Full text of Commercial and Financial Chronicle : January 13, 1949, Vol. 169, No. 4768

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

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14 1949

JAN

P'JS. ASM.
U(M».W y

ESTABLISHED 1S39

Reg. T7. B. Pat. Office

Volume

New

Number 4768

169

Truman Budget Sets
New Peacetime Peak

By WILLIAM A

almost $2

billion above

fiscal year figure.

rent

Picturing 1949

Defense

together with lower employment, but

lion. Receipts to

healthier economy.

be bolstered by

more

of social security

levies.
President

Truman's

budget

Forecasting is

Jan.

c

short

time

expend-

iture

-

on

rec¬

ord.

On

basis

of

the

-

cur¬

rent

receipts a
deficit oi $873

i

million

is

timated

the

Truman

coming

the

but

year,

President, as already in¬
in
previous
messages,

recommends taxes be increased

$4 billion

by

and

existing social se¬
curity levels be boosted by an ad¬
ditional $2 billion.
The text of

the

budget message outlining the
general recommendations follows:
To

the

Congress

of the ^United

States:

I

transmitting

am

States

United

for

my

recom¬

Budget of the
fiscal

the

(Continued

r

our

year

page

on

Due

January

of

into

launch

a

for

forecast

which

said

so

written

and

much

is

his

own

1.40%

have.

those

with

of

ideas

others

mixed
of

and

for-

in this country

a younger gen¬

eration which almost from its birth has been nourished

up

and

should

poisoned?—with wholly visionary
always fantastic notions which are out of harmony
we

say

with American traditions and the American system.

33)

on page

To

this element many strange passages
address

McDonnell
before the Sales Managers' Bureau
the

St.

by Mr

Louis

Chamber

of

31,

1946

Dec.

31, 1948.
during

Yet

to

those

two

years

the

earni ngs oil

the

stocks

in¬

cluded in that

vanced

Had
lad

appear

A.

Rotnem1

this^average sold as high in
did in 1929

iratio to earnings as it

would

it

as

have reached

Had it sold at

420.

it

did

reached

in

as

1937, it
Its

357.

level of

a

high

a

ratio

would have

peak, however,
193 and its-

during the year was

closing level Was 177.
in

other

ways

—

by

the yield of stocks compared with

bonds,

by

or

the

ratios

of

the

value of listed stocks to estimated

national wealth,

personal income,

(Continued

on page

33;

in the President's

recent messages may

Ralph

ad¬
54%.

average

Measured

There has grown up

the risk of

runs

ad¬
only

10c from Dec.

y

—or

getting

and probably do

reasonable

enough, but those with longer experience in this
(Continued

Commerce, St. Louis, Mo., Jan. 7,

on page

very

28)

State and

1949.

Municipal

;V:V

1950-59

R. H. Johnson & Co.
'I

-

.

from

being

d ust ria1

n

1949

15,

to

1949.

Anyone who speaks on a subject
of such wide-spread interest and

\

Prices

Which the House Is Built

•

•

.

the

Jones

vanced

jv The. Sand Upon

-

;

Trust

Equipment

that

average

•

:;:An

Chesapeake and Ohio
Railway
Certificates

fact

Analysis of the various and sundry measures now rec¬
ways. In other
ommended by the President may in some instances divert
words,
I
attention from .the underlying notions and philosophy upon
w o u1d;-b e
treading >\ o n; which they rest.-So long as the President or his advisers
m u c h ; safer
hold to; the. basic concepts of society and economics now
ground
if
I
directing and controlling their actions, there can be little
were
predictWm. A. McDonnell
hope of escaping the type of programs proposed in the Presi¬
i n g what
dent's recent messages even if, by some strange chance, these
would happen
to American business in 1975 be
particular measure! were all relegated to the: scrap heap
cause those of you who were still
where1 most of them belong. -There is an element , of the
living in that year would have
unrealistic not to say of danger, accordingly, in devoting
long f'since forgotten what I had
attention so exclusively to the blueprints of the super
said.structure that the nature of the foundation upon which it
And then there is another rea¬
son for the anxiety with which I
must rest escapes the searching inquiry it deserves and must

of

2l/g %

his

.

country,

29)

by the

i

of

is

shown

EDITORIAL

be

soon

conservative

so

con-

tive

can-'

so

error

(Continued

the laws of

has been
se rva

Dow

by the proved

ending June 30, 1950.
Under

-<j>

embarrassed

about

mendations for the

market has been

the

not

....

fiscal

dicated >

es¬

for

stock

prophet

outlay of $41.9

"

is fortunate that the

during the last two years, or it might be vulnerable to the indications
that commodity prices and business activity may move to lower and
more realistic levels and that taxes may be increased. That the market

because ;

for

billion,,
the
largest peace¬

It

con¬

to restore its repu¬

occur

year-end.

term

-

prognostica¬
tionif .only,

overall

an-

before

than <S>

safer

ntained

o

provisions

will remain unbroken and typical six-month rally will
-

This is particularly true of short range fore¬
Someone has widely observed that long range prophesy is

casting.

It

10.

one

com¬

Predicts although uncertainty will overhang market

until Congress disposes of Truman's proposals, lows of last three
years

tation for reliability.

Congress

o

on

President

indoor sport which has recently fallen into

an

delivered

was

t

1950

year

,

a

Concludes the longer readjustment is delayed,
more painful it will be.

siderable disrepute and I doubt that T am the

for the fiscal

message

eventual attainment of

modity prices.

the

$4 billion in additional taxes and

$2 billion

an

market's conservatism since 1946 limits its

vulnerability to indicated reductions in business activity and

warns,

fairs and finance to take $6.7 bil¬

Analyst, Harris Upham & Co.

Market analyst holds

as year

however, management is going to have its first real test since
prewar days.
Looks for losses and failures in some businesses,

at over
$14 billion and international af¬

By RALPH A. ROTNEM

-

Market

of readjustment with levelling off of prices
and business volume, but without depression, Mid-West banker

estimated

expenditures

McDONNELL*

President, First National Bank, St. Louis, Mo.

cur¬

Copy

a

The Stock Maiket in 1949

Business Outlook (or 1949

Provides outlays of $41.9 billion,
or

Price 30 Cents

York, N. Y., Thursday, January 13, 1949

Yield

-

t

Bonds

-

Established 1927

•

to 2.35%
INVESTMENT SECURITIES

(accrued

dividends

to

be

added)
5

64 Wall

THE NATIONAL CITY BANK

White,Weld&Co.

BOSTON

Members New York Stock

Troy

PHILADELPHIA

Albany

Buffalo

Street, New York 5

Chicago

London

Philadelphia

Woonsocket

OF NEW YORK
\

,

*l

' '

Bell
'

Washington, D.C.

Bond

Dept. Teletype: NY 1-708

New York

Wires

1-395

Connect

Montreal

[.

Toronto

NATIONAL BANK
THE

OF

NATIONAL BANK

EUROPEAN

of INDIA. LIMITED

CANADIAN

MISSOURI

UTILITIES

and other
to

the

Government

in

Kenya Colony and Uganda
Head

Branches

in

Colony,

26,
Bishopsgate,
London, E. C.

Zanzibar

Subscribed Capital

Paid-Up
Reserve
Bank

,

India, Burma, Cevlon, Kenya
Kericho. Kenya, and Aden
and

The

Underwriters and

Office:
,

-£4,000,000

i

Capital
Fund
conducts

Distributors of

£2,500,000
every

description

Established

also undertaken




Invited

Cincinnati

Chicago

Columbus

Available

Dominion Securities
Grporatioti

1896

upon

request

IRA HAUPT & CO.
Members

York Stock Exchange
Principal Exchangee

New

and other

Membert New York Stock Exchange

40

CLEVELAND
New York

COMMON
Prospectus and analysis

SUTRO BROS. & CO.
Est.

1899

(Incorporated)

of1

1

Trusteeships and Executorships

FOREIGN SECURITIES
Inquiries

.and

OTIS & CO.

£2,000,000

BONOS & STOCKS

Municipal

Corporate Securities

banking and exchange business
■

CITY OF NEW YORK

Buenos Aires

Amsterdam

Bankers

CHASE

THE

HAnover 2-0980

Teletype NY

Private

Springfield

Wilkes-Barre

Providence

HART SMITH & CO.
53 WILLIAM ST., N. Y. 5

Syracuse
Scranton

Harrisburg

40 Wall
Boston

Exchange

Band Department

Street, New York 5

Exchange Place, New York 5, N. Y.

120 Broadway, New York 5
Denver

Toledo

Buffalo

Telephone

REctor

2-7340

111

Broadway, N. Y. 6

WOrth 4-6000
Bell System

Teletype NY 1-702-3

Boston

Teletype NY 1-2708

Telephone: Enterprise 1820

2

THE

(158)

What

Cities Serviee 3/77

-

SOLD

—

Mr.

Corporation

back is

'

Teletype NY 1-583

with hluewith blue

still

incomes

It

in

cline

farm

earned

round of wage

should

increase

increases

sumer

spending.

promises

farmers' needs for

Furthermore,
new equipment

and

still

so

far to be mod¬

SCRIP

erate; and the

strong,

too

regard

easy

quel
—★—

se¬

of

gen¬

again

widely

a

MCDonnell

fore¬

New

120

Exchange

York

Curb

Exchange

George

gloom can be readily docu¬
Softening of demand and

of

2-7815

REctor

Tel.

B.

Edwin

story

a

mented.

prices is evident in textiles,
clothing, leather products, rubber,
furniture, radios, some chemicals
of

TRADING MARKETS IN

drugs, house furnishings and
lumber, certain kinds of ma¬
chinery, machine tools and build¬
and

Central

Elec.

States

Com.

Standard Gas & Elec. Com.

Copper Canyon Mining
Gaspe Oil Ventures
Alfalfa

National

even

ing materials. Layoffs are making
the headlines—partly because on
significant scale and for

any

seasonal

than

Soya Corp.

still

MINING

AND

OIL STOCKS

luctant

to

Members Nat'l Ass'n of Securities Dealers, Inc.
27

William

St., N. Y. C. 5, N. Y.

I Montgomery St., Jersey

Tel. DIgby 4-2190

City 2, N. J.

Tele.: NY 1-1055

the new railroad

pay

uries

toilet goods)

and

from the pace
no

long ago.

longer a precious

Failures

are

of

new

Stock

signs of
formal markets, have been mov¬
ing closer to regular prices.
bargain sales are

this is not the first gloom

But

story since the end of the war.
According largely to the tempera¬
ment of the observers, it is the

and Sold

third

second,
could

™I BANKERS BOND ^
Floor, Kentucky Home Life Bldg.

LOUISVILLE

2,

KENTUCKY
Bell Telp

LSIRf-

there

souls today who

present
misfortunes
to
be
as
merely peripheral as
those
which drew tears in the

preceding three years.
know is that total na¬

we

expressed in
National Product approxi¬

tional

activity

mated

as

of

What
net

we

want

effect

in

to

In

other

words,

develop¬

a

ment that many

have regarded as
deflationary in its effects seem
likely to contribute to sustaining
activity after we take'into ac¬
count its indirect repercussions.

that

in

(both

annual

1949, and by
smaller

(A

in

amount

substantial

billion
the

has

in

rates)

early

significant though

a

the

already

half.

last

to

recovery

$6.6
in

occurred

fourth; quarter.)

The foreign
aid program will be in full swing,

was.1

which

the

ward
other

not the

end

case

urttil to¬

1948.

of

On

the

real

LD

lllllllllllllllllllillllllllllllllllllllllllh

general
his

in

of

their

as

to

induce

attack

of

fit to attribute to

^Extracts

State

from

been

and

a

was

foreseen

drastic

fall

Society

more,

some

Public

Accountants,
City, Jan. 10, 1949.

UTILITIES
When

Private

ly

construction

decline

to

since

the

!

Construction

some

new

designs,

investment

by many

as

tax.

operators

of

ness

this

for

end

the
the

of

BUCKLEY SECURITIES

of

one

CORPORATION

were

Further¬

Walnut St.

1420

of

class

the

Private

Philadelphia,

relation

out

be

to

good

figure,

substantial

was

v/ith

time

financed

to

the

by

rate

less

on

may

securely

producers, but that is at
unknown.

an

all

seem

to have been satis¬

choice.

The

new

Congress

may

but I doubt if its short-term

sueeess

will be conspicuous. Com¬

pulsory allocations would still di¬
vert

other

from

the

construction

more

10-15%
trial

houses.

A

decline

is in prospect for

building.

struction,

indus¬

Commercial

including

of

con¬

private edu¬

cational and scientific institutions,

structures.

hands

is

in

Telephone

Teletyi

RIttenhouse 6-3717

PH 73

NORTHWEST MINING

For
or

of

Immediate

Execution of

Quotes call TWX Sp-43

Exchange

from
Std.

A.M.,

Pac.

other

Time:

the

biggest

Low

fact

debt

on

of

one

be

expenditures

frog

most

in

the

galvanic.

determined by

We Maintain

American Markets For:

New

York

Stock

Exchange

New

York

Curb

INDUSTRIALS

Exchange

York

New

Cotton

Commodity
Chicago

Exchange

Exchange,

Board

of

New Orleans Cotton

MINING
CANADIAN

OILS

are

pool,

CORPORATION
of

Brokers

Peyton

Underwriters ~

-

Building,

Spokane
at

Kellogg, Idaho and Yakima, Wn.

BUY

level of activity approximat¬

spend.

Income

from

ing the present is bound to be
high, and will be supplemented
from

special

refunds,
ing

they

weaken

the

are

increases
not

as

price

BONDS

tax

to

as

payments

tional life insurance

to

Royal Bank of Scotland

na¬
Incorporated by Royal Charter 1727

payments to
HEAD

on

SAVINGS

S.

incentives),

previously discussed,

(Continued

U.

(assum¬

high

so

production

support

farmers

such

sources

wage

page

37)

OFFICE—Edinburgh

LONDON

LAMBORN & CO., Inc.
WALL

STREET

NEW YORK 5, N. Y.

Cotton

NEW
CHICAGO

YORK

4,

N. Y.
PITTSBURGH

GENEVA, r SWITZERLAND




8

West

49

OFFICES:

Bishopsgate, E. C. 2

Smithfield, E. C. 1

Charing Cross, S. W. 1

Burlington Gardens, W, 1

Exchange Bldg.

DETROIT

3

Scotland

64 New Bond Street,

SUGAR
Raw—Refined—Liquid

Y.

Exchange

Spokane

Dealers

•

income and by

any

to

British Securities

LTD.

GOODBODY & CO.

:

Members N. Y. Stock
115 BROADWAY
Telephone BArclay 7-0100

»»yurn

»»*«»>*

«

u

IF. 1

TOTAL ASSETS

£153,656,759

Exports—Imports—Futures
Associated

Exchange and Other Principal Exchanges

Glyn

NEW YORK 6, N. Y.
Teletype NY 1-672

,

if

will

Inc.

SCOPHONY,

at
,

They will

Trade

Exchange

And other Exchanges

N.

Sp-82

Members Standard Stock

the

the

99

CANADIAN

Floor
11:30

STANDARD SECURITIES

H. Hentz & Co.
CANADIAN

to

hours.

Branches throughout

Members

Order«

on

10:45

Branches

not the

|

SECURITIES

Most

country's strong bulwarks against
collapse.
Consumers'

OFFICE

Stock Exchange Bldg., Fhila. 2

seep

tax

Byllesby & Compan y

PHILADELPHIA

in
be

through
expected jump

The

H. M.

it.

would

sustaining
able

burdensome

is

enlargement

corporation

nancial

demands

Angdc'o

Los

and

Stromberg-Carlson Co.

is still

disaster

program

orders.

the

worst

That

and

commensurate

be

importunate

York

HaskeLte Manufacturing

a

reached for

was

expenditures' in the

defense

basis.

the

7-7 '-1

Wire System between

New

Dayton Malleable Iron

to

It is true that

well do better.

may
a

the year on a seasonally adjusted

of

BArclay

American La France

rigid

large
farm residential building may slip concerns can still tap the lending
off by between 5% and 10%, par¬ tif not the equity markets without
ticularly in the second half of great effort or hazard to their fi¬
Many

Broadway

New York 5

PEnnypacker 5-5976

cheap¬

be held.
Taking all factors into
account, however, I do not expect
this rate to fall below $17 billion
by the end of this year, and we

in

Non-

120

Philadelphia 2

third and fourth quarters of
1948,
with little likelihood that it could

v

first
war.

is

equipment in

like¬

seems

Distributed

—have

into
Private

of

,

un¬

ahead

time it

to us.

branch offices

our

large industries—e.g.,

additionally

more

to

petroleum, utilities, and railroads

us

ship

wires

KENTUCKY

saw

an

developing
usually

in

profits

from

area,

Certified
New York

Mobile, Ala.
Direct

or

partly quieted by the President's
message,
omitting as it did any
proposal to restore an eviscerat¬
excess

NY 1-1557

Nov O tears.La. Birmingham, Alt

Then

the consequences. Such fears

ing

Exchange

not

associate i with bold

the

the

address by Mr.

business

business has

Stock

rather

a

nerves.

scapegoat complex

a

York

St., New York 4, N. Y,

XAiravar 2-0700

expectedly large share of respon¬
sibility for inflation. Soundly or
not

New

expansion

wisdom, the President

Any

than
•

completion

off

help them both to get
along with fewer private imports

Paradoxically, I regard the de¬ materials that matter most, and
cline in agricultural prices as in¬
greater
liberality
in
mortgage
flationary or buoying, as the case
guarantees would tend principally
may be. Farmers save more than
do city dwellers from the same to fabricate more money rather

York
1856

tapering
programs

will

of

George at Monthly Meeting, New

Established

announced

Members

outlook

equipment

controversy is mo3t rife. So
industries and big concerns

tries

terms

33

the

on

many

have

tion of European and other coun¬

try to play Lady Bountiful in this

The Farmers' Income

Lynchburg, Va.

probably

hand, the improved produc¬ hardly

and to

,

Steiner.Rouse&Ci
25 Broad

for producers' durable
that

is

to

inflationary a year ago, will
a supporting factor. It will
obviously not be so pronounced

'

Tele. LY 83

is

The need
.

very

the

—★—

Scott, Horner &
Mason, Inc.

1948 levels.

great.

still be

is

are

ought to hold

little
choice
but
to
go
Still further, a quiet force
that could be of great importance

Net exports, or the balance of
exports over imports which was

know

bound to occur
through the system in 1949.
changes

Dan River Mills

lion.

dollar fied, and current costs are not in¬
viting to the man who has a
$260.8 (in annual rates)

during the fourth quarter of 1948.

Moore-Handley Hdwe. Co.

national

record-breaking

a

worth

American Furniture Co.

to

spending power.
expectations are that 1949
payments will reach $1.5-$2 bil¬

and

the

Gross

Trading Markets

documented,

hardy

are

What
'iiiiiiiiimiiiiMMiimiiiimiiiiimiiii

tion

Present

They

fourth.

or

be

all

regard

Incorporated

Long Distance 238-9

Preab¬

surd, but happened in some cases.

Standard Oil Ky.

1st

one

Christmas

Bought and Sold

Bought

commodity.

of our
disequilibrium ,in

best

Refining Co.

fell away
Paper is

increasing and the
entries
declining.

market prices,

Gray

Common

are

the

government
payments which make up the dif¬
ference constituting a net addi¬
—

close to

hand

collections in now as then, but seems certain to what may turn
some sections are down.
Sales of top the third quarter mark of high labor costs.
luxury goods (liquor, furs, lux¬ $5.2 billion by half to $2 billion rather dizzy pace

rate

Ashland Oil &

good deal larger than their

a

on

Telephone

tariffs.

STEIN & COMPANY

other

they

reasons

Many shippers are re¬

rare.

farmers' total income will

earned incomes

shudder

easily,

BROADWAY, NEW YORK 5

result of the support price pro¬

be

those

who

Members

with

assets and debt,

to. liquid

grams,

cast.

For

reasonably

thus placing unusually rigid props
under their spending.
Finally as

eral decline is
once

con¬

position

their

is

as

aggregate

is

structures

Bought—Sold—Quoted

^

the other

income, and the shift in
spending power to their city cou¬
sins reflected in the probable de¬

visi¬

,t1

Louisiana Securities

accom¬

:

cash

bly; the fourth

Stock

Alabama &

important se!>

no

likely during 1949. Looks for Gross National Product in 1949 around $265 billion, but
panied by slightly higher unemployment and lower wholesale prices and living costs.

prints;
credit
expansion is

slowing

York

-J

■

Failing new pressures, inflation is fading. Prices have caught up with the money sup¬
ply (on oversimplification but a useful bench mark); the supply of many sorts of goods has
caught ud with demand at prevailing prices; in some industries capacity in being has caught
UD
up

120 Broadway, New York 5

New

Thursday, January 13, 194!)

George analyzes briefly present and prospective business trends and concludes

QUOTED

New York Hanseatic

BArclay 7-5660

CHRONICLE

Dun and Bradstreet Economist

Central Public Utilities 51/2/52
—

FINANCIAL

By EDWIN B. GEORGE*

Associated Electric 5/61

BOUGHT

&

Changes Ahead in Busiztess?

'

v/..„ /

..

COMMERCIAL

DIgby 4-2727

Mills

Banks:

&

Co.

Williams Deacon's Bank,

Ltd.

1

Volume 169
■

4768:

Number

THE. COMMERCIAL

f i. 1',"'

•-W-r*">

7L

Articles and News
The

Stock

Business
What

Market in

Outlook

1949—William A.

Industry With

Unjustifiable Attacks

'

■*....

..-.

X^Co\Lef^-'i

.

for

International

—Ernest H. Weinivurm..

•>.it

f:....

..

^v;.:

Writer surveys

/

Settlements'

fry.' Indicates

;V..;'}"*£-l£.-.■■.

.> v.

Concerning Depression in the Financial Industry—Howard M.

.

.4

Television—A

New

Impetus
2 —Spyros P. Skouras.. ,

,

Motion

to

.......

Viewpoint

i.
•J

•

H.

—

J.

As

I'

.

Investments—Roger
*

...

Delivers

His

Economic

Philip Cortney States Position
LaSalle Street Women

^

CIO Education

herg,

and

Reveals

Is the "Fair

13

Department, Headed by Si II. RuttenProgram
< j,.;.. vr......................'

15

.

.

(Debate

N. Y. Institute

NASD

-

of,Finance Adds Course

Surveys Geographical

1

Securities

;

of

0

cal

Speak

to

o

19

FHLB- Notes Marketed.

J. B. O'Connor

-

'20

...

Discusses

Paul Hoffman

says
,.

21

.,....

k;'

a

Europe's Economic Status..............

Henry J. Kaiser and Joseph W. Fraser Blame Instalment Credit
for Threatened Lay-Offs in the Automobile
Industry..

.

of

Boxed)

.(

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

,

Curbs

Walter

S.

Tower

Estimates

Rise

of

Steel

i

22
23

Little

|

" :

'

! longest

the natural gas

in

shown by the increase
utility customers,
sales. Also given is

as

Inch

Renominated

Chairman

as

of New

York

Curb

gas. sales,

.,.

Kaiser & Co. Review
National
Reflect

Food

Prices

.. ........

Moving Downward,

ntrAi.

Chemical Bank Executives Defend

Bank's

of

26

far

y

in

\

»

to

arrears

of

greater

As We See It

/

Bank and Insurance Stocks

1947)

and

a

r

Canadian

Securities

the

gas

the.

27
;...............

.:......!. ;. 1 y

Dealer-Broker—Investment Recommendations

,■■■';
i

Funds

Prominent Personalities

I NSTA Notes

in

Mutual

of

new

the

■

■

of

about

in

FPC

1-947

construction

About

Banks

Our

-

.

_

and

Bankers

...V

Wilfred May
Report ..'.

natural

gas

42

Reporter's
Our Reporter on Governments
Prospective Security Offerings

<i

,v.

.u

pipe

State

of

42

..

phe¬

14
20

The

Registration/^,.......

40

.

/

Industry.. j.." 5
Tomorrow^ Markets (Walter Whyte Says)
b " 34
Washington and You,.. ...................;...;..../... - 44
Twice

The

COMMERCrAL

Reg. IT. S.

..

pL' Drapers' Gardens. London,
and.

FINANCIAL
.

Weekly

WILLIAJf B.

and

CHRONICLE
Patent

-

Reentered

Office

ary

2-9570

to

9578

WItLIAM

DANA

WILLIAM D.
it' ,"r

SEIBERT.

\

Thursday-'general

corporatibn

state and city news,

Other

Offices:-

3,

is

39

rvews

N.

the

post

Y.,,- under

the

Natural

Gas Industries

of

the

Oil

and

Their

and

tistics Co., Babson Park, Mass*

that

the

of

ad¬

news,

etc.)1.

Union.

of

office

at

-Act' of

$35.00

Countries', $42.00'

135

"S.

HI/ (Telephone:




.

Salle

State

St.,

0613);

.7

pet

$^8.00'

DIgby 4-2370

Teletype NY J-194'2

.'

,

Trans-

Tino

S

estimated

an

Believed

INVESTMENT

upon

New

Jersey and

Texas

Eastern

& Co.

rix;

to

expensive and long¬
gas pipe line in the

509

SECURITIES

olive.

street

St.LouisI.Mo,

Pennsyl¬
Transmis¬

Corp. will add 1,400 miles to
while Tennessee Gas

Members St. Louis Stock

Exchange

system,

will

construct

a

1,-

spend

Gas

,System

plans

Dcvis Coal & Coke

to

than $130- million

more

on

expansion.; El- Paso

over

lion

Gardner Petroleum Pfd.

Lighting
Electric, while

$150 mil¬

Gauley Mountain Coal

its line to Pacific

en

and Pacific Gas

&

Tennessee

will

Gas

spend

Seaboard Ice 1st 4's

$136

construction to be fin-

on

The

one

Victor Fuel Co. 1st 5's

big

factor

Midland Valley RR Series A

hampering

the surge of natural gas expansion
continues to be steel, mainly 24inch
the

arid

line,)

nearly

needed,
!
-.

=

30-inch, steel

approved

pipe. For
8,500 miles of pipe

1,950,000

and- for

(Continued

the
on

tons

are

applications

page

George Birkins Company
:

40 Exchange Place, New York 5
WHitehall 4-8957

Tele. NY 1-1404

34)

We

interested in offerings of i

The

per

High Grade Public Utility and Industrial

rate

in

-

of

in

PREFERRED STOCKS

New

York

Miles

Shoes, Inc.

year.
>

0*

-.

•

■

Analyses

available

on

request

-

Record

Morrthiy,
(Foreign postage extra.)•

account

of

the

New

York

fluctuation^ iif

lands.

y,{Members ftew York.Stock Exchange

Members

lifcw- York Curb Exchange

G,. E.

