ed until after the first of January.

Bonds

(Wednesday)

February 17

(Offering to stockholders—underwritten by The First Boston
Corp.) 195;312 shares

v;-.

$12,000,000

EST) between $40,000,000 and $45,000,000

Public Service Co. of

.....Common

,bu,

Corp.
Dec. 3 (letter of notification) 50,000 shares of class A
common stock (par $2).
Price—$6 per share. Proceeds—
To capitalize
several wholly-owned subsidiaries and
for general working capital. Office—1510 Jericho Turn¬
pike, New Hyde Park, N. Y. Underwriter—Singer, Bean
& Mackie, Inc., New York, N. Y. Offering — Not expect¬

(Tuesday)

invited;

Co
a.m.

Co.

First Lumber

Boston

(Offering to stockholders—to be underwritten by Morgan
Stanley & Co. and The First Boston Corp.) $59,778,000

Common

«5t

First

33,000

Consolidated Edison Co. of New York, Inc

(Monday)

Dean

Corp.;
Rhoades

The

50,000 shares

Kaiser Industries Corp..
(The First

Co.)

(Friday)

Service

February 4
January

Common

January 27

and

......._...Common

Co.

PST) $15,000,000

a.m.

writer

(Offering to stockholders—underwritten by Clark, Dodge & Co.)

$75,000,000

Finance

filed

Mich.

Common

Humphrey

capital.

;

$4,000,000

Gas & Electric Co
(Bids 8:30

'•

Loeb

National State Bank

-Debentures

Co.,

Robinson,

Street, Port Chester,

Price—At par

(Thursday)

stockholders—underwriten

and

Bonds

Co., Inc.;. White, Weld & Co.

acd Laurence M. Marks & Co.) $15,000,000

C. I. T. Financial Corp
V

(Offering
Corp.

Portfolios, Inc.) $500,000

(Kidder, Peabody & Co.; Blyth

(Shields & Co.) 404,900 shares

Mobile Gas Service Corp
.

Washington Water Power Co._______^_-

Common

January 22

Debens. & Pfd.

Office—1 South Main

subordinated debentures.

(Offering to stockholders—to be underwritten by The First
Boston Corp. and Drexel & Co.) 295,841 shares

offeff

proposes

Finance

January 21

Com.

debentures

convertible subordinated

company

(letter of notification) $300,000 of 10-year 6%
Price—At par (in de¬
of $1,000 each). Proceeds — For working
capital, to make loans, etc. Office—2104 "O" St.„'LiK*-'
coin, Neb. Underwriters — J. Cliff Rahel & Co. and
Eugene C. Dinsmore, Omaha, Neb.
-

(Kidder,

Underwriter—None.

senior

and Lester, Ryuns & Co.) 300,000 shares

The

1968.

nominations

Corp.__

(The First Boston Corp.

Federated

Southern Natural Gas Co

Corp
Debentures
(Paine, Webber, Jackson & Curtis) $1,250,000

Natural Gas

Kaman Aircraft

40,000

$918,000

due

of Federated.

stockholders—underwritten by Johnston, Lemon &
Dillon, Union Securities & Co. and
Abacus Fund) $7,500,000
3

(Offering to stockholders—underwritten by The First Boston

Corp-1__Debentures

Iligginson Corp.; White, Weld & Co.;

r-'-;&

(Tuesday)

Eastman

Corp.)

filed

debentures

Rockland-Atlas National Bank of Boston__Common

$10,000,000

$210,000 of the debentures to purchase the capital stock
of Consumers Time Credit,
Inc., a New York company;
$442,000 of the debentures in exchange for Consumers
debentures; and $226,000 of the debentures in exchange
for the outstanding 12% debentures of three subsidiaries

Common

January 7

General

Eastman

Government Employees Variable Annuity
Life Insurance Co
Common

"Vu\\ 'J'}

•

106,841

and Dean Witter & Co.) 500,000 shares

January 20
4

2_AiCommon

Cranberry, Marache & Co.) 12,000 SliaiPjes?*"-

underwritten

Dec.

Northwest Gas & Oil Exploration Co..^.Common
;

Southern California Edison Co

it Federated Corp. of Delaware

Common

Union Securities & Co.)

Dillon,

~.r'

expense
tion. Underwriter—None.

..Bonds
$10,000,000

Seiberling Rubber Co.________
■

300,000 shares of common stock. Prto*—
($5 per share). Proceeds—To cover operating
during the development period of the corpora¬

At par

(Monday)

EST)

Laboratories, Berkeley, Calif.

Feb. 20 filed

$900,000

Co.__^

noon

Ethodont

—Common

January 19
;;v(Bids

Chicago 5c North Western Ry._

Common
$144,000

(Peter Morgan & Co.)

Corp.;Ltd._____^__^__

(Allen

,7;

Price^—$1

share. Proceeds—For new equipment, repayment of
loan, acquisition of properties under option, and other
corporate purposes. Office—Toronto, Canada, and Em¬
porium, Pa. Underwriter—None.

per

common

(Albion Securities Co.)

; ;

;

Dec.

Surrey Oil & Gas Corp

_-_r-_____Commoii

Robert H. Green is President.

Derson Mines Ltd.
June 5 filed 350,000 shares of common stock.

Co.

Heliogen Products, Inc._—
„

Research

—

Aug. 29 filed 150,000 shares of preferred stock (no par)
Price—To be supplied by amendment. Proceeds—To re¬
pay short-term bank l loans and for expansion and im¬

Common

Proceeds-—For investment.
Sales Corp., St

Counselors

—

Cryogenic Engineering Co.
Sept. 22 (letter of notification) 150,000 shares of class A
common stock (par 10
cents)., Price—$2 per share; Pie*
ceeds
For repayment of loan; purchase of
plant and
office equipment; raw materials and
supplies; and for
working capital, etc. Office—U. W. National Bank Bldg.,
1740 Broadway, Denver, Colo. Underwriter—L. A.
Huey,
Denver, Colo.

ness,

Consumers

Price—At market.

Underwriter

—For retirement

crude oil properties if favorable
opportunities therefore
arise. Underwriter—None.
;
->•

Research Fund, Inc., St. Louis,
100,000 shares of capital stock, (par

filed

cent).

(Monday)

—

Counselors
Feb.

Kansas

NEW ISSUE CALENDAR
Industro Transistor Corp:__
J?.*. Fuller & qo.i,. 150,000 shures'

Underwriter
Morgan
Offering—Postponed indef¬

Stanley & Co., New York.
initely.

Cooperative Association,

mined by competitive bidding. Probable bidders: Halsey,
Stuart & Co. Inc.; Glore,. Forgan ,&> Co.; The' First Bos¬

"(CST)

13.

short-term bank

Consumers

Edison Co.Hl/13)

Dec. 18 filed $20,000,000 of sinking fund
debentures, due
Jan. 1, 2009. Proceeds—To be added to
wbrking capital
lor ultimate application toward the cost of

ton

Feb.

(31)

invited)

Bonds
$8,000,000

Bell Telephone Co.

(Bids to be Invited) $110,000,000

Debentures

and 1,537.500 shares of

common

stock (ne

B stock (par |1).

United States.
Underwriter—To be determined by competitive bidding.
Probable bidders: Blyth & Co., Inc., and The First BesProceeds—To the Attorney General of the

Continued

page

The Commercial and Financial Chronicle

(32)

Continued jrom page

Corp.
(jointly); Kuhn, Loeb & Co.; Lehman
Brothers, and Glore, Forgan & Co. (jointly). Bids—Had
been scheduled to be received up to 3:45 p.m. (EDT) on

Hamilton Oil & Gas Corp.

Oct. 22 filed 1,000,000 shares

May 13 at Room 654, 101 Indiana Ave., N. W., Waihimton 25, D. C., but bidding has been postponed.
Telephone

Co. of California

if Glenmont Investors Syndicate
15 .(letter of notification) 100 units.
Price—$2,000
unit. Proceeds—For purchase of land and to erect a
commercial' building.
Office—c/o Glenn Garvin, 3401
East-West Highway. Chevy Chase, Md.
Underwriter—

■Dec
per

588,000 common shares issuable upon exercise
1,176,000 options rights previously offered (Oct. 19,
1957), which rights entitle the original
purchaser
thereof to purchase one-half share of stock at 50 cents
per share at the expiration of 13 months after com¬

Insurance

Employees Variable Annuity Life
Co.
(1/20)

Nov. 13 filed 2,500,000 shares of common stock
to be offered by company on or about Jan. 20,

(par $1)
1959 viz:
(1) to holders of common stock (par $4) of Government
Employees Insurance Co., on the basis of one warrant per
share of stock held on Jan. 6, 1959 (1,334,570 shares are
now outstanding);
(2) to holders of common stock (par
$1.50) of Government Employees Life Insurance Co., on
the basis of l3/2 warrants per share of stock held on Jan.
6, 1959 (216,429 shares are now outstanding); and (3) to
holders of common stock (par $5) of Government Em¬
ployees Corp., on the basis of % warrant per share of
etock held on Jan. 6,1959 (as of Sept. 30, 1958 there were
143,127 shares of stock outstanding and $614,360 of 5%
convertible capital debentures due 1967, convertible into
chares of common at $28.0374 per share.
If all these
debentures were converted into common stock prior to
the record date, a total of 164,724 common shares would
be outstanding. Warrants will expire on Feb. 10, 1959.

—$3 per share.
Government

—

mencement of such

Proceeds—For capital and surplus.
Employees Insurance Building,

Washington, D. C. Underwriters—-Johnston, Lemon &
Co., Washington. D. C.; Eastman Dillon, Union Securities
& Cc., New York; and Abacus Fund,
Boston, Mass. /
Grain Elevator Warehouse Co.' ?•
;
;
:

Nov. 3 filed 100,000 outstanding shares of common stock

(par 10 cents). National Alfalfa Dehydrating & Milling
Co., holder of the 100,000 common shares, proposes to

•.

offering.]

one

convertible

preference

stock

held

stock

for

warrant

one

purchase

one-eighth

share of

Grain Elevator stock for each share of National Alfalfa
common held on Nov.
17, 1958; rights to expire Dec. 31.
Price—$2
Office

927

—

share.

per

Market

Proceeds—To

Street,

selling stockholder.
Wilmington, Del. Under¬

Union Co.

Oct. 29 filed 187,534 shares of common stock
(par $5)
being offered in exchange for outstanding common stock
-cf Sunrise Supermarkets
Corp. at the rate of one share
of

Grand Union stock for each 2.409 shares of Sunrise
etock.
The offer is subject to acceptance
by at least
80 % of the outstanding Sunrise shares

by Dec. 31. State¬

ment became effective

Dec. 10/

the

company's

tributors

and

their

news

dealers,

employees at

wholesalers

$1.65

per

writer—None,
•

Heliogen Products, Inc. (1/15)
(letter of notification) 28,800 shares of
.

Oct. 22

common

stock

(par $1). Price—$5 per share. Proceeds—For
payment of past due accounts and loans and general

if Highland Telephone
Dec.

stock

(letter of notification) 2,250 shares of

(no par)

Price

fective Dec.

19.

Gulf States Utilities Co.
(1/19)
Dec. 11 filed
810,000,000 of first mortgage bonds due
1989. Proceeds—-To
repay bank loans and for construc¬
tion program. Underwriter—To be

determined by com¬
bidders: Halsev, Stuart &

petitive
Co.
ner

bidding. Probable
Inc.; Lehman Brothers; Merrill Lvnch,
Pierce, Fen& Smith and White Weld &
Co. (jointly); Stone &

Webster Securities

Bros. & Hutzler

and Eastman Dillon, Union
Securities & Co. (jointly).
Bids—Expected to be received up to noon (EST) on Jan
19 atTheHanover Bank, 70

Gulf
Dec.

States

Broadway,New York

Utilities Co.

15.N.Y.

(1/13)

filed 100,000 shares of
cumulative preferred
(par $100). Proceeds—To repay bank loans and

stock

for

construction

program.
Underwriter—To be deter¬
competitive bidding. Probable bidders: Lee
Higginson Corp; Stone & Webster Securities
Corp.:
Kuhn, Loeb & Co. and Salomon Bros. & Hutzler (joint¬
ly); Lehman Brothers and Equitable Securities Corp.
<jointly); Glore, Forgan & Co. and W. C. Langlev & Co.

mined

Corp.; and Salomon

Highway Trailer Industries, Inc.
24 filed 473,000 outstanding shares of
common
stock (par 25 cents). Price—At prices
generally prevail¬
ing on the American Stock Exchange.
Proceeds — To

Nov.

stockholders.

Office—250

Park

Avenue,

stock

Credit stock for each two shares of Hilton Hotels stock.
Price—To be supplied by amendment.
Proceeds—To-

with

bank

loans,

will

comprise

the

operating
funds of Hilton Credit and will be used for
general cor¬
porate purposes and to finance the company's purchase
of charge accounts from Hilton Hotels and other
estab¬
lishments who may agree to honoi4* Carte Blanche cards.
Underwriter—Carl M. Loeb, Rhoades &

Co., New York.

if Hinsdale Raceway,

Price—The

common

stock at par

($1

per

share) and the

notes in units of $500 each. Proceeds—For construction
of a track, including land,

grandstand, mutual plant
building, stables and paddock, dining hall, service build¬
ing, administrative building, penthouse, tote board and
Underwriter—None,.

Hoagland & Dodge Drilling Co.,
June 12 filed 27,000 shares of
capital
per share.
Proceeds—To be used fn
ploration of mines and development

Inc.
stock.

Price—$10

part for
and

mines and in payment of indebtedness.
Ariz. Underwriter—None.

the

ex¬

operation

Office—Tucson,

(letter

cumulative
to

be offered to

and

notification)

convertible

preferred

15,500 shares of 5%
stock, series B, 1957,

approximately 10 charitable institutions

group of other prospective purchasers
(some of the shares may be purchased by the Homasote

Price—At

Trenton, N. J.

($10

par

per

share).

Proceeds

Office—Lower Ferry Road,

(letter of notification 4,500 shares of 5% cumu¬
preferred stock, series B, 1957 (par
S10) and 1,500 shares of common stock (par $1) to be
offered to employees in
units, each unit consisting of
convertible

one

common

stock

and

three

pre¬

stock.

Price—$50 per unit. Proceeds—To obtain
commitments by banks for unsecured term loans and

for

construction purposes.

Home

Dec.
fered

Owners

Life

Underwriter—None.

Insurance Co.

standby)

153,840 shares of common stock
subscription by stockholders (for

two shares

the basis of

held.

one

additional share

15-dav

for

of¬

Home-Stake Production Co.,
Tulsa, Okla.
5 filed 116,667 shares of common stock

general

corporate

Bldg., Tulsa, Okla.
Household
Dec.

laboratories; and for working capital. Office—
Ave., Port Washington,, L. I., N. Y. Under¬
writer
B. Fennekohl & Co., 205 East 85th St., New
York, N. Y.

4 Manhasset
—

Jackson's

Minit Markets, Inc.
250,000 shares of common stock (par $1).
Price—$3 per share. Proceeds—For acquisition of land
and construction of stores prior to their sales to others
and their lease-back by the company; for the equipping
and stocking of its stores, and for general operating pur¬
poses.
Office — 5113 Fairmont St., Jacksonville, Fla.

Proceeds—For working capital and
purposes.
Office — 2202 Philtower

Underwriter—None.

Finance

Corp., Chicago, III.

(1/7-8)

19 filed

$30,000,000 of sinking fund debentures due
Price—To be supplied by amendment. Proceeds—
To reduce short-term bank loans which were
incurred
under the company's established
line of credit to pro¬
vide additional funds for
lending to customers in the
course

Dec.

filed

Underwriters—Pierce, Carrison, Wulbern, Inc., Jackson¬
ville, Fla.; Courts & Co., Atlanta, Ga.; and The John¬
son, Lane Space Corp., Savannah, Ga.
22

Industries

filed

of business.

Corp.

(1/12)

5^00,000 shares of common stock (par $4).

Price—To

be supplied by amendment.
Proceeds—To
selling stockholders.
Underwriters—The First Boston
Corp., Dean Witter & Co. and Carl M. Loeb, Rhoades &
Co., all of New York.

Kaman
Dec.

Aircraft

filed

Corp., Bloomfield, Conn.
(1/7)
$1,250,000 of 6% convertible subordinated

debentures due

1974.

Price—To be supplied

by amend¬
working capital. Underwriter—
Jackson & Curtis, Boston, Mass.

Proceeds—For

Kansas

Power &

Light Co. (1/14)
275,000 shares of common stock (par $8.75).
supplied by amendment.
Proceeds—To
repay $6,500,000 of bank borrowings and for construc¬
tion program.
Underwriter — The First Boston Corp.,
Dec. 22 filed

Price—To

New

York.. '

<•

if Kimberly-Clark Corp.
Dec. 30 filed 225,000 shares of common stock to be of¬
fered in exchange for the common stock of the Ameri¬
Envelope Co. of West Carrollton/ Ohio. The
change is contingent on acceptance by all of

ex¬

the

stockholders.
Laure Exploration Co.,

Underwriters—Lee Higginson

Inc., Arnett, Okla.

Dec. 23 filed 400,000 shares of common stock.
per

share.

exploration

Price—$2

Proceeds—For machinery and equipment and
purposes. Underwriter—None.

Vtetrch 28 filed

Securities Corp.

1.000.000 shares of capital stock
(par

$1).
Proceeds—To acquire stock control
expanding life and other inturance companies and related companies and then to
merate such companies as subsidiaries." Underwriter—
first Maine Corp.. Portland, Me.
Price—$5 per share.

of "young, aggressive and

1984.

usual

test

for

Life Insurance

(par $5).

share.

per

Inc.

(letter of notification) 200,000 shares of common
stock (par 10 cents). Price—$1 per share. Proceeds—Tov
acquire machinery and equipment and additional space

Price—To be supplied by amendment,

Nov.

Price—$6

Itemco
Nov. 28

each

Proceeds—For working capital. Office—Fort
Lauderdale,
Fla. Underwriter—H. Hentz &
Co., New York. I Offering
—Expected late in January.
•

Corp.
46,260 shares of common stock. Price—$100
share. Proceeds—For investment. Office—19 Rector;.
Street, New York, N. Y. Underwriter—None.
per

can

filed

for

Investors

1 filed

Dec.

Paine, Webber,

if Homasote Co.

ferred

Israel

ment.

Underwriter—None.

Dec. 22

lative

lantic Federal Building, 1750 E. Sunrise Boulevard, Ft.
Lauderdale, Fla. Underwriter—None.

Kaiser

small

(letter of notification) 55,555 shares of common
(par two cents). Price—$4.50 per share. Proceeds
account and paid-in surplus. Office—At¬

—For capital

Dec.

if Homasote Co.

Offering—Being held in abeyance.

Investment Corp. of Florida

Oct. 9

Corp., Beverly Hills, Calif.

Dec. 18 filed 1,942,570 shares of common stock
(par $1)
to be offered for subscription
by common stockholders of
Hilton Hotels Corp. at the rate of one share of Hilton

gether

Co., New York.

—

Underwriter—None.
Hilton Credit

working capital and to enlarge research

if International Bank, Washington, D. C.
Dec. 29 filed $5,000,000 of notes (series B,
$500,000, twoyear, 3% per unit; series C, $1,000,000, four-year 4% per
unit; and series D, $3,500,000, 6-year, 5% per unit). Price
—100% of principal amount.
Proceeds
For working
capital. Underwriter—Johnston, Lemon & Co., Wash¬
ington, D. C.