-

exchange; remittances for for¬
eign subscriptions and advertisements must

be

Bank

Company
f.

^-5;

of.

(Foreign postage, extra.)'

Earnings

of

made

•-

Trust

Record—rMontMy,

year.

$25.00 per year;

Note-—On

■

Public National
&

"

S.1;

year:

L

are

New

Mafeh

per

per year.

Other Publications
Quotation

and

Monthly

the

La

.1

Bank

$25.00

j

bank clearings,
*

6

■

from Texas
irom lexa

City at
million.

:f/:%/'

■

Cantd^.'

.

and

Broadway, N. Y.

estimated, that

•

vertising issue), and every Monday' 'com¬
plete statistical issue .—r market quotation

Chicago

from, the Jan. 4 Bi¬

c

C., .Eng-

natural

additional. million

industry,, marking its

Bulletin

second-class matter Febru.i
at

DominionOther

;

records,

E.

I
Subscription Rates'.""'-""-^
Subscriptions in .United States-, JJ.
Posseissions, Territories and Members

Thursday, January 13, 1949
-Every

as

1942-

Pan-American

President

RKJGS, Business Manager

[.'■■■

Smith.

&

most

Columbia

growth period of the

^Reprinted

8, 1*879; •

y

HERBERT D. SEIBERT. Editor & Publisher
.

25,

York..

DANA COMPANY, Publishers

REctor

...

Edwards

SIEGEL & CO.

than at

Copyright 1949 by William B. Dana
»
r
t
Company,
■- ' "
' / '.v.1'

j

v, 25 Park Pla^e, New York 8, N. Y.

•

c/o

liSes

I1"nf„s
I^
^afons^served ^bv nbout 20%

Securities, published by Oil Sta¬
Published

Southern Production

"moved

ished: in 1951.

weekly

'

:

i

Petroleum Ht. & Pr.

still the
sufficient.
Within

are

gas

natural

and

an

i

387-raile line from Texas to Pitts-

5,370

first

26

the

its

author¬

lines

gas

840^fle

$189

Transmission

applications awaiting

new

of

York,.

14,600 miles.

.....

'.

Trade

FPC approval total

Corner.. 1..!. .*..!.........

Salesman's

Securities Now in
The

.

;.

Railroad Securities
Securities

«

.

rently,

27"

'...b

Public Utility Securities/...........i

~

_

sion

greater by 17,000 miles than the
-15 V
railroad mileage, and 100,000 miles
.116
longer than oil pipe lines,.
Cur¬
.b.... ^ b 5

„

Observations—A,

■

1

vania.

251,330

of

I
j

completion it will
supply 340- million cubic feet daily
to gas utility companies in New

•

News
.

■

cost

of

of

Kentucky Utilities

J

time, and

include

jld •

to New York

natural

total

one

of natural

of

d:™

authorized by

was

figure

The

today

Teletype NY 1-2846

ACTIVE MARKETS

th

it

years

1948

b

est

gained

(Hugh Bullock)'-/- I&

Street, New York 5, N Y.

the

include

expanson

previous

world,

pipe line. Some idea of
the vastness of these lines may be
when it is realized that

6

20 Pine

Among others, some of the most
important projects approved in

all-time high of

new

bringing

the

miles

36 /
18

.....

Fund Business

ized

13

.'....

FPC,

mires.

'.............8

Einzig—"The Forgotten War Debts"
From Washington Ahead of the
News—Carlisle Bargeron
Indications of Business Activity.....;..
Mutual

a

pipe lines

nomenal

13

.

HAnover 2-8244

;

sharply in¬

such lines in America to the

14

Coming Events in the Investment Field.
-

1948,

about 8,500 miles
12 '

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

-

-

In

,

!

era.

$1.95 billion will be spent on na-'
tural gas.transmission facilities..

creasing demand.

.Cover

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

I

®

five

35"

Business Man's Bookshelf

growth,

.

amount

supply• is not

Growth

(Editorial)1...:.............

•

^production^

be

Mortgage Notes.../.....';....

'

(sales^have

1932

1932

Regular Features

:

.

.

Government Securities

tre¬

transmission

especially hetween Pittsburgh and
Chicago, owing to the fact that the
enrrent .sunnlv nf n«ti,irnT
current supply of natural gas i<5 so
is sn

.....26

Self-Policing Job in Our

a

Such-lines

Gn$the

any

Pipe Lines Continue to Spark
•.

YORK

4-6551

«nCC-n

r

and

spells,

27

eWorld Bank-Sells Last of Guaranteed

since

sales

made

factories will be closed down this
Winter during the coldest

25

^Inflationary Economy

.

NEW

St.
'

United States

in¬

gas

of

lines,- formerly

^ 8 ™

|

doubling in the size of the indus¬
try, undoubtedly many mills and

Bank" Operations

Paul S. Willis...!.......,....

says

records

tripled from

24

„

Municipal Bond Market Outlook.............

City Bank Heads Tell Shareholders 1948
Tapering Off of Some Upward Trends

repeatedly

and

,

Exchange

Governors

1

Despite

24

,

Werle

Dept.

and

fo Boston.""

in the field and the natural
gas

■comppnent of .mixed,

.v

.

natural

fram rexas to Ohio, another from
Texas to Philadelphia
and New
York City, and a third from Texas

gas

and

shattered
to

to

postwar

Eristic);

'U4g

ers

24

.....

Ingot Capacity

Wall
■

na-

-

includes, in addition |!
utility sales, direct sales of natural gas by producers to consum-.

23

Merryle Rukeyser....

a

Since .the conversion the Big and

to

Million Tons

96

STREET,:

in

some

rotten

your

99

at

Telephone: WHitehall

electrical-

beginning

1

Susan E. Gildersleeve

the marketed production of natural gas, which

22

.

lines

the

mendous

*

says

WALL

in

T

natural

revenues-

Support for Existing Real Estate Securities Values

Paying the Other Fellow's Bills

troleitrh

f

o

~

■industry

,

22

u

,

Guaranty Trust Co. Executives See Inflationary Tendencies Still in
Ascendancy
at

Wrong Heroes Stealing Bows,

99
;

you

swimming
haul

sinking

securities

some

lies have been laid.

pipe

itiated

of growth

years

21.

.......

"

H. R. Amott Sees

Come

Obsolete. Securities

I:: In 1M1, the change-over of the
jASrartae .Big and Little Inch pe-

'

n a t u r a 1

e

of the

gas

f"

o

regional to

a

biggest
(20 to 24
in
1947, are indicated at about inches in
diameter) pipe lines in
$980:1 million in 1948, a 16% in¬
the
country,
have been overcrease, while total sales in 1948
shadowed by the authorization or
rose
,11.4%. Jpi Chart I.we are prebeginning of even larger lines (30
sentmg a pictorial analysis of 14 inches
in diameter is now charac-

19

Baby,

a

*

18%

%

u

■0848.8 million

Over-the-Connter

New School.

at

Making Hitler Looking Like

exactly

by

of

because

i sicm
fines. Since 1931, nearly 60,(JO0. miles of long-distance natural

utility
^revenues, at a

17

'.

.....

Benjamin Graham
Stalin

I

-

gas

aii '.'"in-

■

0

,.

A

old

ty-welded, seamless pipe, and the
(automatic
ditch-digger, • making
possifcde Tong-distanee transmis-

.gas

17

Selling Mutual Funds...

on

Distribution

buy

industry was sparked by
technological improvements

-

ij®
"

o n

liver" 1^47. To- -'
15

Expand Area of Mid-West Exchange Parley
^Joseph E. Pogue Decries boss of Equity Markets

l l i

i r e a s e.r
4

15

'

...

.

'the

jtility cdmpa-

?

Boren Bill Re-Introduced by Rep. Carl Ilinshaw...

r

iclxang^ from

%vay

from

| dies,

by Leon If. Kevserling' and

Merryle Rukeyser)

By

rnr

gas
;

of Air Travel...........

o n ;

p an-

reivedYiatufal"

12

J

Deal" Socialism?

leading companies.

Gas

clear

steer

funds?
cash

Li sis data regarding

customers- re-!

;

Research

Tax

to

wereiv't

equipment, the industry abounds with favor*

necessary

o'f7 Ulti^tmtion,

\122

.

4 12'

Palyi.

e x

sion.-

6

........

d

a n

.Cover
.iv^.:......

Melchior

construe t i

?.
v

--..••'v-

>

Excess Profits Tax.:

on

Ralph S. Damon Foresees Predominance
'

♦

Report.

Hear

to

II

-

.r
■*•■

Budget Sets New Peacetime Peak...

Had

tempting

finance tremendous expansion

to

•

.25

;..

«

Truman

provide

/

-

.

.'.

Truman

capital in order,

new_

indus-

gas

industry for the full 1948
:
year tell a tale of the establishment of new
records by the industry
v..8,...:
;in 1948; more customers
served, greater -production, larger revenues,
arid a peak in
expenditures of
rauHiion against ^73d million
ii n 1-9 4 7 f o r r
;9

Babson..

^

Been To The

.

:

TtnsTEin

MOTOR BOAT SHOW?

super-abundant, and>" despite difficulties

are

Praliminary figures of the Natural.

Industry

Outlook

B. S.

AMD COMPANY

and future prospects of natural

progress
reserves

-able growth factors.

T

>v

President's Message and the
Simonson, Jr...r.
oil

Sleight-Of-Hand-Out—Jo Bingham
Utilities

Picture

securing

and

>7.

...

Have Prices Risen More Than Incomes ?--£. W. Eckard:*

„

in

:.

Ernst -'4

Equity Capital—Whose Problem Now?—Floyd L. Carlisle,. Jr.4*..

Industry With

Z

•

By SUSAN E.-GILDERSLEEVE*

.

'

;

(159)

Editor, Oil Statistics Co., Babson Park, Mass,

2,V

.^;V

v.......

Future—Srwait E; Gildersleeve

a

Bank

on

CHRONICLE

A Future

.Covert

i. i

..

McDonnell

Changes Ahead in .Business?—Ee/wm B. George....

Natural Gas^r—An
i

.Page

1949—Ralph A.. Rotnem.,.,.

for

FINANCIAL

Natural Gas—An

I N DEX

'

&

•

,

t

2$ Broad Street, New York 4
V L.:.; Tel.r HAnover 2-4386
.

;

.

.135 S, La. Salle St, Chicago 3
I *
.TpLj Financial 6-2330

Teletype—NY
Glens Falls

,

-'

1-5"'"',^
-

....

Schenectady

—
.

-

■ -

Wcrr^ter

Unterberg & Co.

Members N. Y.

Security Dealers Ass'n

61 Broadway, New York 6,N.Y.
Telephone BOwlingr Green 9-356S
Teletype

NY

1-1666

.

4

Thursday, January 13,

CHRONICLE

FINANCIAL

&

COMMERCIAL

THE

(160)

1949

Concerning Depression in
The Financial Industry
For International Settlements

Unjustifiable Attacks

By HOWARD M. ERNST*

WEINWXJRM

By ERNEST II.

Thomas H. McKittrick, its former President, now a member of staff
was returned to nations rightfully claiming it. Opposes

directed particularly at

gold received by BIS from Hitler
j>

when

Ad¬
will
the poli-

appropriations for the second year of the plan. This will cover

consider additional

<£-

ciesoftheAd-

of

Thus, he took a leave of
his job as a Vice-

Kittrick.

ministration

charge

from

absence

in

of

President

de¬

Bank to take over one of

carrying

posts

out

E.

policies.
i o u sly,

Paris office

the

at

dent

C. A. as head of the trade

and

with

the

from

Gold From Germany

The

The

of the

direct
stockholders.

without

Bank

the

of

influence

National
the key

Chase

the

termining and
these

acceptance by the Bank

the

gold from Germany during the
war.
The facts are fully explained

payments branch to increase trade
reduce the difficulties result¬

hope to satisfy
all
those 1 in¬

from bilateralism. His years
experience and, perhaps even
more important, his personal con¬
tacts with the heads of the central

12 of the last report of the
Bank for the year ended March 31,

terested in the

banks

O b

v

ing

efficient

most

official

of

can

Recovery
Ernest H. Weinwurm

be>

always dis¬

agreements over aims and meth¬
ods; democracy requires that they
shall be explored fully and no re¬

of

places—get immedi¬

in high

ately excited at any mention of a
connection with "Wall Street," a
spot which they almost identify
with hell. This is being done even
in such

and

cases

-skills
to be

where special

experience

easily

not

found elsewhere are at stake.

agaip, there has been a
repetition of false statements con¬
cerning the Bank for International
Settlements at Basle, Switzerland.
have

statements

been

re¬

the past but
printed again neverthe¬
the assumption that most

futed many times in

they
less

are.
on

readers

are

of

unaware

the

true

facts.
;

During the last
has

increased

,

at

a

well

year,

the B. I. S.

activities

its

oiled

time

gently

con¬

mechanism

when

it

ready

most

ur¬

this

was

has

needed. : Surely,

public record.

ter of

first
accused
of having remained as
head of the B. I. S. during the
McKittrick

Mr.

although the Bank was "72%

war

controlled
are

being

is

Hitler."

by

facts

The

follows: The European cen¬

as

banks

principal

the

were

central banks

number of central banks and espe¬

cially to those in countries which
were
ultimately drawn into the
conflict

of

time, money and effort;

their

who

managed to save
the Bank during the war was an

American, Thomas H. McKittrick.
At the end of the

by exchange opera¬

gold shipments to

or

over¬

decision adopted

meetings

in 1939

direc¬

no

held

were

a

during

resigned
position and returned to the war and the annual meetings
this country, But it is not surpris¬
were
conducted by proxy.
This
ing that those in charge of getting
war

from his

the best experts for the new Eco¬
nomic Cooperation Administration
:

regard

gold

the

to

E

Western

nations

u r o p e a n

(France, Belgium,
Netherlands)
and an amount of 3,740 kilograms
was

eventually returned to those

countries.

refers to the
the Bretton

point

third

The

resolution adopted by

1944 to rec¬

Woods Conference in

ommend liquidation

decisions

that

means

made

the

by

Belgium, referred to that
resolution and stated that "no gov¬
Bank of

ernment has

so

far proposed that

should
be
The American Gov¬

recommendation

this

out.

carried

ernment which

apply the

to

was

Woods

Bretton

has

Agreement

just expressed the view that there
was
no reason
to give effect to
the recommendation of the Bret¬

furnished

has

their herculean tasks.
not

to

mean

All

these

record

to

Bonds

only

buy

banks)

having been sold, this advertisement

and is
or

central

a

not

an

offering of

solicitation

of

an

these Bonds

offer

to

buy

as

for sale,

any

of

a

or

such

matter
an

of

offer

Bonds.

ISSUE

"

ernment

recently

to inform the boards

Price:

100

and

Sinking Fund Bonds Due

accrued interest

from Jan.

that

ernment

The

of these two

destroyed, but the obvious alter¬
I

nate

am

hopes
be

not

r

issue




is

It

"

y

impression that the
public today does not understand
exactly what in effect they have
my

when

done

stock

a

or

is

bond

a

acquired. They do not realize that
in

buying

stock they purchase

a

partnership in

a

business.

a

It is

previous instances, if private en¬

whose business they may present¬

ly be engaged.

Most

government will step in and

our

furnish the
'

required service.

That firm doubt¬
proving a profitable

is today

less

Furthermore

enterprise.

if

it

at

if

results

probable

the

commercial

min¬

its

behooves all

of

enterprises.

of these facts, it

consideration

to concentrate

us

interests in ending the afore¬

our

depression

mentioned

that
the
brought

matter
up

any

and

thoroughly

most

investi¬

been

and,

fi¬

nally, it has received a clean bill
of health.
Both Europe and this
country

can

who

be

grateful

to

the

managed to get such a

They probably

will form

for

purposes

which

determined.

relation

assets

with

the

to

their

and

current,

value

and

past

on

of

character

the

along

probable

Now without be¬

future earnings.

stock salesman, I sug¬
that these same considera¬

coming
gest
tions

a

be

applied

the

to

of

cost

purchase of their stocks at current
market prices.
I would be very

In

much surprised if a great number

fact,

might

we

doing

be

these

main

purpose

all

things, but regardless,

that

continuing to
private enterprise
the
fundamental

wherewithal for the

economic

our

our

of

alive a
supplies

keep

operation of

is

empire

para¬

I repeat, the

alternative is
pleasant. It would be a defi¬
step against the basic philos¬

mount.
not

nite

ophy of Americans.
'In

correct

order; to

if

it

evil, it

an

rather than try to
It is

possible

directly check the evil itself.

stop a train by shutting

easier to
off

the

engine's

obtaining

of people do not suddenly

that the terms offered
favorable

by

than

power

the train

slow

down, but without power progress
must

of

to a halt.

come

The power

financial industry has been

our

The

this state¬
invokes is "why?" and the

natural

ment

is

answer

question

the $64

one.

more

their

had

The

first
in

that

thing
effort

an

comes

to

basis of risk, by which I presume
mean

open

tuations.

Here

again it is

lack., of

of

market fluc¬
case

a

understanding

to

to

as

just what the daily quoted prices
should

It

mean.

the

that

be

understood

thus

figures

indicate the

actually

published

liquidating

value of your partnership. Permit
to

emphasize

few

"liquidating,"

partnership' interests

shares in private corporations

or
can

be

readily liquidated except after
protracted and lengthy negotia¬

tions and
value.

then

not

always at full

Compare the current fluc¬

tuations of any stock to what you

think you might get for your in¬
terest in your firm or shares of
your

corporation

then

and

sale,

on an

immediate

better
comparative risk in¬
volved in buying an interest in a
you

may

the

judge

member

the

solve

of

but

publicly owned corporation.
Apathy

Public

for

Reasons

in¬

or

It is quite possible some people
will excuse the situation on the

for

temporarily

of

completed.

recently

me

only

that

deal -they

private

some

plying the brakes with the power
still on.
Both steps are apt to

a

than

realize

were

terest in their own business

barricade or even ap¬

erecting

a

the

they will

always appeared to me sounder to
seek its cause first and eliminate

the

of

the

earnings and

company

affected

not

are

Re¬

assets

by the market price of its stock.

problem is the fact that the busi¬
ness

of

an

dividual

financial

contemplate

time

will

with

their

be

one

and

therefrom

returns

they

project

time

to

is tied

up

from
that

own

business.

Hence

they have lost all interest in any
line

of

the extent of

endeavor,

lacking

any

even

to

knowl¬

edge of the fundamentals of other
available

brings

up

opportunities.

the

second

There

they are

that

extent

may

other

Question of Management

people is prospering

our

such

completely satisfied with their in¬

reason

This
for

is

*Mr. Ernst is
&

a

partner in Ernst

Co., members of the New York

Stock

Exchange.

still

another

thought

that may be a factor in the pub¬

lic's

indifference to

the

financial

industry and that is management.
They

may

say

that in their

business they are

boss,

or

own

at most

have only a few partners to con¬
tend

with, and that though it

be true

they

strange

management.

may

purchase an in¬
terest in a publicly owned con¬
cern on more advantageous terms,
they will be at the mercy of a
a

can

That

is

to

certain extent true but not quite

as

bad

as

tically all

opinion about those who
interested in arousing new

suspicions

In doing so, the price to

paid would be determined

ulator, protecting the investor or
creating alleged plutocratic lords.

the right

cannot easily be

or

-

partnership in any of
leading and foremost indus¬
tries of our country, through the

our

one.

have

concerns

financial in¬
dustry. This is essential, not for
the purpose of aiding the gam¬
bler, easing the way for the spec¬
strengthening

whatever

All its wartime

business.
be

manufacturing,

our

and

ing
In

govern¬

to directly

ment should be forced

finance

to

allied

in

interests

the purchasing them it would be good

concerning

length

expanded by acquiring

be

could

I do not think it is. necessary

dilate

mind

inquire of the U. S. Treas¬
ury before discussing the question
in public as an open and unde¬

are

Utica, N. Y.

the

towards

terprise performing a public
necessity no longer can operate,

would

sure

to

result.

238 Genesee Street

pleasant

a

apathy

public's

financial industry.

please our
certainly, as in

equally
enemies.

did not ma¬
terialize.
However,
those
who
want
additional information

men

MOHAWK VALLEY INVESTING COMPANY, INC.

not

the

precisely the same deal that they
made when they formed or en¬
tered
into
the private firm
in

as

<

unfortunately

more

gated
1964

is

sure

thought to the majority, and I am

Gov¬

States

the

regards
'

closed."
would

United

the

transactions

1, 1949

financial

industry result in its elimination
economic structure will be

our

of its decision and to

institutions
add

Monetary

the International Bank

and

Fund

the

on

(pbviously, there are no secrets

EASTERN ROCK PRODUCTS, INC.

that should the

say

public in general have ceased to
be interested in equities or loans.

concerning

consequence,

around the B.I.S.

$295,000 First Mortgage 5%

do

that gov¬
instructed its

In

ments.

cided
NEW

I

practically shut off for it is de¬
rived from the public
and the

not

but by the Presi-

appears

giants

Now

current depression of our

should

should have remembered Mr. Mc¬

these

the siriews with which to perform

the Bank for International Settle¬

ton Woods Conference

(the

were

stockholders

National

I.S. and President of the

representatives

Moreover, in conformity with

tors'

he

sought at the

centers."

seas
man

which

and

reserves

tions

Thomas H. McKittrick
The

reached with
claimed by

Full agreement was

principal author of that resolution
theory could have voted the B. I. which was
passed without discus¬
S.
stock
held by
these central
sion was the late Harry D. White,
banks.
However, the Bank had
then
Assistant Secretary of the
taken appropriate action to pre¬
Treasury and chief U. S. delegate
serve its neutrality during the war
at the Conference.
which were formally set out in a
In
a
speech delivered at the
declaration of Dec." 18, 1939. There
annual meeting of the B.I.S.' on
the Bank stated as its policy "that
June 14, 1948, Mr. Maurice Frere,
it would limit itself to operations Chairman of the board of the B.

beginning of the war to safeguard

deal

good

a

plete examination of all the gold
bars received was made in co¬

operation with the Allied nations.

well and thus in

as

saved both the U. S. and the Mar¬

countries

After the end of the war, a com¬

of the B.I.S.
stockholders of the B. I. S. When The facts
surrounding this strange
Hitler overran most countries of
decision have been discussed
at
Europe he became master of their
length in the "Chronicle."
The

shall

Plan

be ^summarized

can

private enterprise in decline of financial industry.

gratifying to note that at last cognizance has been taken of
the serious depression which our financial industry has been suffer¬
ing. I .use the word "industry" advisedly for it is as much an industry
as agriculture, mining,
manufacturing or commerce. In fact, it is the
financial industry which in the$

.

siderably and has become an im¬
portant center for settling finan¬ which would stand as above re¬
cial transactions among the re¬ proach
from the point of view
cipient nations of the European both of belligerents and neutrals.
Recovery Program. Thus there is In virtue of this principle, the
every reason for satisfaction that Bank has very considerably re¬
it was possible
to maintain the duced the volume of its business.
Bank's
organization during the It has, however, been able to ren¬
war and thus have an experienced
der valuable services to a great
and

They

difficult assignment tinued to service those debts dur¬
and
everyone
interested in the ing the war and this was in the
success
of
the
Marshall
Plan interest of all the stockholders of
Payments were made
should rejoice that so competent the Bank.
in gold through the Swiss National
a man could be found at all.
Bank.
The B. I. S., in each in¬
However, "certain circles" appar¬
stance, asked for and received an
ently have other aims, and thus
assurance
from
the
Reichsbank
try to discredit Mr. McKittrick
that it had owned the gold before
in repeating thpse old and often
the war.
refuted
stories
about
his evil-

tral

Once

These

1948.

Europe

sponsible official will be angered
even
by heavy attacks provided
they deal with important material
problems. ■1Cj ■
However, efforts to smear men doings as head of the B. I. S. dur¬
who have
volunteered to carry ing the war.
out one of the toughest assign¬
Though it has been done so
ments in all history should be left often before, it may still be useful
to the propagandists "behind the to review once again those de¬
iron curtain."
But some people- velopments which are now a mat¬
even

page

exceedingly

Program.
There will

on

briefly as follows: The Bank had
who are stock¬ large claims against Germany un¬
the Young
Plan reparation
holders of the B. I. S. made him der
an
almost ideal > choice for this settlements of 1930. Germany con¬

of

progress

the

and

the

even

to
It is

past

deals

accusation

'second

of

not

well as to lack of appreciation that they become partners
they acquire corporation stocks, recommends arousing public
interest in securities through education. Sees danger of government
as

ness

the Bank.

European Recovery Program and the staff of the European Cooperation
sharp scrutiny during the months to come when Congress

Both the

men

Ernst, ascribing causes of public apathy in matter of invest¬
ment to widespread success of individual owners in their own busi¬

of ECA. Says
liquidation of

ministration will be under

and the

Mr.

operations of the Bank for International Settlements,

Mr. Weinwurm refutes accusations against wartime

-

Bank

on

tions

it sounds.
our

furnish

extensive,

Today

foremost

thorough and

(Continued

on page

prac¬

corpora¬

stockholders

with

detailed

28)

Volume

169

Number 4763

'

COMMERCIAL

THE

&

FINANCIAL

CHRONICLE

(161)

5

Hubert Atwater Now
Steel Production

7The

Electric Output

With Gammack & Co.

,t

Carloadings

State of Trade

By A. WILFRED MAY

Commodity Price Index
Food Price
'

On

Confusing Stock Market With Social Trends

The

stock

market's

decline

which

the

greeted

Election

and

-

Hubert F. Atwater is

Retail Trade-

Industry

as

likelihood

of

the

socialist

For

state.

example,
magazine then irately called the stock market
community a herd of "scared rabbits" and de-

Co., 40
Street,

,

results

leading

a

J

j

\

scribed investors generally as "a manic group that

.

' j

either

;is

unduly", elated or unduly depressed,"
concluding that "the market runs a perverse and
miserable course in contraposition to the American

'

scholarly and authoritative commen¬
tary, similarly denying the interpretative signifi'

the market's post-election
decline, was
Leon H. Keyserling, an architect of the
Truman "Fair Deal," in the "New York Times"
Magazine of last Sunday, as follows: ".
it would
on

the stock market to

zen

lead any

to the

with

been accompanied by the highest business
prosperity and standards of living ever achieved."

A.

Wilfred

Suddenly Become Political Philosophers

other

as a herd of moronic nincompoops, the
Wall Street community suddenly seemed to deserve the highest acco..lades as the nation's number-one political analysts.
The "Times'"

v

leading editorial in the
ting's above-cited denial

issue which carried Mr. Keyser:
of the market's prescience, stated in substanvtiation of its gratification over "Truman's 'Welfare State"' and his

cr'

very

same

full"reiteration of the electorate's "mandate": "Of all the comments
on
the Truman program that of the Stock

srrc *

Exchange,

but

•

emotional

not

sentimental, was the most striking. The market listened.
*:s'^lelt
a
sense
of
relief, and rose."
Then
after explaining
thai
tC*v^'Practically all that Mr. Truman has done has been to take his
J

election

mandate

seriously,

he had

right and duty to do," the
concluded; "we agree with the Stock Exchange that the
Truman Administration is not likely to upset the balance."
as

a

newspaper
r

In the
r

'

'

same

attribution

Mr. Arthur Krock reported Washington's
interpretative weight
to
the
stock
mar¬

great

alleged

lack of the

political

needed

power

his

achieve

to

Planned

•

.

No, Correlation Between Bullishness and Freedom
The
'

actual

the

market

"rise"—which, incidentally,

embodied merely a recovery of 40% of the ground lost since
October,
and still leaves stock prices exceedingly low in relation to such eco¬
nomic factors

earnings, net worth, commodity prices, national in¬

as

etc.—we do not

come,

to know.

presume

Perhaps the reiteration of such prospective by-products of the

V

.

for

reasons

Welfare State

Utopian

permanent spending extravaganza to pay for the

a

as

and further attacks

program,

the

on

"gluttonous" rentiers,

is generating belief in relative attractiveness of equities.'"'
In any event, there
;

rising stock prices and
demonstrated

-

Britain
after

•

the

July

-

;

-

the

recent

correlation whatever between

no

freedom

of

other

instituted

accompanied by

was

enterprise.

in

record

revolution

Labor

18-month

an

is

countries.

the

by

This

clearly

socialization, including the

the

Labor

took

in

over

capital

August

advance

the

on

levy,

and

the

on

1945.

•

!

-Similarly, the postwar socialization in Norway has not prevented
an 11% rise in her common stocks since 1945, to a level 53% above
(source:

International

International

70%

in

Financial

Monetary Fund).

equity

And

Statistics,

in France

share prices occurred

in

Yearbook of the League of Nations).
.V.;V:' •/
' :
V>f''
V':,;':1 V/
*
*
..

.

So

we

that not

see

a

1936-'37

published
six-month

an

consumer

rise

of

V',;v''.Vf'\-

;•

no

correlation

anywhere

be¬

but also

that

it

is

especially fallacious to

advancing market is taking its

cue

of the

that

conclusions

stock market—let

about

such

a

nation's

elements

as

to sales

profits

was

taxation

the

proposals

representing

a

for

levy

ever

higher

incentive

on

socialization,

and

capital,

istration's and its economic advisers' attacks
divestment of

prices
ment

the

from

capitalism,

on

its

more

the

authority
of

thoughtful

..market

will

were

over

prices,

various
and

further

wages,

accentuate

excess

Enlarging

of the

utility
bonds, started
his

career

with
mond

Red¬

Hubert

in 1906. For the past several years
he has been with J. G. White & Co.

Fred Stone, Jr., V-P
Of Marine Trust Go.
Charles

H.

Diefendorf,

dent of The Marine

to furnish

levels needed

ized plants should strive for

our

Vice-P
dent
D.

In

such

connection with the report, President Truman incorporated
major legislative recommendations as tax increases, extension

olj present credit policy, promotion
trols;

expansion

agriculture;

natural

of

of supply and production; con¬
continue

resources;

continue ■ European

Recovery

of

price

support

for

On

Tuesday of the current week the President, in presenting the
budget, a record-breaking one of $41,858,000,000 for peacetime
covering the next fiscal year, gave warning that the Federal Gov¬
ernment will be obliged to operate in the red unless
Congress in¬
creases taxes by $6,000,000,000 to provide for adequate debt reduction.
Calling for an increase of $1,700,000,000 in. Federal spending in
the year beginning next
July 1, President Truman stressed the point
new

,

.

Fred

Jr.,

York

the Munic¬

of

ipal
ties

Securi¬
Depart¬

ment

the

of

•

bank,
B

d

r o a

Mr.

120
w

The

joined

Trust

Marine
Fred

D.

Stone,

Jr.

Co.

in Jan. of

1948 and

charge
market

bank's

the

of

ay.

Stone

is in

general

municipal operations.

Program;

extend Presint's authority to make reciprocal trade agreements; provide housg relief; Federal education program; national health program and
extension of old-age and unemployment insurance systems.
:

a

for

Colby is With
DuPont, Homsey Go.

G. S

'■'.j'

BOSTON, MASS.—G. S. Colby
recently joined the research staff
of

du

Pont, Homsey Co., 31 Milk

Street, and will henceforth write
their- "Weekly

Letter,"

which

is

,

that it represented "minimum requirements," since the Federal Gov¬

ernment will collect only $40,985,000,000

in taxes in the fiscal year
1950, being at least $873,000,000 short of the figure necessary for a
balanced budget and well below the amount needed for "adequate"
debt reduction.
The

volume

of

retail

purchases the past week dipped

slightly

below that of the previous week but moderately surpassed the level
of the comparable week last year.
Markdowns were sharper and
were

Cold,

extended

to

more

items than

the

in

similar week

a

ago.

year

inclement weather stimulated apparel volume in some areas.
dollar volume of wholesale orders rose fractionally in the

The
week

1948."

and

showed

There

re-orders

were

little variance
numerous

to replenish

slightly slower than
STEEL

a

from

orders for

stocks reported.

year ago,

OPERATIONS

that of the

similar

THIS

WEEK

TO

prompt.

were

From

this

nected
Co.

late

year,

with

ESTABLISH

Scrap prices slid off this week in every major area. But whether
means that further declines are in order or that the
present drop
foretells less steel demand is not clear.
One thing is certain, scrap
it

the country are

jittery, according to "The Iron Age,"
>.

;

..

;,

Pittsburgh,
Cleveland,
Cincinnati,
Youngstown and Philadelphia have been translated this week into
(Continued

on

page

the

first

was

of

con¬

Gleason

&

Boston, in the capacity of
financial analyst and, during that
period, was the writer of Sherman
Gleason's "Weekly Letter." In the

"Chronicle"

of

Jan.

6

it

incorrectly reported that Mr.
Colby had joined F. L. Putnam &
was

Co.

:

-v,

,

;.v

Bond, Sikora Mgrs.

:

Mericka's It. Y. Office
Wm.

J.

porated,

over

to

Colby

Sherman

and

of

NEW HIGH RECORD

national metalworking weekly.
Nervousness
in
Chicago,

1945

Mr.

banks

in

Spring needs with scattered
Collections continued to be

but deliveries generally

SCHEDULED

week

available> to brokers,
individuals.; ^.
■'

Bond
been

Mericka

announce

and

Alfred

& Co., Incor¬
that Joseph V.

Sikora have

A.

placed in charge of the firm's

New York office, 150 Broadway,
succeeding T. G. Horsfield, who
retired
Bond

Dec.

and

with the

31,

Mr.

1948.

firm for

Mr.

Both

Sikora

have

some

been

time.

39)

an

the

Kingan & Co.

groups,

Otherwise

public's

Universal Match Co.

Admin¬

McGraw (F.

be weighed
the

H.) & Co.

For clever,

helpful hints j

Sellingj

by

for selling securities
the

Bought—Sold—Quoted

"Securities

Corner,"

FREDERIC H. HATCH & CO., INC.
Established

1888

a

regular

Thurs¬

MEMBERS N.
63 Wall

Y.

SECURITY

Street, New York 5, N. Y.

DEALERS

in

day's

issue

"Chronicle."
ASSOCIATION

com¬

Bell Teletype NY 1-897

read j

Sales¬

every

feature

hull

next

already-existing

on

man's

of

govern¬

rents, and credit, the wholesale

citizen.

Pointers

Time Inc.

man¬

control

i-

representative

incentives and

increased labor force and modern¬
increase in total output.

as

r e s

Stone,

New

of

an¬
the

election

3 to 4%

a

Co.

nounces

and not the special gain of any particular group.
Emphasizing the need for nearly a million job opportunities for our
giowing labor force he stated

Presi¬

Trust

Buffalo,

his statement, he said, "such

on

Atwater

F.

Co.

&

the whole country,

instead

placency which is hastening the nation down the socialist road.




public

,

profits and attempted

grasping

politically powerful

conscientious

a

and

about $21,000,000,000 and the ratio of profits

about 5%.

in

are

confiscatory
new

(only partly "in-lhe-closet"), the demand for greater

subsidization
-

capital

railroad

equity funds for industrial expansion, and to promote sustained eco¬
nomic health, although some businesses have not thrived nearly so
well as others."
T..Setting forth his economic policy, the President said in sub¬
stance, that the goal the nation seeks is the greatest prosperity for

government's n-th degree

budgetary extravagances, its proposed embarkation into steel
ufacturing;

Mr.

Atwater,

profits, the President observed that corporate

on

•

making

change,

specialist in

from expected preservation of free

enterprise.
In

assume

of

Ex¬

less fortunate.

were

Commenting

tween the direction of stock
prices and the degree of national social¬

ization;

Stock

of

profits after taxes

the

by

against the back-

*

econ¬

was

President, "ceased the broad upward movement" which began
price controls.

markets all

only is there

during 1948.

Great

In

shares stands at 122 compared with 107 when

Government

labor force

removal of

while others

Government

ground of Leon Blum's socializing Front Populaire (source: Statistical

\

and

of steel nationalization, the London "Financial Times"

eve

Index of 30 industrial

1939
■

1945

financial

probable

'

by

social

the

"*

•

London Stock Exchange; and even now, after 3J/fe
years of industrial
and

•

definitely is

:

ad¬
and

*

With respect to wages, the President reported that wages rose
some groups managed to keep a step ahead of
increasing prices,

v

ket's two-day rise after the President's outlining of his "Fair
Deal,"
and cited as one explanation for the bullish ticker Mr. Truman's

Society.

the

to

price index declined a little, although other parts
he pointed out, and continued: "Sharply divergent
prices—both up and down—confront us with urgent
problems of adjustment to sustain maximum employment and pro¬
duction throughout the economy."

newspaper

of

added

3 to 4% higher than in 1947 with farm output
increase of 9%.
On the other hand, prices, according

movements

hand, during the subsequent market rally which
President Truman's State of the Union Message last week,

followed

were

of the index rose,

May

far from being conceived of

-

#

production, the President noted that output for the

whole

a

The

have

/*'

as

showing

thoughtful citi¬

by the recent popular reaffirmation of
principles and programs which, up to the present,

the

unemployment insurance showed an increase
initial claims reflect a rise of approximately 5%.

workers who

As for
omy

clouded

On

for

and

Unemployment held at the low level of 2,000,000.

to suspect that our economic future has been

Bear Market's Lunatics

claims

2%

million

a

few weeks of speculative flurry

a

year

continued

.

.

than

visers

the New York

ing that employment averaged 59,000,000 civilian workers, including

of

made by

City, in¬

vestment

members

production turned upward the past week, attaining a high
moderately exceeding output of the comparable week a
ago.
For the week ended Dec. 11, the latest report available,
and

In a review of past achievements of our capitalistic
system,
President Tinman in his Economic Report delivered on Friday, last,
stated that the year 1948 was a year of "bountiful
prosperity," add¬

A more

more

Year's holidays over, over-all in¬

York

dustrial

>>

dream."

take

and New

&

Wall
New

level

of about

'

cance

With the Christmas

weekly

asso¬

'

was

angrily characterized by large segments of our press and public
the manifestation of
Wall Street hysteria in exaggerating the

now

with

Gammack

Auto Production

Business Failures

r

ciated

Index

of

the

G

(152)

COMMERCIAL

THE

&

CHRONICLE

FINANCIAL

Thursday, January 13, 1949

IVVLV*-#.'' VYY..-

Truman Delivers His Economic Report
Racking

'Jrw#' rt

'

x

■

'

-

his message on State of the Unions the President gives data on present economic situation
and lists guides to economic policy. Recommends a budget surplus, with $4 billions in additional4axes.
Wants credit speculation and rent controls continued and enlarged, with- additional power to curb

f

up

prices and related

Outlines policies to promote economic growth.-

wages.

By CARLISLE BARGERON

President Harry

S. Truman on Jan. 7 submitted to Congress his "Economic 'Report,"
along with the Annual Economic Review of his Couhcil of Economic Advisers, as required
under

the

Employ m
Act

of

The
of

the

uuGget oi .workers,; who in turn
sought to press wages upward as
cost of living advanced. The
rising spiral
created more and
more
maladjustment
among
prices, wages, and other incomes.

en t

1946.

the

Report
elabor¬

an

ation

of

views

the

and

Early in 1948, a sharp break in
grain i prices
spread -cone-em
throughout the economy. - Com¬
modity
speculation,
fed 1 by a
world demand of unprecedented

recommenda¬

tions given by
President

the

in

his

The

significant thing

Mes¬

long as the rising

j comes

in-

the

continues,

He

of

course

activity

and

there will be in operation
the

of

man>
have-bee

which

forces

idea

his

from

seems to

U nib

!

two

n

earlier.

The

text

the

magnitude and intensified by our
own shift t corn crop, had carried
the prices of wheat and corn to
levels

Presi¬

dents

of

which

could

be

not

'sus¬

col¬

The market structure

tained.

lapsed of its own weight. On Feb.

Truman

President

"Eco¬

Leftist

done

responsible for the long-sustained
advance
few

of

priees.
of

sectors

danger o
continue

nant.

All

economy!
inflationary!

u s

be

predomi-i
example, the shortage^!

For

steel

of

There are

to

electric

and

and'

power,

To the Congress

the price of cash wheat was
25% or 74 .cents a bushel lower
than it had been a month earlier.

I

; i"5 ;

of the United

' ;

But this break did not set off a

States:

train of consequences similar to
people of the United States
those which, following World War.
have just enjoyed another year of
bountiful prosperity. This has en- !
turned .the boom_into a.deabled us .further to strengthen our
^
economy at home, and further to rapidity m
1920 1922. In '1948,supplement the recovery of free- I ^e
2?
j
- speculative,
dom-ioving
peoples
elsewhere S1"313^ market did not bring ^unemployment, cutbacks in producwho seek lasting peace.
tion, general unloading of invenThe resourcefulnes of
tories, or abandonment of plans
ean business, the skill of our
labpr for capital investment. Our eeontforce, and the productivity of our ,
omy showed strength sufficient to
agriculture have lifted our standwithstand shock, of a .kind which
ards of living beyond any prewar
had ended earlier inflations with
The

itwuf

?

.

.

,,

expectation.
these

-

We

•

„

have

_

,

.

achieved

=.

blessings through the happy

combination

of

our

free

nnliQr.'
collapse.
The

institu¬

^

.

,,

r

■

for this

reasons

not

were

tions, our system of private .enter¬ just that we were luckier in 1948
than we had been in 1920. Affirmprise upon which we primarily
rely for economic results, our vig- j ativ^ national policies and greater
caution in the business community
orous government, and the mutual
combined
with
other
develop¬
...

,.

'

t

respect and trust that we all hold

.for.

another.

one

elements in

our

My pledge to all
economic system

is that their government will con¬

tinue to steer

guided by
these values.

a

course

full

recognition of
Toward this end, I ask of all the
cooperation and confidence upon
which

our

Let

of life depends. .1

way

all

remember

unparalleled

prosperity

us

that

opr

has not
maintained by chance, and

been
that

we

future

and

lose it if

can

to

our

Courageous
has
con¬

action

,

leave the

we

chance.

positive

tributed to

progress, and some

of the most serious" difficulties
still confronting us exist because
our

thought and action have not

been

sufficiently clear and vigor--

OUS.

"

.

-As

we

-V';

,

■

work together in 1949

j\
tp

-v-*

...

,

+h/-\

kit

.

rvt vsnnn

w

n11'tr

naiv* wm i

shock-resistant.

The

the

look

to

oej-

current

our

cute

time

to

formulate

and

axe-

practical program of imme¬
diate
and
long-range
economic
measures pointed toward stability
and growth.
a

Sources of Our Economic

Strength
The year just ended

has tested

As the

markets.

price drop was
localized, it did not cause cancel¬
lation of the buying and invest¬

er

banking structure was strong¬

and

more

resilient than in the

early twenties.

-Qur businessmen,

become better informed,
more prudent. Our woiking

having
were

serious trouble last year,
it

was

which

had

the

attained

Nor did

duction in taxes.

we

de¬

adequate protective pro¬

velop

an

gram

against hurtful deflation in

future.

the
to

We

must

now

look

improved combination of
basic private action and supple¬
mentary
government
action
to
develop still better remedies and
safeguards.
r
an

Our escape from the danger of
general recession in the Spring

further

opened,

of

1948

that

we

does

not

dangers
can

mean

will

wait

thatno

appear,

until they

;

rei

or

beginning of the proc-r
by which a more stable Condi j

tion

be reached

ean

after

concern

or

They squeezed the family further effort

and

vigilance.

of

have

been

raised.

along :with

the

automobile

industry,

were

in¬

companies

now

<

•

".

will

sway.

The alarming thing is that this idea (of government interven¬
tion) was picked up so quickly. It was incubated only about two
weeks before it found a nest in the President's message.
First, it

planted with a gossip columnist by a little economist who is
working, with Senator O'Mahoney. Keyserling, the Leftist on the
President's economic council, planted it with the President. The
Council as a whole, didn't sponsor it.
was

sharp and uneven movement of
prices upward.
Since both fac*
tors may be at work in different

The

is

episode

pretty

disheartening

those of us who have
Truman, those of us who
have defended him against charges of radicalism. Personally, I still
can t see him as a radical.
■
■
»

parts of the economy at the same
time or in rapid sequence, we neec
range of

made

be

s

sharp and uneven adjustment ©j
prices downward may eause ;dis-j
locations quite as serious as "the

a

study

a

But the fact is that it is

agitation will be revived in full

a

a

to have available

f

.

about

be called before Congressional
committees and hammered about the conduct of their business. The

cessatidia ©i
about inflation. Besides1

enough to justify

that

is

-

excitement.
"•v .j "
a
steel shortage.'

any

talk

moving hell bent lor it.

''. The. steel

period pf- rising prices. "But these
adjustments' have hot proceeded
far

time

same

loiig

a

asks

cause

of

lot

try wouldn't convert to war, when they would not have had the
war orders to sustain tnem, and because the steel
industry wouldn't
go out for a helter-skelter expansion.
Roosevelt, at the time, of
.course,- was-insisting we were not headed for war, while at the

•marks the
ess

he

should
a

pn doing business as usuhl when they knew a war was coming
LThe agitators became apoplectic because tlie automobile indus¬

on.

versed, should be looked ' upon as
desirable development to' br
welcomed father than fearted.VTt

been

"gov¬

unable to

see

devil's horns

on

to

Mr.

.

.

ernmental measures which
as

brake

can

be

prosperity of the post!
has been great, it Laj

years

in' considerable

somewhat

1949,

of

extent to

Lister

harder

we

and

alert,
drawal

or

demand

•

factors

sure,

is

war-

Mr,.

moved

Committee

back

boast

can

in.

)

only

Democrat,
the slightest

one

of

and this

Truman's most loyal

apologists

having a hard time exSecretary of State: He
admittedly played with the Left-wing crowd aiid admittedly was in
good standing with the pro-Russian school of the. State Department
Now-.we are being told that sometime before he left the department '
;

are

he

had, had

.

a

change of heart and

was

as

the author of the get-tough

with Russia policy. ■ Maybe so.
•

-But'it is also

a

fact that in the

had'to do with evolving, Poland

accompaf

Acheson's law firm is

nied by a reduction of productive
activity and . the mounting unemf
ployment to -which this would'
lead.

Labor

p'aihing the appointment of Dean Acheson

that

not

has

tee

with'r
lessening of terriporari;

make

to

element

which, the Leftists have
Senate

Hill

balance

entering a perioc
The momentum

are

tests.

wing

Alabama, who might be said to have
is highly debatable. The make-up of the commit¬
is characterized by such extremists as Murray of Montana, Claude
Pepper and the new whirlwind, Humphreys of Minnesota: " v
V

f actor:
the aftermath of war

of war-created demand

The

■'■■■

or

temporary

were

In

part

left

unquestionably moved in on
him. The steel incident is but one example. You have only to take
•«Took at the reorganized committees in Congress to appreciate the

While the
war

the.

But

acceleratoi:

or as

course

ended

up

of policies he evolved or

with

a

loan for $19,000^000.

registered at Ihe State Departinent

as

repfesefi-

tatives,for the Polish government.

i'*:^:^Mr;.'TfumaiJ'TS --apologists contend that, Acheson

'.^Vv:'Z!\

was,

the only,one V;

experience that could he called upon for the job. In this highly
I believe that prosperity can be ip.volyed. game of global politics we are now playing, we need men
well acquainted with the European brigands, we are told, men wild
continued and that; with properaction, the prospective volume< oil: know -them -by theii" first narnes, can match them in the game of
business i n v.estm,e nt, consumer intrigue, The field of such experienced men narrows "down to Jnterspending, and governmental trans¬ riational lawyers. -Dewey, was to have John Foster Dulles, member of
actions should promote ample emi- the country's largest international Jaw firm, as his Secretary of State,
ploymeritv opportunities for- the had he been elected. This was on the theory that he had had wide
,

of

But many adjust¬ experience in -dealing with these foreign birds; Mr. Truman ' chose
price and income reiaf- •from; another international law firm.. The international lawyers have
tipns need to be made, and these had- experience in keeping their European clients in and out of jail,
must flow mainly from the wish Jn straightening out. their financial entanglements, helping them bor¬

coming

ments

year.

.

in

doing the many things an, international lawyer does for
(t is a decidedly ne-w theme in the oonduct of Our foreign
Maybe a solution for the muddled situation of our State
from the fart that it is the jpolic^. JDepartmenl. would be to faim out the conduct of pur foreign policy
of the Government under the Em¬ to an international law firm for a fee. " If we do" it should be done on
of the leaders in

our

row, money,

©ntem¬

his clients,

prise economy. These leaders
should draw sustaining confident*

affairs.

a

ployment Act of 1946 to use at
its resources to avoid depression
and to maintain continuous

-contingent arrangement; in other words, the firm paid according
trouble ir keeps us. hut "Of;;
■ *\
•'.*'! - L.

to "the amount of
t.: ..The

pros¬

perity.

explanation being made in behalf of Mr. Truman and the steel

incident is that having failed as a haberdasher he has

a deep and abiding sympathy for the, small business man; nothing radical about it, he
prospects win
Just naturally has this feeling.
|
not be realized automatically.
The;
V
; Many: ihtle fellows are feeling a squeeze because they can't get
strength
of
our
economy,
tmr
steel-. This touches Mr. Truman's heart. So why not make this little
strength of our great Nation, de¬
gesture towards them. . .
v
•
•
i
pends upon our capacity and

These

•

wi^-

ingness to adopt the salutary poli¬
cies which

are

required by chang¬

ing circumstances and to put them
into effect.

'

more

draw¬
detailed infor¬

mation; and analysis furnished tr
me by the Annual.Economic Re¬
view of the Council of Economic

(Continued
•

v xViu

u.i

:

;

;
.,

This writer, however, can't escape the source of the steel attack

and the fact- that Mr. Truman took it up so

readily, paying

no

tion to his conservative advisers who argued against it.

atten¬

L

;

;

In this Economic Report,

ing upon the

So

•

favorable

de¬

threatening proportions in
the scend upon lis in full force before
preceding months was continuing taking wise preventive measures.
unchecked.
Prices
were
rising We have been granted a breathing
everywhere. They brought higher spell,
but
we
have
not been
but
uneasy
profits to business granted lasting prosperity without




halted

examining it.

sisting

price,

a

although action

not effective enough to ter¬

perity.

1948

been

seriously

!
L,
1
a revival of the agi¬
against the steel industry that was at a
high pitch in 1941 before Pearl "Harbor.
The
'agitation then was that the steel companies,

Carlisle Bargeron

improved;

.

and

a

firms.

steel

tation

plans

challenged our ability and will¬
ingness to act to protect our pros¬
inflation

the

6ur
needs and supply, of the question of whether
we
need
more
plant
capacity,
how
much,
whether the steel companies can or are wiliin'g to expand, etc.
The government will lend them*,
money
if they want it.
In i the last analysis,
the government may build the plants.
Now what's wrong about all this? How could
anybody misinterpret his motives? ; He seems
to be honestly taken back that any excitement" ■

]

created
purchasing
power *
h a:
of businessmen and waned, and we must now relj
consumers..'
.i
;' v;,:,■•■■■ more fully on currently generated
Nor was the farm price sup¬ purchasing power to absorb a full"
port policy the Only source of our output of goods and services. We
strength., Our
whole
financial must, be more than ever on the
ment

the strength of our economy, and

When

have

reduced, and .where

inflation has

which

or

economic position, to draw court¬ minate "the
inflationary
trend
age
from our progress, and tp which was soon augmented by the
benefit by our mistakes.
Now iis defense program and by the re¬
the

been

to bring about a chain
reaction of price breaks in other

ers'

•

to

conditions

that

should

J

where the pressure of demand La.:

rested

industry,

consum

/;;;■ • •'

in the economy where sup

areas

ply

farmers, to curtail the farm¬
demand for the products of

,

the whole country still another

to the

on

The recent appearance of widei

price applied

collapse of grain prices would
go far enough to impoverish

not

.

guaranteed that according to the need.

support program
the

farm

,

Which up to now have been rather

.

ments to make the economy more

combat the remaining dangers of
groups were better supplied -with
postwar inflation, we should bear current income and accumulated
always in mind that' our purpose
savings.
Our social security and
is-at the same time t© build strong
related policies added to the feel¬
bulwarks against deflation and
ing of stability. The government
depression, and thus to consoli¬ had so
employed a large budget
date our past gains and moye fon¬
surplus as to prevent the infla¬
ward to new levels of
sustained tion from becoming as hectic as it
prosperity for all.
otherwise would have been; end
This third annual Economic Rer such policies served to moderate
port, under the Employment Act the extent of the reaction. This
of 1946., affords not only the Presi¬ combination of
private and .gov¬
dent but also the Congress and ernment action helped-us to avoid
casion

on

.

steadily. mounting eosts o$
public utility services, add further
to the higher, costs of production
the

readily passed
ing public.'

without

advisers

There's

our

where

forces

13,

nomic Report" follows:

,

Truman's attack

Mr.

be surprised at the furore it raised, and in effect, asks
"
in a hurt tone, what is' wrong, what, has he

v

.

sage / Qn
the
State of the

hays

about

industry in bis State of the Union message is that he readily took

contents

are

1

-m .-asv

%

on page
v

*

-r

to

TK*1

iCH-ON'ff'f).

y

»

,

(Special

CHICAGO, ILL.—John R. Doyle
has been added to the staff of

[ Doyle, O'Connor & Co., Inc., 135

i South Ls Salle Street....

30)

With Geo. C. Lane & Co.. "

Doyle, O'Connor Adds

.