Office—145 North Main St., Monroe, N. Y.
Underwriter—None.

Foundation).

Co. of America

Proceeds—For

and development department. Underwriter—S. D. Fuller

com¬

phone plant.

—For construction purposes.

88,740 shares of class A common capital
etock (par $1.80). Price—$5.35
per share. Proceeds—To
increase capital and surplus.
Office—815 15th Street,
N. W.,
Washington, D. C. Underwriter—Statement ef¬

10
cents); reduced to 135,000 shares by amendment subse¬
quently filed. Price—To be related to the market price.

—

and

filed

Industro Transistor Corp.
(N. Y.)
(1/5-9)
Feb. 28 filed 150,000 shares of common stock (par

$45 per share. Proceeds —
To repay bank loans and for construction of a new tele¬

selling

18.

•

common

to be offered for subscription

stockholders.

mon

share;

shares will be offered to general public at $2
share. Proceeds—To satisfy creditors' claims and for
general corporate purposes. Office—41 E. 42nd
St., New
York 17, N. Y.
Underwriter—Mortimer B. Burnsidc &
Co., Inc., New York 5, N. Y.

Guaranty Life Insurance

ment effective Nov.

Co.

dis¬

100,000

•

Industrial Minerals Corp.,
Washington, D. C.
July 24 filed 600,000 shares of common stock (par one
;ent). Price—$1 per share. Proceeds—To develop and
)perate graphite and mica properties in Alabama. Unlerwriters—Dearborn & Co. and Carr-Rigdom & Co.,
both of Washington, D. C., on a best efforts basis. State¬

,,,

and

per

Nov.

program.
Underwriter—To be determined
by competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Eastman Dillon, Union Securities &
Co.; The
First Boston Corp.; Harriman
Ripley & Co. Inc. Offer¬
ing—Date indefinite.
/

Price — At par. Proceeds — To repay
debts, acquisition of investments, and for general pur¬
poses.
Address—P. O. Box-348, Albany, N, Y. Under¬

Dec.

• Great American Publications, inc.
15 (letter of
notification) 130,000 shares of com¬
mon stock
(par 10 cents), of which 30,000 shares will
be offered for 30 days to the
company's employees, and

Dec.

construction

each

cise the rights.

clubhouse.

writer—None.
Grand

Michigan Electric Co. /
Sept. 26 filed $20,000,000 of first mortgage bonds due
Nov. 1, 1988. Proceeds—To retire bank loans used for

about

Underwriters—None.

Indiana &

Nov. 1,
Stockholders will have 45 days in which to exer¬

1958.

common

Office—Tel Aviv, Israel.

groves.

Development Corp.
Oct. 23 (letter of notification) 22,820 shares of non¬
voting convertible preference stock (par $12) to be
offered for subscription by stockholders on the basis
01

750,000 shares of common stock. Price—$1
share. Proceeds—To be used for new packing houses,
purchase of citrus groves and for the planting of new

per

for

Heartland

Inc., Hinsdale, N. H.
Dec. 29 filed capital trust certificates
offer to iis stockholders preferential warrants to subevidencing 1,000,In¬
000 shares of capital stock, and 2,000 debenture notes.
scribe to 93,750 shares of Grain Elevator stock on the
basis

I. C. P. Israel Citrus Plantations Ltd.
Dec. 23 filed

working capital. Office — 35-10 Astoria Blvd., L. I. C.
3, N. Y. Underwriter—Albion Securities Co., Suite 1512,
11 Broadway, New York
4, N. Y.,

None.
Government

(par 25

provements and to discharge in part short-term bank
Underwriters—Paine, Webber, Jackson & Curtis,

of common stock

ditional

loans.

of New York and Boston. Mass., and Mitchum, Jones &
Templeton, Los Angeles, Calif, (not under a firm com¬
mitment basis)./ V /;/a ■
' - //• AV.
• General Telephone Co. of Florida
(1/14-15)
Dec. 23 filed 480,000 shares of $1.30 cumulative preferred
stock, series B. Price—At par ($25 per share). Proceeds
—To repay bank loans.
Underwriters—Paine, Webber,
Jackson & Curtis and Stone & Webster Securities Corp.,
both of New York and Boston; and Mitchum, Jones &
Templeton, Los Angeies, Calif. There is no firm commit¬
ment by the underwriters to acquire the stock.

Hussman Refrigerator Co.
18 (letter of notification) an undetermined number
of shares of common stock
(par $5), not to exceed an
aggregate of $50,000, to be offered to employees. Price
—At the market.
Proceeds—To buy stock on the New
York Stock Exchange.
Office—2401 North Leffingwell
Avenue, St. Louis, 6, Mo. Underwriter—None.
Dec.

Price—$2 per share. Proceeds—To acquire funds
to test drill, explore, and develop oil and gas properties.
Underwriter—None.
[The registration includes an ad¬

(1/7)
of 5% cumulative preferred
ftock (par $20). Price—To be supplied by amendment.
Proceeds—To be used for property additions and im¬
General

Thursday, January 1, 1959

cents).

Dec. 16 filed 500,000 shares

Office

Corp. and White, Weld & Co., both of New York, and
William Blair & Co.,
Chicago,. 111.
'/■;.1— ■f.''' r

(jointly). Bids—Expected to be received up to 11 a.m.
(EST) 011 Jan. 13 at The Hanover Bank, 70 Broadway,
New York 15, N. Y.
v
;

ton

Price

Los Armeies Drug Co.

Oct. 3 filed 50,000 shares of capital
stock, to
for subscription by holders of outstanding

be offered

stock,

pro
an

rata basis

Any shares not

sold will be offered

a
on

exchange basis to holders of outstanding 5% sinking

.Volume 189

Number 5808

The Commercial and Financial Chronicle

fund debentures. Price—$10.50 per share to stockholders;
$11.50 to public. Proceeds—$328,300 to redeem outstand¬
ing 5% sinking fund debentures and $189,200 to reduce

body & Co., Smith, Barney & Co. and Blyth & Co., Inc.
(jointly). Bids—Had been expected to be received up
noon (EDT) on Aug. 26 at Room 2033, Two Rector St.,

New

Office—Los Angeles, Calif* Un¬
derwriter—Quincy Cass Associates, Los Angeles, Calif.

For

York, N. Y., but company on Aug. 22 again decided
pending improvement in market conditions.

Montana Power Co.

Feb.

Co., inc., Miami, Ffa.
Price—$5
share. Proceeds—To reduce current indebtedness to
Walter E. Heller & Co. Underwriter—Plymouth Bond
& Share Corp., Miami, Fla.
.
" r

debentures due March 1, 1974 and 485,550 common stock
purchase .warrantsrto purchase 454,545. shares of $1 par
common stoek to
be offered in exchange for National

Corp.
Dec. 10 (letter of notification))70,000 shares of common
stock (par $5). Price—$5.50 per share. Proceeds—To be

each NTA shares Dealer-Managers—Cruttenden,

Hills, Calif.
f
-rr//
:
-

Telephone Co.
Nov. 19 (letter of notification) 5,454 shares of common
stock (no par) to be offered for subscription by stockon

the basis of

one

share for each

new

per

share.

•

stock

—403

/Merchants Petroleum Co..-'"L
Oct.' 8 (letter of notification) 159,395 shares of common
stock (par 25 cents) being offered for subscription by
stockholders of record Nov. 24; *1958" On" the basis of one
^riew shalre foir.;4ach five shares held; rights to expire

'//.* >//

'/'■'/ ;

^Office—55 West 42nd Street, New York 36, N. Y. Under¬
writer—C. H. Abraham & Co., Inc., 565 Fifth Ave., New

Offering—Expected in January.

Millsap Oil & Gas Co.
Dec. 23 filed 602,786 shares of common stock.

extension

and

common

Underwriter—None.

July 1 filed $20,000,000 of first mortgage bonds due 1988.
Together with other funds, to be used to
Way $15,500,000 in bank loans and to carry on the
company's construction program through 1959. Under¬
writer—To be determined by competitive bidding. Prob¬
able bidders: Halsey, Stuart & Co.
Inc.; Lehman Bros,;
Merrill Lynch, Pierce, Fermer & Smith, and Stone &
Webster Securities Corp.
(jointly); White, Weld & Co.;
Eastman- Dillon,; Union^Securities
Co. ^Kidder -Pea-

basis.

and

Dec. 24 filed

ceeds

—

To repay

Rictiwell

•

stock, of which

bank loans and for working capital.

Petroleum Ltd., Alberta, Canada

1,998,716 shares of common stock (par $1).
1,174,716 shares are to be sold on behalf o|
and 824,000 shares for the account of cer¬
tain selling stockholders. The company proposes to offer
the 1,174,716 shares for subscription by its shareholder!
at the rate of one new share for each three shares held
Of this stock,
the company

(with an oversubscription privilege). The subscription
period will be for 30 days following issuance of sub¬
scription rights. Price—To be supplied by amendmeProceeds—To pay off demand note, to pay other inc
edness, and the balance if any will be added to w^
capitaL Underwriter —Pacific Securities LP

100% and stock at $3 per share: Pro¬
textile mill, machinery, equipment
York, N» Y. Underwriter—Harris

Securities Corp., New York, N. Y., on a best efforts, basis.
Offering—Expected some time in January.
"
-

100,000 shares of common

June 26 filed

materials, and to provide working capitaL Office

—375 Park Ave., New

Underwriter—Bache & Co., New York.

Industries, Inc. ;
of 5Vz% convertible debentures
250,000 shares of common stock (par 10 cents). Price

raw

Corp., Roseland, N.

50,000 shares are to be offered for the account of tp*
company and 50,000 shares for the account of a sellirig
stockholder. Price—To be supplied by amendment. Pro*

filed $250,000

—Debentures at

Corp., Orlando, Flp.

Resistoflex

ceeds—To purchase a
and

Remo

Orlando, Fla.

■1.:

/ ■
-w-..V,.
-•
Sept. 22 filed 100,000 shares of class A common stocks.
Price—To be supplied by amendment.
Proceeds—For
working capital. Underwriter — Citrus Securities Co*
-

Odlin

Nov.

—

$1,000. Price—At par. Proceeds—For work¬
ing capital and general corporate purposes. Underwriter
—Rassco Israel Corp., New York, on a "best effort^

mingo Plaza, Hialeah, Fla.

Montana Power Co.
Proceeds

of $500 and

$1,000,000 of 15-year 6% series A sinking
fund debentures due 1973, to be offered in denomination*

Oak Ridge, Inc.
Sept. 4 (letter of notification) 100,000 shares of common
6tock (par $1). Price — $3 per share. Proceeds — For
working capital. Office—11 Flamingo Plaza, Hialeah,
Fla.
Underwriter—Henry & Associates, Inc., 11 Fla¬

June 26 filed

None.

stock (no par). Price—$13.18 per share. Proceeds—For
general funds of the company.
Office —1500 DeKoven

Avenue, Racine, Wis.

Underwriter—None.

Rassco Financial Corp.

$692,000 of 6% debentures maturing on or before Dec.
31, 1974 and $123,000 of 7% debentures due on or before
May 6, 1965. The company proposes to make a public
offering of 25,000 shares of common stock at $10 per
share.
The remaining shares and the debentures are
subject to an exchange offer between this corporation
O. K. Rubber, Inc., and O. K. Ko-op Rubber Welding
System, on an alternative basis. Proceeds—Of the public
offering, Will be used for additional working capital
and/or to service part of the company's debt. Office—
551
Rio Grande Ave., Littleton, Colo.
Underwriter—

improvement of. gas distribution system. Underwriters—
The First Boston Corp., New York, and The RobinsonHumphrey Co., Inc., Atlanta, Ga.
~

...

Keyport, N. J.

(letter of notification) 600,000 shares of common

Welders, Inc.
Dec. 15 filed 60,600 shares of common stock, $43,333.33
of 31/4% debentures maturing on or before May 6, 1965,

Jan. 21, 1959; rights to expire on Feb. 9, 1959. Price—
To be
supplied by amendment.
Proceeds—To reduce

(letter of notification) 7,050 shares of

Pence -<l#

O. K. Rubber

Mobile GasService Corp; (1/22)
r "
;
Dec. 30 filed 33,000 shares of common stock to be of¬
fered for subscription by common stockholders at the
rate of one new share for each 10 shares held of record

Dec. 19

ferred stock.

gerieial'corporate

Miami, Fla. Underwriter—Cosby & Co., Clearwater, Fla.

Underwriter—None.

• Modine Manufacturing; Co.

(par $5)
and 8,000 shares of special common stock
(par $75).
Price—For common stock, $8.75 per share; for special
common
stock, $131.25 per share. Proceeds—For con¬
struction program, to purchase shares of Coastal Chem¬
ical Corp.
(a subsidiary), and the balance will be

for the

Baysnne, N. J. 1//k;
of $8 srumulative preferred

$100) :and 41,000^)00 of 8% suta0rdin-»

stock, series A;

stock (par 10 cents). Price—50 cents per share. Proceeds
—For working capital. Office—20th Avo~N. W. 75th St.,

filed 200,000 shares of common stock

incurred

Pionssr Trading Carp.,
Nov. 10 filedv 10,000 shares

Nylonet Corp.
Nov. 24

• Mississippi Chemical Corp., Yazoo City, Miss.

loans

Di'exel & Co., Philadelphia, Pa.

-Corp.

general funds of thq*

for general corporate purposes. Un*First Boston Corp., New' Ybtk, and

Price—$1
per share. Proceeds— For additional working capital.
Office—Siioam Springs, Ark. Underwriter—None.

bank

Proceeds—To be added to the

company and used
derwrtters — The

—

• Military PubHshinglnetftute, Inc.
,\j:
Dec. 9 (letter trf notification) 125,000 shares of common
stock (par 5 cents). Price—$2 per share.
Proceeds—
For general corporate purposes and working capital.

short-term

ment.

share. Proceeds—To
purchase money .mortgage on/property; development of
property and for;working, capital. Office—611 Forsyth
Building, Atlanta, Ga. Underwriter—None.
'-

added to surplus.

Nedow Oil Tool Co.

stOck. ( par~$4). / Price-—$12,50vper

■

(no pa?:) to
by its com¬
stockholders of record Jan. 6, 1959, at the rate ot
one new share for each 20 shares then held; rights to
expire on Jan. 26. Employees will be given a contingent
subscription privilege. Price—To be supplied by amend¬

Price-r-$If000 per »nit. Proceeds
purposes; Underw riter—None.
^L«ohTrottlng-An#cUtianF 4nc.
FYanciscd* Calif.:
;
// .• /
Aug, 7 filed 650,000' shares of jcommonr- stock (par ond
cent) //'Trice—$ 1.50 per share, Proeeed^Ta, pay eurrenf
rNow Jersey Investing Fund, Inc., flow York
;
liabilities, for :new c<mstructton ,and Working capitaU
Deci 'O - filed* 200^000 .shares ;of capital stock. Trioe—-At
market/ JPre«®®4s!--TFor investment. • Investment Adviser /4>fflee--Bayard, Fla. Underwriter—Robert /!#» ^Fermaii
and Distributor—Spear, Leeds dc Kellogg, New York. /
Co., Inc., Miami, Fla. Statement effective Dec/ 17.
; :
Frpirie Fibreboanl Ltd. - f
v"-Northern Insurance Co. of New York
Aug; 18 filed 209,993 shares of common stock (par $1,501
Dec. 5 filed 145,200 additional shares of capital stock
to be offered for sale 4o Tesidents of Canada in the Prov¬
(par $12.50) being offered for subscription by stockhold¬
inces of Manitoba, Saskatchewan fand /Alberta and'
ers of record Dec. 23, 1958, at the rate of one new-Share
residents of the United States "only in the State of Norfo
for each two shares then held; rights to expire on Jan.
Dakota." /Price — $3 per share,
Proceeds ^
con¬
19.
Price
$36 per \ share.
Proceeds—To: increase
struction purpose.
Office —Saskatoon, i Sa^atchewanu
capital and surplus.
Underwriters—The First Boston
Canada. Underwriter—Allied Securities Ltd., arid UriStofc
Corp. and Wood, Struthers & Co., both of New York#
Securities, Ltd., both of Saskatoon, Canada.,
Northwest Gas & Oil Exploration Co. (1/6)
;
W Raritan Industries Corp.
^
Aug. 22 (letter of notification) 300,000 shares of common
Dec. 29 (letter of notification) 37,500 shares of capital
stock "(par 10 cents).
Price—$1 per share. Proceeds—
stock (par $1), of which 20,450 shares are to be offered
For acquisition of additional gas and oil interests and
to the public; the remaining 17,050 shares are to b*
corporate administrative expenses. Office—150 Broad¬
used for payment of assets transferred to the company
way, New York 38, N. Y. Underwriter — Greenfield &
and services rendered. Price—$2 per Share. ProceedsCo., Inc., New York 5, N. Y. Statement effective Dec. 15.
—For general corporate purposes.
Office—20 First St*

■

RwiUTOi^Old

Dec. 24

(1/7)

mon

development of new engineering proj¬
ects; purchase* of 10 hcres of land, and the balance wiU
be used for working- capital. Offiee—14806- Oxnard St.*
Van Nuys,<Jalif. Un#er^Triters-^-Holtbn, Hull & Co., Los
Angeles, Calif. a(nd Pacific Coast Securities Co., San

Oct/28 (letter-of inOtHicatioh) ;$0,000 shares of 7% pre¬
ferred stock, (par $3.5*0); Trtce^$5 per share. Proceeds—
For construction of a/hiailna/v Office

York 17, N. Y.

Pennsylvania Power & Light Co.

Dec. 17 filed 295,841 shares of common stock
be offered by the company for subscription

Town,Bank'BHg.VrBaltimore 2,;^d.'UnderOttter—MOrv-

;

Office

To be used ifor

AWAtlintiCilteriBi, Inc., Sultlmoro, iWd.: J .'1

Proceeds—For capital expenditures.

William

' ;.y- Vvy v'-;' -u
Dec. 8 (letter of notification) 150,000 shares of common
stock (par 50 cents). Prtce—^2 per share. Proceeds—

-r^$lt40: :per {share* 'Proceeds — To reduce bank loan;
to dncrease^verkihg capita!- and for general corporate
purposes. ^Offieo-^617 W. 7th Street, Los^Angeles, Calif,

'V
:-'v
pec. 17 (letter of .notification) 24,000 shares of common

units of $20 of debentures and
Price—To be supplied by

stock.

Networks Electronic

Jan. 15; 1959 <with an oversubscription privilege). Price

landtSeciifitiekC^^B^thi^e^RW. - ■'/' \ ■ ;

common

May 5 (letter of notification) 150,000 shares of common
stock (par one cdrit).. Price—$2 per share. Proceeds—To
pay loan; to acquire fishing tools for leasing; and for
working capitaL Office—931 San Jacinto Bldg., Houston,
Tex. Underwriter—T. J. Campbell Investment Go.7 Inc.,
Houston, Tex.

•

/^"Military • Corp.

(1/7)

Nay lor Engineering & Research Corp.
Sept. 29 (letter of notification) 300,000 shares of cumu¬
lative voting and non-assessable common stock. Price—
At par ($1 per share). Proceeds—For organizational ex¬
penses and first three months' operational expenses. Of¬
fice—1250 Wilshire Blvd., Los Angeles 17, Calif. Under¬
writer—Waldron & Co., San Francisco 4, Calif.

W Mercantile Acceptance Corp. of California
Dec. 17 (letter of notification) $50,000 of 12-year 5^%
capital debentures. Price—At par. Proceeds—For work¬
ing capital. Office—333 Montgomery Street, San Fran¬
cisco, Calif. Underwriter—None.