NEW

to

The

Pinanciae

HAVEN,

H. Mower is with
&

•

"Cino&cft)

CONNJ.^Riissell ^
George

Lane

Co., Inc., 70 College Street.

;

"

Volume

169

Number 4768

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

(163)

7

Have Prices Risen More Than Incomes?

Whose Problem Now?

By E. W. ECKARD
Professor of Business
Administration, University of Arkansas

By FLOYD L. CARLISLE, JR.

Professor Eckard, on the basis of his statistical
analysis of gross national product, incomes and prices,
concludes that prices have risen less than
money in:ome in comparison with prewar years and hence
real income is higher now than in

Noting decline in perUon of population now investing in common
stocks, writer places responsibility for educating and encouraging

,

securities in newspapers

and magazines.

V

,

have to take it from the government—and then "free enterprise';;
may cease to exist as such. "Wall Street" used to provide industry
with e q u i t y
may

""-"'V

■

.

Industry constantly needs equity capital. The "free enterprise"
system demands it. If industry doesn't acquire it from the public it

/

or three years the complaint that prices have risen more rapidly
incomes is commonplace. A matter of public
policy is at stake: namely, will a

than money
fourth round of wage increases be asked for and
granted?
complaint and*—
-

the

ago

uct

of

generally

"Wall

ty

not

of the

years

in

Street"

there

were

many

important
der

If

to

witn

These
had

many

only

would

ly

chey

and

actual¬

write"

these
Floyd L. Carlisle, Jr.

new

capital

issues
cause

such

issues

at

practically disappeared from

the

either

market

their

because

has been
shrunken by
inheritance taxes and "re¬

capital
high

distributed"
dimmed

others

to

chances

the

and

of

because

or

profits

large

are

prospect of high
be paid

by the

by

investment

Our

have

prospective rewards. And it looks
as
though these taxes are likely
to stay for some little time.
The

of
developed
"trading" in securities
among
experienced and reason¬
ably wealthy investors for a small
brokerage- machinery

"Wall Street" has been

handle

commission.
aren't

wealth,

the

people

nomic

by

And

taxes

from

longer

no

cumulation

of

earned

has been

structure.
permit ac¬

substantial

wealth

the

;

.

This

in

The Potential

eco¬

in

can

corpo¬

be

done

devoted to thrift and

organs

sys¬

tematic savings and the part that

corporate equities

can play in such
savings programs. It can be done
by investing a proper portion of
employee benefit and employee
savings funds in such securities.

be done

can

by paid advertising
newspapers and magazines.

radio

be

mentioned

present

on

programs.

"Wall

already set

,ts

"people"—the farmers, the

workers, the successful young men
in the professions, in business and

the

in-

able

many

savings through
analysts

in

the

have

-have

in

been

strangely
they

so

economics

that

mistrust

to

big busi
the financial fraternity and
come

ness,

'the stock market.

A recent survey

by the Federal Reserve Bank in¬
dicates that only about 5% of the

people

in

this

country with ac¬
savings have any por
thereof directly invested in

firms,

the

'common

stocks

of

American

of

bonds

investment

same

government
to

clusive
indexes

period

period

year

will

be

technique

war

sav¬

people.

applied

The

to

cor¬

Street"

aid

perhaps

the

industry

help

most

it

give
needs

effectively

this big task.

If

partment of Labor)

methods to sell
its

wares

?■

A

comparison

of the
income from

monetary

rise

incomes.

in

prewar

See Table

I

for

a

sum¬

of changes.

mary

TABLE
Index

Numbers

of

Disposable

with

this

I

Personal

Income,

Consumers'

Prices,

Meat Prices, and Per-capita Disposable Personal Income in

United
•

(All figures are index numbers with the
average cf

1935-39
Index

of

disposable

income

the

States
1935-39—100)

1947

1948 (First

-

to

its functions and

the

big

new

100

262.2

280.2

100

159.2

169.2

Consumers'

high

Price Index
(De¬
partment of Labor)_______

high Meat component of the Con¬
since
sumers' Price Index
100
217.1
236.7
approximately 95% of our dis¬ Per-capita disposable personal
posable personal income is spent
income
100
234.1
250.2
lor consumption.
It is difficult to
Source: Department of Commerce
Survey of Current Business." The index for
say
which
field of consumers' per-capita disposable personal income was computed by adjusting the disposable
goods receives the most attention personal income index to take into consideration a 12% increase in population.
because of high prices.
In many
Stated as index numbers with crease of 12% in
population the
cases
it is suggested/that prices
1935-39 as the base the figures
per-capita disposable personal in¬
have become so high that total on
disposable
come index numbers become
personal
income
100
ability to buy has been exceeded. (shown in Table II) became 100 for
1935-39, 234.1 for 1947 and.
The idea that by some device or for
1935-39, 262.2 for 1947 and 250.2 for the first six months of
______

t,

other all

of

have been gypped

us

in this boom

period is fairly

Or, to restate the last

mon.

com¬

280.2

for

the

first

When adjusted for

half

of

1948.

1948.

postwar in¬

a

At

the

time the

same

(Continued

on

because

prop¬

prices

The

have

risen

"income"

word

more

WE TAKE PLEASURE IN ANNOUNCING THE FORMATION
OF

income.

money

is

used

income in accordance with the

YOUNG &(GEItSTEN

use
ac¬

the

in

term

the

income

40 Exchange Place,

counting figures released
income"

"real

denote

the

will

be

sometimes

what

of

concept
come

by the
Commerce.
The

of

Department

the

Telephone Whitehall 4-2250

used

elusive

money

TO

in¬

will buy in the way of con¬

sumers'

goods.

arrive at
shall

use

In

real

a

the

"disposable
because

released

that
now

the last

HENRY

as

B.

R.

YOUNG

GERSTEN

income"

income

"pay¬
If dispos¬
has risen

prices, then
real

we can

incomes

are

than they were before

war.

we

BUSINESS

THEODORE

latter includes

personal

higher

TRADING

income"

"personal

ments to governments."

assume

GENERAL BROKERAGE AND

SECURITIES

attempt to

our

personal

the

TRANSACT A

UNLISTED

income figure we

figure

than

New York 5, N. Y.

But if the

have suffered

contrary
a

J □ H N

E.

BLUNT, 3RD

GILBERT

R. WINFIELD

ELLIS

JAMES

RICHARD

SIMMDNS

G.

EUGENE

W.

HDTCHKISS

H.

D.

PAUL

OSGOOD

CASEY, JR.

MILLER

STANLEY

E.

CRONWALL

decline

represented by the
remaining 95%. Its present profit
margins can't possibly permit it
to

do

announce

that

our

ANNOUNCE

New York office

so.

1

.

JOSEPH V.

BOND

and

Blunt

ALFRED A. SIKORA

2DS

Can industry afford to wait for
"Wall Street,"\with its own lack
of

capital, its lack of practical
ability quickly to reorganize its
methods, and 'its lack of trained
salesmen,-to take the lead

obviously, necessary educa¬
selling job ahead? The

Mr. T. G.

Horsfield, Vice President and Director,

retired from this firm December

time

may

job

Street's"

be too short.
shouldn't

prime

"Wall Street"

to repre¬

sent the investor's interests rather'

than the corporation's.




Corporate

SOUTH

LA SALLE

&

Simmons

STREET, CHICAGO

FINANCIAL

4

B-4774

&

CONDUCT

A

GENERAL

INVESTMENT

BUSINESS

Co.

INCORPORATED
MEMBERS

Member Cleveland Stock Exchange

"Wall

responsibility.

presumes

Ellis

TELEPHONE

After all.
be

OF

31,1948.
TO

Wm. J. Mericka

tional and

this

PARTNERSHIP

will be under the direction of

Corporations Must Help

young
in the

THE

market
,

NEW

YORK

CHICAGO

150

Broadway
UNION

COMMERCE

Con-

43)

page

osition, real incomes have fallen

is true

We wish to

Half)

personal

...

cor¬

securities

use

(De¬

find that

we

porations. "Wall Street" has not
yet reorganized its system and

-for

and

we

generally refer
to
prices of consumers' goods

able

and

indexes.

prices

with respect to

m

many

the base.
condemning

as

productive

to

since

used

must

the. choice

the Consumers' Price Index

ap¬

1935-39 in¬

Statements

porate securities could be equally

"Wall

clearly de¬

computed

are

rather

the

two

1935-39.

care

most

five

to

ings

the

the

term

cumulated
tio'n

For

II.

brokerage

billions

lagging.

period prior to World War
For the sake of convenience

principal investment banking and

and
espe¬
industry, or the financially in¬ counsel oganizations
experienced heirs of our formei cially in the many rapidly grow¬
capitalists, now have or are get-, ing mutual investment
companies.
ting most of the wealth—bat for
After all, industry helped sell
the past 16 years 01* more, these
educated

a

of

supervising

the

such

in¬

prices have risen less rapidly than

the machinery for herein to refer to money value of

up

.in

•people

Eckard

W.

of

part this com¬

incidentally has

;

Investors

E.

rapidly than

Street"

/estment of such

The

and

investment

intelligently

income.

explain to

social

statements, by articles
employee and consumer house

can

or

upon

by public

our

tax

to

own

securities?

It

the

now

existing

advantages of prudent and

in

distributed" to others

stagnated

1

been

immediate and aggressive cam¬

paign of their

It

too,

effective

then, shouldn't they embark
an

much
anymore.
has been "re¬

trading

Their

has

consideration

fined

communication, with
potential market.
Why,

new

"investors"

These

.

Proceed

of

rate

profits, making the
of ail proportion to the

i nt

to

of

in

than

period

in

in¬

to whether

more

the

exercised

use

proceed

com-

parison is made between the pres¬

corporations

most

channels
this

to

leading
the

from

such

the

p

and

*

living; and <2) by means of a
be
study of the behavior of appropri¬
us

as

con¬

aid

an

as

conclusion

a

price

However, considerable

of

Let

a

various

serve

since

comes

index of the cost

mak¬

ing

integrity,

-

some

in

prices have risen

proaches in the order mentioned.

ent and some not too

systematic

out

of

men

riod: (1) through a comparison of
the increase ot income with the
increase of

rise

will

forming

pe¬

ate income flows.

person

investments
selected

affairs.

How

income taxes which must

risks

be

1935-39

income of the

protection of

such

can

the

rising
rapidly
the

experience and good judgment in

a

substantial investors

and

investors

Should

profit.. Today these real "under¬
writers"
have

the

could

they
others

to

be¬

funds

own

believed

they

resell

for

supervised

their

with

And

company

have

since

been

by
employed, but in secur¬
widely diversified char¬

a

acter.

"u nder-

the

are

ities of

They

■equity

in

that

prices and in¬

not
which

days to postwar times with
dexes

risen

*

—.—

current

other

comes

:

two approaches to the
problem of

have

variants of this

are many

——

at least

are

determining whether real incomes

effect

cor¬

There

-

There

re-

sym¬

while

•:

in real income.

the

pathy is to the

economy is good, all of
people, in amounts reasonable
circumstances, should be

portion of their savings in
porate
securities generally,

wealthy
clients.

most

their

a

that

one

ceives

educated and encouraged to invest

firms

friends

—

"free enterprise" private

our

our

capital.

large

issuing corporation
broker.

ownership

un¬

writing

firms

the

1

;'v:

^During the past two

securities are, after all, the prod¬

capital. Twen¬

to

prewar period. Bises conclusion on: (1) consumers are
spending
of their disposable personal income]; and (2) consumers' prices have risen less thaP
income as evidenced
by comparison of price indexes with incomes.

smaller percent

increased individual interest in private securites on
corporations as
well as securities industry. Says corporations should advertise their

New York
BUILDING, CLEVELAND

CTOCK

STOCK

v'-V

EXCHANGE

CORRESPONDENT

CLARK,

EXCHANGE

JANUARY

...

DODGE

NEW

11, 19^3

&

YORK

OF

CO.

8

(164)

THE

Television—A New Impetus
To Motion Picture

Thursday, January 13, 1949

CHRONICLE

FINANCIAL

&

COMMERCIAL

Dealer-Broker Investment

Industry

Recommendations and Literature

By SPYROS P. SKOURAS*

It is understood that the

President, Twentieth Century-Fox Film Corp.

interested

send

to

firms mentioned will he pleased

parties the following literature'.

Asserting television, combined with radio and motion picture industries, will reach height of

success and
prosperity and be of great service to humanity, lead ng motion picture executive warns film industry is
going to have headaches before adjustments are perfected. Contends, eventually whole new technique,"
with vastly larger audience, faces all three industries, with films as backbone of entertainment. Sees

television

combined

with

films, creating

a new

entertainment-seeking public.

Radio and motion

pictures complement each other and combined, both have attained
great success. So, now, television, with the aid of motion pictures and radio, and the great
facilities it affords, all three combined, will-reach the height of success and

prosperity and

let

But

not take

us

everything for
granted
all

is

in

that
serene

the

amuse¬

ment

and

en¬

tertainment
world.

Tele¬

over

55

tragedy of conflict as it is waged,
surely, will hasten world brother¬
hood.
The possibilities are as il¬
limitable

television

of

mean

predic¬

tions

realized, we will
stormy periods.

will

through

go

be

many

bnere

no

little

ment.

We

have

on

and

plague

mo¬

hands

our

developed,

the

a

will
and give
it

amusement

world,

—A.

N. Y.

Democracy

has

envoy.

the

a

found

A medium that

good

a

new

fleet-footed

new

depict
instantaneous

life with

can

effect, while it is being lived, and,
at

the

same

time,

can

record

the

dio,

whether

in

not.

or

fill

in

the

mind's

with whatever images
conjured by the sound alone.
Let

When
our

more

impact,

whole

dia¬

honestly, the record
appealing to me, had

emotional

greater

and

dramatic

tragedy, than when
saw the picture.
"Wilson" was
great picture, too, and gentle¬

I
a

men,

more

greatness will be what is
of

You

you.

had

ex¬

better

for it.

30,

disfavor

Sound

in

public

can escape

enter¬

much critical

Gold

larger audience
with

Memorandum

—

—

Co., 145 Sutter
Street, San Francisco 4, Calif.

confronts you

now

When between 15 and 20 million
sets

will

in

be

in

use

homes, and television in theatres
be

in

common

sion will be

wire

use,

then the

radio and televi¬

picture
one.

television

will

be

because

in this

of

theatres, nationally
and internationally, together for
unsurpassed shows, attracting all
and types
added

50

some

people in the United
seldom

now

Continental

sec

Preliminary
19

New

Hanseatic

Bonds

Railroad

serv¬

The

tertainment

show

will

be

today

is

films.

&

leaflets

and

Archer-Daniels-Midland, Com¬
Southern

&

Petroleum

Corp.,

instance

(Continued'on

42)

Texas

Central and Youngstown

Sheet &

Tube.

en¬

The
a

developments

—

Current

in Niagara Hudson

Power

Corp., Central States Elec¬
American Power & Light

tric,

'

Commonwealth

&

&

Light

&

Lindsay
Finch

Southern,

American

and

&

Beryllium

Inc.;

Corp.;

Light & Chemical
Telecommunications

Co.;
and

The Girdler Corp.—Coffin, Betz &

Sullivan, 123 South Broad Street,

Western Canada Oil Industry—

Data—Charles V King

NUMBER OF

&

Co.,

61

Broadway, New York 6, N. Y.
*

CHRONICLE

♦

#

Broadway, New

York

6, N. Y.

January 20th.

''ANNUAL REVIEW & OUTLOOK" number will

Company—Memorandum
—J. R. Williston & Co., 115 Broad¬
way,

on

this

banking and corporation leaders who
★

Do not miss the

Bank in this
and financial

cross

the

the country's industries.

your

Firm, Corporation

or

section of America's most competent business

opinion which will




year's possibilities from

opportunity to advertise

composite

appear

space

in this number.

209

Electric
ration

York

i-

South

Salle

La

Street,

—

Power

& Light Corpo¬

Analysis

—

Newburger,

Co., 15 Broad Street, New

5, N. Y.

.

Regular advertising rates will prevail
for

Co.,

Chicago 4, 111.

Loeb &

in the January 20th issue.
I

„

delphia 2, Pa.
Also available
on

John

memoranda

are

Stetson

B.

and

Warner

Sunshine

Consolidated,

>

Inc.—

Detailed

analysis—Aetna Securi¬
ties Corp., Ill
Broadway, New
York 6, N. Y.
Texas

Union

Oil

Corp.—Infor¬

mation—Stewart J. Lee' &

Co., 60

Wall Street, New York 5, N. Y.

United

Kingdom

4%

Funding

Loan—Write-up—Zippin & Com¬
208 S. La Salle Street. Chi¬
cago 4, 111.

pany,

Utah Power & Light—Write for
data

attention of

Edward

L.

South Main

R.

H.

Burton

&

Burton—

Co., 160
Street, Salt Lake City

1, Utah.

■

•

' :

For Chile Bond issues

Schroder Trust Agent
Schroder

Trust

Company

has

been appointed successor agent for
the following dollar bond issue of

the Republic of Chile:

Twenty-year 7%

external

loan

Railway refunding sinking fund
6%

external

bonds, dated

Also available is
,

'

on

a

memorndum

Budd Company.

Kingan & Co.—Memorandum—

McCarley & Co., Vanderbilt Hotel

Building, Asheville, N. C.

Jan.

1,

1928, due Jan. 1, 1961.

bonds,

dated

sinking fund 6%

Sept.

1,

1928,

due

Sept. 1, 1961.

sinking fund 6%

dated

March

1, 1962; and

External

bonds,
Durez Plastics & Chemicals, Inc.

respective fields.

manage

Byllesby & Co.,
Stock Exchange Building, Phila¬

March

loan

New York 6, N. Y.

—Analysis—William A. Fuller &

business perspective

Clothier—Mem¬

M.

External loan

present the opinions and forecasts of the nation's
banking and financial

your

3, 111.

bonds,
Crane

Get

cago

External loan

C. I. T. Financial Corp.—Data—

Robers & Co., 61

★

memoran¬

1922, due Nov. 1, 1942.

"ANNUAL REVIEW & OUTLOOK"

the outlook for business in their

Inc.—New

sinking fund bonds, dated Nov. 1,

Philadelphia 9, Pa.

on

Skilsaw,

Broadway, New York 6, N. Y.

Tracerlab,

our

6,

Electric, Electric

Gas

Stocks for the Future—Data on

Will be Published

&

York

be

generally

page

Hutton

New

Lionel

Oils,

Steel,
StewartCo., Wisconsin

Sharon

Reorganization Plans

the backbone of

and

analysis of

are an

Laboratories

Warner,

reached.

radio

1948

N. Y.

Corp.,

will

in

115 Broadway, New York 6,

Co.,

Creole

ice to the public will result.

Inc.—De¬

F.

Broadway,

Company.

1949—Goodbody

for

Prospects

time will be eased and the bumps

perity and the most effective

Industries,

analysis—E.

61

dum—Ames, Emerich & Co., Inc.,
105 South La Salle Street, Chi¬

Bank

data on
banks—New York

New York 5, N. Y.

way,

will be ironed out

amusement, the greatest pros¬

analysis of

an

N. Y.

of

Corporation, 120 Broad¬

monwealth

course,

Schenley
tailed

Strawbridge &

York

New

York

audience, all of the headaches in

entertainment

a

Earnings—Tabulation

part of the trinity

in

Also "available is

orandum—H.

on

that the fin¬

6,

Miles Shoes, Inc.

on

Can,

Also available

serving this

New York

.

cir¬

Ill

leaders

Trust

in

bulletin

Abbott

so

1948

Zenith Radio Corp.

on

With the facilities of television,

zenith

earnings

for

Railroad Developments, and a

pictures.

est

Stocks—

indicated

Industry—Analysis of the
Outlook—Eastman, Dillon & Co.,
15 Broad Street, New York 5, N. Y.
Also available is a comparative
analysis of American Can and

of people.
Then
the motion pic¬

audience

City Bank

Oil

Power

The 1949 issue of

Wall

&

Bank

Broadway,

61

Co.,

to

ture-television

York

stocks

Foreign Power—Ira Haupt & Co.,

THE

Co.,

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

no

thousands

be

19

Standard

★

1

Co.,

Co.—Analysis—C. E. Unterberg &

by

is

There

question about that. The vast fa¬
cilities of the new art will bring

will

for

cular

transmission.

ages

New

Preliminary

National

Public

&

vastly

a

challenge.

a

television

a

Stocks

Lauterwasser

easy

whole

a

tirely changed setting and

Of

alone,

technique,

States alone who

the

recorded

comparatively

new

to 60 million

I questioned the casting
picture, "Wilson," Darryl

logue—and
was

are

illustrate:

me

tainment,

Dec.

blessing,

eye,

New

City,

it

ra¬

only in sound. Your

can

ecutives
York

of

know

that you deal

prepare

York, New
1948.

kind

a

you

listeners

pected

of

&

Kidder

M.

N. Y.

world of achievement, an en¬

Theatre

enjoy

*Excerpts from an address by
Mr. Skouras before the Radio Ex¬
Club

A whole
new

sound.

You, gentlemen of

it is

radio, but we have been facing
this problem for many years.

motion

Of course,

the show also,

sees

It has been

will

motion

acting.

and

for

the

Zanuck
:

.

weapon, peace

television will give to
picture industry its
greatest impetus since the advent

it

casting

different matter.

opinion,

of

but the whole future of the human
race.

On

imagination,
imagination can

human

perfect

When

destruction of

picture industry and
the contrary,
in my

vision too.

us

of

radio.

predict

eventual

dealing

and upset us
us many headaches.
But once it
is developed, not only will it af¬
fect the present styles and matterns

the

motion

"panic"
that it will

passing

mighty giant, and until it is fully
grown

darkly

who jcry

are

We

do

will

or

midget marvel of the

no

there

motion pictures are
going to have headaches, but let
me tell you something about tele¬

gadget

fad of the times.
with

the

of

Gentlemen, let me express the
opinion that we are tinkering with

that

an

those

for

and many ups

great

be

and

the

and

a

adjustment period.
However, I see no basis whatso¬

and

Spytos P. Skouras

perfection of tele¬

is no question that the
picture industry and radio
will feel the impact of this growth

headaches and

these

the

motion

ever

Before

Corp.—Memorandum

Pennroad

Copper—Review—Hirsch & Co.,
25 Broad Street, New York 4,

the audience uses its

There

•

many,

downs.

as

vision is inevitable. ^

have to

and

Com¬

pany,

Street, New York 5, N. Y.

vision is going
to
give* us
many

Power

Minn.—Special write-up—
companies in 25 major industries A. C. Allyn and Company, Inc.,
—G. H. Walker & Co., 1 Wall 100 W. Monroe Street, Chicago 3,
Illinois.
Street, New York 5, N. Y.
stocks of

on

service to hu-^

manity.

States

Northern

Stock Program for In¬

Common

vestors—Data

dated

May 1, 1963.

1,

sinking
May

1,

1929,

fund

1930,

due

G%

due

Volume

Number

169

4768

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

to

Viewpoint on President's
Message and the Outlook

gift

record private

wages,

New York.

the-

estate

economic

ef¬

effective.

fects

the

we

on

of

gift taxes will become

and

As

to

personal taxes,
question about it,
although it may be that we will
get some slight increase in the

Message. I
now
present

have

some

their report.
! The overall

upper

conclusion

corporate

brackets.

dependent

on

That

fact

the

on

rate

is

being

of

seven

created

to

a

the

are

in

the

sources;

was

corporate

about

one

There
H. J. Simonson, Jr.

prise requests.
It followed the

any
statements
of the program.

New

the

as
to
Also,

nomically, it seemed to
Deal

eco¬

to be
unsound¬
us

he wants to protect

as

the

from boom and bust by
business expand output,

economy

having
promote

of

basis

the govern¬

revenue to

we'take

if

the 38% cur¬
rent rate, increase it to
45%, we
have

so

basic points increase,
$300 million, which is a
$2.1 billion increase. So if we get
the 45% corporate rate it will only
seven

employment and

at the

increase

the

whereas he
We

think

$2.1 billion,
talking $4 billion.

revenue

is
that

the

chances

going

to

when

he

are

the

debt

each

only

course,

low

other

going to have
debt

this

and this

(Continued

can

on

placed privately. They

announcement

a

Equipment, Inc.

4% Fifteen-Year Sinking Fund Notes

In

speaking of this year, I mean
the fiscal year ending June 30.
1950, which will be the year cov¬

due

February 1, 1964

ered in his

Budget Message, which
is going to be delivered in a few
days.

On the basis of the reduc¬

tion in deM of about

$2 billion, it
quite necessary that the cor¬
porate income of the country be
is

very near as high as it has
in the past or else we are
to

have

deficits.

some

been

Reynolds & Co.

going

We

don't

think
for

gift taxes, and

rather that the administration will

fident

there

will

be

quite

no

con¬

E.P.T.

$4 billion.

that the

Now

news

out, however—and it is not

•

see

•

the

any

program

deficit

will

provide

financing,

to it that the necessary

January 13, 1949

but

funds

people thought—we

many

cluded

that

should

at"

the

least

quite favorable.

is

bad

as

con¬

effect

market

temporarily be
It is the old story

This announcement is neither
securities.

uncertainty that prevails, then

you

know what the conditions

and

when

doesn't

an

The

offer to sell,

nor a

solicitation of offers to buy, any of these

offering is made only by the Prospectus,

v.

are,

do know them, it

you

seem

bad

as

as

you

NEW ISSUES

thought it would.
We have

what

been

concerned some¬

the voting of Southern

by

Affiliated Gas

Democrats and Republicans

on the
in the House rules pro¬
cedure, as this raises the question

changes
to

as

effective the expected

how

Equipment, Inc

coalition between the Republicans
and Southern Democrats will be
in

preventing or at least reducing
legislation.
However,
it

40,000 Shares

costly

likely

seems

to

that

us

the items in the

all

the

81st

($50 Par Value)

Congress does not want

recession,

severe

a

$3.00 Cumulative Preferred Stock

substantially
satisfied that

are

we

of

President's Mes¬

sage will be modified
and over

some

much

less

With Non-Detachable Common Stock Purchase Warrants

a

depression.
I will

vidual
on

cover

items

them.

few

a

and

Price $50.00 per Share

indi¬

of the

viewpoints

our

First, it is obvious that

government expenditures will be

high.

The

defense

continued.

be

training,

will

program

As

to

universal

1,000,000 Shares

question whether that

we

will become effective

or

not. There

Common Stock

is quite

a lot of opposition to it.
supports will, of course, be
enacted.
We
expect. legislation
will extend the present farm sup¬

Farm

ports

rather

lower

than

to

to

supports

permit

become

($1 Par Value)

Price

the

effec¬

$9-25 per Share

tive next year.
On

the

matter

of

taxes,

the

President says he needs $4 billion.
Notice he doesn't say how it is to

:be raised exactly* but he did

say

that corporations should stand the

bulk

of

it;

taxes may

rates

in

that

Copies of the Prospectus
named in the

It is

our

not have
year.

middle

and- upper

conclusion that

an excess

We

*An

We

do

we

will-

profits tax this

expect

any
may

State only from such of the several Underwriters/
lawfully offer these securities in such States.

think

address

an

increase

by. Mr.

Harriman

Eastman, Dillon & Co.

Kidder, Peabody & Co.

Los. Angeles, Cal., Jan, 5,1949,




Laurence M. Marks

in

Simonson

Ripley & Co.

Incorporated

corporate

at the Los Angeles Stock Exchange
Club to a group of securities dealcrs,

as

Reynolds & Co.

taxes to be increased up to. about

45%.

be obtained in

personal .income

brackets; and that the estate and
gift taxes should be increased,
i

may

Prospectus and others

have to. be increased in
the

January 13, 1949

it,
an

37)

offered for sale
of record only.

are not

appears as a matter

Affiliated Gas

& Co

I

talking

be

page

$4,000,000

year.

great that he will get about $3 bil¬

are

that,

is

answer, to

is if there

year.

lion with corporate and estate and
we

do

the

costs.

about permitting wages to
go up.

wants

encourage

is

promote

building

time be wants to raise taxes

same

of

the

on

times

Democratic program in every de¬
tail. Conspicuous by their absence

typical

from
other
the
increased

basic point, accounts for $300,-

ment;

sur¬

no

taxes

000,000 of

ex¬

was

pected.

funds
actually

of

was

it

know,

The

He

last couple of years to effect some

we

as

and

These Notes have been

execu-

down

that

reduction

ness,

government

he

don't

mod¬

very

opinion.

to

wants

reducing

one

seven

near

the

We think

the

promote

He

of

.

also the debt.

raising

by

staff

cost

the

a

our

substantial surplus
inflation and

Message

were

that

idea

the next

over

9

Further, he

increase of

reduce

in

were

said
to

in

morning was
Budget must be

Federal

balanced and

reduction

just

5

presented

program,

million units

an

The statement this
that the

to about 45% will necessitate the

that

•

senior

our

the President's

/ what

est

It has been part of
Democratic program and also
President Truman's wishes for the

largely

held

the

housing.

How

con-

ferred

our

in

rental

years.

small

a

question of housing, the

President

a telephone conference with our staff in
there, while I heard it here. Dr. Macaulay,

message

and possibly
individuals

from

cost

said he wants

•

Dr. Winkler, our two economists, Vice-President Chadwick and
tives

taxes,

On the

savings, relatively high farm earnings and

holding

They heard the President's

from various forms of taxes,

higher brackets/

record of individual incomes.

For the last two hours I have been

government debt will

amount

Investment analyst, after consideration of the President's message on State of the
Union, foresees a
slight decline in peak levels of 1948 in current year, most recessions coming in latter half. Looks for
little change in intfc>st rate& and stock yields, with money in circulation remaining at
present level. :
Says a recession will be moderate and will be cushioned by huge money supply, high government spend-

ing, full employment at high

couple of billion dol¬

primarily corporations, estate and

President, National Securities and Research Corporation

.

a

of the

lars

come

By H. J. SIMONSON, JR.*

•

retire

(165)

Union Securities Corporation

of
in-

10

serially from 1950 to

turity;

(3)

Jan.

on

$6,400,000

5

equipment
BB, due
serially from 1949 to 1959, at
prices to yield *1.40% to 2.50%,
according to maturity; and (4) on
Jan.
6
$2,060,000
Florida
East
Coast Ry. 2%% equip, trust certifi¬
cates, series K, due serially from
1949 to 1959, at prices to yield
1.50% to 2.95%, according to ma¬
Central

Illinois
trust

214%

series

certificates,

turity.

*
*

{

Oct.

shows that reperiod were disap¬

although sales were in

pointing,

of

excess

Nov.

fiscal

the

for

those

1947. The principal cause
earnings was the fact

1,

of invest¬

New
York, and Halsey, Stuart & Co.,
First

the

Corp.,

Boston

Inc., Chicago, on Dec. 7 offered
to
the
public $150,000,000
American
Telephone
& Tele¬
graph Co. 25-year 3%% deben¬
tures due Dec. 1,

1973, at 101.61

Other

interest.

and

in¬

Illinois

vestment houses participating in
this offering were

of 1948

also

was

solidated

(Inc.) MulYantis &
Co., Inc., Farwell, Chapman &
Co., Detmer & Co., E. W. Thomas
Co.,
Dempsey &
Co,, , Mason,.
laney, Wells & Co., F. S.

Co.,

Patterson, Cope-

Moran

&

land &

Kendall, Inc., Sills, MinCo., Inc., Alfred O'Gara

ton

&

figures

Straus

are

follows

as

SUBSIDIARIES

AND

CO.

&

$1,993,784

Nov. 1,'47
$1,958,211

*.1.985

30,903

Nil

$8.76

Oct. 30,'48

other

&

Sales

inc.

Net after taxes,

Earns,

etc.

...

sh.

com.

per

assets

282,143

266,496

liabilities

109,241

113,12.3

Current
Current

PACKING

CU.DAHY

THE

CO.

SUBS.

AND

Fiscal Years End.—;
rev.

Nov.. 1,'47

Oct. 30,'48

other

$567,8 H

Net after taxes, etc.

1,013

Sales

&

Earns,

$0.36

$4.32

73,509

67,409

36,700

27,006

sh.

per com.

Current

assets

Current liabilities

SWIFT

(Including

other

Nov. 1,'47

inc.

$2,364,372

$2,251,826

*Net aft. taxes, etc.

27,889
$4.71

322,775

tions
and

provision
fixed

to

for

cost

high

assets—$10,000,000

$12,000,000

in

addi¬

in

1948

1947.

A.

G.

Becker

9

headed

(par $50)

Younker

Moines,

Inc.

Co.,

on

investment

an

which

pub¬

(no

Inc.,

Bros.,

la.

value)

par

Des

preferred

The

was

offered at $50 per share, and the

at

$26

among

were

per

Central

In¬

share.

the underwriters
Republic

Co.

(Inc.), William Blair & Co., Stifel, Nicolaus & Co., Inc., Bacon,

Income 514—1952

Whipple & Co., Sills, Minton &

Chicago, North Shore &
Milwaukee Railway
Common

&

and 70,000 shares of
stock

common

of

common

Corp.

Co., Inc., Straus & Blosser, Hol-

ley, Dayton & Gernon and Mullaney, Wells & Co. The net pro¬
ceeds

Stock

to be used, in part, to

are

retire unsecured bank loans, to¬

talling
ance

j Brailsford & Go.

bank loans and the balance to

be

added to working capital.

is included

among,the group of
bankers

of

$1)

which

Enamel

Ferro

latter's

the

on

Coip.,

$1,500,000, and

will

be

added

to

the bal¬
working

in Illinois in Chicago

on

bid

a

Office

U.

S

nies

Analysis

on

in

-—

Corp.

request.)

on

Dec.

were

of

two

—

'

the

of the

of' Justice

for

controlling

a

in¬

American*

American

which

9

13 :with

rayon-fibre

North

and

Dec.

Property

Department

Corp.
I

on-

Alien

of

acquisition
terest

Stock

.

Western

Co.,

Light

offered

Iowa,

stockholders
1948

the

Cherry-Burrell

Corp.,

Chicago,

from the Prudential Insurance

Co.

by a 31/2% promissory note due
serially to Dec. 1, 1963. The pro¬
ceeds were used to retire $2,400.000 of bank

loans and to increase

able

the

at

rate

compa¬

Rayon

Bemberg

the stockholders

advised in the corporation's

underwritten by

Power

$12,000,000

Ala¬

vestors, at 103.39 and interest,
series C,

through

as

bilities

Edison Co. at 102.46 and
and

interest

$7,500,000 Oklahoma Gas &

were

Portsmouth

sale did

the

Jan. 3 of the

on

Co.

He added that

include

not

deordorant

of

pads

and

the

SEC

Reliance

of

Insurance
offered at

Dec.

on

$25

four week

neriod in the company's

This is a gain of $1,970,17.5% over the same period

history.
or

year

Retail sales for the

ago.

Dec. 4, 1948 were

increase of $23,-

an

over

last year.

*

#

registration statement was
with the SEC on Dec. 30

covering

surplus.

per

share, the net

be

will

There

j Members New York Stock Exchange
Members Chicago Stock Exchange
Associate

Member

New

York

'.::vv"-

*

consolidated

The

H.

Gossard

W.

profits of

net

Co., Chicago, and

its subsidiaries for the year
Nov.

222,

share,

as

against

$2.48

or




ended

30, 1948, amounted to $632,—
equal to $2.92 per common
a

net of $537,987,
share, for

common

per

the

preceding fiscal year. At Nov.

30,

1948, net working capital was

$2 995,788, compared with $2,980,829

a

before.

year

letter

notification

of

with

A

the

SEC

on

covering 3,100 shares of common
stock,

SI, of Oxford Elec¬
under¬

par

tric Corp., Chicago, to be
written

Townsend, Graff &

by

Co., New York, N. Y. It is pro¬
posed

to

$3.871/2

per

share

for the

remaining 1,300 shares.
V

V;

:

*1*

*!*

Operations
of the Florsheim
Co.,, Chicago, resulted in a
profit of $1,515,586 after adequate
provisions for doubtful accounts,
depreciation, Federal income and
other taxes. This was equivalent
Shoe

to

$2.22

shares
and

of

$1.11

shares

of

per

class
per

class

outstanding,

share
A
B

and

on

—

on

—

common

stock

compares

with

QUOTED

Request

on

&

COMPANY

Specialists in Foreign Securities
208 S. La Salle St.,
Telephone RAndolph 6-469S

Chicago 4, Illinois
..

.

stock

618,120

(Continued on page 42)

SOLD

Write-up Sent

373,671

common

share

4% FUNDING LOAN

BOUGHT

at $4

the stock

offer

share for 1,800 of the shares

-

V-

was

Dec. 31

Curb

South La Salle St., Chicago 3, III.
Tel. ANdover 3-5700
Tele. CG 650-651
135

New Yorki:

un¬

no

derwriting.

82,500 shares of com¬

ZIPPIN
Chicago

Life

Mutual

Illinois, to be

Common

*

28

proceeds to be used to increase

Barrington,

highest for any

1948 were the

.

STRAUS & BLOSSER

was

of

Co.

filed

weeks ended Dec.

028 for the four

4,

with

notification

of

filed

and

(ASSOCIATE)

Metals Disintegrating

*

-

letter

A

DUE 1960/90

NEW YORK CURB EXCHANGE

line of

a

-

tories, Inc.

sales of $13,225,-

.Common

;

Inc.,

UNITED KINGDOM

THE CHICAGO STOCK EXCHANGE

Steel

President
Chicago, an¬

Levinson,

Yu,

Sales

Hudnut

Supply

,

Common

carried

Co., Inc., who will operate
through their affiliate, Richard

it

fund notes

Jewel Tea Co.. Inc.,

reports that retail

NEW YORK STOCK EXCHANGE

Detroit Harvester

outstandng

&

per

filed

Texas Eastern Transmission

j

L.

Chen

ner

1963.

due Dec. 1,

A

Common

asset

Chen Yu business to Wm. R. War¬

1

Hospital

250,000 414% sinking

Tele. CG 146-7

of

net

securities

nounced the sale

has
placed
privately,
through
Harris,
Hall
&
Co.
(Inc.), Chicago, an issue of $1,-

209 S. La Salle Street'Chicago 4

Members

Chi¬

1948, amount¬
equal to $9.12

30,158

on

with

Morris
of

stock

%

*

i.:

A. C. ALLYN & CO.

-

Inc.,

$107,628 cash.

s]s

#

766,525, or 20.3%

of Chicago Stock Exchange

-

at market values of $169,525 and

while current lia¬
said to be $1,423,558.

American

publicly

1977, of the Potomac

,

that

$274,983,

share

a

shares,

Corp.

Halsey, Stuart & Co. Inc. also
other groups of under¬

series due

reports

to

ed

headed

$5,500,000 first mortgage
and collateral trust bonds, 3V\%

'sgs.

Fund,

of Nov. 30,

$140,642,118,

Common

si:

Television

-

■

covering 4 000 shares of capital
*

participated in this offering.

offered

and current liabilities
$1,559,700.

to

amounted

(Inc.).

Copeland &
of Chicago, also

writers, who on Dec. 8

share
and
$1.05
per
share, for the preceding
year. As of Oct. 31,
1948,

$3,114,258

3%%, due Dec. 1, 1978,
Harris,
Hall
&
Co.

Co first mortgage

Inc.,

compares

$2,500,000 first mortgage bonds,

Inc. and Patterson,

Kendall,

This

current consolidated assets totaled

-

William A. Ful ler & Co.

I

a

of

48 weeks ended

Winters & Crampton

at $20

ton Tucker, President,
was en¬
$1.57 per common share, as against
$32,158,427 and $2,630,868, Or$5.33 joined from disposing of any of
the corporation's assets during the
per common share, respectively,
aforementioned
-60-day
period.
in the preceding fiscal year.
The Tucker firm was reported to
have current- assets of $6,270,141,
Another grcup of investment
including only $731,401 of cash
bankers,
headed
by
Halsey,
and United States Treasury notes,

offered

per

stock.

net of $602,222, or $1.59 per

a

fiscal

15, 1948 for 47,-

Michael L. Igoe.
year from 1953 to 1963 at which
at Chicago, Jan. 3 issued an order
time the unpaid balance of $1,000,000 will mature.
Current as¬ postponing for 60 days all bank¬
sets at Oct. 31, 1948 amounted) to ruptcy, liquidation and receiver¬
$13,496,482, and current'liabilities ship actions against the Tucker
Corp. On Jan. 6, he ordered ac¬
$3,060,620.
For the fiscal year
Chi¬
ended Oct. 31, 1948, net sales to¬ tivity at the corporation's
taled $28,574,329 and net profit af¬ cago plant confined to a "shut¬
down" basis indefinitely.
Prester income taxes was $952,549, or

licly

was

share on
stock
share on the

common

Federal Judge

Stuart & Co. Inc. 011 Dec. 9 pub¬

cents

which
per

preferred

cleansing
•(Inc. U
and
including,A among- pads, which items -will continue to
be made and sold-by a division.
others, Julien Collins & Co. The A
headed b^'v Mr.-Levinson which
utility firm also arranged for
will be known as 5-Day Labora¬
the sale to six institutional in¬

The loan is pay¬
of $300,000 each

working capital.

re¬

on

investment bankers
headed by Harris, Hall & Co*

/V

borrowed $4,000,000

December

'• ••

•.

Corp.

preferred

1,

Dec.

subscribe

to

on

were

group

a

Tel. DEarborn 2-5600

record

of

right

share,

shares

,

in

66

common

the basis .of one
additional share for each five
shares held. The unsubscribed

138,

Members

its

206 additional shares of common

of the
subsidiaries,
including the carrying of inven¬
tories and receivables.
*

and

common

ill

operates

to

before Dec.

rr

to be

its

si:

'

.

,

Federal income

convertible

Kansas, Missouri, Oklahoma and

purposes

$

a

with

'■

ended Oct. 31,
consolidated net income,

the

Telephone

&

which

Inc.,

per

and

■

•

taxes,
of
$477,421,
equivalent to $1.26

*

stock (par $10 ner share)

corporate

•

after charges and

the allega¬
completely

added to Ferro Enamel's general

eral

1948,

••

year

values at Oct. 31,

Wells & Co., F. S. Yantis & Co.,

Inc.,

are

ports for the

The

*
.....

Stockyards

cago,

bonds, 3%% series due 1978, at
102.75 and interest. Mullaney,

file

Common

suit

:

'

V;-v"• '•'•'■■V:

and Kirk-

nounced that it had decided not to

Chemicals, Inc.

opinion

the

'

.

'.-United

by Central

Chicago.

to five selling

unfounded.",'

Jan. 12,
plants

an¬

Pullman,

Durez Plastics &

my

in

tions

*

CHICAGO 4

Corp., stated

"in

that

shares

land. The net proceeds are

bama

capital.

208 S. La Salle Street

|

President of Admiral

basis of one

expired

held. Rights

legal fees, and judicial
triple damages following
accounting.
Ross
Siragusa,

the

$16.75

at

each five

for

share

1948

29,

and

award of

stockholders of

common

Dec.

share

(par

against

Corp.,
assessment
and
accounting under court decrees
of all damages caused by the al¬
leged infringement of patents,

first offered to the

were

record

new

stock

common

un¬

69,590

of

issue

an

of

shares

which

injunctions

Admiral:

costs

Chicago,

Paul II. Davis & Co.,

derwrote

patent

preliminary

of

,

i

infringement agaimt
Admiral Corp., also of Chicago. The
suit seeks
both
permanent and

*

*

•

of America. The loan is evidenced

syndicate

cluded

Central Public Utility

of $10,000,000,
to be used as fol¬
$8,900,000 to retire present
loan

for

•

licly offered 34,000 shares of 5%
sinking
fund
preferred
stock

Swift & Co.,

Jan. 28 will consider approving

long-term

a

75,243

assets

■^Before

oversubscribed.

ahy Packing Co. and

on

281,708

115,610

Current

banking

three of

preferred
Liquid Carbonic

$5.80

Current liabilities!-

"

V

34,335

''Earnings per share

&

Dec.

annual reports of

stockholders of
Corp., Chicago,

The

;

Co.

stockholders.
V '
*

Chicago

company

Subsidiaries)

Fiscal Years End.— Oct. 30,'48
Sales

and

Domestic

Wholly-Owned
Canadian

Republic

Chi¬

Co.,

41,000.$shares

proceeds will go

v\A \

25-year

Co.

which

will be underwritten

A

■

A''

*

.

treasury funds and used for gen¬

CO.

&

nancing operation this year, was

largest meat packers in this
country, Armour & Co., the Cud-

Edison

&

*

4. In litigation of far reaching in¬

1939. Subsidiaries operate
7,122

,

represented the largest
individual corporate public fi¬

The

V

per

which

the

of

'■

fering.

A• i:* >"

Building

of

cago,

$10, of Insurance

par

Exchange

also participated in the latter of¬

terest and implication for the na¬
3% notes,
tion's television and radio receiver
series A, due Nov, 1, 1973, at {
manufacturing industry, Motorola,
100.50 % and interest.
Inc., Chicago, on Jan. 0 xiJed suum
;;:r;V:
"4«;/:
*
' .*■;//
'■ A' /A V', Federal District 'Court at

Light

loss.

*Net

Blosser. The offering,

&

v y

investment

(000's omitted):

and

Co., Ketcham & Nongard

&

.

15

Dec.

on

Gas

Bedford

New

factor. The con¬

a

William Blair

Byllesby & Co.

M.

,

$5,000,000

offered

publicly

lows:

Co., Bacon, Whipple & Co.; II.

&

underwriter,

major plants of the three
companies were strikebound for
2Vz months. The sudden and sharp
break in meat prices in February
that the

ARMOUR

headed by

;

im.t

stock,

mon

interest. Mullaney, Wells & Co,

'

'
•.._

3*4%

mortgage

bonds, due 1978, at 102.52% and

•

.

the net proceeds

52 Weeks Ended—

A nationwide group

,

Halsey, Stuart & Co., Inc., the
sole

of the lower

*

ment bankers, jointly

equal to
year ended

nearly

or

'

Sit
'+

.■

1948,

30,

suits for that

V

$

v

•

'■

Halse.y, Stuart & Co. Inc., headed four groups of underwriters,
offering (1) on Dec., 10 $9,720,000 New York Central RR. 2%%
equipment trust certificates, due serially from 1950 to 1964, at prices
to yield-1.55% to 2.90%, according to ihaturity; (2) on Dec. 16 $15,740,000 Southern Pacifc Co. 2%.%«
serial equipment trust certificates,
covering the fiscal year ended
1959, inclusive, at prices to yield
1.45% to 2.45%, according to ma¬

'

•

■■

series Z, due

consideration.

under

Thursday, January 13, 1949

first

Electric

quarter 1948 statement was

third

Illinois Brevities

CHRONICLE

FINANCIAL

&

COMMERCIAL

THE

(166)

Teletype CG 451

.

Volume 169

Number 4768

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

current

product. There are addi¬
tional government payments, and
h minor amouht of business
pay¬

Sleight -of - Hand - Out
1

By.ro BINGHAM

J,

V-£

••

^

'

Bingham Survey Associates

££:;•'£ '
'

{y.

ments, for which
vices

they are

current

no

rendered.

are

In that

passive-,

a

unproductive

.Holding fundamental question in social security Is how much we ' segment of the "economy.^ How¬
ever, although they do not rep¬
can, and, not how much we shall, dish out, writer points out it
resent earnings arising from the
may be a sea-saw mechanism, that redistribules poverty instead of
;/ current production Nef goods and
wealth. Cites increasing burden of dependency and other similar: ",
Services, they do represent ' de¬
mand- upon, it.
payments on current product, and foresees diminution of real income
Each
dollar
of
these ipayments will buy as much
f by producers through tax slices from current product pie - to main,

social security payments.
J"
f •• •
socially-secure land flowing with milk an,d xnpney,
can help ourselves is leading us from
Hamlin.. "Enougn
piper's song of security which lures us from the ring of
tain

\

The vision of

-

to which

we

for all" is

a

and anvil, and

ax
«"

?

dims the other sounds of

spread-is

the

in

So

hospital,,, medical,

economic

dental and other'needed

paradise

This

be

created

a

10

compre-

by
h

n

e

i

s

v

scheme of

e

so¬

clear

Bingham

nor

payments

neither

anything'th:

persons1

to

rev-:

the pension^ How:
it cost? V Estimates

pay

would

not

only

social

insurance' and relief payments
>ut

also:

all

Federal,-State and
oeal pensions, including military

bote

.terminal leave and

veterans

subsistence

allowances;« govern¬
life insurance benefits, etc

ment

The

recent

reflect

totals

unusual

binding

upon the Legis¬
would
happen?

What

thing that happened was a
slump in the Oregon bond market.
Immediately after it was known
that

pay for social

the

State

proposal
local

or

ceived

passed
bonds re¬

was

Oregon

bids; and bids already
actually withdrawn on
$2,000,000 issue.
A Salem, Ore¬

made
a

no

were

$85,127

1,499

Ratio
i'

v

p.4°.

In

.-

v

tax
the

*

■

time

a

and will

meet

Social

Security

Bulletin,

--

of

and

still

are

war-

imposed

cannot

help but diminish the real
income of the producers and ren¬
der relatively smaller all the cuts
from
the
current-product

pie.

Nearly a-dozen billions for de¬
pendents at home, the already de¬
pleted Marshall Plan billions for
those

abroad,

additional

several

billions

anticipated
social

the

for

lic

acceptance

more

den

makes

Welfare

programs

tion, more and
is being-made

of

more

f Current product is the
all the food,
shelter,

source of

bacco

and

trinkets

purchased,

whether they are bought with in¬
come
from property or invest¬

ment,

from

wages,
•unemployment benefits

assistance.

Those

from

or

public

or

who

purchase

with wages are
exchanging a part
of their own current

product for

a-

of

part

ojthers.

the

But there is

exchange
product
with

current

by

those

what

product

of

equivalent

no

balance

or

of

current

who

purchase

called

are

want to bankrupt the State."

"transfer

shakes

These may be calle

.

"dependency" payments,
represent

the"

and

burden upon the

a

cm-

rent product of others.

.A readily
understandable illustration of this

burden—this sharing of productis the heavy
levy of the Federa1
individual

income

tax.

The

the

fiscal

In

for

expanding old-age

are

expected

&nd
$37,500,000: £
respectively.
And for : the
State of Washington this is re¬
cit.

"

ments made to

increasing depend¬

the

come

the

rations

shorter
of

all.

be¬
The

privilege of receiving without the
corollary responsibility of produc¬
ing, has an averaging effect on
incomes
It

is

a

and

standards

whatever

of

living.

mechanism.

see-saw

degree

it

By
redistributes

Wealth, it also redistributes
erty.

pov¬

And it is possible to tip the
so far as to lead to eco¬

of

of

calized.

been the reaction

of impetus firs'
given by the passage of the Social:

are

part.

a

by the Social

tration,

programs.

1930

not

were

from

its

proposal

3,1191
4.0%

4.5%

Agency,

have

defeated

fo

of

insurance

posals
three times. .;. The
1946
Townsend
pension • proposal

of;

$j.00-at-60,'.
tion
The

which

financed by

tax,
tax

was

was

to

have

3% transac¬
roundly defeated
a

carried

by. the proposal
made it clear who would
pay for
it, and how.
But the
1948 pro¬
posal merely instructed the Legis¬
lature "to provide and pay
\
.

a'minimum

$50

(and)

.

monthly pension of
to feed, clothe, house,




11,319
6.4%

*

December,

1947,

curity at home

abroad

and

Bertram

must

the

Seligman

before their promise
Can be fulfilled. And
yet the trend

City, members of the New York

is more toward promise than ful¬

the

fillment.
an

.For

enlarging
in

persons

Stock

example, there .is
proportion of aged

the

population, and £
diminishing proportion of the age

*
.

an

lier than the 65 that is

Workers

mon.

ments

the

product

of

com¬

longer pay¬
unemployment
out

come

employment;

B.

are

York

by

industry

as

but

mands for

'a

to

be

well

'as

by

are

'also

there

wherewithal

for

such

Young and Henry

40 Exchange
Place, New
City, to transact a general

business.

/

"Chronicle" of Dec. 23.

gov¬

Henry Blair Opens

de¬

the

Henry Blair has opened offices

at
41
Broad
Street, New York
City, to engage in the securities

business.

without any adjustment of wages

a

$3,210,000

.

Mr. Blair

was

;

&

' -

Quincy Railroad

Equipment Trust of 1949
.

2i/4% Equipment Trust Certificates

<

*

(Philadelphia Plan)
To

mature

$107,000 semi-annually from July 1, 1949

to

programs"

for
-

com¬

government
individual

Totals

ctnr

indicate

payments

of

The

assistance

these

To be

tee

responsi¬

and

follow

family
for

January 1, 1964, inclusive

unconditionally guaranteed as to payment of principal and dividends by endorsement
by Chicago, Burlington & Quincy Railroad Company.

These
Certificates are to be issued under an Agreement dated January 1, 1949 which
.i....provides for the issuance of $3,210,000 aggregate principal amount of certificates
to be secured
by new standard-gauge railroad equipment estimated to cost
ap¬
proximately $4,318,500.•
•'
-

•

se¬

Priced

to

yield 1.30%

to 2.325%,

Year

•

:

f'

•

Thousands ;.