Pennsylvania Power Co.
of first mortgage bonds due 19881
Proceeds—Tp redeem a like amount Of 5% first mort¬
gage bonds due 1987. Underwriter—To be determined
by competitive bidding. Probable bidders: Halsey, Stuarl
& Co. Inc.; Kidder, Peabody & Co.; White Weld & Co.j,
Equitable Securities Corp., and Shields & Co. (jointly)J
Lehman Brothers, Eastman Dillon, Union Securities dp
Co., Salomon Bros. & Hutzler and Ladenburg, Thalmani*
& Co. (jointly); Merrill Lynch, Pierce, Fenner & Smitlk
and Dean Witter fc Co. (jointly). Bids — Tentatively
had been expected to be received up to 11 a.m. (EDTJ
on Aug, 27 but
company on Aug. 22 decided to defe*
sale pending improvement in market conditions.

St., Fredericksburg, Va. Underwriter—
Kidder, Peabody & Co., Inc., New York.

(1/6)
Nov. 24 (letter of notification) 90,000 shares of common
stock (par 20 cents). Price—$2.75 per share. Proceeds—
For payment on contract to purchase invention; research
and development expenses; and working capital. Office
—c/o Virgil F. Every, 20 Lexington Avenue, Rochelle
Park, N. J. Underwriter —jQiarles Plohn & Co., New
York, N. Y.

be offered in

amendment.

Mechmetal-Tronics Inc.

Underwriter—None.

four shares of

St., Mankato, Minn.

Aug. 1 filed $8,000,000

Natural Gas Service Co.

Price—
Proceeds—To complete dial conversion

program.
Office—315 South Second
Underwriter—None.

Co.

Dec. 4 filed $200,000 of 6% subordinated income deben¬
tures due Jan. 15, 1984, and 40,000 shares of common

seven

shares held; unsubscribed shares to employees.

$55

Podesta
Cantor, Fitzgerald & Co., Inc. and Westheimer

Co.,

Mankato Citizens

v;1-.

Pasadena, Calif.
;
May 19 filed 20,000 shares of common stock (par $1),
Price—At market,
Proceeds-—For investment. Under¬
writer—Investors Investments Corp., Pasadena, Calif.
•'
/Packman Plan Fund, Inc.,

Inc. common Stock at the' rate of
$11 of debentures and one warrant to purchase onequarter of a share of National Theatres, Inc. stock for

Underwriter—None. Letter to be amended..

sometime in February.

Telefilm" Associates,

used to build and operate and all-year resort hotel. Office
^-Siiite 204, 8907 Wilshire Blvd., Beverly

Oppenheimer Fund, Inc.
' 1 -'V//'
100,000 shares of capital stock. Price—At,
(about $10 per share). Proceeds—For invests
ment. Office—25 Broad St., New York. Underwriter—
Oppenheimer & Co., New York. Offering — Expected
Dec. 5 filed

market

W NationalTheatres,Inc., Los Angeles, Calif. 1
$26,000,000 5(2 % sinking fund subordinated

Mammoth -Mountain 1nn

(1/14).

1984.
—

Dec. 30 filed

(Province of), Canada

filed

$75,000,000 of 25 - year debentures ! di&
Price — To be supplied by amendmentProceeds
For capital
expenditures^ Underwriters1 W
Harriman Ripley & Co., Inc. and Wood, Gundy & Co^,
Inc., both of New York;
<
f

Price—To be related to the current market

price on the New York Stock Exchange. Proceeds—To¬
gether with other funds, to carry on the company's con¬
struction program through 1959.
Manager-Dealers—■
Smith, Barney & Co., Kidder, Peabody & Co. and Blyth
& Co., Inc.
^

per

Ontario
Dec.

of Montana.

M. C. A. Credit

holders

(par 35 cents).. Price—$1 per share. Proceeds-^
development of oil arid gas properties. Office—dIS

Oct.- 6 filed 100,000 shares of common stock.

•

—J

International Trade Mart, New Orleans 12, La. • Under¬
writer—Assets Investment Co., Inc., New Orleans, La,
*

July 1 filed 100,000 shares of common stock (no par).
The stock will be offered only to bona fide residents

Underwriter—None.

Oil, Gas & Minerals, Inc.
stock

to defer sale

LuHoc Mining Corp.
Sept. 29 filed 350,000 shares of common stock. Price—$1
per share. Proceeds—For the acquisition of properties
under option and for various geological expenses, test
drilling, purchase of equipment, and other similar pur-poees.
Offices—•Wilmington,- Del., and Emporium, Pa.

Nov. 16 (letter of notification) 116,000 shares of commo»

short term bank loans.

•

3$f

(33)

couver,
,

Canada.

„

--',r-%ConiiniXed

(34)

The Commercial and Financial Chronicle

Continued from page

writer—None.

Arnold Malkap, President, located at 565
Avenue, New York 17, N. Y., will subscribe for
100,000 shares if other 100,000 shares are sold publicly.

capital stock
Price—$125 per share. Proceeds—For general
corporate purpose. Office—21 Rutter St., Rochester, N. Y.
Underwriter
Frederick A. Merlau, Rochester, N. Y.,

Sire

(no par).

tion.

and

in¬

amount

holders at the rate of

Price—$2.50

one new

per

share.

(par 2Vz

share for each four shares

writer—None.

Under¬

Paper Co.
Dec. 11 filed 288,450 shares of common stock, to be of¬
fered in exchange for outstanding shares of capital stock
of F. J. Kress Box Co. on the basis of 2JA shares of St.
Regis common for each share of capital stock of Kress.
St. Regis will declare the exchange offer effective if
95% of the outstanding shares of Kress stock are de¬
posited in exchange and may elect to do so if a lesser
per cent, but not less than 80%, of Kress shares, are so
deposited.

Diego Gas & Electric Co.

Dec.

Smith

(1/8)

Sports

shares of common stock to be
stockholders on the basis of one new

expand two present establishments
the number of alley beds

* by
increasing
by eight at Yorktown Heights
by six at Wilton Manor Lanes, Fort
Lauderdale;
$300,000 for deposits on leaseholds, telephones and util¬
ities; and $395,000 for working capital. Underwriter-

Sports

selling stockholder. Office—400 W. Vickery Blvd.,
Underwriter—Kay & Co., Inc., Hous¬
ton, Tex.
a

—33 Great Neck

Worth, Tex.

Price—At
1033-30th

general corporate purposes.

Office—Eighth Ave. South
Bradford Ave., Nashville, Tenn.
Underwriter
Equitable Securities Corp., Nashville, Tenn.
and

—

$26,500,000 of 71/2% capital income sinking
debentures (reduced to $25,000,000
by amendment
Dec. 17), $1,000,000 of the new
debentures are to

★ Standard Sign & Signal Co.
Dec. 17 (letter of
notification) 300,000 shares of com¬
mon -stock.
Price—At par ($1 per share). Proceeds—
To promote and expand the
development of the Safety

be offered to
company employees
equal to 98% of principal amount.

at an offering price
The remaining $24,000,000 of debentures will be offered for
public sale at

School

Co., Buffalo, N. Y. Statement effective

6130

Life, Health & Accident Insurance Co.
July 9 (letter of notification) 50,000 shares of common
stock

Sheridan-Belmont Hotel Co.
Aug. 19 (letter of notification)
$250,000 of 6% convertible
debentures due Sept.
15, 1963 to be offered for subscrip¬
tion
a

North Sheridan
Rd.,

working capital. Office
3172
Chicago 14, 111. Underwriter—None.

Price
crease

(1/5-9)

stock (par 20 cents).
$3 per share. Proceeds—To purchase
equipment, in¬

present inventories, and for
working capital. Of¬
fice—150 Glen Cove Road Carle
Place, N. Y. Under¬

Price—$5

stocks

and

per

bonds

share.

and

Proceeds—To

acquire other life

Strategic Minerals Corp. of Amerfea, Dallas, Tex
$2,000,000 of first lien mortgage 6% bond;

March 31 filed
and

common

insurance companies. Address—P. O. Box
678, Gulfport
Miss.
Underwriter—Gates, Carter & Co., Gulfport, Miss

—

Silicon Transistor
Corp.
Dec. 4 filed 200,000 shares of

(par $1).

invested

pro rata basis. Price—

£ p,ar^, Pr?ceeds—For

business.

Haven

State

Dec.

Preston

—Sano &

ov.

stockholders

Shelter

Office—c/o Brown Kendrick,
Drive, Dallas, Texas. Underwriter
Co., New York, N. Y. Offering—Not expected
until after Jan.
31, 1959.

100% of principal amount.
Proceeds—For general cor¬
porate purposes, including the
financing of the cost of
any acquisitions and new
construction. Underwriters—
Paine, Webber, Jackson & -Curtis. Boston, Mass. and S.

common

Underwriter—

(1/12-16)
Dec. 15 filed 1,000,000 shares of common stock
(par $1).
Price—To be supplied
by amendment.Proceeds—To¬
gether with $6,500,000 of borrowings, will be used for
the acquisition of
Spur Distributing Co., Inc., and for

Sheraton Corp. of America

Rd., Great Neck, N. Y.

Spur Oil Co.

Oct. 24 filed

(Delaware)- Inc.,

None.

America, Inc., Washington, D. C.

St., N. W., Washington 7, D. C. Investment Advisor—In¬
vestment Fund Management
Corp.

D. Lunt

are to be offered to certain employees.
Price—$1share. Rlroceeds—For working capital. Underwriter
—None/"jvV".«* J "*: •• V . V" :

per

Tube
29

Dec.

Investments

Ltd.

(England)

filed

50,000 American depositary receipts for
ordinary registered stock.- Depositary—Guaranty Trust
Co. of NeW

York, 140 Broadway; New York, N. Y."

' ;•

★ 22 East 42nd Street Corp.'
r;... »
Dec. 29 (letter of notification) 2,500 shares :of 15% cumu¬
lative

preferred stock.'; Price—At

par

($100 per share b

Proceeds^To pa£ off and amortize mortgages and, to
offer preferred' stock in
exchange for notes.
Under-r
.

writer—None.
United Asbestos Corp. Ltd.
12 filed 1,000,000 shares of

(1/5-9)
capital stock (par $1).
by. amendment.
Proceeds—For

Dec.

Price—To

besupplied

general

corporate purposes. Office—132 St. James Street;
West, Montreal," /.Quebec; .Canada ^Underwriter—Allen
& Co., New/York., /•.'
V/h-kVC.' ].,.'■,•

-{t-

United Employees Insurance Co,/
f
April 16 filed 2,Q0Q,()00 shares of common stock (par $5)
Price
$10 per share. ; Proceeds — For acquisition of
operating properties* real- ,and/or personal, includin#
—

office furniture, fixtures, equipment and office space, by
lease or purchase. Office — Wilmington, Del.
Under¬
writer—None:
Myrl L. McKee of Portland, Ore., If
.

President,

y,-

j,'..

United Pacific Aluminum Corp.,;
/
Dec. 18 filed 100,000shares of common stock (par $1).Price

;

975,000 shares of

—For bonds, 95%

stock (par 10 cents). Prici
princmal amount; and for stock $J

common

per share.

chemical

United Security Life & Accident Insurance Co.
:
Aug. 22 -filed 120,000 shares of class A common stock;
Price—$3 per share. Proceeds—To provide the reserves
required-tot be held In life and accident insurance poli¬

and to

pay

the

necessary -expenses

in producing

insurance/

Arenas

Nov. 18 filed 461,950 shares of common stock
(par one
cent). Price—At the market (but in no event less than
$6 per share). Proceeds—To selling stockholders. Office

Sept. 26 (letter of notification) 3,567 shares of common
(par $1). Price—$18.75 per share. Proceeds—To

stock

filed

are

cies,

None.

Service Life Insurance Co.

fund

following a distribution to stockholders of rec^
Dec.'5; 1958 of American Machine & Metals, Inc.
will
be; an ''Oversubscription privilege. Rights
expected t<^exphre;bir
remainirig 2,720;

ord

There

D. H. Blair & Co., Jtfew York, and Stern, Frank, Meyer
& Fox, Los, Angeles, Calif/*' Offering—Expected about
the middle of Jpnuary.

and

—

•

Arenas

filed

Proceeds—To erect and operate one or more
processing plants using the Bruce - Williami

Process to benefieiate
manganese
Southwest Shares,

ores.

Inc., Austin, Texas.

Underwriter-

■

be held
s.

—$8 per share. Proceeds—To purchase an additional cold
rolling mill and;for general, corporate purposes. Office
—5311 Avalon Blvd.,. Los Angeles, Calif. Underwriters—

including working capital. Underwriter—East¬
Dillon, Union Securities & Co., New York.

—

Jan. 20 in Room 1130,

for other

purposes

Dec. 12 filed 50,000 shares of common stock.
Proceeds—For investment. Office

6f>,which>;

shares, "are;tp >; be offered for subscription by;
holders of Company's' common stock of record Dec. 31,
1958, on the basis of three new shares for each share to

Pinspotters, Inc. for bowling alley beds; $350,000 to pay
installations, fixtures and equipment; $85,000

106,841

market.

(Delaware) Inc.
$2,000,000 of 6% 10-year convertible de¬
(subordinated), due Jan. 1, 1969. Price—To be
supplied by amendment. Proceeds—$750,000 to pay AMF

each

Shares in

(EST)

Mining

jftied/280,7^^^

bentures

Nov.

four shares held on or about Jan.
19,
1959; rights to expire on Feb. 4. Price—To be supplied
by amendment. Proceeds
Together with a proposed
$3,000,000 term loan, will be used for general corporate

go to
Fort

York, N. Y.

Agency, Inc., both of Denver, Colo.
Seiberling Rubber Co. (1/19)

man

determined

Co.

be received up to 11 a.m.
90 Broad St., New

surance

common

bidding. Probable bidders: Halsey, Stuart
Inc.; Blyth & Co., Inc., and Kidder, Peabody &
Co. (jointly); The First Boston
Corp. Bids—Expected to
&

tion and 3,000 shares of capital stock of Silver State In¬

for

Underwriter—To

competitive

Diego Imperial Corp., San Diego, Calif.
common stock, to be of¬
fered in exchange for all of the
45,000 outstanding shares
of capital stock of Silver State
Savings & Loan Associa¬

offered to

Proceeds—To repay bank loans and for

construction.

Price—To be supplied by amend-?

mortgage pipe line

bonds due 1979.
new

San

common

(par five cents).

Southern Natural Gas Co.
<l/20h"
Dec. 18 filed $35,000,000 20-year first

Corp.

(jointly); Eastman Dillon,
Lynch, Pierce, Fen(jointly); Lehman Brothers; Blyth & Co.,

filed

Utilities, Inc.
notification) 127,659 shares of

Price—$2.35 per share. Proceeds
—For payment of loan and account
payable; and for
working capital. Office—6930 N. W. 27th Ave., Miami,
Fla. Underwriter—Ross
Securities, Inc., New York, N. Y.
Offering—Expected early in January.
;

Dec. 9 filed 845,000 shares of

43,800 shares of common stock (par $5).
To be supplied by amendment. Proceeds — To

Dec. 15 (letter of
stock

Inc.; The First Boston Corp. Bids—To be received up
to 8:30 a.m. (PST) on Jan. 8 at room
1200, 111 Sutter
St., San Francisco 4, Calif.

Dec.

filed

—

(par $1)".

278,043

Southern Gulf

Union Securities & Co. and Merrill
&

(1/13-15)

selling stockholders. Underwriters—Dean Witter & Co-,
Chicago, 111., and Smith, Polian & Co., Omaha, Neb.

property. Underwriter—To be determined by
competitive bidding. Probable bidders: Halsey, Stuart.
& Co. Inc.; White, Weld & Co. and Shields & Co. (joint¬
ly); ^alojnon Bros. & Hutzjer, Kuhn, £,oeb.&.Co. and

ner

Price

Trout

Dec. 2

(par $25).

Underwriters

fjled 480,0.00 outstanding shares of class A com-

Chicago/ lib Undenvriter-^Demps^-TegelCT & Co., St.
Louis, Mo/-1
*vv
:
/. * /'I'.

Smith, Polian &

Co., Omaha, Neb.
Southern California Water Co.

to utility

Securities

loans,

and the balance for construction
program.
—Dean Witter &
Co., Chicago, 111., and

Dec. 8 filed $15,000,000 of sinking fund debentures due
Jan. 15, 1984. Proceeds—Toward the cost of additions

American

Southern California Water Co. (1/13-15)
Dec. 22 filed $2,000,000 of convertible subordinated de¬
bentures, due Jan. 1, 1979. Price—To be supplied by
amendment. Proceeds—To retire short-term bank

St. Regis

San

Francisco, Calif.

Proceeds—For additional

working capital. Office—South St. Paul, Minn.

Brothers, New York.

Prl«e—To be supplied by amendment. Proceeds—To repay bank loans and for construction program.
Under¬
writers—The First Boston Corp., New
York; and Dean
Witter & Co., San

cents), to be offered for subscription by common stock¬
held.

for

stock

(expected at around $12 per share). Proceeds—To
selling stockholders. Office — 2700 North Halsted St.,

the basis of $100 principal
each 25 shares of stock held

Southern California Edison Co. (1/19)
Dec. 24 filed 500,000 shares of common stock

it St. Paul Ammonia Products, Inc.
stock

of debentures

mon

man

writer—None.

common

Dec.

j
"T

ment

about Jan. 13; rights to expire on Jan. 27. Price—
To be supplied by amendment. Proceeds — To reduce
bank loans and for working
capital. Underwriter—Leh¬
on

con¬

debentures, at par (in units of $100 each);
and of stock, $1 per share. Proceeds — For investments
and working capital.
Office—Alexandria, Va. Under¬

250,000 shares of

stockholders

Und^rwriter^Alleh Investment

Co., Boulder, Colo. "V. '/I/
e Tractor
Supply Co. (112-15)

Smith-Corona Marchant, Inc. (1/13)
;
/
24 filed $7,443,100 of convertible subordinated de¬
bentures due Jan. 1, 1979 to be offered for
subscription
common

Colo.^ /J'
(par $5),
Price—$10 per share./Proceeds—For working capital and

construption progratti;

•

vertible debentures and 99,998 shares of common stock

filed

Tower Merchandise Mart; Inc., Boulder,
10 filed 51)0,000 shares of common stock

Dec.

to be offered in uniti
Price—$li per uniu

Nov.

United States.
Underwriters—Rowles, Winston
Co., Houston, Tex., and Dewar, Robertson & Pancoast, San Antonio, Tex. Offering — Expected early in
January.

Price—Of

program,

nental

Underwriters—The First Boston
Corp., New York, and Lester, Ryons & Co., Los Angeles,
Calif.
;

Dec.

venture

(par 10 cents)

share to each class of stock.

working capital
Office — ill E. Malt
St., Morristown, Tehn. Underwriter—Valley Securities
Corp., Morristown,-Tenn.
\
7ri'' •'~V •

working capital.

Routh Robbins Investment Corp.
Sept. 22 filed $1,000,000 of 10-year 6% cumulative

joint

amounts

stock

common
one

Proceeds —For

interests in the
to be offered in
$15,000, payable 20% down and
the balance upon demand during 1959.
Proceeds—To
assemble and acquire interests in Canada and Conticorporation's

„

loans

minimum

(1/20)
Dec. 29 filed 300,000 shares of additional common stock
(par $1). Price—To be supplied by amendment. Pro¬
bank

Slick Oil Corp., Houston, Texas
Dec. 8 filed $1,500,000 of participating

+ Rohr Aircraft Corp.

short-term

March 25

emulative

v-V- '/

;

Finance Corp.
/
(letter of notificationy 27,272 shares of 70-cem;
preferred stock (par $5) and 27,272 share*

Iimepian

one

Inc., New York.