1936

'<•

$1,115,608

according to maturity

1940

Issuance and sale
The

of these Certificates are subject to authorization by the Interstate Commerce Commission.
Offering Circular may be obtained in any state in which this announcement is circulated
from only
of the undersigned and otherdealers as may lawfully ofer these securities in such state.

such

1_2,223,686

1844____^__i__—

2,062,141 h

1946

6,334,805

Source:

F-om

Fa??* ' and

figures

HALSEY, STUART &, CO. Inc.
ift

Government Finance: 1948-1949, The Tax
Foundation, Tables 21 and 22.
,..;v

But those public

benefits

1

are

which

assistants,

not, the
are

a

only

drain,

pay¬

on

the

Includes retirement and dr-atrlp'/
nayunder Railr-^»d an-*- Cv'l Serv'"'

Acts, veterans' pensions
benefits in
Rhode
Island
.-

i

McMASTER HUTCHINSON & CO.
-

t

t

.

.

.

..

like

rtients

California.

GREGORY & SON
incorporated

OTIS & CO.
(incorporated)

un¬

and

Retirement

X-'-ness

FREEMAN & COMPANY

incorporated

THE ILLINOIS COMPANY

employment, retirement
ments

A. G. BECKER &, CO.-

and
and
•><

Dated January 1, 1949. Principal and semi-annual dividends
(January 1 and July 1) payable in Chicago, Illinois. Definitive
Certificates, with dividend warrants attached, in the denomination of $1,000, registerable as to
principal. Not redeemable
prior to maturity. These Certificates are offered when, as and if received by us. Certificates in definitive form
will be delivered-af the office of Halsey, ^Stuart & Co, Inc., 123 So. LaSalle
St., Chicago. 111.,The information contained herein has
been carefully compiled from sources considered reliable and, while not
guaranteed.as to completeness or accuracy, we
believe it to be correct

January 12, 1949

•

.

'
„

as

"

of this date.-

,

<

formerly

partner in Alvin V. Filer & Co,

~

Chicago, Burlington

.

..formation
0f
the
new
firm
previously reported in the

^benefits,

total

R.

announce

at

trading

.

of

•

was

provided

reduction

•'

....

pre¬

brokerage and unlisted securities

demands for health and

benefits

'

Gersten

fices

and

kinds of payments to
employed
workers for time which is not de¬
voted to the creation of
product.
There

■

the forma¬
tion of Young & Gersten with of¬

o

demands for various

are

.

Theodore

want

of: larger

»

of
de¬

Formed in MYC

age ear¬

now

manager

Young & Gersten

supply the labor
force; yet there is continued-pres¬
retirement at

as

unlisted

trading
partment. Mr. Seligman was
viously with Ward & Co.

groups" which
sure for

Exchange,

firm's

Dollars in

the

pro¬

•

half billion

a

$5,000 000,000.

over

bination

J

such

in

payments

gov¬

expenditure figure here given.

lected years:

to

1946

.

$177,217

in 194-3. -In

related

and

from less than

-

people

certain duplication of

period benefit payments

surances

vose

the result

submitted

this

significance

working hours which produce the
government

Graff

mentioned.

Security

ernment;

a

become

reportec

be produced

ir

by the Social Security
Administration for the social in¬

people's vote in Oregon on Nov. 2,
1948.
Oregon
cradled
the
Townsend plan, and since 1938 the

been

$657,000,000

current, and somewhat start¬

a

govern*

or that
we
shouldn't; it is
merely that doing is prerequisite
to having.
The materials for se-

transfer

has

Townsend,

The follow¬

were

unfortunately
and

2,113

-

this,

j 2 There is

Seligman
with

Co., 15 Broad Street, New York

reported

°ecurity.

ling indication of this is
of

Public assistance
the country ;as f

to $1,183 000.000

same

bility

Oregon Proposal

for

rose

nomic disaster.
The

&

Security Adminis¬

but

relationship

welfare

Security Act in 1935. This began
the great forward motion of wel¬

the

Bertram
associated

individuals, to the

ing dollar figures

examples, 'this

payments is not lo¬
It is nationwide, and has

whole

waj

increasing the burden o'

dependency

growth

A

Dependency Payments

tion of West Coast

trend

Seligman Joins
Townsend, Graff & Go.

opera¬

product

by individuals, of which Iransfei
payments

the nation's productive capacities,
j It is not that we cannot have all

ernment

ax—*

total of personal income receiver

However, despite the concentra*

balance

—

$55

costs to support our

Federal, State and local;

j

"

\

Burden

payments

of

to

ported to involve an annual defi¬

take

payments,

assistance

year,

greater the imposition of taxes tr
care

Wash¬

those states

to -cost

$50

$125,000,000

fare

ency

govern¬

and

passed proposals

recently

ington,

its

of

California

the

land'" ments, combine into a net2 bur¬
wreck: the den which requires the utmost of

or

foundations

ment.

now*

are

the

of

turrets

weaken

also

can

payments," that is. with pensions,
public assistance and social secur¬

ity benefits.

billion it

It is obvious that "the vote that

-

clothing, to -

and

—;—:

pay¬

yet there

shell,

the

B.

indicate this is
by relating all
transfer
or
"dependency"

lative

don't

the

the decisive question is, "Where's
the product coming from?"

to

"We

it. ' We

not

the

all

Perhaps the least complicated

services—including social security

intend

is

"Where's

.

net dr-air.

a

on current

benefits.

didn't

it

now

benefits, which must

-.v.;

question

refrain,

thing but Harvey out of the hat,

implementation be
Even under the social

recognized.

-already
laid but not yet out of the legis¬

'

potential'

be appropriated
'.
If legis¬
lation legerdemain is to pull any¬

their

security

that

of

r

money coming from?" The answer
to that is taxes, and "There shall

important that the real bur¬
of

gon,
news
release reported the
Contrite Townsend Club as saying,

plans

expansion

-

;

trend which

a

vital

catchy

loss
-

11

pub¬

;

probably be increased tc
/demands of enveloping

Government, tnis is

offset. the

The

in

temporary disability
compulsory health insurance,

Federal

.

when

peace

rates

now

to

product:1

j The fact that such new provi¬
sions are being groomed for

!

1.8%

Source:

timer

about

lature?

fits.

security legislation

-.'(Dollars in millions)j
" 1933 >
1940
1
$46,629
$78,347

1929

A

One

for

people produce at any given time
is the only source of
goods and

classifies

merce

Personal-income_^_;„Transfer payments^.-—

passed

produce

security bene¬
Money is merely a medium
of
exchange.
The coin of the
realm of security is work. What

-look-

$103,000,000 • a .year;
Was the State then facing bank¬
ruptcy?
Was
the
proposal- as

Money talks, but it doesn't tell
real story of social
security.
money

product

the Department of Com¬

dered")

only

the

security

current

Inthis 'category ("payments for
which no current services are ren¬

ranged from $50,000,000 to $200,000,000
annually.
The
entire
budget of the State of Oregon is

were

down
to
one
fundamental, the
question would be, how much can
we dish
up? and not, how much
shall we dish out?

social

the

to

con¬

war-connected payments not to be

much

compressed

Essentially,

equivalent

social

the promotional
stage;
Of coverage,

the

enue

social

security

tribution

although it

wages,
an

mately have to produce the

almost

heresy.
;; Neverthe¬
less, if all the
of

or

more analytical
majority of the voters
had... evidently
been,
that" the
people of the Slate would ulti¬

tions about it

talk

from rents

has "npt made

dollar

a

care -;,.

didn/t

It

voters ihad-

to

than

reserva¬

is

the

lose, and they passed; it,
Where were these pensions to
come
from, that? the Legislature'
was "to provide and
pay?" : It was

cial .."security,
that,V to have
any

different.

was

if

as

wide-

■+——-1—-—-

-provide

and

,

work.

at

men

the^——

belief

Jo

/£

a

Of the current product as

expected regularly. But this dif¬
ference would be offsetby- the
upsurge of payments under new

ser¬

sense

(167)

•

12

'

'

•

COMMERCIAL

THE

(168)

*

I

Bank and Insurance Stocks
By H. E. JOHNSON

be

number

a

of

firm

of the most

is the market fluctuation and

.of the stockholders,

Defends His Attitude.

good enough to print in your issue of Dec. 30
was intended for Wilfred May, the economist, and for other econo¬
mists. In last week's "Commercial and Financial Chronicle" I got an
The letter you were

trend of security

level in over

a

call him affec-

in anticipation of improved

and a half, possibly

year

t i

operating results for the first half of 1948.

reaction and most shares

about two months. After this
there began an upward movement which continued until the end of
the year and carried insurance shares to the best levels in over two
years. •
'
'/ ; + :'' + ■ ■
While these comments reflect the general movements of a selected
_

considerable variations in the
of stocks are still selling

list of insurance stocks, there have been

of

below their

and in
In

A number

companies.

various

peaks

Others have surpassed their previous
near the levels reached in 1946.

1947 highs.

some

are

cases

considering

remembered that

a

comparison the following

included.

and December 31, 1948 is

r,-:--/.-"-.;:.;-"

Aetna

Low: "

High

$

$

.

$

$

AV

Insurance,

76

-57

67

Insurance—

Agricultural

-

18%- 14%

-56

72

-

52

Continental Insurance,.

55 %

-44

64

-

48%

59%-46%

Hartford
Home

+

X';

32%- 26

26%

31%

+

23%

31%

+

8

-

23%

105

121

23

29

ser,

President and Secretaryrespectively, prior to

as

+ 16
+

6

general partner of the Jana¬

22%

+

2%

77%

87

+

9%

90

-30%

35

-

30%

31%

-

66

68

37

-

73%

31%- 23

—

•

33%

+

+

2%

76

+

8

23

31%

+

8%

+

+ 14%

Springfield Fire & Mar.

45%-37%

46%- 40

41%

44

U. S. Fire

53%-43%

60%- 45%

46

60%

It is of interest to note that all

of the above stock prices

2%

the high range for the year.
the

action of the Dow-Jones

1948 and $465,321,000 at the end of 1947,

the correct

$591,578,000. Considering this cor¬
rection, the deposit trend of First National for 1948 is the same as
figure for 1947 should have been

F. L. Putnam & Go.
and

ties

offices

at

is

made

Appoint, Ellis, Pope

Pine

30

Inc.,

Street,

Among other activi¬

York.

of purchasing
and
financing European invest¬
ments and deblocking of accounts.
L. D. Silberstein, formerly asso¬
ciated
with
banking
firms
in
Amsterdam and London, is Presi¬
is

the

purpose

dent of the

corporation.

&

nam

Giles Montanye

With

Alembers New York Stock Exchange
120 BROADWAY,

NEW YORK 5, N. Y.

Telephone: BArclay 7-3500
Bell

Manager Trading Dept.)




abuse

taxation

of

that the power
to tax is the power to destroy and
confiscate property. Quite recently

the
I
stated that there ought to be a
limitation on taxation in the Con¬

meeting sponsored by
National
Conference
Board
in

a

stitution.

I

profits a
impost."

relaxation of

marginal efficiency; and it avoids
some
of
the
inequities
which
might

the

under

result

excess

profits tax.
"In any event, the non-economic
elements involved in the choice
between these

in

or

it

make

two types

combination

a

that

clear

should

rest

of taxes,

of

the

broadest

the

on

two,

decision

the

grounds of policy." •
Sincerely yours,

proceeds to argue that

excess

an

profits tax, and

excess

an

that might lead to a

CORTNEY

PHILIP

guise
punitive

advocating "under the

am

of

under

high marginal rate

the

Jan.

1949

10,

.

L.

&

Free

Co.,

19

Street, New York City, an¬
nounce
that Giles Montanye is
associated with the firm.

Allan MacDuffie

Opens

Own Law Firm
Allan

MacDuffie

will

open

his

specialize in securi¬
ties and corporate law. Mr. Mac¬
Duffie
has
recently been with
own

in case

between two

corporate
have to choose

general

the

in

we

evils.

argument was simply that
maladjustments and distor¬
tions created by the war have left
My

the

situation making for a
very
defective operation of the
price mechanism and for the pun¬
ishment of those industries who
have not enjoyed a backlog of de¬
with

us

mand
then

a

pent up during the war. I
added that any increase in

in particular)

is

There

doubt that one of

no

worst effects of

with the

economic processes, it is

help as prompt a res¬
toration as possible of the normal
relations between the various seg¬
its duty to

ments of

our

economy.

else.

all

is

I

expressed a preference,
reasons, for a rea¬
and prior thereto was an attorney sonable excess profits tax rather
with the Securities and Exchange than a general increase in a cor¬
porate tax, much as I am opposed
Commission.
;o the very principle of an excess
profits tax. For the corporations
Firm Name Is Now
enjoying a privileged situation as
Ingraham

Jan. 3 the firm

of Van Lahr,

erations I
for

next

20, at the Cordon Club, 410
'Michigan
Avenue,
inas¬
much as Dr. Palyi has recently
South

returned

economic

conditions

that it will make

much of

months'

two

a

in

the

Marshall

so¬

Plan

countries.
Dr.
and

Palyi

born in Hungary

was

in

educated

Switzerland

and

in this
country since 1933 and is an Amer¬
Germany.

ain

has

He

ican citizen.

lived

His varied

in

career

countries, Great Brit¬

the United States, com¬
practical business activities

and

bined
with

academic

in

work

of

some

the leading universities both here
and abroad.
His
and
of

work

visiting

as

research

professor

economist for three

large universities has de¬
into broad literary and
platform pursuits. He has broad¬
our

veloped

the

on

Round

University of Chicago

Table

of

the

Air

the

and

Northwestern

ing

Stand;

news

University Review¬
and for a year was

commentator

for

radio station besides
ten

many

a

Chicago

having writ¬

articles for the

"Com¬

mercial and Financial Chronicle."

Gaines With Day,
(Special

result

I doubt

from

journ in Europe where he studied

of abnormal backlog of
demand built up during the war,

a

Palyi's views on "The Euro¬
Loophole Economy" at their
dinner meeting on Thursday,

Jan.

cast

said and nothing
In the light of these consid¬

This

offices to

chior
pean

Continental

inflation and
deflation is that it distorts the
normal
relationships
between
prices, costs, etc. To the'extent
that
the- Government interferes
the

Palyi

ILL. — La
Salle
Street Women are looking forward
with interest to hearing Dr. MelCHICAGO,

or

during the war.

pent up

Rector

now

doesn't

to

The

Financial

NEW HAVEN,
W.

Stoddard
Chronicle)

CONN.—William

Gaines has become associated

they pay" with Day, Stoddard & Williams,
20% excess profit rather than an
Stock Exchange, have promoted
Inc., 95 Elm Street. Mr. Gaines
Bank Building, was changed to increase of 10% on the total profit.
in the past was an officer of Ed¬
Harold J. Ellis to Sales Manager
Doll & Isphording, Inc.
Officers The Government
seems
to be ward M. Bradley & Co., Inc.

of

the

Boston

Robert W. Pope to Assistant

Sales

Manager.

Both have been

with the firm for some time.
Ellis

Teletype—NY 1-1248-49

(L. A. Gibbs.

any

There is no doubt

goods (automobiles,

Frederick L. Free Go.

Doll &

and

Laird, Bisseil & Meeds

against

for that matter in
wages, could only accentuate the
imbalance of our economy due to
an
abnormal demand for certain

MASS.—F. L. Put¬ Doll & Isphording, Inc.
Co..
Inc., 77 Franklin
CINCINNATI, OHIO—Effective

members

Street,

STOCKS

tax.

taxation,

BOSTON,

INSURANCE

Now, anyone who
"Commercial and Finan¬
cial Chronicle" may have seen a
number
of
statements
by
me

tax,

the

of

Meridian Indus¬

McLanahan, Merritt &

banks.

BANK

New

of the

Frederick

Industrial
Average which stood at 181.16 at the end of 1947 and closed the year
1948 at 177.30. While it must be recognized that undivided stocks in
the Averages have done better than the composite would indicate,
it is felt that the performance of insurance stocks during 1948 was
favorable and considerably better than other industrial groups.
Correction—In compiling the figures on bank stocks for last
week's column an error was made in one of the deposit totals of the
First National Bank of New York. Instead of deposits of $523,323,000
to

Announcement

formation

with the

higher at the end of 1948 than at
the beginning of the year.
While a few show only small changes,
there are some that show substantial gains. Another point of interest
is the fact that a considerable number of the shares in the above list
exception of New Hampshire were

avoids

Financial Company

with

25%- 21

it

that would exist in some concerns

is

To Hear Dr. M.

trial and Financial Company,

-20%

too, 'provided the increase
moderate,' the Council added.
has administrative simplicity;

tages,

Cortney

Philip

crease

25

-72%

It

28.

La Salle Street Women

42

25

cor¬

preference I expressed for an ex¬
cess
profits tax against an in¬

42

95

regular

Meridian Industrial

an¬

was

'/+'/ /;'+,+ +++

+ ; ±v

49

-40

in

poration rates* has certain advan¬

Strangely enough, Wilfred May
answer
any of
the eco¬
nomic reasons
advanced in the

it

organization

nounced.

106

45

inflationary.

increase

+ New York City.

95%

7%

re¬

increase prices;

wartime backlog

a

reli

41%

+

it

consumer;

reduce the pressure for in¬
in wages of a kind that

"An

you

Then he

Howard G. Paterson has retired

92

+ 10%

to

the

to

be

would

must refute,

year-end.

-

-40

81

for most other

Stone & Pey¬

Montgomery,

49%- 41

Washington

the end of

with

formerly

were

100y4-85y2 108

32%-23

at

Both

firm.

Francis

J.

associated

23

51 %-41

contrast

that

-

•-

in

now

is

30

55

near

and

Eckstein

as

-100

73%-63

is

been

partnership

5%

Security Insurance

This

120

Co.,

&

New York City, an¬
Benjamin F. Peyser
admitted
to
general

that

the dissolution of this firm at the

48%

St, Paul Fire & Marine

ended 1948

Janareli

Joseph
nounce

with

creases

have

I

profits

8%

41%

and

reads the

+ 11%

48%- 40%

122

Phoenix Insurance
-

Partner

as

Eckstein Rejoins Firm

+ 15%

28%-22%

River

Peyser

the

it may

Asso¬

Wilfred's presentation of
thesis. He says that I "en
thusiastically endorse" the excess

+

3%

tistical

shift

my

68%

+

duces incentive to

ciation
what

recession,; it is difficult

a

to

however,

Janareli Go. Admits

has

event of

American Sta¬

I

63%

15%

by
said

before

has

tax

advantages:

the

I

dated Dec.

55

60

stand

letter

Treasurer,

12%

willing

am

what

profits

excess

It is sensitive
to changes in
nusiness conditions,
and therefore will rapidly reduce
its demands on taxpayers in the

these

written in my

1%

44%

32

Fire

Providence

Saul

and

2%

11%

61

-23 %

Hampshire

North

69%- 53

110%-94%

Fire

Ins. Co. of No. America

New

securities,

Aal

+

44%

27

—-

Insurance

National

J.

+

31%-24%

American
—

unlisted

and

Clarence

broker

17%

5iy4-38y2

Hanover Fire

and

65%

-

(Newark)14%-10

Glens Falls
Great

are

'firm,

the

dealer

as

15%

15%-

-44

61

Association ■+

Fireman's

listed

in

in

Partners

acts

which

57

-13%

68

Fire

Golkin.

64

2-0

Fidelity-Phenix

+, S
+ 1%
+ 12%

61

58%

51

■

49

47%

Boston Insurance

American

$

+§+$

49%- 41

56%-42%

Insurance

from 1947
to 1948

Price Range
, Dec. 31
High
Low ;; 1D47
1948

Price Range

+7

115

Broadway,
Change

—Bid Price—•

1948

1947

+

Broadway, New York
City, has been changed to Aal &
kin,

Golkin.

tabulation presents the
market record over the past two years for a selected list of leading
fire insurance stocks. In addition to the price range for 1947 and 1948,
the market price at the end of the respective years is shown. Also
the change in the market value of the shares between Dec. 31, 1947
For purposes of

I
to

shares, however, it should be
number of companies have issued rights to sub¬

scribe for additional shares. In some cases this has reduced the mar¬
ket value of existing shares because of the matter of dilution.
V

"The

t e 1 y

a

friends.
Jerome C. Aal

individual

the

n

o

among

Following the rise there was a general
declined until the end of August or for

shares

general corporate tax in the pres¬
ent economic circumstances:

"Naughty
Will," as we

1948, the general market for insurance stocks
moved upward. By June it had reached the highest

and the first quarter of
turned firm and

<♦>-

from

answer

fluctuations during 1947

considerable period of trendless

a

"

Chronicle":

Editor, "The Commercial and Financial

The

shares.

prices for the various insurance

;

Replies to A. Wilfred May's "Observations" and Again

to review other happenings for the year just ended., One
important factors in this connection, from the standpoint

.'opportunity

On Excess Profits Tax

Aal & Gol-

the leading
provides an

information are available on the operations of
five insurance companies for 1948. The interim period

detailed

After

of Young,

name

yet before annual reports and

weeks

Philip Cortney States Position

Announcement is made that thfe

Stocks

This Week—Insurance
will

Changed to

Aal and Golkin
«

It

LETTER TO THE EDITOR:

Firm Name

,v

•

Thursday,- January 13, 1949

CHRONICLE

FINANCIAL

&

own

ton.

in

the

past

conducted

investment business
-

Mr.

his

in Bos¬

are

name

Willis E. Doll, President, and

Isphording, Vice-Presi¬
dent.
The new corporation will
continue to specialize in general
market municipal bonds in which
it has been engaged for over 18
Robert B.

years.

a

difference

whether

Isphording, Inc., Provident

aware

the

of

situation because I

economic mes¬
the following
comparing the relative

find, in Truman's
sage

to

Congress,

statement

merits and demerits of

an

excess

profits tax versus an increase

in

With Steiner, Rouse & Co.
NEW
R.

ORLEANS, LA.—George

Andry is with Steiner, Rouse &

Co., Maritime Building.

'

,

.

Volume 169

Number 4763

The
..

Commenting

COMMERCIAL

Forgotten Wai Debts
'i,

Y<

.<

•

THE

,''r'

'

'■

i

failure of the British Government

on

to enter into nego¬

In

position to demand scaling-down than at end of hostilities.

unnoticed; indeed very little attention is paid now¬
adays to the<s>
problem of lost their original character. They
the £3,500,- can no longer be regarded as war
000,000
war debts. Even within the totals held
debt owed by by any particular
country there
to

overseas

countries. The

misman-

gross

agement
this

of

problem

have

been

extensive

and postwar

Britain

is

This
in

now

ist

than

Stafford

Cripps in
Paul

Dr.

by

and

Sir

par¬

ticular, goes a
long way to¬

Einzig

the

on

road

Britain's

to

recon¬

struction.
It

is

did

not

Loan

pity

a

the

insist

in

United

States

negotiated,
that before the $3,750,000,000 loan
is placed at Britain's
disposal, all
debts

was

would

accordance

in

have

with

laid

down

ment.

This

'

that the

to

the

the

in

be

principles

Loan

Agree¬

have

would

claims of

meant

overseas

coun¬

tries would have had to be scaled

down, and the balance, apart from
reasonable

a

leased,

be

to

amount

would

have

had

re¬

be

to

funded for a long period.
Even
though most creditor governments
would

have

been

agree to terms

ain,
the
thanks to
have

reluctant

moral

been

to

acceptable to Brit¬

British

United States

Government,

support

by -the

Government, would

able

to

take

would

have

had

fall

to

with

in

line

American-

an

British funding scheme, as an al¬
ternative to a complete

blocking

of

their

claims

Y

period.

for

indefinite

an

-Y'YY'-

;

worse

after

At that time the

constituted

they

sterling balances
political debt. Now

a

constitute

mercial

largely

a

com¬

debt.

The
the

attitude

in

of

underwent

sterling balances
perceptible change

a

declared

his

forward

rendered

the creditor

of

by

putting
for

the

Britain

to

countries

during the
war by
helping to maintain their
independence and integrity. The
Prime Minister endorsed this atti¬

declared government
policy. Since
the advent of Sir Stafford
Cripps

little

very

claims.

heard of

was

He

counter¬

have

to

appears

abandoned the idea of
insisting on
a
scaling down of the balances.

Any Parliamentary questions try¬
ing to elicit V information as to
when
sent

the

government

counterclaims

the usual evasive

are

will

pre¬

met

with

ment,

Britain

has

dertaken to obtain
of

definitely un¬
scaling down

a

the

sterling balances. It is to
hoped that Washington will

be

remind

London

taking

is

in

0'-'

'

that

force

the

and

at

luncheon

meeting at

rant

a

Jan.<S>

11th.

*

which

1920

City S

Radisson

i t

Traders

y

Party

the

at

Hotel.

1940

to

Louis

miles

passenger

peaked

Last

billion

reached

120

during the

Traders

Club

St.

of

at the Chase

As
he

Pointing

Feb. 12, 1949 (New York City)

Friday Night Bond Club Annual
Dinner Dance

at the Hotel Penn¬

sylvania.
(New York, N. Y.)

York

Annual

Curb

Exchange

Election.

Feb. 15, 1949

5-9, 1949

(Colorado

Springs,

Colo.)
National
sociation

Security
Annual

Traders

As¬

Convention

at

The Broadmoor Hotel. >;

the

other

York

New

in

California

stores

Hollywood and
cities

now

are

national air transportation

ply to

a

trend

to

current

miles,
to

we

totalY of

every

normal

ceiling, for air trans¬
portation," he said.].
a

Looking

ahead,

he

stated

on

the future of inter¬

Convention

the Holly¬

at

wood Beach Hotel.

HOUSTON,

nationalism

practice of

that

making

five years the operational
regularity of the air lines may be
expected to be up from the pres

95%

and

to between

within

also

15

years

expressed
would

the

and

is

engaging

business

in

from

Homestead Road.

a

to 99%.

He

that

transconti¬

twenty-five

years

The greater convenience of
air travel will result in the grad¬
ual discontinuance of rail serv¬

service

and

services.

air

even

pay

be

further

without

reduced

any

The

the

to

in

1949

air

high personal

serv-

to

BOSTON,

gov¬

Bright Adds

The

Financial

Chronicle)

MASS. —Judson

.

JY

Cutler has become affiliated with

Elmer

H. Bright & Co., 84 State
Street, members of the New York
and

Mr. Damon described air trans¬
as a

E. H.
(Special

air

increments, he said.

portation

policy. When
privately owned

compete with

can

owned
and
sponsored
foreign lines, Mr. Damon said, "I
think
they can because I have
never seen a government operated
business of any kind anywhere
that could compete with a pri¬
vately owned and operated one."

losses

additional

whether

lines

similar

industry's

at

fi-

asked

ice, which will then be limited to

will

P.

secu¬

offices

98%

opinion

ho

be

97

transportation

Opens

and

air transport

ernment

within

commuter

TEX. —Walter

re¬

the tool of national

special shorter

Walter Thomson

in

question, Mr. Damon ex¬
pressed the view that the greatest
hazard to the growth of that phase
of the industry is the present day

ahead

see

night.