■

Telephone Corp. (1/12)
195,312 shares of common stock (par $10)
to be offered for subscription by common stocxnolders
of record Jan. 9, 1959 on the basis of one new share for
each six shares then held; rights to expire on Jan. 26.
Price—To be supplied by amendment.
Proceeds—To
repay bank borrowings. Underwriter—The First Boston
Corp., New York.

reduce

$50 debenture and

exploration costs and working
Underwriter—Peter Morgan & Co„ New York.

capital.

Price—$100 per unit. Proceeds—For
acquisition of motels. Underwriter—Sire Plan Portfolios,

Dec. 18 filed

crease

ities and for drilling and

(1/7)

of preferred stock.

Rochester

ceeds—To

be offered in units of

Co., as agent for the corpora¬

May be placed privately.

Elmsford, Inc., New York

Thursday, January 1, 1959

Nov.

Nov. 10 filed $250,000 of 6% 10-year debentures and 5,000 shares of 6% participating preferred stock (par $50)

—

associated with Grimm &

Plan of

Surrdy Oil & Gas Corp., Dallas, Tex. (1/1S)
• • :
12 filed 300,000 shares of common stock (par $1).
Price—$3 per share. 'Proceeds—To retire current liabil¬

Fifth

Rochester Razor, Inc.
Dec. 3 (letter of notification) 400 shares of

Office^Louisville, Ky; Underwriter—None:
Edmond M..Bmith, is President.
/>,-»?*;
V
United States Freight' CoUvv;?-.
'tf.y-v
-

Nov.

13., filed

203,897« shares, rifVeapital stock (no par)
offered i,fcfpi:/^subseriptibh .i (by
stockholders
of

being
record
for

Ddc.e.1!8,

each'four

Price

—

1958, lat

the

rate

one

new

held, rights to expire on Jan. 6.
$35-per share. Proceeds — Some $750,000 will

be
used
to
prepay ^conditional, sales
contracts
for
trailers, .tractors ■ ahd miscqllanepus equipment previously
acquired -by\the\ cpmpany .for use in "piggyback" opera-:«
tions, vand approximately $1^750,000 will be applied to
additional "piggyback" equipment,,the balance will be'
used for general corporate purposes,
primarily as addi¬
tional working- capital fo" finance expanded "piggyback" *
operations^, Dnd,eTwritfer—Mer.ri 11 Xynch, Pierce, Fen ner
& Smith, New
Yjorkr^^' .' J.;; "
''.: / ; *; .
>
,

United States Glass & Chemical Corp.
».•/
Nov. 26 filed :708>750 outstanding shares of common stock;
Price—At market. Proceeds
To, selling stockholders,;
—

Office—Tiff in/

Ohio.. Underwriter—None.

it United States Plywood Corp.
15 filed

Dec.

the

undetermined

amount

participations

company's'Employees Stock Purchase Plan, to¬

gether with 28,000 common shares which may be
pursuant thereto.•.
;

pur¬

chased

Uranium Corp. of America, Portland, Ora.
•
April 30,1957 filed 1,250,000 shares of common stock (par
16 cents).
Price—To be sunolied by amendment (exoected to be $1 per share). Proceeds—For exploration
purposes.
Underwriter—-To be named by amendment.

Graham

Albert

ident.

Griswold

Mb-v?-'•«

;of. Portland,

Ore.,

Pres¬

Utah Minerals Co.

April 11
mon

(letler of notification) 900,000

stock,

toce—At

par

(10 cents

per

shares of

share).

com¬

Proceed!

Number 5808

189

Volume

Wallet

City,

Utah.

Sootfrup A -Co., Salt

New

.ceh^d onvApril-30;
Dec.

Inc.
capiu

Price

stoeki

—

Ave., Rochester 11, N- Y. UiiderMJiler^Frank f5. Hun
< Co., Inc., Rochester, N. Y
>
^
..V .1,.^

PiwdacfSrlnc.

(l/€)

r.t

(letter of notification) 12^000 shares:* of common
issued as part of the consideration
paid by the company for Mother's Food Products, Inc.

Dec.

stock

(par 25 cents)

Price—To

be related

tp market price

Exchange-. Proceeds

Y.'fiy '

announced

was

stockholders.

Glore, Forgan & Co., New York.

that

Co.

and. Drexel

First

The

Boston

;

Co.

the

(jointly);

Dec.

N. Y.

& Curtis,

/yj;; '//y,
Co..,/^./-

ic Waite iJack) Mitring

;

Chicago & North Western Ry.

(1/6)

Bids will be received by the company at 400 West

Price—To be

son

pay bank
—Kidder.

loans and for new construction. Underwriters
Peabody & Co., Blyth & Co., Inc., White, Weld
& Co. and Laurence M. Marks & Co., all of New York

the

Wood Organizations, Inc.
(letter of notification) 100,000 shares of common
stock : (par 25 cents). Price—$3 per share.
Proceeds—
For land development and home construction, in Florida;
and for general corporate purposes.
Off ice—62 Third
Ave., Mineola, L. L, N. Y. and 2259 Bee Ridge Road,
Sarasota,1 Fla. Underwriter—Michael G. Kletz & Co.,
Inc., 30 Rockefeller Plaza, New York, N. Y.

& Hutzler.

Madi¬
St., Chicago 6, 111., up to noon (CST) on Jan. 6 for
purchase from it off $3,300,000 equipment trust cer¬
tificates to mature in 15 equal annual instalments. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; Salomon Bros.

Wen

;

West Ohio Gas Co.

bidders:

Market

St.,

Statement effective Dec.

None.

Lima, O.

the

first

half

1959.

Lehman 'Brothers t»nd

Denmark

(Kingdom of)
reported that an issue of between $20,000$30,000,000 may possibly be placed on the Ameri¬
market this year. Underwriter—Kuhn, Loeb & Co.,

Sept. 2 it

was

000 to
can

New York.

Underwriter—

15.

stock

Eastman Dillon, Union
(jointly); Merrill Lynch, Pierce, FenSmith, White, Weld & Co., Shields & Co. and R.
W. Pressprich & Co. (jointly); Morgan Stanley & Co.
*

ner

37,615 shares of common stock (par $5) be¬
ing offered for subscription by common stockholders of
record Dec. 6, 1958, at the.rate of one new share for each
10 shares then held; : rights to expire on"Jan. .0.'.Price—
$15 per share.
Proceeds —For construction program
West

common

issue and

Proceeds—To aid the existence and

Office—Rye, N. Y.

bank loans and for construction program.

Price—$750

certificate

per

(plus Federal tax of $150).

policies of the Club.
Underwriter—None.

First

Wyoming Dorp.

Nov. 17 filed.l,449,307, shares of common stock.yOf these

shares-1,199,307 <are subject to partially •completed sub¬
scriptions at $2, -$3.33 and $4 per share; and the addi¬
tional 250,000 shares are to be offered initially to share¬
holders of recoi-d Nov. 1, 1958, in the ratio of one new
share for each 2.33 shares held on that date. ' Price—$4
per share. Proceeds—$300,000 will be used fbr payments
pn contract to purchase shares of International Fidelity
Insurance Co.; $325,000 for capitalization of a fire insur¬
ance. company; $500,000 for capitalization of a title insur¬
ance company; $500,00.0 for additional capital, contribu¬
tion to Great Plains Development Co.; and $300,000 as
an additional eapilal contribution fo Great ^Plains-Mort¬
gage Co. Office—319 E. "A" St., Casper, >Wyo.; Under-

Georgia Power Co.
«

VyV

writer—None..-...

o....

that

the

stockholders

the

(9/.10)

Dec. 10 it was announced that the company

reported

13, 1959. Price—$27 per share. Proceeds—To increase
capital and surplus. Underwriter—Merrill Lynch, Pierce,
Fenner & Smith, Oklahoma City, Okla.

(par $10)

Underwriter—Alex Brown & Sons,

/(.y\

Co., Tulsa, Okla.

will vote on Jan. 13 to approve a plan to offer
100,000 shares of additional capital stock (par $10) on
about a one-for-six basis to stockholders of record Jan.

To be supplied by amendment. fer^Seeds—For
merchandise inventories, accounts receivable, and other

corporate purposes.

Bank

Underwriter—None.

—

yBaltimore, Md.,./

announced

Price'—$375 per common share and $1,000
debenture. Proceeds — To develop property and

stock

was

(1/13)
Nov. 25 it was

Concord Ltd.

Woodward & Lothrop Inc. (1/8)
9 filed 50,000 shares of common

First National Bank & Trust

Price

City National Bank

plans to offer to its
1958 the right to subscribe
for 125,000 additional shares of capital stock (par $20)
on the basis of one new share for each 10 shares held;
rights to expire on Jan. 10, 1959.Price—$40 per share.
Proceeds—To increase capital and surplus. Office—931
Main Street, Houston 1, Texas.

Sept.

Wilmington Country Club, Wilmington, Del.
Oct. 27 filed $500,000 of debentures due 199V (non in¬
terest bearing) and 800 shares of common stock (pai
$25) to be offered to members of this -club and o 1

Dec.

plans to issue
$18,000,000 of 30-j^ear first mortgage bonds. Pro¬
ceeds—For construction program.
Underwriter—To be
determined by competitive bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc., Kidder, Pea¬
body & Co. and Shields & Co. (jointly); Lehman Broth¬
ers; The First Boston Corp.; Morgan Stanley & Co.;
Equitable Securities Corp. and Eastman Dillon, Union
Securities & Co. (jointly); Harriman Ripley & Co. Inc.
Registration—Planned for Aug. 14. Bids—Expected to
be received on Sept. 10.
and sell

Co., Inc.
secondary offering of commor
voting stock is expected this year. Underwriters — May
include: Blyth & Co., Inc.; Lehman Brothers and Smith,
Barney & Co.

yyry /y ■

was

reported

Gulf Power Co.

(4/2)

Dec. 10 it

was announced that the company plans to issue
$7,000,000 of 30-year first mortgage bonds. Pro¬
ceeds—'For construction program.
Underwriter—To be

and sell

Alabama Power Co.

Dee." 10 it
issue

was

and sale

bonds.

Proceeds

that the company' plans the
^$20,000,000 of: 30-year firsV mortgage
.

—-

For

construction

program.

Under¬

writer—To be determined by competitive5 bidding. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; Lehman Broth¬
ers ;

Eastman

Dillon, Union Securities
Co.,' Equitable
Go: (jpihtly); Harriman
Ripley & Co., Inc. and Goldman, Sachs & Co. (jointly);
Morgan Stanley -& Co.; Blyth & Co., Inc. and Kidder,
Peabody & Co. (jointly); The First Boston Corp. Regis¬
Securities Corp. and'Drexel &

Stone & Webster Securities

Corp. (jointly); Glore, For¬

& Co., and Goldman Sachs & Co. (jointly).

gan

Kansas

Power &

14 it

ceeds—For

Light Co.

announced

was

company plans to issue and.
of first mortgage bonds due 1988. Pro-

construction

program.
Underwriter—To b#
by competitive bidding. Probable bidders;
Halsey, Stuart & Co. Inc.; The First Boston Corp.; Glore,'
Forgan & Co.; Harriman Ripley & Co. Inc.; White/Weld
& Co.; Blyth & Co., Inc.; Equitable Securities Corp

determined

Laboratory for Electronics, Inc.
Henry W. Harding, President, announced that
are currently considering refinancing
$790,000 of outstanding notes ($658,750 held by a principal
stockholder and $131,250 by a bank) on a more perma¬
nent basis.
This may be done through equity or con¬
vertible debenture financing. Office—75 Pitts St., Bos¬

July 3,

the directors

Master Fund, Inc., Fairfield, Calif.
Jan. 27 it

announced

was

this newly organized

invest¬

ment company *tlans to

offer to bona fide residents
California 10,OP") shares of capital stock (par $1). Price

—$10 per sharless

underwriting discount of 8^%.

Proceeds—For investment.
Mercantile National Bank, Dallas, Texas.
15 it was announced that the stockholders

Dec.

vote Jan. 20

will

authorizing the issuance of 125,000 addi¬

each

common

stock

the basis of

one

new

held.
Price—$26 per share.
capital and surplus. Underwrit¬
ers—Rauscher, Pierce & Co.,
Inc. and First Southwest
Co., both of Dallas, Texas.
shares

for

Proceeds—To

increase

Miami Window Corp.

the company plans issuance
$2,500,000 6*/2% debentures due 1974 (with
attachable warrants—each $1,000 debenture to carry a
warrant to buy 200 shares of common stock at $3 per.
Dec. 15 it was reported that

and sale of

share). Underwriters—Cruttenden, Podesta & Co., Chi-r
eago, 111., and Clayton Securities Corp., Boston, Mass.
Registration—Expected about mid-January.

Michigan Bell Telephone Co.
Aug. 12 directors approved plans to sell $40,000,000 ol
34-year debentures. Proceeds—To redeem a like amount
>f 4%% debentures due November, 1992. Underwriter
—To be determined by competitive bidding.
ProbablO
bidders:

Halsey, Stuart & Co. Inc.; Morgan Stanley &

Bids—Had

Co.

ceived
pone

been

tentatively

scheduled

re¬

Sept. 16, but on Aug. 26 it was voted to post*

this refunding program because of present market

conditions.

Midland Enterprises, Inc.
March 28, company
before Dec. 31, 1958

announced it plans to issue on or
$3,200,000 of firpt preferred mort¬
gage bonds. May be placed privately/ Proceeds — To,
repay bank loans and for working capittel.
Midwestern Gas Transmission Co.

this subsidiary ol
Tennessee Gas Transmission Co.1ias applied to the Fed¬
eral Power Commission for permission to issue first
March

was

announced

that

bonds, unsecured notes and common stock,
Proceeds—To build pipe line system to cost about $111,mortgage

000,000.
Underwriters — Stone & Webster Securitiei
Corp. and White Weld & Co., both of New York.

Mississippi Power Co.
10

announced

(6/25)
that this company plans to

determined, by competitive bidding.

(4/30)

announced
of

pany plans to sell some bonds originally scheduled for
mid-year of 1958. The proposed sale was subsequently
deferred until early 1959. Proceeds — About $8,000,000.
for construction program. Underwriter—To be determined
by competitive bidding.
Probable bidders:' Halsey/
Stuart & Co. Inc.; Kidder, Peabody & Co., and Merrfil
Lynch/Pierce, Fenner & Smith (jointly); Lehmaxr
Brothers; Eastman Dillon, Union Securities & Co. and

Great Atlantic & Pacific Tea

Feb. 19 it

/•

Kansas Gas & Electric Co.
March 31, G. W. Evans, Chairman, announced that com-•

tional shares of

stockholders of record Oct. 2,

per

Underwriter!

—May be The First Boston Corp.; Kidder, Peabody &
Co.; Merrill Lynch, Pierce, Fenner & Smith; and White
Weld & Co., all of New York.

Wilier Color Television System, Inc.
April 2 {letter of notification) 72.035 shares of commi>
stock (par $1) of which 10,000 are being offei'dd toi stock¬
holders at $2 per share (rights to expire on4 Jan. 17),
and the remaining 62,035 shares are being publicly of¬
fered at $3 each.
Proceeds—For general corporate pur¬
poses.
Office—151 Adell Avenue, Yonkers. N: Y. Undervvriter-r-Edwin.Jefferson. 39 Broadway, New York 6.
N. Y. Statement effective Nov. 18.
.

build taertain facilities.

New,York.

ton, Mass.

Equitable Gas Co.
July 18 it was announced that the company expects later
iq the year to issue and sell additional securities, prob¬
ably preferred stoeki to secure approximatelyr$5JM)0,000
of additional funds. Proceeds—Together with $7,000,000
from private sale Of 4Vz% bonds, to repay short-term

* Westchester Country Club, Inc.
^
Dec. 19 (letter of notification) 400 certificates of in¬
terest, series A, to be sold to members of" -the Club.

;

Japan (Empire of)
Aug. 20 it was stated that an issue of between $25,000,00®
and $30,000,000 of bonds may soon be publicly offered
on the American market.
Proceeds—For public works
projects, etc. Financial Adviser—The First Boston Corp.,

Securities & Co.

Nov. 17 filed

Office—319

Freight System, Inc. (Mich.)
was reported that the company plans to issue
125,000 shares of common stock. Underwriters—A. C. Allyn & Co., Inc. and Walston &
Co., Inc. Offer¬
ing—Expected any day.
it

sell $10,000,000
may

Proceeds—To repay outstanding bank loans. Underwriter
—To be determined by competitive bidding.
Probable

;

was

Inc.
reported fhat the company

sell additional

Dec. 1

and

Feb.

Columbia Gas System,

Dec.

and

announced that the stockholders will vote

was

Dec. 9 filed

;

approving a proposed subscription of¬
fering of 38,503 additional shares of capital stock. Price
—$20 per share. Proceeds—To increase capital and sur¬
plus. Underwriter—None.

Washington Water Power Co. ' (1/7 )>.
$15,000,000 of first mortgage bonds due 1989.
supplied by amendment. Proceeds—To re¬

Jan.

due

Interstate Motor

Dec. 31 it

notification) 700,000 shares qf common
Itock (par 20 cents). Price—15 cents per share; Pro¬
ceeds—For mining expenses.
Dffiee—Hoprri^ 1413, 170
Broadway, New York 38, N. Y..: Underwriter—None. •:

(2/25)

plans to issue and
bonds dated March 1,
Proceeds—For improve¬

company

mortgage

March 1, 1994.
Underwriter—To be determined by competibidding. Probable bidders: Halsey Stuart & Co.
Inc.; Morgan Stanley & Co.; Glore, Forgan & Co. and
Eastman Dillon, Union Securities & Co. (jointly). Bids
—Expected to be received on Feb. 25.

r^- Central Bank & Trust Co., Great Neck, L. I., N. Y.

.;/y

(letter of

Dec.

1959

first

and sell

—

announced

was

tive

Dec. 1

tures. v Underwriters
May be Lehman Brothers
Emanuel, Deetjen & Co., both of New York.

York,

New

$50,000,000

ments, etc.

:> Avco Manufacturing Co.
Dec. 15 it was reported that the company is considering /
the issuance of about $15,000,000 -of convertible deben¬

(par $1.56)Price—To be supplied by amendment
(approximately $2.25 per. share.)
Pro«c^aV—,To repay
short term bank loan; reduce accounts payable^ acquire
Inventory and the balance for working capital. Under¬

writer—Paine, Webber, Jackson

sell

Blyth & Co., Inc.;

Vocaliiie€Q; of America, Inc.'
Nov. 10 (letter of notification) 21,500 shares of.Common
stock

Dec.

Corp.

was reported
that the company plans regis¬
January of 250,000 shares of common stock.
Proceeds—To go to selling stockholders. Underwriter—
yy
'Cruttenden, Podesta & Co., Chicago, 111.

yir lll>nois Bell Telephone Co.

tration

Offering—Expected in

1959.

company

Arnold Altex Aluminum Co.

Co., .67 .iWall St.,

j;//v.'J/:/,

100,000 shares are to be sold for the account of selling
Proceeds—For expansion.
Underwriter—,

re-

share for each 10 shares held

new

r.;

pnderwTiter—Granbery,, Marache
New' York,, N,

one

.the American

To Jesse C,v a^d>Bernard
Goodwin, Office—r-644 Greenyvieh St., New.^prk, N. Y.

Stock

Bids—Expected to be

(with an over¬
subscription privilege). Price—To be determined just
prior to offering, *-Proceeds—To be used as the equity
base for the financing of substantial expansion programs
of system companies.
Underwriter—To be determined
by competitive bidding. Probable bidders: White, Weld

Vita Food

;

has filed
an application with the SEC for the issuance of
486,325
additional shares of common stock (par $25) in the
early
months of 1959 to stockholders under rights on the basis

development ol oil and gas iatids.Oliice—574 Jeffersoi

American Natural Gas Co.

York,

(letter, oi nostxficatioh) 300,OOo shares of
—
At par ($1 pen share). Proceeds

May-6-

(35)

tration—Planned for April 3.

Lak

■■ /

•

Oil Co.

Utah

The Commercial and Financial Chronicle

Office—305. Main St., Park Cit}

—For mining expenses.

Utah

Probable bidders:
Halsey, Stuart & Co. Inc.; Merrill Lynch, Pierce, Fenner

Dec.

issue and sell

Bmith, Salomon Bros. & Hutzler and Drexel & Co.
(jointly); Eastman Dillon, Union Securities & Co.;
Equitable Securities Corp.; Kidder, Peabody & Co. and
White, Weld & Co. (jointly); Blyth & Co., Inc. Registra¬

Proceeds—For

tion—Planned

ly); Merrill Lynch, Pierce, Fenner & Smith;'Kidder,
Peabody & Co. and White, Weld & Co. (jointly). Regis¬
tration—Planned for May 29. Bids—Expected to be re¬

ceived

for

March

Bids—Expected to be

re¬

April 2.

Heublein, Inc.

$5,000,000 of 30-year first mortgage bonds.
construction program.

Underwriter—To

by competitive bidding. Probable bid¬
Halsey, Stuart & Co. Inc.; Eastman Dillon, Union
Securities & Co. and Equitable Securities Corp. (joint¬

determined

ders:

ceived

Aug. 25 it Was reported that the company plans early
registration of 400,000 shares of common stock; of which

was

June 25.

Continued on page

The; Commercial arid Financial Chronicle

(36)

Continued irom page

•

March 24 it

was

Jan, ,13 at the rate of one new share for each
will expire on Feb. 3. Under-,
writers—Blyth & Co., Inc. and El worthy & Co., both of
San Francisco, Calif.

plans to issue and

announced company

by ?•;/; Public Service Co. of Indiana, Inc. (2/17)
Dec. 8 it was announced that the company will issue
a- first preferred ship mortgage on the liners S. S. Brasi)
and S. S. Argentina. Underwriters—Kuhn, Loeb & Co
$25,000,000 of first mortgage bonds. Proceeds—To repay
and Lehman Brothers, both of New York.
bank loans incurred for construction program.
Under¬
Offering —
determined

writer—To

Bank, Newark, N. J. (1/23)
Dec. 22 it was announced that stockholders will vote
Jan. 13 on approving the proposed offering of about 80,000 shares of common stock to stockholders of record
23,

Mass.

Dec.

Price—$50 per share. Proceeds—To increase capital and
surplus. Underwriter—Clark, Dodge & Co., New York,
March 7 it

for each

$7,500,000

the balance of this year. The man¬
agement intends to negotiate a new line of credit with a
group of banks and expects to sell equity securities later
this year or in early 1959, depending upon prevailing
market conditions. Underwriter—For any common stock:
The First Boston Corp., New York.

some

Southern Cow
Dec. 10 it

Co.
*

bonds

Eastman

Underwriter

1989.

—

Northern

States

Power

Co.

Bell

(jointly); The First Boston Corp., Blyth

new

(1/13)

The

investment

would

appears,

world,

the

Triple

for

accomodation,

one-half

that

the

feeling

being

what

ever
the cost, such a
would clear the atmosphere
and let the general market adjust
'

Looking
issue

new

the

over

prospective
the week

calendar for

ahead,
Treasury bond
market during the
closing of the
year served to strengthen the be¬

it would seem that the
being kept clear for the
Treasury in the event that current
guessing
on
its
plans is well

lief

that

the

Government

undertake to float
term

issue

sizable long-

early this month.

The long end

definitely
tending to

will

easy

of the

list turned

with the situation
a bit of pressure

exert

the corporate bond market

track

the

week

that

within

the

10 days the

Treasury will
disclose *its plans for raising new
money

needs

immediately

week,

reverse

41/s%

coupon.

market

observers

are

that, in spite of the
driving force of inflation fears,
any drift lower in fixed term is¬
sues

must

and consequent rise in yields,
be
reflected
in
renewed

buying of the latter.

spread

Reinvestment Demand

debt

issue

the

point

where

money would be dis¬

sharply toward the

market.

Yields

(jointly); Kidder, Peabody & Co. and White, Weld &
Co. (jointly).

Week's

nothing

The scope of such reinvestment

the

weeks

tap

for

But

Wednesday,

General

Telephone

Co. of California will
be raising $10 million through the
sale of new preferred stock and

new

Water

offering

Power

$15

Co.,

million

flotation of an issue of $15 million
of debentures by San Diego Gas

and

the

coupon

debentures

and

for

& Electric Co.

Joins

Clisby Staff

has

type to attract the individual in¬

Clisby & Co., 2360 Ingleside Ave.

MACON, Ga.—Eugene H. Killen
added

the

former partner

trator of the Federal Small Busi¬

Administration,

ness

staff

Investment

Division.
Mr.

Read

also

Director of

Fiduciary Trust Company of
His father, William A.

New York.

Read,

was

York

investment firm of William

Read

cessor

the founder of the New

Company, the prede¬

Dillon, Read & Co.

To Be Barclay & Crawford
TORONTO, Canada—The firm
of
Biggar
&
Crawford,
_

name

the

Toronto

Stock

Exchange, will be changed to
Barclay & Crawford effective Jam

affords an attractive yield.
Government financing over a
long period has not been of the

been

Dillon, Read & Co., New York
banking
firm,
has
been
named
Deputy
Adminis¬

Investment

members

rate

fixed

tional Bank and

the

Pennsylvania Power & Light
Co. is slated to launch a "rights"
offering of 295,841 shares of com¬
mon the same
day.
Thursday is slated for offering
of
C.I.T.
Financial _Corp's
$75
of

Hicks Read, President
Middleburg (Virginia) Na¬

Duncan

of the

bonds through bankers.

less normal levels
In

Small Business Adm.

either Monday or Tuesday.

ahead.

fact, it
could
help ease the" Treasury's
burden if long-term financing is
undertaken

There

D. H. Read Named

Calendar

next week.

way

The corporate new issue market
be a trifle slow in
getting

little

~
that company plans to lssu*

program. Underwriter—To be determined bycompetitive bidding. Probable bidders: Halsey, Stuart &
Co. Inc.; Estabrook & Co. and Coffin &
Burr, Inc.

Rather it has been aimed

under

Light Co.

struction

will

market.

between

of tho

Worcester Gas Light Co.
Aug. 18 it was reported that the company plans the sale
of $5,000,000 first mortgage bonds. Proceeds—For con¬

Washington

demand, it is observed should be

on high-grade
bonds and
investment-type stocks has been
widening again and probably is

posed to turn

de¬

yields

culated, probably would have
a

now

Spread Widens

ahead. The Government it is cal¬
set

amount

bidding.
bidders: Halsey, Stuart & Co. Inc.;
Smith,
Barney & Co; and Robert W. Baird & Co., Inc. (jointly);
Equitable Securities Corp. and Eastman Dillon, Union
Securities & Co. (jointly); White, Weld & Co.,
Kidder,
Peabody & Co. and Salomon Bros. & Hutzler (jointly);
The First Boston Corp.
Offering—Not expected until
late in 1958 or early in 1959.

chiefly at institutional outlets.

normal

confident

approaching
people with

vestor.

announced

will

Bond

•

equities
is
spread of
three-quarters of a

the

With dividend and interest pay¬

ensuing

velops.

The
is

below

Only
a
couple
of
corporate ments holding up to record levels
undertakings of substantial there is a disposition to anticipate
dimensions are on the list through a good January in the new issue

well.

Belief

range

point.

founded.

now

to around 4.65%, and

Power

was

investment-type

far

move

itself accordingly.

corporates

from 4.30%

Treasury take the bull by the
horns and seek some long-term

The

Probable

now

see

credit

$16,000,000 of first mortgage bonds. Proceeds—
To retire bank loans and for construction
program. Un¬
derwriter — To be determined by competitive

Thomas & Betts Co.
Nov. 24 it was reported that the
company plans early
registration of about 250,000 to 300,000 shares of common

offering of 74,511
capital stock to stockholders

The Chase Manhattan.Bank will

agent for the

Wisconsin
March 17 it

Sept. 30, 1958.

York.

Pacific National Bank of San Francisco
Dec. 12 directors approved proposed

the fiscal

and sell

Hargrove, Vice-President, that the corporation plans to raise about $90,000,000 through the sale of new securities
(tentative plans
call for the sale of
bonds, debentures and preferred
stock). Proceeds—To refund $30,000,000 of outstanding
bank loans, and the balance will be used for
capital ex¬
penditures. Underwriter—Dillon, Read & Co. Inc., New

Pierce, Fenner & Smith.

Action

Missouri Public Service Com¬

Texas Eastern Transmission
Corp.
Dec. 11 it was announced
by W.

& Co., Inc. and Kuhn, Loeb & Co. (jointly); White, Weld
& Co. and Glore, Forgan & Co.
(jointly); Merrill Lynch.

Savings Association.

New York.

Telephone Co.

$110,000,000 oi
35-year debentures. Proceeds — To refund outstanding
$100,000,000 4%% debentures. Underwriter—To be de¬
termined by competitive bidding.
Probable bidders;
Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.
Of¬
fering—Has been postponed. Bids had been expected

in the pro¬

Virginian Ry.
Aug. 26 the directors approved a proposal to exchange
2,795,500 shares of 6% cumulative preferred stock (par
$10) for $32,148,250 new 6% subordinated income sink¬
ing fund debentures to mature Aug. 1, 2008 on the basil
of $11.50 principal amount of debentures for each
pre¬
ferred share. Offer began on Nov. 17 and will
expire on
Jan. 16. Dealer-Manager—Harriman
Ripley & Co. Inc.,

mission authorized the company to issue

about

first step

which have been reduced by the
repayment of excessiv*
short term obligations
previously incurred.

and

was announced

financing involved is in the neighborhood of $250-,000,000., The purpose is to restore government balance*

construction

Southwestern

State Su¬

new

Corp. (jointly);
Lynch, Pierce, Fenner & Smith; Kidder, Peabody
White, Weld & Co. (jointly). RegistrationPlanned for May 1. Bids—Expected to be received on
May 28.
C;.'V-//-/'/

—

Securities & Co. and Equitable Securities

July 10 it

3, Allen S. King, President, announced that the
plans about the middle of 1959 to put out a
common stock issue and possibly a $15,000,000 preferred
stock issue if there is a satisfactory market. Proceeds—
To repay bank loans and for construction program. Un¬
derwriter
To be determined by competitive bidding.
Probable bidders (1) For preferred stock: Blyth & Co.,
Inc. and The First Boston Corp. (jointly); Lehman Broth¬
ers
and Biter & Co.
(jointly); Merrill Lynch, Pierce,
Fenner & Smith; Harriman Ripley & Co., Inc. and East-'
*nan
Dillon, Union Securities & Co. (jointly); Kuhn,
Loeb & Co. (2) For common stock: Lehman Brothers

(jointly);

Merrill

(Minn.)

New York

the United States, Canada and the United
Kfhgdom.
The three institutions which are to head this syndicatoare The Chase Manhattan
Bank, The First National City
Bank of New York, and Bank of America National Trust

program.
Underwriter—To
by competitive bidding. Probable bid¬
Halsey, Stuart & Co. Inc.; Eastman Dillon, Union

& Co.

the

being negotiated between the
government/in- cooperation with the two investment
banking firms and a syndicate of commercial banks in

determined

ders:

Dec.

additional

Pierce, Fenner & Smith

for the country.

program

Dillon, Union Securities & Co. and Equitable

Proceeds—For

with

gram a short-term credit is

Electric Generating Co. (5/28)
Dec. 10 it was announced that the company plans to issue
and sell $25,000,000 of 30-year first mortgage bonds.

company

end Riter & Co.

},:•/' '?■■■:!•& ;''-k

;////;;

(2/4)

Southern

determined

rests

(jointly); Lehman Brothers. Bids—Ex¬
pected up to 11 a.m. (EST) on Feb. 4 at 250 Park Ave.,
New York, N. Y. Registration—Planned for Jan. 9. •

competitive bidding. Probable' bidders: Halsey, Stuart
& Co. Inc.; Equitable Securities Corp.; Lehman Brothers
and Bear, Stearns & Co.
(jointly); Eastman Dillon,
Union Securities & Co.; The First Boston Corp.; White,
Weld & Co.; Dean Witter & Co.; Blyth & Co., Inc. and
Merrill Lynch, Pierce, Fenner & Smith (jointly); Harriman Ripley & Co., Inc.
Bids—Expected to be received
before April 1.

stock

(Government of)
.".%!■
July 1 the Government announced that Kuhn, Loeb &
Co. and Kidder,
Peabody & Co., both of New York, have:
been selected as financial
advisors to develop a financial

Securities Corp.

Public Service Co.

common

public, the proceeds of which
between $50,000,000 and $60,000,000. Approval

Venezuela

announced that the company

Merrill Lynch,

issue of

the

—

plans to raise
early in 1959 between $40,000,000 and $45,000,000 through
the public sale of common stock. Proceeds — For con¬

and

was
reported that the company plans sale
$25,000,000 to $30,000,000 of first mortgage

due

was

Chemical
Society.
Underwriters
May be
Lehmais
Brothers, Smith, "Barney & Co. and Merrill Lynch,
Pierce, Fenner & Smith, all of New York. Offering —
Expected early in 1959.
*
/

struction program. Underwriter—To be
determined by
competitive bidding. Probable bidders: The First Boston
Corp.; Morgan Stanley & Co., Kidder, Peabody & Co.

from

—

reported that

Court (expected within two months). Proceeds—
the; Petroleum Research Fund of the American

Proceeds—To expand opera¬
197 Auburn Ave., N. E., Atlanta, Ga.

Underwriter—None.

penditures. Underwriter—To be determined by com¬
petitive bidding. Probable bidders: Halsey, Stuart &
Co. Inc.; The First Boston Corp.; Glore, Forgan & Co.;
Blyth & Co., Inc.
Dec.

Office

tions.

was

offered

preme

future.

near

may run
of the transaction

with the purchase

Weeks, New York.

holders in the

reported that the company will sell in
1959 about $35,000,000 of new securities, including somd
first mortgage bonds, in addition, there is a possibility
of a preferred stock issue and raising of some funds
through common stock financing, ''perhaps in the form
of convertible debentures."
Proceeds—For capital ex¬

connection

Insurance Co.
Aug. 26 it was announced that, the company in all prob¬
ability will offer additional common stock to its share¬

was

+ Northern Indiana

the company is planning
Proceeds — To replace an

Southeastern Fidelity Fire

James D. Edgett, President, announced com¬
pany plans early in 1959 to make a public offering of its
Stock, and has applied to the Interstate Commerce Com¬
mission for authority to do so.
;; ;
12

that

long-term financing.

blower &

capital and surplus. Un¬

North*American Van Lines, Inc.

Dec.

will

properties from Gulf States Land & Industries, and
VA% bonds due 1960. Underwriter — May be Horn-

Nov. 20,

Gas

reported

was

interim loan obtained in

derwriter—John M. Tait & Associates, Cincinnati, Ohio,

Illinois

■

Universal Oil Products Co.

Aug. 13 it

Corp.

Equitable Life Assurance Co.
Dec. 1 it was announced that the company plans an of¬
fering of 950,000 shares of capital stock. Price — $10 per

Northern

•

struction program.

Proceeds—To increase capital and
Underwriter—May be The First Boston Corp.,

South Coast

Oct.

/■

ing may be put off until June, 1959. Proceeds—For con¬
Underwriter—May be determined d*y
competitive bidding. Probable bidders: White, Weld
Co. and Shields & Co.
(jointly); Lehman Bros.; Merrill
Lynch, Pierce, Fenner & Smith.

additional 40,000 shares of
the basis of one new share
The offering period will last

shares held.

March 28 it was announced company plans to market
about $30,000,000 of common stock in the latter part of
this year or in the first quarter of
1959, but this financ¬

New York.

North American

increase

1959,

20,

(par $10)

;

-J Union Electric Co., St. Louis, Mo.

Boston,

it will offer its stockholders

announced

was

Jan.

surplus.

tion expenditures for

Proceeds—To

for about two weeks.

€rom additional financing will be required for construc¬

chare.

Bank

Bids—Ex¬

(1/20)

capital stock

announced that approximately

was

record

Electric and Gas Co.

New York State

National

Rockland-Atlas

1958, on the basis of one new share for
each six shares then held; rights to expire on Feb. 16.
about Jan.

Forgan & Co.; Harriman Ripley & Co., Inc.
pected to be received on Feb. 17.

Pipe Line Corp.' / / *
Dec. 8 it was reported that the company is planning the
sale early in January of $30,000,000 to $35,000,000 of first
mortgage pipeline bonds. Additional financing-expected
later in 1959. Proceeds—For construction
program. Un¬
derwriter—White, Weld & Co. and Stone & Webster Se¬
curities Corp., both of New York.

competitive
bidding.
Inc.; Kuhn, Loeb
Co.; The First Boston Corp.; Blyth & Co., Inc.; Glore,

Transcontinental Gas

Probable bidders: Halsey Stuart & Co.

National State

Barney

Offering—planned for some time in

January.

sell 824,000,000 of government insured bonds secured

Has been abandoned.

Proceeds

—To selling, stockholders. r; Underwriter—Smith;
& Co., New York.

'/three shares held; rights

**r\

Price—To be supplied by amendment.

stock.

of record

s'-'-'.y/,
•'
v
Moore-McCormack Lines, Inc.
«*?v.;

Thursday, January 1,1959

*..

19.

The firm's main office will be

located

thereafter

Street, West.

King

Number 5808

yolume 189

The Commercial and Financial Chronicle

(37)

The following statistical tabulations
latest week

Business Activity

week
Latest

Equivalent to—
Steel ingots and castings

Jan.

(net tons)

Month

*1,840,000

that date,

of quotations,

cases

Ago
58.6

1,985,000

1,501,000

exports

Pennsylvania

Year

Month

Ago

anthracite

tons)

To North

235,256
(net tons)

.Dec. 19

7,097,335

117,822,000

7,788,000

28,356,000

28,240,000

7,880,000
27,861,000

.Dec. 19

2,455,000
13,872,000
7,553,000

2,698,000
13,651,000

2,474,000
12,695,000

27,264,000
2,436,000
13,106,000

7,011,900

6,366,000

178,599,000

174,706,000

169,576,000

27,936,000

29,647,000

138,182,000

148,087,000

32,155,000
162,415,000

189,486,000
27,719,000
152,383,000
57,674,000

.Dec. 19

\ •

NEWS-RECORD:- :'.