Touching

passenger

begin to

can

from New York to the West Coast

ol

hence.

investment Bankers Association

rities

of

branches

billion passenger miles. "With our

nental rail travel

Dec. 4-9, 1949 (Hollywood, Fla.)

4033

example of the ever grow¬
of air transport of freight,
pointed) to the fact that a

flying plane loads of merchandise

will

market

there

Thomson

Airlines

high

use

with

can

total

current

66%

time

war's

1947, to
in 1948,

American

all

an

ent

Dinner at the Hotel Statler.

Annual

month

number

one

and

in

shrink, Mr.
Damon ventured a prediction that
it
would
ultimately get down
nearly to its pre-war level of 30

travel

(Detroit, Mich.)

Detroit Stock Exchange Annual

Oct.

tbe

no

65%

the

after

74%

an

ing

miles

passenger

that

foresee how far

the

14, 1949

New

out

factor,

1938, soarea

industry getting about 6 billion

f

Hotel.

Feb.

That

in air
freight, according to Mr. Damon.

war,

about

billion

1946

dropped to

between

including troop movement and all
travel, may be expected to run
61

a

and will be less in 1949.

which

(St. Louis, Mo.)

Winter Party

factor.

in

82%

re¬

with

cost

lowering of the break¬

load

even

mile

which stood at 50% in

this year, Mr. Damon said.
Jan. 28, 1949

than

efficiency has

seat

sion years, and
at

e c u r

Winter

from

to

the

resultant

end,

Ralph S. Damon

the Hotel Sherman.

Twin

duced

Greater

except
for a
dip during the
worst depres¬

.

25, 1949 (Chicago, 111.)
Chicago : Bond
Traders
Club
party at the Bal Tabarin Inn ol

Association

pas¬

miles

per year

Dinner

1949 (Minneapolis, Minn.)

30

senger

Jan.

Jan. 26,

about

billion

1949 (Chicago, 111.)

Meeting at Cordon Club.

miles

passenger

sonnel.

tion of Stock Exchange Firms An¬
nual Winter Meeting.

Women

more

three years ago but with less per¬

at

Governors of Associa¬

Street

and

was

fairly constant

Jan. 20-22, 1949 (Buffalo, N. Y.)

Salle

Restau¬

industry which in a period of
rising costs feels severely the
squeeze of higher operating ex¬
penses.
American
Airlines,
he
stated, is flying more plane miles

railroad, bus
and plane,

curities Dealers, Inc.

Oldelmonico

Oscar's

ice

total

travel market,

of the National Association of Se¬

La

on

The

under¬

mush be

York

(Sea Island, Ga.)
Meeting of Board of Governors

answers.

And yet, under the Loan
Agree¬

New

1949

tude, which had thus become the

honored.

v

intention

counterclaims

services

(Baltimore, Md.)

the Lord Baltimore Hotel.

Jan. 20,

transcontinental rail travel

no

quarter century hence.
The air transportation industry is
getting a constantly bigger
piece of a constantly shrinking travel pie, Ralph S. Damon, President
of American
Airlines, told members of the Investment Association of

Field

Baltimore Security Traders As¬
14th Annual Banquet at

Board of

13

Ralph S. Damon, President of American Airlines, tells Investment
Association of New York there will be

sociation

Security

government's

matter

when Sir Stafford Cripps replaced
Mr. Dalton as Chancellor of the

strong

a

line, and the creditor governments
eventually

much

immediately

was

Jan. 14, 1949

(169)

Foresees Predominance of Air Travel

scaling down

1945, when the Exchequer. Mr. Dalton repeatedly

Agreement

war

a

the termination of the hostilities.

nulli¬

wards

fying their claim of achievements

she

that

means
a

position to demand

ment,

of

sterling balances has

by the Social¬
govern¬

changes

ownership. To a large degree the
dividing line between wartime
disappeared.

Investment

Jan. 17-18,

LONDON, ENGLAND.—The temporary agreement on Egypt's
wartime sterling balances expires on Dec. 31, and negotiations have
been initiated in Cairo for its renewal.
The report announcing this

Britain

CHRONICLE

EVENTS

!

tiations
to; scale down its foreign war debts as required by the
Anglo-American Loan Agreement, Dr. Einzig points out because of
shifting of ownership and the commingling of these debts with ;
others, the dividing line between wartime and postwar sterling bal¬
ances has
disappeared and, because of this, Britain is now in worse

has passed almost

FINANCIAL

COMING

By PAUL EINZIG

...

&

Boston

Stock Exchanges. He
previously with Townsend,
Dabney & Tyson.
was.

■

Instead, the British Government
allowed things to drift.
An un¬

duly

large

balances

form
a

of

part

the

sterling

repatriated in the
purchases in Britain, as
was

of

result of which Britain's
capac¬

ity to export to countries which
paid in goods or hard currencies
was

correspondingly
large amounts

reduced.

Further
leased

in

dollars

in

were

re¬

series

a

of

temporary
agreements.
Britain
has thus used up the dollars avail¬
able for this purpose without se¬

curing in return either the fund¬
ing of the debt or its scaling
down.

As

power

to

consent

down

a

to

funding

has

creditors'

scaling

or

,

dwindled

down

con¬

Further, large amounts

been

during

the

secure

siderably.
have

result, its bargaining

converted

the

period

into

of

dollars

sterling's

convertibility, as a result of the
inadequacy of the control that
should

have

prevented

version of old
In

the

spite

of

con¬

sterling balances.

of

size

the

such

reductions

ain's

external
to

seem

much

1945.

Britain has

been

This is

because

the

been

dollar

sufficed

adverse, and that

assistance

for

The

net

the

has

meeting

sterling

result

of

the

the

Not

sion

of

Minneapolis

of

Building.

Grady

Common Capital Stock

Clark,

General

Sales

(Par Value $10)

Manager
of
Investors Synd i

t e,

c a

in

making

Price $30

the

of

some

added

balances




of

have

Share

Mr.

thai

Warme

would be

nected

con¬

Copies of the Prospectus

with

Roy

H.

Warme

us

Minneap¬
office

may

may be obtained from such of the several underwriters, including the undersigned,
legally offer these securities in compliance with the securities laws of the respective States.

of

company.

Mr. Warme started with Honey¬
well as Sales Promotion
Manager,

Union Securities

and had been with them for eight
Past President of the Sales

years.

apolis,

he

Director
ation

of

is

of

of

presently

The

Minne¬

Regional

National

Corporation

Stone & Webster Securities Corporation

White, Weld & Co.!;

Feder¬

Sales Executives.

A. C.

Allyn and Company

Equitable Securities Corporation

Incorporated

Albert R. Spearow Opens

Inn Hotel

sterling

increase

per

announcement

that, the

the

144,200 Shares

Roanoke

those of other countries has been

and

solicitation of an offer to buy these securities.

Mississippi River Fuel Corporation

Investors

Syndicate,

BUTLER, MO. — Albert R.
Spearow 'is engaging in a securi¬
ties business from offices at the

countries

a

New Issue

Honeywell,

deficit.
of

a

or

Hoy

barely

decline

balances

—

has just joined
the sales force

borrowing from Managers Association

natural, seeing that her trade bal¬
has

MINN.

offer to sell

offering is made only by the Prospectus.

Warme, formerly General Sales
Manager for the Moduflow Divi¬

the

■Peter to repay Paul.' This is
only
ance

MINNEAPOLIS,

olis

floating debt does
changed very

an

H.

in

have

since

Investors Syndicate

wartime

individual

This advertisement is not

—The

the

balances, the grand total of Brit¬
not

Roy H. Warme Joins

Building.-.

Hornblower & Weeks
January 11, 1949

•

Tucker, Anthony & Co.

G. H. Walker & Co.

14

(170)

THE

■

COMMERCIAL

&

Thursday, January 13, 1949

FINANCIAL CHRONICLE

:

Reynolds & Co.

Public

Affiliated Gas Stocks
nationwide

A

Co. is offering today

Rapidly strengthening support for the St. Lawrence Seaway and
project suggests that action may be forthcoming at last on
this long mooted scheme. Urgent power requirements in the Province
of Ontario and the State of New York have, accentuated the neces¬

Power

sity for the development of addi-^——1——
—
~-jsources of supply. The U. S.
live -, shipping route in the world-

tional

has

long

tmpetus

envis¬

would

aged the ultimate development of

construction

the Seaway and the local practical
demand on both sides of the St.

be

given to

the

to

gives

.

the Midwest section of the United

States, apart from consideration
of competition from the Canadian
side of' the border.

NOW however

the alarming decline of the ironore reserves of the
great Mesabi
J

the glowing promise
Quebec-Labrador deposits

and

range
of

the

as

a

main

has

ply

future

changed the
;;:v
v ;
Seaway
there

-.

the

Without

the

be

rador

sup¬

completely

picture.
would

of

source

probability of Lab¬
moving down from the

ore

of

Canadian

new

ports which would provide access
markets
for
Canadian
raw

appropriate im¬
petus to the long range plan. *,
Until
recently
strenuous
op¬
position to the scheme had em¬
anated from the powerful ironore producers of the U. S.
Great
Lakes
region.
Previously these
interests were of the Opinion that
insufficient
tonnage • could
be
moved Over the Seaway to benefit
Lawrence

materials

which

are

immo¬

now

bilized for lack of transport facil¬
ities.
This
would further
en¬

the' establishment of netv
connections to tidewater and
thus lead to inore active develop¬

ment of the Canadian hinterland

mence

to

rival'that of

its

U.

S.

counterpart.'
4
i
As far as general considerations
.

concerned

great constructive
enterprise of this kind could! not
are

fail

to

ity

on

sides of the border.
growing indica¬

both

with

in. this

tions

activ¬

economic

country of

a

natural

trend in the direction of economic

recession-

board

ployment, it is timely to consider
the
St.
Lawrence- Seaway
and

to

that

existing
On

area.

plants

new

or

other

the

hand

increased

and

with

the

Power

way,

ore

public :works

completion of the Sea¬
could be transported 300
miles. by rail to tidewater on the
St. Lawrence and then 1,00.0 miles
to Cleveland,
Ohio.
(Lake Su¬
perior ore now moves 850 miles
by water from Daluth to Cleve¬
land.)

*

"

■

•:

.

i

•

'

From

the

Canadian

angle the
securing an exist¬

possibility of
ing stable outlet for the huge
potential production of the Que¬
bec-Labrador field is a powerful
ill

factor

itself

Seaway.

in

favor

the

of

as

a

constructive

project.

It would

also

play a. notable role in the
general scheme of U. S.-Canadian
iefense, in the operation of which
coordination

the

of - U*

S.-Cana-

other

natural

which

the

the

U.

Midwest

S.

resources

Dominion

is

w

ternal section of the bond market

but Dominion internals displayed
steadier tone
following their

a

decline.

recent

so

also

firmer and

Free

funds

were

were

of

cessation

a

November bond

redemptions. The
.orporate-arbitrave
rate
also

showed notable strength.
Among
the. stocks the gold issues were

Al¬

European ports without
transhipment
'i

again the best performers.
though recurrent rumors of

Although Canadian opinion is
unanimously in its favor, nev¬
ertheless the implementation of
this ambitious plan could have a
revolutionary effect on the Cana¬

impending rise
in the official
price of gold assisted this move¬

,

not

dian

economic

sealane
with

hub

scheme.

connecting

the

Great

would

The

the

real

basis

of

strength
in Canadian gold shares is the
improved technical situation of
Dominion gold-mining indus¬

the

try, the deflated condition of this

industrial

Lakes

become

new

ment

an

Atlantic

section of the market, and the un¬
derlying belief .that in. a world of
uncertain values gold offers sta¬
bility and certainty ~ of ultimate
profit. Western oils on the other

the
the

most

ac-

CANADIAN BONDS

share

per

the

and

$9.25 per share.
In

addition,

hand showed a reactionary ten¬
dency after their long sustained
advaince, and the basemetal and
,

industrial

issues, 'were

irregular.

dull

';-";

and
u

..

the

through

;

1964.

1,

the

the

of

sale

shares

common

certain

to

the

of

qf

Manufacturing

Co.,

and

system

^

Industries,

the

private" placement

■

of

notes will be used in part to pay

the

for

all

the

liabilities,

subject to

assets,

of Bryant,

&

Night and Payne; to finance .the
capital expenditures of Affiliated
Gas

during the next

and for

12 months;

working capital and

eral corporate

"-detachable

no

chase

.

,

The

\

share

one

of

Of

chase

to

pursuant

of

the

preferred stock.

three

N.

H.—Cooke,

Jen¬

MUNICIPAL
CORPORATION

offices at 71 West Pearl Street, to
engage in the securities business
R. L.
new

Cooke, Jr., a principal of the
organization, was formerly

sale of part

&

*

or

respect

While GPU

u

v..;-.'

corporations

:>■;

'.

thus not committed to any

early sale of properties
'eXceot for the initial sale of part or all of the New York State
E & G stock), and the eventual decision might, be tu distribute some
is

of them to GPU stockholders,

V.

whose

it may be of interest to estimate how
currently from their sale. System earn¬

ings in 1948

estimated at $2 a share, exactly the same as in 1947.
earnings of the-subsidiaries to be dis¬
as follows:

are

acquired by Affiliated
completion

posed of

Gas upon

York State Electric & Gas___—

Rochester

engaged primarily in the business

Staten

of manufacturing und

selling

gas
:

Gas

Island

Canada

heating equipment, water heaters,
water

were

New

r.

of this financing, aije

&

—

Electric

]

•

79.363

Power

Philippine

-$4,064,596
2,172,510
575,747

Edison

Subsidiaries

1,515,491

coolers, and allied miscel¬

laneous products used

Total

by the gas

:

-

—-

:.$8,407,707

H

All of these stocks are

fully owned, so that there are no markets
in minority stock to serve as a guide. If New York State E & G, the
tial, commercial and
industrial
;',J
largest property, is to be sold through an offering of GPU rights
markets.
If is the intention of the net yield to the company may be slightly lower than if it were
the company to continue this bus¬ offered by direct sale to the public. Also, the Philippine subsidiaries
iness and to expand into the pro¬ cannot be valued on as high a market basis as the New York subheating industry for the residen¬

'

duction and sale of similar

equip¬

*

using allied fuels.

i

business of Bryant,
and Payne

Day & Night

into Affiliated Gas, the

problems of engineering and de¬

sign,

production,

advertising

markets

should

Judging from current market prices of unseasoned utility
stocks sold or distributed to the public in 1948, it appears likely that
the above securi^es rould only, be sold to average about eight times
earnings, after allowing for hanking commissions and expenses. On
of eight times 1947 earnings, therefore, the total amount
realized would approximate $67,000,000. This is just about the amount
the basis

required to retire-the combined debt of the two holding companies,
anything for the construction program. However,

and does not allow

System earnings are expected to improve as the result of the present
national (construction program, the recent rate Increases,- and future growth

to

receive

closer

(particularly, in the Philippines). Also, present market multiples of

control and coordination than has

earnings are well below normal and any future improvement should
permit realization of a substantially larger amount thdn the $67,Q00,009 estimated above.

Western Canada
Oil
A. E.AMES & CO
-

■

i

INCORPORATED

•

possible heretofore.

Pro forma

canadian stocks
The

(

Industry

Information

Available

NEW YORK 5,

N. Y.

1948

31,

r\

Members Toronto Stock Exchange
WORTH

4-2400

NY




1-1045

61

Broadway, N. Y.

WHitehall 4-8980

Direct voire to Toronto

as

much holding

company

debt as is permissible.

Other integrated

after

tion of Bryant Heater Co., Day &

Night

Manufacturing

Payne

Furnace
assets

Co.,

of

Co.

596.
year

Combined net

shows total

890,540
31, 1947.

versus

$3,908]-

profit for the

ended Oct. 31, 1948,

246,314,

^anjd

$13,821,032, and

total current liabilities of

Charles King & Co.

,

holding companies such as New England Electric System and Cen¬
giving effect tral & South West have been allowed to retain debts and N'ew.
England
this financing and the acquisi¬ Gas & Electric has both bonds and preferred stock.
Sale of common

Oct.
to

5

It would of course be advantageous to GPU stockholders to retain

balance sheet of Af¬

filiated Gas Equipment, Inc. as Of

current

TWO WALL STREET

'

distribu¬

sales

tion, and

1

sidiaries.

been

in business for himself in Nashua

-

Gas

improved earnings.

$3
,

Through the integration of the

NASHUA,

'

»

business and properties are to Jae< Nineteen
forty-seven equity

ment

kins & Co. has been formed-with

(5) it will* be

'

much cash could be realized

The

bond indenture;

cipally Manila Electric) remains in the indefinite future, because the
rehabilitation program following the war has not been completed
the
expansion .now
taking place is bringing substantially

15.

warrants,-. will

redemption

or

in the

restrictions

to accounting and financial readjustments (some of
questions have been successfully appealed to the New York
courts). And sate or distribution of the Philippines properties (prin¬

be. applied* exclusively to The purr

cumulative

other

and

shares,

common

are:

these

Net proceeds from the sale

the exercise of the

latest plan

At any rate, two immediate steps are

with

for

each share of preferred at a price

1954.

the Philippine Islands. Three

contemplated if the SEC
all of the common stock of New York State
Corp. by an offering to GPU stockholders; and an
accounting reorganization of Associated Electric which would facil- '
itate resumption of dividend payments to GPU. Sale of the common
stocks of Rochester Gas & Electric Corp. and Staten Island Edison
Coip. mav have to await clearing up of certain issues which have
arisen between GPU and the New York Public Service Commission,

ptir-

of $11.25 per share up to Jan.

*

:

to Associated Gas & Electric which in: 1940

1

approves:

warrants

common'

The' system ^;

Total system cash needs therefore appear to be $81,000,000 if all
But th.e program is flexible and need not
be completed at any particular time limit. The most pressing require¬
ments1 are of course the construction program and GPU's near-term
bank maturities.
Substantial reduction :of the Associated Electric

Electric

;

-

electricity
successor

-

'

with annual revenues of about $100,000;-'V
to 743,000 customers and gas to 65,000

.

1

purposes^ include

Payne.

This wouli^ Iteave
New Jersey*,

for GPU to provide some $15,000,000 equity money for the
construction program in 1949, and probably more in later

sibilities.

gen¬

ing the repayment to Dresser.

filing

was

debt, it may be conjectured, might permit refunding the balance and....
thus getting rid pf the bothersome indenture provisions'.
It might
also be possible to merge Associated Electric and GPU which should
facilitate retainihg some holding company'debt. Such debt might
well be a convertible debenture issue, possibly with a sinking fund.
However, the "present GPU plan makes no mention' of these pos¬

all

Day

that it

debts were to be retired.

Inc.- The proceeds tohe, received
from

one,

years.

Co., three wholly-ownedi

subsidiaries of Dresser

large

a

*

'

"

necessary

Payne

'

-

,

Philippine subsidiaries.

and

,

because of

Bryant Heater Co., .Day & Night

Furnace

.

.

to

liabilities,

«

recently announced

(1) Probable reluctance of the
SEC to approve a three-state system, or to permit gas services to
be retained by the New York companies; (2) sale of at least one of
the New York subsidiaries (Staten Island) had been contemplated
for some time; (3) Pennsylvania subsidiaries are now controlled by
the sub-holding company, Associated Electric;
,Cprapahyjv''Mrfth^
y•
000,Q00 bonds outstanding, and because of indenture provisions Asso¬
ciated cannot pay dividends to GPU; (4) it is also ^difficult to finance'
the present construction program of Associated Electric subsidiaries

subject

purchase all of the assets,

•

•

integration'plan which would: eventually elim¬

new

Reasons for the

;<anid

used

•

.

15-

through

be

'

the number had been reduced to 36 in five states and the
Philippines, and at present there are 20 subsidiaries. The new plan
would cut this to nine, in three areas.

Rey¬

preferred

'

-

Utilities

years ago

f

will

•'

controlled-182 companies' in 27 states and

has

'

.

Proceeds to be received

GOVERNMENT
PROVINCIAL

a

•GPU .is. the

sinking fund notes,.due Feb.

year

1

'

Public

customers.

L.

.

company

privately,

placed

;

Cooke, Jenkins & Co.

* '•

would, still be

at

common

nolds & Co., $4,000,000 of- 4-%

sus¬

lav¬

V

five major operating subsidiaries in Pennsylvania and
which in. turn would control four small er companies.

,The

Inc.

.

inate tha,New York

stock of Affili¬

Equipment,

"

preferred stock is offered at $50 .000,: "supplying

of

of the

i t h

Arthur to

common

indi¬

there

that has
been in evidence since the heavj

ishly endowed. It is also possible
that prairie grain might eventu¬
ally
be
delivered
from
Port

shares-of

u'

«.

with the SEC

1,000,000

and

entitle preferred holders' to*

tained gelling 'pressure

of

warrants,

Gas

'

■

General

stock

common

purchase

During' the week there was a
minimum of activity in the ex¬

cations

heart

non-aetacnable

ated

s

borrowings by Day & Night and

trial

to

shares of

preferred stock, with

industry and the greater dc/elopment of Canadian natural
resources are important factors.

dian

iron-Ore
Canada would also be able to ship
at low cost directly to the indus¬
In

addition

.

scheme

unem¬

General Public Utilities

<

a

stimulate

Moreover

of 40,000

cumulative

of

St. Lawrence to the Atlantic Sea¬

in

issues

new

bordering

on
the Seaway.
In
accessibility to
sources
of
raw
materials, loWcost power, and the availability Of
convenient factory sites, industrial
activity.011 the Canadian side Of
if the Seaway would soon com¬

(Thursday)
'*

courage

rail

view

By OWEN ELY

derwriters headea by Reynolds &

By WILLIAM J. McKAY

Administration

Utility Securities

of .94 un¬

group

was

$2,-

stock holdings at eight times

earnings, with proceeds used to retire debt

(in effect) some 20 times earnings, works to the disadvantage
of stockholders by reducing share earnings sharply.
In the present
instance it is estimated that consolidated system earnings might
at

shrink from $2 to arourid $1.38 per share and parent compatiy earn¬

ings from $1.02 to an amount barely sufficient to cover the 800 divi¬
dend rate,

if the whole plan,were immediately consummated.

net profit of $1,~ the earnings picture. <
!
'
year ended Oct.
President Tegen, in announcing the plan, stated that it is impos¬
' ■■ '-.v.-";.. sible to calculate pro forma earnings at this time because of the in.

the

for

'

Reteh- *'

tion of some holding company debt would permit greater flexibility
in the sale of New York and foreign holdings, and-Would also improve

Volume 169

definite

character

security sales
Public

Number 4763'"

of

the

are not

Utilities

THE

its timing.

and

program

COMMERCIAL

He stated

in

"Such

expected to affect adversely earnings of General

Corporation available

for

dividends

common

to time."

Furthermore, he said, the reduction of bank

Utilities

current

income

the

class

$5,000

living

made

sity for amortization of such bank debt.

Federal

Reserve

in

duced

System.

(H.

of

net'savings have become rapidly

SEC

in

,

the

higher

Lyle
i

individuals

10%, as a
matter of fact the many American
individuals"
earning
less
than

The

Tri-City parties of the National Security Traders Association
will begin with the annual winter
party of the Bond Traders Club of
Chicago at the Bal Tabarin of the Hotel Sherman; Chicago, on Jan. 25.
The

that

Special

will leaver the next afternoon for St. Louis.

cars

curity Traders Club of St. Louis will entertain the visitors
day, Jan. 28, with the annual dinner at the Chase Hotel. -

The

the

Interstate and Foreign Commerce.

The Se*
Thurs¬

"conclusions", drawn

above

CITY

The

SECURITY

Executive

TRADERS

Committee

of

Association

A
Twin

of

City Se-:

curity Traders Association has appointed the following committees:
Membership—C. C. Rudd, Chairman, Piper, Jaffray & Hopwood;
E. R. Gearino, Marquette National
Bank; P. E. Matche, Paine, Web¬
ber, Jackson & Curtis, St. Paul.
Executive—D.

N.

Anderson, First National Bank of St. Paul;
Peafcody & Co.; R. S. McNaghten, Williams-

D. F. Goodman. Kidder,

McNaghten

Co.
Entertainment—H.

v

within

:

Rice,

St. Paul.

Chairman,

Irving

J.

Rice

&

Co.,

7

j "(3)

The
leased

its

Organizations

proposals for tax revisions, in

(CIO)

elaborate

an

Jan.

on

9

brochure

pre¬

is

now

onstituteu

c

that

rel¬

even

atively
tax

small

cuts

ben¬

efiting

the

ty,

revenue

mere

no

dickering with
expenditure,:,
will

result

savings
cient

in

suffi¬
to

re¬

duce taxes for
S. H.

the

Ruttenberg

average
and

man

tain

at

the budget

the

time

same

other

."It

does

that

income

not

taxes

follow,

for

tax

viduals

are

however,

reductions

in

low-income indi¬
await

must

decreased

budgetary requirements. Alternar
tive

sources

be found to

can

pensate for the

revenue

attributable

tax

income

to

reduction
for

cuts

persons.

com¬

low-

•

vidual
tax

placed

was

income

increases

not

the

profit

paring
now

has
to

all
may

in

$21.8

from

billion,

curities

from

billion,

and

ex¬

by

com¬

corporations
on

$10.8

hand

billion

government

$2.2
net

did

Cash

billion

working

to

se¬

$13

capital

from $24.6 billion to $59.8 billion,
by the second quarter of 1947.
The
rate

mid

trend

of accumulated

savings
1947.

has

to

Securities

the

Commissions

$63.9 billion.

in¬

Cash

on

hand

securities

ment

declined

to

as

new

a

amended,
sentence

is

generally

as

recognized

by

end

transaction

of

such

As

with

long

production hold up, operation
within the bounds of a budgetary

advisable,

seems

of

at

revenues

i.e.,
least

should

which

taxes cmong

the

for

higher
(4)

(3)

groups;

rates

amount of

first

for'furnishing

mortgageV 5%

sinking

quarries,

The

1954.

in¬

fund

bonds

well

as

several

stone

lime

kilns,

as

sells sand and gravel.