;

60,668,000

62,816,000.
588,847

619,350

Dec. 20

546,505

532,274

550,374

(net

1947-49_=100—

—

123.7

133.9

Meats, poultry and fish.
Dairy products
Fruits and vegetables
Food

114.3

$207,597,000

Dec. 25

Dec. 25
Dec. 25

121,925,000
185,672,000

$291,813,000
109,497,000

$273,014,000

$273,767,000

113,064,000
159,950,000
143,894,000
16,056,000

122,226,000
151,541,000

182,316,000

163,757,000
21,915,000

Dec. 25

120.7

125,759,000
56,557,000

and

Gas

Solid

(COMMERCIAL AND
INC.

(a)

8,960,000

8,925,000

507,000

384,000

293

169

294

304

135.1°

oil

INDUSTRIAL)

—

136.8

103.6

104.8

132.4

132.2

128.3

107.1

107.3

99.8

128.1

operation

and

Women's

boys'
gills'

107.9

and

12,274,000

251

244

166

6.198c

6.196c

5.967c

$66.41

$39.83

$40.50

6.196c

Dec. 22

Pig iron <per gross ton)
Scrap steel (per gross ton)

Dec. 22
-Dec. 22

91.8

$66.42

refinery

Jec. 24

12.800c
12.000c

13.000c

13.000c
.12.800c

12.800c

12.000c

10.500c

11.500c
1 24.700c

12 JJOOc

11.500c

.Dec. 24

24.700c

.Dec. 2.4

99.000c

.Dec. 30

85.53

86.34

_Dec. 30

——

Average corporate

.9020

99.125c,

98.875c

90.34

90.48

93.38

94.56

94.71

95.01

131,288

*120,793

107,542

93,596

128,490

161,552

S. A.

Railroad

Group
Utilities Group-

SEED

93.38

90.06

Stocks

93.97

84.04

88.40

84.17
.■

82.65

88.13

84.04

88.27

(tons)

;

1,643,020
712,407

Stocks

(pounds)

90.63

93.52

Produced

92.35

92.79

96.07

Consumption

.Dec. 30

3.88

vi.-.

3.79

Stocks

3.53

„

3.09

4.39

4.2H

.Dec. 30
.Dec. 30
.Dec. 30
.Dec. 30

3.69

4.19

4.18

4.43

4.41

4.14

4.86

4.85

4.97

.Dec. 30
.Dec. 30

4.54

4.53

4.55

4.38

4.40

4.37

4.17

.Dec. 30

4.25

4.22

4.00

MOODY'S COMMODITY INDEX.

.Dec. 30

389.4

392.2

395.5

391.2

NATIONAL PAPERBOARD ASSOCIATION:
Orders received (tons)-.

.Dec. 20

255,178

275,370

272,186

206,345

.Dec. 20

295,919

309,537

306,086

290,705

403,401

398,251

276,404

—.

IZL.
Group
Group-

Group

Percentage of activity
Unfilled-orders (tons) at end of period

Dec.
Dec.

20
20

364,444

645,936

49,061,000

108,132,000

96,315,000

223,092,000

155,344,000

76,745,000

142,251,000

103,322,000

72,268,000

143,997,000
120,921,000

Oct.31

(pounds)

—•—

9G,931,000

94,699,000
130,973,000
116,520,000

116,105
329,102
284,212

;

Hulls—

3.93

70,434,000

;

•

(tons)
(tons)

71,215
135,067

249,383
299,826
259,656

142,293

Stocks

(tons) Oct. 31

Produced

—_

(tons)

Shipped

(tons)
(running bales)—

Linters

Stocks

Oct.

121,677
160,223

90,426

282,049

77,319

GG,441
62,962

128,972

136,097
108,863

Produced

208,081

219,140
94,348

Shipped

145,172

105,756

252,096
199,332
143,620

615

Hull Fiber

' 912,009

122,625,000

(tons) Oct. 31

Shipped

1,139,754

506,842

239,110,000

(pounds)

Produced

4.18

4.07

Cake and Meal—

482,208 ."J
306,751

1,437,455

—

Refined Oil—

90.20

4.09

(1,000-lb. bales)—

Stocks Oct. 31

1,039

673

1,392

(a)

1,344

3,749

Shipped
Motes, Grabbots, etc. (1,000 pounds)—

247

800
432

Produced

OIL, PAINT AND DRUG REPORTER PRICE INDEX—
—

PROD¬

COMMERCE—Month

(pounds) Oct. 31

92.35

4.40

Production, (tons')

SEED

Produced (pounds)
Shipped (pounds)

90.48

4.10

Baa

(tons

Crude Oil—

97.16

89.78

.Dec. 30

COTTON

mills

90.20

Average corporate
Aaa

at end of period

(tons)
(tons) Oct. 31

Stocks

Dec. 30

Group

AVERAGE

AND

—Dec. 30

MOODY'S BOND YIELD DAILY AVERAGES:
U. s. Government Bonds

1949

(tons of 2,000 pounds)

pounds)

Received

100.98

93.23
89.78

Dec. 30

Utilities

129,051

Cotton Seed—.

93.13

—Dec. 30

Baa

Industrials

98,357

113,288

October:

1M&4KL625C

88.79

•

Dec. 30

Public

*112,079

UCTS—DEPT.

10,000c
26.000c

Dec. 30

—Dec. 30

Railroad

110,463
128,048

fabricators—

Crushed

U. S. Government Bonds

Public

126.7

2,000

COTTON

MOODY'S BOND PRICES DAILY AVERAGES:

Industrials

127.1

2,980

1,846

Produced

Dec 26

190

1,823

792

1,461

Shipped

108.26

109.65

110.73

109.15

ROUND-LOT

1,054

1,091

614

$357.5

*.$357.8

238.6

*239.4

97.5

*98.4

63.7

*63.6

64.2

33.9

32.9

43.6

43.5

40.7

PERSONAL INCOME IN THE UNITED STATES

TRANSACTIONS FOR ACCOUNT OF MEM¬
BERS, .EXCEPT ODD-LOT. DEALERS AND SPECIALISTS:
Transactions of specialists in stocks in which registered—
Total purchases
Dec.

(DEPARTMENT OF COMMERCE)—Month
of October in billions:
1,497,380

2,265,180

2,623,030

2,657,090

Total

personal

income

$350.6

Short sales

Dec.

410,010

494,280

481,800

304,800

Other sales

-Dec.

2,037,880

2.130,730

1,825,760

1,147,680

—Dec.

2,447,890

2,625,010

2,307,560

Dec.

581,310

572,060

Dec.

9.2

.Dec.

36,900
548,440

523,440
55,300

403,520

Proprietors and rental income

57.4

*57.0

585,340

539,970
535,370 ■■■<;

467,500

-Dec.

522,800

448,420

Personal

32.0

31.9

31.8

*27.0

22.6

.Dec.

900,570

785,110

678,500

505,535

-Dec.

125,840

134,410

117,330

.Dec.

858,765

806,721

859,291

130,300
527,102

.Dec.

984,605

941,131

•976,621

057,402

Total- sales

Other transactions initiated

Service

Other sales.
Total

sales

Other transactions Initiated

45,400

•

397,110

Other sales.
Total- sales.

44,900

Other

Dec.

3,985,200
674,090
3,477,421
4.151,511

4,138,970

—Dec.

Total purchases
Short sales

572,750

3,445,085

Dec.
Dec.

Other sales
—

4.017,835

3,467,120
654,430

Total

2,078,302

3,806,981

transfer

26.9

payments
contribution

for

2,558,302

Oct.

1,588,793

1,517,823

1,470,488

Dec.

$73,836,477

$72,439,196

$69,346,567

1,225,767
$50,692,078

1,550,232

1,526,476
11,152
1,515,324

1,489,737

fresh

Oil-bearing

.Dec.

8,853

-Dec.

1,541,379

other sales.

Dollar-value.

■Dec.

468,220

8,098

11,791

1,481,689

1,072,486

$69,670,667

508,010

473,060

273

160

156

468,220

508^010

Dairy
Moat

320~570

464,340

433,730

220

452,460

129

482

•

of shares.

Dec.

542,120

264

330

339

164

174

202

207

eggs

MANUFACTURERS

Shipments

255
275
■

181
280

ASSOCIATION,

Truck and Bus Tires

873,990

Dec.

Other sales

Total* sales
WHOLESALE PRICES, NEW SERIES —U.
LABOR— (1947-49*= W0):

735,120

17,848,630

18,583,760

17,090,470
17,964,460

Dec.

063,830

808,540
15,895,300

11,668,470

16,703,840

12,332,300

S. DEPT. OF

7,133,984

8,437,134

17,998,005

1,481,780
1,361,468
2,778,714

Production

1,253,307
1,143,404
2,880,251

2,986,799/

273,417

251,476

1,375.389
1,271,218

Tractor-Implement Tires (Number of)—

Shipments

317,992

;

•

347,888

119.1

118.4

ail commodities—

.Dec. 23

(a)

Farm products.
Processed foods.

.Dec. 23

(a)

90.7

91.8

93.9

.Dec. 23

(a)

108.8

108.6

107.5

Meats

.Dec. 23
.Dec. 23

(a)

102.0

102.2

96.8

(a)

127.1

126.9

Fassenger Motorcycle, Truck

125.8

♦Revised figure.
^Includes 939,000 barrels of foreign crude runs. §Based on new annual capacity of 140,742,570 tons
as of Jan. 1, 1953, as
against Jan. 1, 1957 basis of 133,459,150 tons.
tNumber of orders not reported since introduction of
Monthly Investment Plan., JPrime Western Zinc sold, on deUyered basis at centers where freight from East St. Louis exceeds
one-half cent, a pound,
(a) Not available.
•'
"
'
""

Tubes

Tread Rubber

—

697,321

3,566,665
3,767,846
7,869,030

3,498,264
3,390,465
7,656,758

3,171,641
3,763,761

*43,081,000
*43,724,000
*32,813,000

50,124,000
47,369,000
24,877,000

Inner

^(Number of)—

Production

314,222

675,748

53,234,000
49,948,000

and Bus

280,153

713,997

Inventory

Commodity Group—

All commodities other than farm and foods.

6,658,564

16,044,954

(Number of)—

Shipments
6

Dec.

—

6,778,256

6,972,137
7,982,594

17,134,475

——

Production

Inventory

for account of members (shares):
Total round-lot sales—

;

278

INC.—Month of October:

totalround-lot stock sales on the n. y. stock
exchange and round-lot stock transactions

Passenger Tires (Number of)—

Round-lot'purchases by dealers—

483

280

271

animals

and

153

501

products

Poultry

231

118

RUBBER

Dec.

219
188

214

•

Other -sales

195
280

320,570

473~060

....—Dec.

292

275

$43,552,805

$71,988,519

$71,225,175

-Dec.

Roundrlot sales by dealersNumber of shares—Total sales.

—

226

153

crops

Tobacco

Customers'

Short' sales

225

183

-199

1,084,277

Customers' short sales.

Number

232

210

—

—Dec.

Dollar- value

—

241

Feed, grains and hay
Food grains
-I
Dec.

Odd-lot purchases by dealers (customers' sales)—
Number- of orders—Customers' total sales.

Short sales

258

15:

245

;

335.7

AGRICUL¬

products

Commercial vegetables,
Cotton

Number' of shares

6.6

*340.9

INDEX

—

;Odd-lot',sales by dealers (customers' purchases)—t
-

6.8

281

DEPT.

TURE— 1910-1914=100—As:

Crops

9.1

227

FARMERS

55.1

252

income

RECEIVED
—

101.5

340.5

nonagricultural

All farm

238.6
.

special in¬
6.7

NUMBER

2,400,025
480,000

3,152,551

income

interest income and dividends

surance

fTOCK TRANSACTIONS FOB ODD-LOT ACCOUNT OF ODDLOT DEALERS AND SPECIALISTS ON N. Y. STOCK
EXCHANGE—SECURITIES EXCHANGE COMMISSION:
,

labor

Less employees'

PRICES

Total-round-lot transactions for account of members—

...

industries

Total

—

industries

Government

off the floor—

Total purchases
Short sales

Total sales

Wage and salary receipts, total

Commodity
producing
Distributing
industries

1,452,480

the floor—

Total purchases
Short sales.

'•-*

125.1

127.2

•"'

113.3

goods and services

In U.

York)

128.7
116.6

Refined copper stocks

13.000c

12.000c

139.0

128.8

(tons of 2,000 pounds)—.
Refined (tons of 2,000 pounds)

21.950c

13.000c

125.5

146.1

116.6

Crude

26.600c

28.375c

.Dec. 24

(primary pig. 99% ) at

Straits tin (New
-

28.S50C

26,575c

iZinc (delivered) at
Zinc (East St. Louis)
Aldmiuum

28.600c

27.025c

.Dec. 24

«.

28.600c

Dec. 24
—Dec. 24

130.4

Copper production in U. S. A.—

$32.83

—Dec. 24

181.1

recreation-

Deliveries

92.3
135.9

189.8

COPPER INSTITUTE—For month of November:

Electrolytic copper—
Export refinery at
Lead (New York) at
Lead (fit. Louis) at.

care

and

92.0
141.3

146.7

Reading

METAL PRICES'(E. & M. J. QUOTATIONS)!

Domestic

",'L

142:7

care

•

.:109.3

09.6

190.4

Medical

Other

IRON AGE COMPOSITE PRICES:
Finished steel (per lb.)

108.3

130.1

apparel

Personal

185

130.1

Transportation

11.218,000

">vV

100.2

Footwear

DUN &
Dec. 25

113.7

:135.2

103.4

131.8

13,534,000

12.379,000

118.0

135.6

•

107.3

9.380,000
467,000

■

138.2

118.1

fuel

and

126.3

138.3

electricity

fuels

Other

Dec. 27

115.0
:

127.9

EDISON ELECTRIC INSTITUTE:

BR AD STREET,

114.8

■

113.4

Public

FAILURES

113.1

115.2

Household

135,124,000
16,417,000

553,000

■

Lee. 20

—:

110.3

113.3

Men's

Dec. 20

:—

131.2

Ilousefurnishings

(U. S. BUREAU OF MINES):

Electric output (in ODO kwh.)

115.5

127.9

DEPARTMENT STORE. SALES INDEX—FEDERAL RESERVE
SYSTEM—1947-49
AVERAGE = 100
--Dec. 20

117.0
-

114.1

12R0

;

(Jan,, 1953-±100)

Dec. 25

coal and lignite (tons)
Pennsylvania anthracite (tons)

121.1

115.8

113.2

away from homo

133.5

114.6

;

Other foods at homo

;

118.7
"

Cereals and bakery products
»./;■■■

120.3

118.0

liome

123.7

119.7

Rent

Bituminous

231,013

2,128

tons)

920

INDEX

PRICE

Food

Federal

476,577
245,559

37,441

Month of October:

552,542

America

164,117
123,604

Undesignated
CONSUMER

590,314

construction

COAL OUTPUT

66,619,000

570,927

Public, construction——^—
State ,and municipal

To South

All items

Private --construction

Total U.

7,712,000

Dec. 20

ENGINEERING

—

(net tons).
To Asia (net tons)

7,581,000

.Dec. 19

ASSOCIATION - OF AMERICAN RAILROADS:
Revenue freight loaded (number of cars).
J Revenue freight received from connections (no. of cars)
CONSTRUCTION

To Europe

6,915,060

.Dec. 19

...

ENGINEERING

6,974,835

-Dec. 19

Stocks at refinerieSi bulk terminals, in transit,, in pipe lines—
Finished and unfinished gasoline (bbls.) at
.Dec. 19
Keroseng. (bbls.) at
:
.Dec. 19
Distillate fuel oil (bbls.) lat.
Dec. 19
Residual fuel oil (bbls.) at
Dec.19

CIVIL

7.096,654

191,304
35,123
8,829

Central America

and

gallons each).
Crude runs to stills—daily- average (bbls.)
Gasoline output (bbls.)
Kerosene. output (bbls.).
Distillate fuel-oil output (bbls.)
Residual fuel oil output (bbls.)

of that dates]

are as

Month

COAL EXPORTS (BUREAU OF MINES)—
Month of September:
v
*

(bbls. of

either for the!

are

Latest

(net

AMERICAN PETROLEUM INSTITUTE:
Crude nil and condensate output—daily average

or,

production and; other figures for thi

cover

Dates shown in first column

Year

Ago
73.5

*68.2

§2,045,000

month available.

month ended

Week

§75.8

—Jan.

Week

AMERICAN IRON AND STEEL INSTITUTE!
Indicated Steel operations (per cent capacity)

,
.

(Camelback)—

(pounds)
Production (pounds)
Inventory (pounds)

Shipments

—

——.—

29,226,000

(a) Not shown to avoid disclosure of figures for individual companies.

6,908,690

•

The Commercial and Financial Chronicle

(38)

Continued

from first

still

page

civilian

7.1%

the
is not

This

lorce.

that your net inflow of new sav¬
the ings has been rising encouragingly

labor

below

far

peak unemployment

Bousing and Mortgage
Prospects in Coming Year
to take it up October. Had the Administration
under
suspension of the Rules, ^warned us that FHA's authoriza¬
which requires a two-thirds ma¬ tion was less than adequate, the
jority. Everyone was amazed at Congress would certainly have
how near we got to the two-thirds provided the necessary increase.

was

necessary

majority; the vote was 251 to 134,
juSt 6 votes shy of passage. Even
our opponents conceded they had
one of the big scares of their lives.

passage

there has
been, an accounting at the polls
and. I am certain that the greatly
swelled ranks of Democratic Con¬
since that time

Now

would

gressmen

the suc¬

assure

Guaranty
the Congress takes it up

of the Home Loan

cess

Plan,

While

some

will

resolution

Housing Bill

form

interim

undoubtedly

take

immediate

precedence, the gen¬
housing bill will still receive
high priority from the Congress.
Tne defeat of the general housing
eral

Predicts Home Loan Guaranty

YY-/YY

Predicts New

bill

by the Administration in the

of the last session
blow, and the new
Congress, 1 am certain, will push
vigorously for a comprehensive

closing

days

serious

was

and

effective

bill.

and

housing. Also, 1

ago.

year

judgment,

ford

cannot af¬
about an
with an un¬

complacent

hampered

economy

think

the

loans

not

their

turn

backs

the

hardships of such

nomic

eco¬

legislative
programs
to put us back on
road to full employment.

But in order to

alone increase
of

the

dition

fate

rise and

production,

free

flow

will take next Spring
automobile in¬

of the

high gear — optimistic predictions
the industry are heard every¬
where.
Whether
the
consuming

must recognize

thousands

the

lamilies

the

■

In short

possible to

The Congress

possible
At the
very most the Congress
may he
per uaded to permit the maximum
rate to adjust from time to time

VA-guaranteed.

which

only

public

part of the motivation for

the

new

regulation

ministration's

forestall

legislation

the Ad¬
try and

was

desire

would

which

the Home Loan Guaranty
Plan
a plan which was viewed
in Administration circles as the
work of the devil.
Now that the 90% loan is per¬
set up

—

that the recession reached bottom

statistics which show, for

that in

April, that recovery is clearly

under way,

and that we need have

further tears of economic con¬

example,

October—the latest month

for which statistics are available—
the

seasonally adjusted; annual
of housing
starts • rose / jo
1,260,000, the highest rate for any

fervently hope that
this optimistic view is a correct

rate

one.

month in

traction.

when

three years.

•

support.

• -

but

change,

never

Jiient.

for

degree of "flexibility"
granted in my judg-

any greater

will

clearly

conditions

market

'%/.v:./a /

%/YY Y,; Y-. ■

Opposes Flexible MIA-VA

•

Interest

v/l realize that
the simple

programs

Oppose* Higher Interest

Rates
argue

many

that

-v'•:/Y''Rate Level'

/interest rates have already risen

solution to FHA and GI
is to permit "flexible"

interest rates. Just give

dangerously high levels. If we

permit the interest rate spiral to
to
even
higher levels, I
think we would be brooking eco¬
nomic disaster.
Y
^

4• flex¬

climb

ibility," we are told, and all of
housing
problems
will
be
cured in a jiffy. 1 have'given a
We must recognize that during
great deal of thought to this "flex¬
tight money period. FHA and GI
ibility" question and if you will
loans are the first to suffer. I be¬
bear with me, I'd like to give you
lieve it therefore incumbent upon
some of the reasons why
we will
us to provide for government sup¬
never have
nor should we have
port through the Federal National
complete "flexibility" in the
interest rates on FHA-iusured and Mortgage Association when mar¬
ket conditions require it. It seems
VA-guaranteed loans.
to me
that we will face such a
In
the first place I think
we
situation when Congress convenes
should correct for the record an
our

But I am sure we all know that
indisputable that our econ¬
there
is a considerable lag
be¬
omy has shown heartening signs
missive
for
Federally-chartered of
recovery from the April
low tween the planning of housing
associations — in other words now
point.
Industrial production has projects, the setting up of financial
that you have won at least a par¬ risen
and
the
actual
substantially, key industries arrangements,tial victory at the administrative
like
the
steel
industry
have breaking of ground. I am sure that
level
it is understandable that
climbed out of the doldrums, and a substantial portion of the hous¬
yqji wijl want to take another look 1he ranks of the unemployed have ing units started this Fall.resulted apparent oversight on the part of
at
your
HomeLoan Guaranty been l'educed substantially.
The from financing commitments ob¬ those who make a case for com¬
PlanY You will undo.ubtedtly want
last
Spring.
And
last plete "flexibility." The fact is that
gap
between current production tained
to see how your lending programs
levels and those a year ago has Spring was a time when mortgage there is a measure of flexibility
function under the new regula¬ been
money
and
forward
mortgage under the FHA program since the
narrowing.
tions before you reach a decision
But unfortunately comparisons commitments were relatively easy law
permits the FHA Commis¬
as* to, whether further legislation
with a year ago are not satisfac¬ to obtain. In addition the Con¬ sioner, taking market conditions
is needed.
tory because at this time a year gress —- quite wisely I am con¬ into account, to set the rate at any
In: any case I shall continue to
provided an additional level up to 6% per annum. So
ago we were headed into serious vinced
support efforts to write the Home economic trouble. I might point stimulas in the Emergency Hous¬
clearly we already have a consid¬
Loan
Guaranty Plan into law. out that last Fall I was one of ing Act effective April 1, which
erable. degree
ofy "flexibility"
The thought occurs that if you do
the first to warn of the coming set up a $1
billion commitment under the FHA program. As a
renew your efforts
to enact the
recession,r a warning which fell fund for the par purchase of FHA matter of fact, I have grave reser¬
Plan, the picture will be some¬
vations about the- FHA's present
upon deaf ears in the Executive and GI loans financing moderately
what altered, By that I mean that
Branch.
priced homes.
statutory authority to go ^as high
the basic question
of the 90%
But what of the situation which as 6%. I am mindful of the fact
Disquieting Economic Clouds
loan as a principle has already
lies
immediately ahead? In the that the home buyer must pay an
I hope that this year we can
been
resolved
by
the Federal
first place the helping hand of the additional V'i of 1% for his insur¬
Home Loan Bank Board's action avoid repeating the same pattern Federal National
Mortgage Asso¬ ance premium, and this means
in, permitting such loans adminis¬ but we cannot blink the facts ciation
special assistance fund .is tljat as a practical matter the FHA
and then there are some disquiet¬
tratively. In other words, the only
no
longer in the picture. The $1 could raise/its rate to/ the point
question now will be whether it ing clouds on the economic hori¬ billion fund was
fully committed where the home buyer Would have
Economic forecasting
is necessary or advisable for your zon.
is a
in September and the Administra¬ to
pay a rate as high as 8%% — a
industry to try for legislation hazardous enough proposition at tion refuses, despite our
urging, to rate I would regard :as- absolutely
which would prbvide some means any time. In the immediate pres¬
release some $400 million of addi¬ unconscionable for a* governmentof pooling the .risk involved in ent for some reason, the picture
tional funds still available for use insured mortgage.
/
seems specially murky.
such loans.
at the President's discretion.
I would gather that the propo¬
:
For one thing the steam of the
Speaking of legislation we can
Also, we have seen a dramatic nents of the "flexibility" policy
be sure of one thing — the next investment boom of the 1955-56
reversal in the demand and sup¬
really have the GI loan in mind:
session
of
Congress will be a period is still lacking. Business
ply relationship in the mortgage The present maximum as we all
lively one.
Frankly, as far as expenditures for plant and equip¬ capital market. Interest rates have
know for the GI loan is 4% %,, and
hdusing legislation is concerned, ment are still far below the peak tightened
along the line, and as we know that historically the Con¬
this legislative cauldron is in a level, and there is no assurance
usual gOvernment-assisted
mort¬ gress has been reluctant to permit
For
state of ferment. Ideas and pro¬ of any substantial upturn.
gages are the first to suffer.
Dis¬ increases in this rate. I
would
grams are being restudied and re¬ example, a recent survey by the counts are
widening —■ to scan¬ point out, however, that the pres¬
Federal Reserve Board of Phila¬
evaluated, and, it would be pre¬
dalous proportions on GI loans I ent maximum of
4%%' is substan¬
mature for me to try to outline delphia indicates that manufac¬
might add—and forward commit¬ tially higher than the_ 4% rate
the specifics of
the legislation turers in that metropolitan area ments at a reasonable
price are which
veterans
were
able
to
which the Congress will adoot. plan to spend approximately 14%
becoming harder and harder to obtain when the program first be¬
What we will probably see, how¬ less on new plant and equipment
obtain.
gan in 1944 up until the Spring
in 1959 than in 1958. Projections
ever, is a two-stage approach —
I think it especially significant of 1953 when the rate was first
of plant and equipment invest¬
first, some sort of an
It is

reasont.ble dictate the need

at least

is made

program

enter

mortgage fblaTieing" of all
types, conventional/'FTJA-inmreJ.
and

would never in con¬
permit tenders to charge
bear in a

science

flow of
-

practical matter I do not

what the traffic would

cfe evjfytiling

encourage q

except ironically
prices where
lower prices.
V

farm

means

permit complete flexibility in the
interest rate of GI and FHA loans.

to';';.

must

to "raise" in

believe that the Congress will ever

housing market who otherwise

would not be able

composition of Congress
the only thing which has

But the

mar¬

apparently the

means

case

"flexible"

conven¬

would

with changing

Washington,

with their very lew
downpayments and their liberal
Joan maturities, permit hundreds

would

rate

the minds of the money managers

programs,

dustry. Auto production is now in

fall

verb to "flex"

let

must

This

flexible

ket conditions. But

current rate

our

-—

—

oppo*

means

conditions.

that

mean

mortgage money, we must
have an ample supply of invest¬
ment
capital seeking outlet
in
FHA and" GI loans. These latter

and

scope

changing

tional

the key to the direction

! Perhaps

housing

maintain

face the inevitable fact that in ad¬

are

the

our economy

will

.Supplementing:
Conventional Mortgages

great

"flexible"

word

rigidity, in other words a
responsiveness
to
adjust
to

Advocates

in our economy,' and we
can
confidently expect Congres¬
sional leadership in forging what¬
ever

liberal basis

should

meaning. I was taught that

new

the

site

conventional

make

to
a

hopeful that
ability of your

help to sustain effective demand
in the housing market.

group

necessary

govern¬

mortgages

continually be raised. Apparently
we are seeing an old word acquire

newly-won

industry

employment total of that magni¬
tude.
I am certain that the rep¬
resentatives in the Congress will

that
public will step up new car purcontent of next
Chases is perhaps the number one
year's
legislation, not only in
enigma in the economic outlook.
is not
housing but
in practically
all
changed in the interim. You now legislation dealing with domestic Sees Housing Slump Next Spring
have permissive authority under
Unfortunately, the putlook' for
programs, will be influenced in
Federal Home Loan Bank Board
large measure by the state of our another basic industry is perhaps
regulations to make 90% loans economy during the Winter and more definite. 1 am learftil that
under certain conditions. I think
by the economic outlook for next the housing industry may be in
this is a forward and commend¬
for serious trouble next. Spiring. I
Spring.
able step on the part of the Board
The doctrine accepted
by the realize that this not ion may seem
and I think we in Congress can Administration and
at first blush to be out of step with
apparently by
share in the credit. I suspect that most of the financial observers is most
recent
housing production
next session.

the

Thursday, January 1, 1958

ment-assisted

to employ these increased funds to
the production of needed
help

and

that the interest rates on

and I know that you will continue

rates of 7.5%
7.6%
respectively in April
August, and is far above a

—

January, and 1 plan to advocate
increase in FNMA special as¬
sistance support fund for lower
an

cost FHA and GI loans.
A

also

pinning to
'

meet

the

needs of our people and
provide a strong under¬

housing

—

industry

housing

healthy

absolute essential

overall economy.

our

recognize that proposals to
extend
and expand
the support
i...

function

the

National

Federal

Mortgage Association's special as¬
sistance program will be strongly

attacked,

and

criticisms

will be that

one

basic

the
we

cannot

afford to authorize additional Fed¬
eral

expenditures at

face

time when

sizable Federal budget

deficit.

•

y:y

•; *

First, let me say that no one has
a monopoly on the
desire to see
the Federal budget balanced. All
of us are against sm and we would
all like to see the budget balanced
as

soon

But

feasible.

thought. In
of

truth

would

the

matter

balance

cannot

leave

this

judgment the plain
is

that

the

budget until
we
have once again achieved a
full employment economy.
Cer¬
tainly a major share of the huge

billion deficit facing us this
year must be laid squarely

$12

fiscal
at

the

door

the

present

eco¬

nomic recession. The simple truth
is that tax revenues have fallen

and if

view this problem real¬

emergency

resolution
insurance

increase

the

FHA

authorization, and

sec¬

ond, prompt attention to the gen¬
eral
I

housing bill.
would

like to

record, .that
was:

less

Congress
F H A.'s
In

the
insurance
last

for

the

.Administration

candid

the

voted

the

than

state

with

the

adequacy

of
authorization.

session

when

ment
are

not

national basis happily

pessimistic, but
promise

theless they do not
stantial increase.

none¬
a

sub¬

billion

additional

au¬

Unemployment
continues
to
an uncomfortably high
level.
Despite the economic re¬
covery since April, we still have
close
to
4
million unemployed
remain at

Americans.

This

be more than ample to continue
FHA'S insurance program without
let up into the next session.
We
now know that that was not the

means,

taking

the usual seasonal

ca«e

and" the FHA

institute

was

forced

rationing procedures in

employed: in January, and the
figure will probably be much
closer to 5 million.
I

think

this

saw

should realize also

that the seasonally adjusted un¬
employment rate in October was

connection

that, October

marked fall-off in FHA ap¬

increased to. 4 Vz %.
This

achieved

costs

have proved

cline in VA appraisal requests for

increase in interest
most costly to
home buying veterans. Thus, for
example, over the life of a 25-year

proposed construction.

loan

plications
There

pattern into ac¬
thorization, everyone took it for count,, that at a rock bottom mini¬
granted-that that amount would mum we will have 4^ million un¬
$4

for

was

does

also

new
a

not take

construction.

very

any

where

^harp. de¬

particular
all of

the

sharp

4%%

average

see

interest

veteran

rate

I know that your great

will continue te channel

much

this

industry

Now when

and

the

must recog¬

budget balance can be
only when production

income

generates

in¬

sufficiently to provide the
necessary tax revenues. Certainly
fwe must be careful in the expen¬
costs ditures we authorize, but by the

$1,900 more than a 4% rate.. Trans¬
is leading. In my judgment, hous¬ lated in physical terms, the- up¬
ing productibn will turn down ward spiral"of interest rates over
considerably more than seasonally the past 5 years has deprived the
in January and February, and we average home buying veteran of at
may well face the danger of a least an additional bedroom which
serious slump in housing produc¬ lie could afford at the lower inter¬
est rate.
tion next spring.
*
acumen

istically, I think
nize that

Rear these argu¬

ments that government
a swell¬
interest
ing, fund of mortgage capital into, rates should be: "flexible," E sus¬
housing construction. I understand pect that what is really meant is

creases

token

the fixed obligations
budget are huge and we
must, of course, provide whatever
our country needs for its
security.
same

the

The basic task for

expanded
great pri¬
enterprise system and I am

economy

vate

lies with

confident that the

our

savings indus¬

try will da its share and

achieving the healthy .and thriv¬
ing home- building and home fi¬
nancing industry upon which our
prosperity depends.

Number 5808

189

Volume
.

The Commercial and Financial Chronicle

■

in warehouses and inventories
being accumulated.
When

were

Mooney Appointed

the

outlook

Executive Director

lost

some

Of the N. A. i. C.

cies

••

By ROBERT R. RICH

....

George

Balanced Mutual
Fund

Reports:

New Records

and

-Inc.,: a balanced mutual fund in-were: - United
Aircraft;
Allied
vesting in bonds v and preferred- chemical;; Ohio Oil; Standard Oil
stocks as well as common stocks, Co;
of
California; - Union Bagincrease in net asset-Camp/Paper; Central1; Louisiana
from $7.48 to $8.90 per share
Electric; General Public Utilities;

reports
value

during the fiscal year ended Nov.
30.

This is

gain of 22.2%.

According .'to th*31 fund's annual - Common stocks eliminated were,
report, year-end figures of, $89,- Combustion Engineering; Louis251,292 for ,w»ai her assets aiid«ville & Nashville RR.; McKesson
27,482 in number of shareholders & .Robbins; Seaboard Air Line
are new record highs.
The report-,: rr.; and Simmons Co.
*.
V

result

the

that

clear

makes

substantial

lvr,y

and

shareholders;

new

sition during the^ yeafof the

Nelson Fund, Inc.,

n0n-:ciiversified

was

by Herbert
President of the
M

o n.

George A. Mooney

•

open-end,

seeking capital

soirff £r°wth

companies and European

.somesectrrities

Management

1955. He
Assistant
Financial News

of'"The

New

Times."- *."£
y

V Mr.

was

of 'the

York

' V

Mooneyr

President

"As

first

the

World

Trade

cies

and

other/ restraints
deemed desirable by government
any

authorities to influence the availf

ability
retard

could
further expansion of busiand

cost

credit

activity,. particularly in the
housing field. Any prolonged or

ness

SL
ni Si
"J c^?.f
?q|o ^E^'

value

asset

per

not meet

share/ the

the

jectives of the
vestor. Rather,

for

mand

in¬

and

the

increased

the renewed

de¬

goods, profits snapped
sharply than even the

most

optimistic had expected.

former

member

Financial
.The

Governor

the

New

Writers'

National

Investment

and

York

Association.

Association

Companies

closed-end

repre¬

adjusted for
creased

10%

the

rate of

companies with

seasonal

Be¬

factors

in¬

fourth

quarter.
The
expansion in 1959 will be

moderate, about 10%

annual

basis.

will

Dividend

in¬

general

combined total net assets, as of

1959, and dividend cuts will be far
less

"With the

ances,

Keystone's Views
Prospects

increase

Gross

Na-

tional Product is forecast for 1959

improvement in cor¬
supplemented by

profits

realistic depreciation allow¬

there i sconsiderable

that

ance

Federal

non¬

income

tax

report

points

that

out

which

the

fund

currently has unrealized apprecia¬
tion should be sold before the end
of the
present fiscal

year,

present
fund's

non-taxability

dividends

for

the

die

Federal

be¬

tax purposes might be dis¬
turbed. It is accordingly expected
come

that any net gains realized from
the sale of such securities between
the end of the present fiscal
year
and March 15, 1959 will be dis¬

tributed

thereafter,
additional

the

shareholders

either
shares

option

shortly

cash

the fund at

each,

shareholder,

and in either case will be taxable

to recipient shareholders

net

long-term capital gain.

Mutual Fund Sales
Aided

by Market
Uncertainty
With the common stock market
its all-time high, the prob¬

near

lems of individual stock selection
are more

vidual

complex for both indi¬

and institutional

investors

1959 begins, according to Rob¬
ert
E.
Glark, Executive Viceas

President of Calvin Bullock, Ltd.,
New York, sponsors of six U. S.
and Canadian mutual funds with
assets of over $500,000,000.

Such an environment, he notes,,

emphasizes
the
importance
of
careful selection and frequent in¬
vestment readjustment by profes¬
sional management both for shortterm
protection and long-term

profit. The well-managed mutual
provides these features and,
as sales of $11A
billion of new

fund

numerous.

porate

On 1959

The

securities

28%, and by another

year-end 1958,. in excess of $14
billion.
;
~

fund

small

result

tween the second and third quar¬
ters of 1958, profits after taxes

international trade.

investment ob¬

average

the

writers

will

serve

for

in¬

oEr

to Sept. 30, 1958 increased 11.2%.
,^s a resu^ of its investment
objectives and( policies, and because - of its unusually high net

needed

back

poli-

line with

Restocking

Writers Association, an organi¬
zation composed exclusively of

creases

Reserve

production

Restrictive Federal

be about in

sets invested in foreign securities

shipments, business

tinue through most of 1959. al¬
though stock-piling is likely to be
more rapid in the earlier
part of
the year than in the latter part.

far

aggravated by the

up¬

anticipate higher prices later in
In¬
ventory accumulation should con¬

companies (mutual funds) and

mental deficits

normal

sents 149 open-end investment

the

.public efficiently at current levels
of consumption, and in some cases

believes

frnm

1958

with

taxable

purposes.

1959—particularly for steel.

Superintendent

on Jan.- 1,
formerly; been

Editor

line

ventories

Banks

had

phase was resumed. Orders
placed to bring inventories

consumption.

As so'ciat i

consumer

production

through
most of 1958 was far below
previ¬
ous levels,
particularly in the dur¬
able goods industries.

appears

Ander- ' "

son,

un¬

into

supply and demand into some¬
thing approaching balance, pro¬
duction was expanded and now

announced

and

was

dug

optimism returned, and consumer
demand was accelerated. To bring

Jan.'

needs,

ending Jan. 31, 1959 will be

glamour in mid-

inventory reduction

'that the fund is the largest of any
ivf
ad
American mutual funds which
iA9-fln/Sprl" -ftave m0re than 20% 0f their as"

iJvSfJirti

'SaSSSt?

its

business

Businessmen
inventories
to
meet

Investment

general

derway.

were

Companies
as

eral

ward

sociation of

for

1957, however, management poli¬
changed sharply and a gen¬

"Late

Na¬

tional As¬

of
Diversified Investment. Fund,
appreciation, announced the ofInc., on Nov. 30 a year ago were
ferjng 0f gQO shares of stock at net
$58,185,498, at which time the fund asset
value, which, as of Dec. 24,
listed 19,083 shareholder accounts.
amounted to $3,002.45 per share.
;
The report, signed by Chairman
The main objective of the Fund
Wm. Gage Brady, Jr., and Presiis to invest in special situations;

stttU
still,

New

management V in-

Vestment company

tor

the

Mooney
appointed

3,000 Plus Figure
^

million'; of assets of . Manhattan
JBond Fund, Inc. Total net assets,

fpoi^t ^haF 'The^nfs
point that
J here
is

Business -and

higher .£market
value
for
the
fund's investments; and (3) acqui¬

State

was

Shares Priced at

(2)

the

Executive,.
Dire

r'-

-■

1111(1, InC.
'

(IX purchases of additional shares of the fund by exist-,
ing

•«-,

JMeiSOIl

in total net assets is the

increase

York, expired Dec. 31, has been
appointed
j

Pacific Gas & Electric; and Dresser
Industries.

A. Mooney, whose
Superintendent of

Banks

Gulf, Mobile & Ohio R. R. Co.

was eliminated from
"the preferred stock, list.
^ ;
common stocks added, durjng the six months ended Nov. 30

Investment -/Fund,

Diversified

Co., 4.78% cumulative pre¬
ferred; El Paso Natural Gas Co.,
$4:875 convertible, 2nd preferred;

J"t$5 preferred
:
..

: y

term

son

(39)

•

business

assur¬

investment

shares in 1958 would

indicate, the
investing public recognizes their
value and usefulness.
:

"Sales of shares

machinery
will
turn
upward.
Capacity appears to be ample in
most industries sp that increased
capital expenditures will not be

volume

needed for

in even greater
expected in 1959.
importance in die

vestors

that purpose.

Instead,

can

growing*

1959 sales outlook is thefactrtftat

there

are

now

850,000 in¬

some

acquiring shares on a pe¬
riodic basis; in 1958 alone about
management bebe detrimental to the economy.
be influenced by such factors as
230,000 investors initiated such
Viewing the economic scene as i*eves that the fund will be a Outlook for the first six months
equipment efficiency, products of plans.
Assets held unaer these
a
whole, your management does -more appropriate investment for of the new year. The report was
research, technological progress, plans aggregate some $1.3 billion,
not see any basic weaknesses in' substantial investors having otherprepared by the economics depart- shifts
in
population
centers, or about 10% of the $13 billion in
the business picture at this time wise balanced portfolios.
ment of Keystone Custodian
changes in transportation facil- mutual fund assets at the
The fund was formed on Nov.
and believes that the underlying
year
Funds, Inc., trustee for 11 mutual ities, etc.
end."
forces responsible for the growth 2, 1955, through the sale of 400 funds with total net asset value of
"Personal
income should conThe Bullock organization views
of the economy will continue to shares of capital stock at $2,500
more than $422 million.
tinue to rise in 1959, perhaps by as
the immediate market future with
per share, with a total of $250,000.
"operate over the longer teirh." *
Summing up prospects for the much as $18 billion, so consumer
As of Dec. 24, 1958, total assets
some skepticism, as is indicated by
I.. At
the
1958
year-end, 63.5%
months ahead, the Outlook conspending promises to help com- reserves in the form of cash and
'
exceeded $1,250,000.
1
t
of the fund's total net assets were
cludes, "It appears that we have plete the production cycle. With U.
S. Government securities rang¬
t invested in common
stocks, 27.1% ' " There is no sales load or under- entered the upward phase of a
spending for non-durable goods ing from 10% to 20% of assets.
in bonds and cash and 9.4%
in writing
commission payable to normal business
cycle. Corporate and services likely to reach about
"We think such buying power will
preferred stocky.
• anyone; the fund receives the enprofits will average 25% higher $9 billion more than last year, the
!
come in handy
during the new
In
the
six
months
since
the tire public offering price. No com- for the year, and dividends will consumer will
have enough left to
mitment exists to any firm for the
year," explains Mr. Clark, "and
be up about 5%.
; fund's semi-annual report, 35 new
Industrial pro- spend about 20% more than last
we expect to use it
aggressively
'issues were added to-thebond handling of the fund's brokerage duction in the last quarter of 1958,
year on durable goods. Under such as various sections of the
business.
equity
:
t section of the
measured by the Federal Reserve
portfolio, most of
circumstances, it is not unrealistic market
adjust to a level more in
George J. Nelson is President Board's
them through acquisition of the
index,
stood
at
about to expect a substantial increase
line with present and prospective
and Treasurer of the fund; John
assets of Manhattan Bond Fund,
140% of its 1947-1949 level and is in
the
sale
of
domestic-made
R.
earnings, both in the United States
Boker, Jr. is Vice-President.
Inc. The
extensive labor unrest would also

Keystone's semi-annual Economic,
Business
and
Financial

expenditures will

than

ever

following bond holdings

were

eliminated

during

the

pe-

The

list

directors

the fund

include Schroeder Boulton, part50-year consolidated guaranteed, ner
Baker, Weeks & Co. and
series "A," 5s, 1962; NT. Y. & Har- Armand G. Erpf, partner of Carl
riod:

Canada

Southern

Co.

Ry.

lem

R. R. Co. series "B," 4s, 2043;
The New York Central R. R. Co.
;

collateral trust 6s, 1980; and Sin¬
clair

Oil

Corp.,

convertible

Fund
H.

to the preferred

section

Service

were:

•

Arizona Pub-

Co., $2.40 cumulative

convertible preferred; Boston

Edi-

Canada.

von

Electrical

New additions

lie

Loeb, Rhodes & Co. and Presi¬
dent
of
the
New
York
Capital

4%s,

1986

stock

likely to average about 146% for cars."
the year 1959 as a whole. All in
all, 1959 will be a good year, a
competitive year, a year of further
substantial
progress
for the
American economy."

Professor

Engineering, University

of ""j1"'8: hf acted as a technical

consultant of the fund in the past,
expeCted that his services

and it is

wri remain available

to the fund

The

Keystone
on

the

featuring

tion,
shows

the

between

publication

problem of infla-

a
constant

chart

and

full-page dis-

Market and the importance of ex-

port

markets to
the American
The report points out
trade is a two-way

economy.

that

lent," Mr. Clark asserts, "based on
many factors including our rapid

foreign

and

Investment

objectives of this Fund
possible
long-term
capital
and

are

income

growth

for

Prospectus

its

upon

shareholders.

request

the

principal reasons for the
recent recession, is now playing a
major role in the rapid recovery,
according to the Keystone Outlook:

Lord, Abbett & Co.
NewYorl.*

Chicago

—

Atlanta

—

Los Angeles

"Through most of 1956 and early

Boston,

net assets,

probability,

reduced

dollar pur¬

chasing power."

outstanding are now
in its history. Total
asgets of the Fund on Qct 31> 1958
were

74.5%

$29,681,355,
over

1957, The

the

increase

net

assets

total

reported

$17,006,952

Oct.

31,

of the Fund

Oct. 31,

increase of 76.4% over the net

1958

were

$26,352,368,

FIRST

quarterly
DIVIDEND

$14,938,610 reported on
corresponding date the pre¬

vious year.
The fund

is believed to be

the

only one in the country which has
requested and received a ruling
from the Treasury Department to
the
effect
that under
existing
circumstances and provided certain requirements are met, a sub-

stantial portion of

the distribu-

when the business outlook' tions paid by the fund in March,
was
optimistic, production
ex<ni ^lviuenas paid during
ceeded consumption, goods piled
the remainder of this fiscal year
1957,

remarkable

income,

highest

the

Change in inventory policy, one

consumer

technological changes and, in all

sbares

the

assets

billion.

Fund

reports total and

street, with the United States ex¬

Common Stock Investment Fund

outlook for stocks is excel¬

population growth, high levels of

jncome
jnc

porting $19 billion/worth of goods
in 1957 as agaiim'Tmports of $13

All Tim** llitfrhw
xVIl" A 1111" AllgllS

which

relationship

the cost of
labor per unit of production over
a 28-year period starting in 1929.
prices

-cussion of the European Common

Affiliated

other hand, the long-

the

term

Fund

Also included is

when needed.

"On

Boston Income

touches

Foerster,

and Canada."

Wellington Equity Fund

(began operations October
24, 1958) 4c a share from
net

investment

shareholders

January 7,

income

record

1959 payable

February 2, 1959 in cash or
stock at shareholder's option,
WALTER L

MORGAN,

President

December 23, 1958.

The Commercial and Financial Chronicle

Thursday, January 1/1959

f40)
\
is

BUSINESS BUZZ

(tmi the Nation'®

[This column is .intended to re¬
flect the "behind the scene" inter¬
pretation from the nation's Capital
and may or may not coincide with
the "Chronicle's" own views.] "*"J

g]~ V'/YfI

JL l/W

/lflU

Capital

net¬

highway

work."

ton...
Behind-the-Seen® Interpretations

basic, coast-to-coast and

our

border-to-border

Mayer & Co,
;

VvaoHINGTON, D. C. —The

■J greatest highway

construction

this country has ever
mark 1959.
Federal
Highway
Administrator
Bertram D. Tallamy acknowl¬
edges that there has never been
anything to equal it anywhere
! around the world.
'

;

program

Frederick M. Mayer and

does not appear
much chance that Congress will
dip into the general fund for
highway
construction money,
particularly in view of the huge
deficit that is coming up six

this time, there

'I known will
-

under the

Co.

of primary and

secondary roads

under,, construction

under

contract,
there
are
approxi¬
mately 3,900 miles of the 41,000
miles
of
divided, multilaned expressways, called the
Interstate System, under con¬

1 nearly

section of the Na¬
of
only, stop-light

every

tion wilWbe driving on links

/tress

these

drive

will

Angeles

Los

able

sands of homes
'

traffic

for the
In some

way

roads.

lions of dollars to build a

and churches.

stop

Already

More than 250,000 miles
of the rural roads are primary

privilege of using an automobile.
The immediate prob¬
lem. facing the Department of
(' Commerce's Bureau of Public
Roads is: Where are we going

highways

Federal

and

which

wide rights of way

with

Remaps some of uie Nation's
automobile manufacturers, the

the Inter¬
the next

;
,

;

United

the

States,

growing

left in every state, but
something will have to give in
the future. The time is coming
acreage

Running Out of Money
''

ernment
\

puts up 90% of the
cost, and the various states the

remaining
the

10%.

Bureau

The facts
Roads

are

going
to
run
out
of money pretty
quick, so they say, unless Con¬
gress provides more funds
at
the

the

new

session,

Eisenhower

result,

Administration

recommending to Congress
that the Federal gasoline tax be
raised from 3 cents to 41/2 cents

gallon

order

funds

for

provide

Interstate

the

program.

The
roads

will

continue, of

course,

rently coming into the Highway
Trust Fund.

that

Already

they

the

across

organizations

many

notifying
ther

their
are

are

Congressmen

opposed

fur¬

(increasing the tax, and

are

requesting the law-makers to

to Washington prepared to vote

against
1959.

when

foe

the

proposal

Many
the

chances

raise

are

later

them

will, hut
showdown comes,

the gasoline tax will

increased

once

Many people,

the

of the

ways.
Preliminaries to
construction, such as the

acquisition, takes from 18

way

to 24 months. Some of the states

better

far

were

their

launch

of the 1956

pro¬

passage

Highway Act. Others

now

argu¬

"schedule,"

behind

still

forging ahead.

are

with

industry-

Total road construction in this

the

interested

time than

this

thing else.

have

better to

cal policy for the
ernment

with-the

given

It would be

that

Congress to provide the needed
are

funds

provided, Mr. Tallamy

apportioning
next

says

of
Interstate funds

for

summer

The old year

fiscal

1961.

ended with $700.-

000,000 plus in the Trust Fund.
will

balance

The

reduced

during the remainder of the fis¬
cal year ending June 30, 1959.

Meantime, Mr. Tallamy main¬

Adminis¬

Road

the Bureau faces the prospect

nearing

Federal

Unless

revenues.

solution
in
others. The contracting indus¬
try, as well as suppliers of ma¬
terials and equipment, is geared
to meet all the requirements of
the program."
The

further

will

Congress

of Roads

tains that the Bureau

to say that prac¬

and the State

tically all of the problems had
been
solved
except the "big

ments

Highway Depart¬

learned

have

year

for

the

Interstate

and

"We

This

System

$900 million for the ABC.

can

For

years

provide," said he, "a

interesting

instance

possible by the sus¬

industry will he called
1,100,000
for

this coming

the

unon

for

tons

of * steel

road

program

The Depart¬

year.

ment of Commerce says there is

sufficient
and

for

cement

the

years.

Certainlv" at

summer,

capacity
tivo

possible

ways

Byrd

stantly be

Chairman of the Senate Finance

the
an

1956 Act,

was

responsible for

amendment

calling for

varying

medians.

At the same time

of ' Virginia.

the

steel

strike

prolonged.

the

ceived

Op¬

the

price equiva¬

stock

the

called,

not

Option has

additional

$400.00

Call

of the premium

reason

seller

re¬

income

his investment.

In selling a Put contract, the
or

seller

the' Put,

Put

giving

deliver

100

which

right

days

premium of $400.00.

the expiration
is

fited

Put

Booklet

for

$400.00

investment

Ask

Option.

exercised,

the

bought stock

con¬

at 60

reduced by the $4004)0

the

for
not

re¬

If before

of the Option, the stock

tract, he will have

received

would

delivered to the maker of the

which price is

ninety

sell

can

the

ceive

for

60,

someone

him

maker

being willing tr

buy the stock selling
a

Use

than

Interstate

and
.

has

the

bene¬

received

of
on

How

$6,000.00,
to

Options

cau

of
are

NY. 5

»nc

BA 7-8108

inter¬

justified

System.

brokers 4 olalers assn.

con¬

must

be remembered that this system

pay-as-

filer, Schmidts Co.
rut 4

must

the guard against

provision

changes

levels

different

widely

TRADING MARKETS
American Cement

Botany Mills
Heywood-Wakefield y
Indian Head Mills

W. L. Maxson

Morgan Engineering
National Co.

I Carl Marks & To Tn<FOREIGN

SECURITIES SPECIALISTS

.20 BROAD STREET
TEL: HANOVER 2-0050

"•

•

Southeastern Pub. Serv.

United States Envelope

•

NEW YORK 5, N. Y.

TELETYPE NY 1-971

LERNER & GO.
Investment Securities

II Post Office Square, Boston

now

thre>

received.
then

such

natural terrain to provide road¬

for the

steel

the

shares.

hundred

stock at

the

lost

ias

lent

Calls

called, the seller of the

safer

and

pension by Congress of the so-

made

indus¬

ahead

man

for ninety days

price

$400.00 for

each

stock

highway by taking advantage of

was

program

asphalt

market

stock selling

probably sell

receive

possible

apportioned to the States

tries and the steel industry have

favorable

that

The road equipment industry,
and

can

entirely independent roadways.

August

made

are

companies having

owning

company

I960, including S2.5 billion

"Last

increase further each year

cement

total of S3.4 billion for the fiscal

added:

for the next three or four years.

the

Put

tacking

will

just as economical, or even more
so, to design and build Interstate
and other modern highways as

one."

Options
or

long and continuous portfolio.

tion

safe bet to say

amend the Act early in the 86th

mandate

by Congress. The en¬
shortage
is
pretty
much a thing of the past, the
question of matching funds has
been resolved in many States

trator went

Call

and

by people

current

New Legislation Expected

Put
sold

and

gineering

and

Federal Gov-'
to going

opposed

are

into debt.

Mr.

System in all the States in ac¬
cordance

program.

those interested in a sound fis¬

V-

said

and com¬
However,

in debt

the

plete

any¬

doubt,"

shouting long and loud that it is

funds

.%//■.;, /V:

Tallamy's Views

Committee,

during the 1959 cal¬
year is expected to in¬
volve a total outlay of S6.2 bil¬
lion, an increase of at least 15%
over 1958.
If plans are carried
out as originally blue-printed,
construction

OF OPTIONS

many

struction

endar

road

THE SELLING

direct interest in the con¬
program
have been

ing

country

the

pro¬

of those hav¬

lie

Senator

S6.2 Billion in 1959

its

and

However, tne ±5ureau of Pub-?
Roads,
which administers
road program in coopera-f
tion with the various states, is.

construction

road

for the Interstate System.

Of course,

1959 and 1960 fiscal years."

products

interwoven

gram

called Byrd amendment

Some

had to start from scratch.
are

prepared

Interstate

immediately after

gram

them.

come out of
the Treasury Department's gen¬
eral fund, on the ground that
the economy of the
country is

industries.

actual

engi¬
neering work and the right-of-

state System should

allied

multi-laned express¬

new

about

automobile

to provide them
duper expressways.

first time motorists
during the latter months of 1958
were permitted to ride on links
(For

ing that the funds for the Inter¬

solidly

important

fibre for the

and

than

people,

with super

some

again.

are

food

secondary

and

without interruption because of
the huge yields that are cur¬

Nation

when it may be more

hut

primary

bit, in some particular areas.

Tallamy,
"that
we
are
pro¬
gressing toward the simultane¬
ous completion of the Interstate

Highway

view

ist on his gasoline, oil, tires and
various other taxes. These taxes
ere in addition to the taxes col¬
lected
by
local governments,
counties and states.

Under the 1956 Highway Act
passed by Congress, calling for
the 41,000 miles of super highways
with
250to
300-foot
rights of way, the Federal Gov¬

OPTIONS

you-go

tion

funds

that is collected from the motorv

construction

slowdown

could

in
popula¬
tions. cannot keep up at the
present rate. Something has got
to give.
Sure, there is a tre¬
mendous amount of "surplus"

primary and secondary
systems and the urban
highways have priority for the
amount

ON THE USE OF

to fire me."

Departments,
the many engineers, the concrete
and asphalt people would agree
that the day is coming that the
present pace for land consump¬
State

The

tremendous

slight difference of opinion,

very

the

2,500,000

than

consume

valuable acres of land.

road

facing

private office and a partnership and he wants

high¬

municipal

miles

state

the

to get the money for
state System during
fiscal year?

want

and

ways.

pay more
taxes for

"We're

miles of rural high¬
approximately 365,-

000

pay

JL 7 IN A SERIES

the

down

laid

United States are more than 3,-

plaining they have to
their

Court Place.

1645

expressway

for it.
The
motorists have long been comthan

the

staff of Wittow & Company,

through a
city or urban area dotted with
homes, parks, schools, factories
mile

light.

added

mil¬
single

000,000

has

Stewart L.

—

been

Herman

ways

foody

Colo.

DENVER,

super

urban

cost several

will

areas

all sounds pretty good, but
is a catch in it.
Some-:

make

duper

there
«,

Wittow Co. Adds
(Special to The Financial Chronicle t

ings have been oy will be razed

in¬

for

stance—without having to

valuable.
literally
thou¬
and other build-

lot of land, much of it

the continent—New

across

York

for

rights of way represent

ATLANTA, Ga. — William L,
Worley
has
become -associated
with The Johnson,
Lane, Space
Corporation, Citizens & Southern
National Bank Building.
.

Congress on the idea of a
41,000 mile system.
The 300-

maintain

engineers

days

motorists

(Special to The Fjnancial Chronicle)
./

sold

i'oot

pre¬

With Johnson, Lane, Space

System, still in the early stages,
v is costing a
lot more than the
/ authorities estimated when they

free,griper duper roads. One of
these

the Interstate

are

Furthermore,

from now motorists in

A year

that

facts

The

tract.

now.

Original Costs Too Low

„

Besides the thousands of miles

of F. M. Mayer

name

continue the business

viously conducted by F. M. Mayer,
30 Broad Street, New York City,

months from

Robert

J. Mayer announce the formation
of a partnership effective Jan. 1,

-—ry

» it

..Telephone
HUbbard 2-1990

9, Mass.
Teletype
BS 69

Full text of Commercial and Financial Chronicle : January 1, 1959, Vol. 189, No. 5808

FRASER