Com¬

pany's business includes contracts

7

due

accrued

outstanding bonds. The
operates

company

Valley

and

bonds

and

100

at

Investing
Co. Inc. of Utica, N. Y., has suc¬
cessfully placed an issue of $295,000 Eastern Rock Products, Inc.,

for

incomes

loopholes

This is tinder

reduced

large

on

offered

were

such

supplies

for

highways, etc.

new

personal

carry-over

lower

closing

the

"No rule

recommenda¬

increased

(2)

low-income
rates

revised tax

a

redistributes

CIO

(1)

are:

ob¬

corporations, wealthy
and
low
income

individuals,
groups."
Among

be

follows:

terest from Jan. 1, 1945.
Proceeds
will
be
used
to
retire
a
like

East. Rock Prods. Eds.
Mohawk

as

exempted security."

an

Valley
The

equal expenditures.
Revenues

respect to

sentence

new

a

employment

as

and

maintenance

paragraph

an

circumstances to be construed

no

offer to buy,

and

solicitation of

or as a

The

as an

offering of this Common Stock for side,

offer to buy,

an

offer is made only by

or as

of such Common Slock.

any

of the Prospectus.

means

incomes;
on

NEW

ISSUE

January 10, 1949

;

a

tea

estate

elimination
taxes,

and

of

and

(9)

gift

tax;

wartime

higher

(8)

400,000 Shares

excise

corporate

taxes along with excess profit and

Koppers Company, Inc.

undistributed earnings taxes.

Is the "Fair

"While not much change

red in current assets
hand

on

tern:

$12.6

billion.

United

and

ernment

sucn

"as casli

States

($10 Par Value)

Gov¬

Keyseding and Rukeyser

securities, large increases

ventories
stead of

in

the

past

year.

bate

question

at

New

to de¬

School

In¬

.

corporations' further im¬

proving their liquid asset position

througn cash and government se¬
curities,
increased
assets
have
into enlarged

Common Stock

occur-?

have occurred in the value of in¬

_

"The New Truman Administra¬

tion—Will

Its

Policies

and

Price $31 per

Plan¬

share

ning Lead Us Toward Socialism?"
will be the

topic under discussion

inventories. It

is clear from developments of the

past

that

increasing'of

in¬

ventories has not been at the

ex¬

year

reducing cash

of

pense

and

on

hand

government securities.

porations

continued

to

Cor¬

show

Copies of the Prospectus

may be obtained from any of the several
underwriters, including the undersigned, only in Slates in which

a

such underwriters

strong favorable position as a re¬
sult of: (1) elimination of excess

and

in

which

qualified to act

are

such

Prospectus

as

dealers in securities

legally

may

be

distributed.

corpo¬

continued

since

By the middle of 1948,

working capital of American




taxes, and (2) the con¬
tinued pricing policies which have
resulted in the highest profit lev¬
els
in
the history
corporations.

tax.

tax

seen

of

1939.

increased

profits

wartime

the

condition

and

indi¬

Corporation

profits
be

em¬

the

concentrated

excess

excess

remove

cess

tax.
were

mainly in the
That

on

at the. end of such paragraph

profits

-"During the war, primary
phasis

creased

gone

substantial

by

Exchange

re¬

in balance unless

increased.
•'

compiled

and

holdings of United States Govern¬

losses.

(b) of section 10 of the Securities Exchange Act of 1934,
is amended by adding

porations,

of
corporations increased
slightly to $22.4 billion while the

tax¬

involve

by the Senate and House of Representatives of the
America in Congress assembled, That paragraph

of

experts.

—^—p0r-\

—

large

payer

Thus

-",fi •'

—

would

average

debt

higher
income brackets; (5) doubling the
excluding banks and
,rate on capital gains; (6) removal
insurance companies, according toof tax-exempt
interest; (7) an in¬
data

sot>H

States

the

tions

pared by its Department of Education and Research, headed by Stan¬
ley H. Ruttenberg. According to the document, "the Federal tax sys¬
tem

reductions in

Be it enacted

United

regulation adopted pursuant to this paragraph shall apply to any

•

re¬

of the

at

exemptions;

Congress of Industrial

of

budget.

tained, however, by

corporations and wealthy individuals. Defends capital gains and
undistributed profits taxes.

■>

or

structure

Education and Research Department issues brochure
recommending ;
substantial tax cuts "for the average man" and increased levies on

•

transactions in exempted securities.

framework

The present

"(5)

Program ?

7

Exchange Act of 1934, so as to limit the
Securities and Exchange Commission to regulate

com¬

to

CIO Reveals Tax

v

.

Securities

fortably within the range of safe¬

surplus
J.

the

as follows: "No rule or regulation adopted pursuant to this paragraph
expenditures are not possible un¬
til national defense, international shall apply to any transaction with respect to an exempted security."
Sec. 2. Paragraph (1) of subsection (c)
obligations and veterans' costs are
of section 15 of the
sharply curtailed,
Securities Exchange Act of 1934/~as amended, is amended by adding

•

Bank.

Publicity—Irving

the

the proposed

"(4)

L. Field, Chairman, Jamieson &
Co.; A. H.
Rand, Jr., Woodard-Elwood & Co.; R. K. Pillsbury, First National

power

are:

Substantial

ASSOCIATION

the

analysis

from

Hinshaw's bill is as

Bill

A

amend

] "(1) Immediate, substantial tax
sible

•

TWIN

The text of Congressman

follows:.

Carl Hinshaw

To

cuts for the average man are pos.

on

made."

regulatory action by the SEC
(c) (1) of the Securities and Ex¬

15

•

savings

It is essential, therefore,

be

23,
1943
by - Congressman
Oklahoma which specifically
dealings in State and municipal

from

Sec.

shift in tne burden of tax¬

a

ation

Twin

favorable

a-

tne

change Act of 1934, but failed to reach the floor
of the House and thus died with the-Committee

have not been able

year,

position.

City Security Traders Association will be host on
Wednesday, Jan. 26, when special cars arrive from Chicago, and will
entertain out-of-town traders and
guests at the Hotel Radisson, Minr
neapolis. A cocktail hour will precede the dinner and a
lively pro¬
gram has been arranged.
t,

a

maintain

to

of

power

of

Boren

securities

on

$5,000

TRI-CITY PARTIES

the

Jan.

on

H.

under

the-top

not,amongst

Securities Exchange

the*

limit

to

as

armed to remove

favorable

a

position,

asset

so

regulate any or all transactions in ex¬
securities.
A similar bill had been in¬

troduced

been able to maintain

liquid

to

amend

to

1934

empted

in¬

levels.

! "Thus, while corporations have

NSTA Notes

Carl
Hinshaw,
Republican
California, on Jan. 3 intro¬
House of Representatives a
bill

the

420)

R.

Act

concentrated

amend

Representative
Congressman from

ana

Since the end of the war, current

come

to

all regulations from exempted securities.

remove

by the Board of Governors

the

of

b£C Acts to

recent study

a

15

Boren Bill Revived
Representative Carl Hinshaw introduced bill in House

lower

and

saving less

are

less, according to

neces¬

(171)

and to buy many of the

in

viduals

debt of General

Corporation will relieve the company of the

meet

to

CHRONICLE

tilings for which they waited dur¬
ing tne \var. Many more indi¬

earnings of Associated Electric Company upon lifting of the dividend
restriction may become available to GPU in an amount
approximately
equal to the dividends on the securities which
may be sold from time

Public

order

expenses

since

FINANCIAL

&

cor-1

of, Americaa

The First Boston

Corporation

"The favorable savings position
of

corporations

witn

the

fact

may

that

be compared
for

1946

asset

families, ranked by
holdings, held 1% of total

individual

savings, r The

of

by

savings

backlog

corporations,

plus

the fact that corporate profits are
at

an

all-time

Leon

H.

Keyserling Merryle S. Rukeyser

high,

suggests
increase in cor¬

reduced
sons

taxes for low-income per¬

is necessary.

"Low

tinue

an

to

income

be

individuals

victims

of

con¬

inflation.

Their savings are being liquidated

Ripley & Co.

Blyth & Co., Inc.

Incorporated

at

the

third

forum

dinner of ihe

season of the New School Associ¬
ates to be held at the New School
for
Social

Research,
66
West
Twelfth Street, on Tuesday, Jan.
18, at 6:30 p.m.
Merryle Stanley

Rukeyser, widely syndicated col¬
poration taxes to compensate for umnist, will speak on the affirma¬
strongly..that

Harriman

the

lowest 40% of

GoldmanJ Sachs & Co.

Lazard Freres & Co.

Stone & Webster Securities
•.

7

■

■

•

'
,

Union Securities

,

\

•

•'

-

-

.

"

'

Corporation

,

T

.

'

Corporation
*•

■

\

'■" /

W.C.Langley &Co.

tive;

Leon H. Keyserling, ViceChairman. Council of Economic

Advisers, Executive Office of the
President, will speak on the nega¬
tive. A. Wilfred May, economist
and

publicist, will preside.

White, Weld & Co.

Hemphill, Noyes & Co.

16

THE

(172)

COMMERCIAL

lar

&

manufacturers

tirement.

*

News About Banks

The High

CONSOLIDATIONS

of business
Trust

CAPITALIZATIONS

dent,

S.

President

Kleeman,

of Colonial Trust Co. of New York,

the

of
Harry S. Rowley as Assistant Sec¬
retary and Treasurer, and of Rob¬
ert J. Bulkley, Jr., as Public Re¬
lations Officer.
Mr. Rowley has
announces

with

been

last

the

appointment

Colonial Trust Co.

two

Assistant

was

Luckenbach

for

He formerly

years.

Treasurer

Steamship

the

of

Co.,

Inc.,

and for several years was a mem¬
of the

ber

Co.

Trust

the

staff of

Guaranty

Mr..

Bulkley, who has
Colonial's pub¬
lic relations and advertising, is a
been in charge of

former

of

staff

the

the

of

member

New

editorial
"Herald

York

Tribune."
*

»:«

y.\

,

Chair¬

Morgenthau, Jr.,

Henry

of the Board of Modern

man

dustrial

of

Sonneborn

G.

directors

Mr. Sonne¬

meeting of the bank.
has

born

since

associated

been

the

to

annual

the

at

L." Sonneborn Sons Inc.

1920 with

(specializing in refined petroleum,
and building products)

chemicals
has

and

been

of

rector

the

and

di¬

since

the

officer

an

company

A Navy pilot in

middle twenties.
World War I,

Mr. Sonneborn at¬
tended Johns Hopkins University
and the Harvard Graduate School

tion,

dent

Jan.

American

the

of

He was President

leum Institute.

of the

Oil

York

Petro¬

Trades

during

Association

and

1935

of

1936

and thereafter served as Treasurer

Morgenthau

The election of Mr.

board of di¬
rectors of the Modern Industrial
Bank was noted in our issue of
of the

Chairman

30, page 2760.

Dec.

11

First

elected

was

President

*

:}!

the

State

Bank

Feb.

1.

associated

Ball

has ftbeen

the

Chemical

Mr.

with

Bank & Trust Company since

since

and

tjs

,

SjS

1926
Vice-

been

has

1942

■

BANK

Total

of

69,684,025

Kluener and Alan M.

ft

.

rity holdings/—

61,586,246

•

Loans and bills dis-

Undivided profits &

;

reserves

3,832,696

.

"Enquirer"

2,253,134

Bridgeport, Conn.

City, N. J., announced

'ft/ftftft/ft/'ft.-

*

The

Gardens

Kew

new

Branch

Hills

the

of

Queens County
Savings Bank, Flushing, N. Y., the

oldest

for

opened

County,

in

bank

savings

Queens

business on

Jan. 8 at 76-82 Main

Street, Flush¬

ing, it was announced by Joseph
Upton, President. William C. Rollauer, Assistant Secretary, is Man¬
ager of the branch and Carl A.
the

With

Manager.

Assistant

Dusen

Van

new

the

office,

bank,

Which will observe its 90th anni¬

April

on

versary

will

14,

main

The

branches.

three

have
office

branches

two

other

the

and

are

terest

of

a

in¬

controlling

Stream Na¬
Trust Co. of Valley

the Valley

in

tional Bank &

Stream, Long Island, N. Y.,

by a

formed by John W.
President of the Brooklyn
Board, was noted in

syndicate
Lake,

Estate

"Eagle" of Jan. 9.
Regional VicePresident of the New York State
Association of Real Estate Boards.
Another member of the syndicate
the

Lake

dent

Esser

President of
Inter-County Title Guaranty

is Thomas H. Quinn,
the

Keuffel

Co.,

stockholders' meeting

associated
Co.

for

with
39

Keuffel

&

Esser

became

and

years

President of the firm in 1946.
.

:■ *

St

.

the

announced

of

series of

a

and

the

in

Vice-Presidents

new

Hartman

who

Sherrerd,

from

moted

and

were

Assistant

both

Total

pro¬

"Inquirer" also said:

Parker

T.

James

and

A.

Vice-President of
the National Bronx Bank, having
been associated with the latter for

In his new ca¬
will be located at 370
Bronx office
Title Guarantee and Trust Co.

the; past 25 years.

pacity he

East 149th Street, the

of

"As

result of the reorganiza¬

a

officers to be in¬
will be Mr.
Auslander,
Chairman
of
the
Board; Mr. Quinn, President; Mr.
Lake, First-President and mort¬
gage officer and Grant Van Sant
tion,

Barnes

.

as

meeting0 of the board of
directors of the Trade Bank &
Trust Company of New York held
At a

stockholders meet¬

following the

ing on Jan. 11, Maxwell Hauser
was elected Vice-President; Louis
and Herman G. Cooperwere elected Assistant Vice-

Scliiff
man

Presidents, and Charles J. Schor
was elected Assistant Secretary.

cashier of the bank is W. Kenneth

ft

Valley

National

Stream

organized
in excess
of $11,000,000 and capital, surplus
and
undivided profits are over
Bank" and Trust Co. was

Its deposits are

in 1920.

$950,000."
lis

1sic

Augustus D.

Sic

V'V. '-Vv'''

Kelsey retired as
(Long

President of the Lynbrook

Roy W. Israel, for many years
Manager of the Credit Department
of the Federation Bank and Trust
Co.

of New

York,

was

appointed

Island,
is

Y.)

N.

National Bank on

continuing, however, it
said, his connection with the

Jan.

11,

bank

board
A testimonial dinner

Chairman

as

of directors.

of

the

recently tendered him by the
officers and directors in recogni¬

was

WE OFFER:

!

20

Bank

/ft:

of Douglas,

Ariz.

At 255

,

.50 Dollar

Savings & Trust

■

Youngstown, Ohio

|

x..-.

Fire

Insurance

Dayton, Ohio

j

At 31

*

■"•■V

Albert

At 56 /yr:V''yy

50 Reliable

the

;•

WHitehal! 3-7220

Teletype NY 1-528




sjc

E.

Board

years

5*t

Cluett,
of

the

of

ij!

Chairman of
Troy

the

age

Executive

in

an

Vice-President

since

He had also been associated,

official capacity with Cluett,

Peabody & Co. Inc., shirt and col¬

i'ft// ft".,'. •' /ft;

Total

2,551,758

*

Govt,

S.

and

S.

70,671,785

71,418,717

6,221,227
713,486

6,522,677
744,135

rity

214,069,151
185,834,819

55,295,390

66,895,640
61,505,842
4,309,845

Total

profits..

ftft-'ftftftft-

si!

5,045,851

sis

V

Cumberland,

Trust
both
Md., became ef¬

Undiv'ed

28, under the
Liberty
Trust
Co.
as

:,-ft ft

Total

ft

■

Pu eh

-

quote:

.

•/.:•('''/■"

v

V i

and
Trust Officer; Thomas L. Keech,

Robinson,

c

e-President

Treasurer and Assistant Trust Of¬

U.

S.

Govt,

&

Loans

Undiv'ed

leading/"businessmen1 of
Cumberland, eight of whom have

served

Trust

as

directors of the Liberty
seven of the Peo¬

Co. and

ples Bank.
had
and

assets

The Liberty Trust Co.
ofSaround $16,000,000

the /Peoples

Bank

•

around

$5,000,000 at the time of the mer¬

231,508,406

discts.

7,712,432
%

s)s

stock

a

/

..

dividend

of

III., increased its

effective

Dec.

from

20

$300,000 to $400,000.
■

/ V

Executive
American

Straus

E.

was

Vice-President
National

of

the
and

President, included the following:
Vice-President, C. C. Pearson;
Assistant Vice-President H. V.

to

Grice, Herbert C. House, Fred S.
Huber, Rudolph Ostengaard, and
Fred G. Tanner, Jr. W. H. Oliver
was

appointed

bank's San

»!s

D.

company," Directors

William

of

sis

"■

California

Angeles,

at

Trust

their

meeting elected Samuel

S. Rolph a Vice-President, Virgil

annual meeting of
Mr. Straus is a di¬

election

Los

the

Office.

sis

of

Directors

of

Manager

Pedro

i

stockholders,

the

.-ft.'Iv:,'

To

following ftthe

announced

':7ft '■

-

4c':'

ly announced by Frank L. King,

December

also

in

fornia Bank, Los Angeles, recent¬

organization meeting of directors

rector of the

Dallas,

promotions at .Cali¬

end

Company,

v

of

reported

was

4s

.

Chicago at the

Trust Company of

Bank

..•.

-;

Year

elected

Bank

'ft

■

ft

'

Robert

cashiers

of. directors.

$100,000 the North Shore National
Bank of Chicago,

■'■•.ft,'/

15

••

599,435,417
229,383,782
6,286,998
:-'x '
1
■}.

profits

capital,

"The board of directors consists

ft

•

600,518,487

—

Through

McNamee,

of

ftt- ,v

312,431,504

'

ficer; Thomas J. McNamee, Assist¬
ant - Vice-President; .Edward
H.

Comptroller, and- C.
Morgan
Smith, ■ Assistant VicePresident.
<';

"V-i

360,776,195

'fi'Ar ■•;/■
1

i

State

George Dahl
and
Zellner
Eldridge were added to the board

se¬

curities
■

<*',■' '»"•ft-'■

<s

that

1,224,454,948

ft.-.'-• i.

,

W. M. Beavers further announced

$

__

*

6, which also stated that President

June 30/48

1,208,312,934 1,158,836,197

onH

•

sistant

DETROIT

OF

$

x-

he

be¬

the Dallas "Times-Herald" of Jan.

1,276,482,959

resources-

from banks

!- "Other officers include John J.

ft'

'

Deposits

executive head of the

30,547,998

Dec. 31/48

1

bank, said the Baltimore
"Sun" of Dec. 29, from which we

438,146,895

19,052,614
BANK

which

before

Texas, and the naming of Ted Her¬
mann and William M. Isom as as¬

DETROIT, MICH.

;

v

merged
also

4*

s*

•"ft;

of the
Charles
A.

name

Piper, President of the latter, will
continue

'

NATIONAL

fective at the close of business on
Dec.

458,734,636

__

with

promotion of Albert W.
629,772,380 Lewis to a Vice-Presidency in the
Merchants

profits

banks

connected

The

se-

,

been

tional City Bank of New York.

bills

and

Loans

sit

several

board.

coming identified in 1920 with the

OF

June 30/48
$

; curity hold'gs 1,132,234,194 1,125,745,357
discounted

of

674,458,774

bahks

Govt,

S.

1

due

and

from

U.

The merger of the Liberty
and the Peoples Bank,

Co.

the

2,356,427,996 2,275,210,573
2,159,926,637 2,082,217,706

resources

Deposits
Cash

the

Vice-,Among

and

President
of

Citizens & Southern, was the Na¬

31/48
•$

Loans and bills dis¬

connected

Southern for

and had served the bank
Vice-President, Executive Vice-

had

ILL.

Dec.

48,977,248

59,085,762
67,797,173

___

CO.

TRUST

CHICAGO;

secu¬

holdings

Mr. Young was

Chairman

NATIONAL

ILLINIOS

AND

BANK

Atlanta, Ga.

the Citizens &

President,

si!

CONTINENTAL

on

Vice-

as

29 years,
as

dis¬

profits—

Undivided

with

secu¬

Loans and bills

National Bank in

Jan. 2.

22,402,424

due from

Govt,

108,076,553

22,585,654

holdings

rity

retirement

said Associated Press advices from

ft.

—

announced

Young

his

1

Atlanta, appearing in the Florida
"Times-Union" of Jacksonville, of

104,638,501 104,860,987

—

banks
U.

CO.

ILL.

107,790,529

resources

Deposits

$

194,004,072

banks

U.

TRUST

AND

Cash and due from

June 30/48

222,292,241

resources

Deposits

Savings

of 76 years. Before
becoming chairman of the bank
last July.
Mr. Cluett had been
at

1936.

York 4, N.Y.

41

Bank* of Troy, N. Y., died on Jan.
3

Kenney & Powell
25 Broad St., New

his

service,
Lynbrook advices to the Brooklyn
"Eagle" stated.
,;
'ft'-ft'ft;.
of

tion

Total

Cash

Undivided

"The

.

Lane

action, it is stated, ends a
banking career of 50 years. Now
70 years of age, Mr. Young was
eligible for retirement five years
ago, but remained active through
the period of postwar adjustment,

Dec. 31/48 Sept. 20/48
$
* $
/,''»/

ft/.

CO.

$

counted

Regan.

85,981,788

2,916,666

CITY BANK
CHICAGO,

CHICAGO

PA.

Dec. 31/48

Vice-President. The

Executive

67,221,385

69,122,244

counted

PHILADELPHIA,

7,890,061

s|:

His

bills dis¬

Undivided profits—

dents; Conrad D. Barto and Wil¬
Gauer, Trust Officers; Her¬
bert F. Gretz and Milton H. Carr,

Tuesday

on

86,300,205

holdings

rity

TRUST

173,763,616

8.660.211

63,570,915

secu¬

counted

liam

FIDELITY-PHILADELPHIA

178.559,500

profits.-

Chairman of the Citizens & South¬

named Assistant Vice-Presi¬

were

the new

stalled

H.

Jan.

ern

72,424,390

Loans and

Belfield, Raymond

President of & Mortgage Co.; George Auslan- Trust Investment
Officers; Fred¬
Title Guarantee and Trust Co. of
der, President of the National erick G. Rogers and Walter R.
New York, announced oh Jan. 11 Combustion Engineering Corp., is
Hagey, Assistant Secretaries, and
that Henry M. Corsa has joined also one of the syndicate mem¬
Davenport Plumer, Jr., Assistant
the company's Bronx office in the bers.
From the "Eagle" of Jan. Trust Officer.
banking department.
Mr. Corsa 9 we likewise quote:
Assistant

June 30/48

225,622,849 216,416,729

Govt,

S.

142,477,429 150,810,702

discounts

!(!

236,062,704

banks

secu¬

holdings——
&

116,864,125

139.611.890

-

Govt,

S.

Loans

Cash and due from
U.

Frederick H.

due from

banks
U.

CO.

245,703,860

resources

Deposits

Vice-Presi¬

dents.

The

and

Cash

rity

Dec. 31/48

M.

D.

442,113,631 423,401,310

Undivided

Maurice

are

Henry

S

475.048.088 456,025,543

resources

Deposits

stock.

UNION TRUST
CINCINNATI, OHIO

The

June 30/48

$
Total

sis

:;s

THIRD

FIFTH

OF

I\IO.

LOUIS,

Dec. 31/48

to $400,000; of the in¬
crease
$100,000
represented
a
stock dividend
of that amount,
while the additional $100,000 came
through the sale of new

BANK

NATIONAL
ST.

$200,000

were

promotions.

•

FIRST

15, from

increased, effective Dec.

THE

included

D.

Officer

ica.

capital of the Farmers Na¬
tional Bank of Salem, Ohio, was

12

It is added that
travel in South Amer¬

years.

he plans to

*

■

20

bank

The

Assistant

one

Investment

*)s

•

,

resigned, effective

has

Louis,

the St. Louis "Globe Dem¬
ocrat" said. He had been with the

'

promotions approved by the board,
according
to
the
Philadelphia
"Inquirer," which indicated that
three
Assistant
Vice-Presidents,
two Trust Officers, two Invest¬
ment Trust Officers, two Assistant
Trust

St.

promoted to Trust Officer.

two

Vice-President

cashier of Industrial Bank of

Jan. 7,

Assistant Trust

election

Vice-Presidents in

Peter W. Herzog,
and

company in 1944 as
Officer, had been

the

;

*

*

4s

was

joined
*

■

The Fidelity-Philadelphia Trust
Co.
of Philadelphia on Dec. 26

re-elected.

were

named assistant cashier.
President Dupuis also announced
that Halsey G. Bechtel Jr., who
ment,

All other directors

the board.

on

place

to fill the new

elected

was

Man¬

of

post

and

Vice-President

in

staff

bank's

the

held

R.

William

International Harvester Company,

ager of the Collection division of
the bank's personal loan depart-

Mr. Keller has been

11.

and

to ten
Odell, Jr.,
Treasurer of
nine

from

bank

the

Chicago,

meeting on Jan.

annual

members.

to Assistant
O. D. Moore Jr.,

the

joined

1922

at

annual

of

of

promoted

was

who

to

directors

board

Jan.

on

&

bank's

the

also

is

of

the

Brooklyn

Mr.

1945

Vice-President.

North¬

at
10
increased the number of directors

who

Jr.,

Chappell

O.

ft"""

-s

Company,

Trust

ern

their

the

At

29.

Dec.

ap¬

Cincinnati

the

elected Assistant Secretary in

was

Jan. 12

on

of

John

that

Keller, Presi¬

was

in

time, the "Enquirer" stated

same

/ V/'Y-,,'

:i<

the election of Karl

Secretaries

*

*

Purchase

*

1946,

large

a

»|!

•

The stockholders of The

Vice-President, it was

known

made

Kelley Graham, President of
The, First National Bank of Jersey

>.-v #

/ v.

also

in

pointed a

•

11,898,417

18,650,509

.si!

si!

Vice-

President

35,657,700

-■

counted

the New

York Trust Co. as Assistant

of

the presidency
corporation.

cept

eastern

Cooper, who

bank from

the

to

came

13,050,352
ft ' •

20,186,222

secu-

Price has resigned as

Mr.

board.

E.

Arthur

of

Vice-President

75,937,158

bank's
New
England Division. He is a
Director of the Bullard Company,
,

Vice-President of the bank to ac¬

are

$

117,197,705

Govt,

S.

meeting William G. F. Price was
elected to fill a vacancy on the

by President Charles W. Dupuis,
the advancement to the office

June 30/48

and due from

banks

U.

Cincinnati, recently announced

of

J.

N.

was

:

127,052,787

resources

Deposits

President in charge of the

Barnard Townsend,

was

advanced to
and Edward A.
through a $400,000 stock
:;ftft ft;/ ■
^
; Berndt, Jr., Assistant Trust Offi¬
*
"ftft"; cer, was made Assistant Vicepromotions in the offi¬ President.* At the stockholders'
Vice-President,
Vice-President,

cial staff of the Central Trust Co.

>;

'

$

Assistant

Morgan,

C.

Clarence

Va., increased its common capital
stock on Dec. 17 from $1,600,000 to

TRUST

AND

PATERSON,

OF

COMPANY

Trust

and

Company of Hartford, Conn., effec¬
tive

'

Dec. 31,'48

Vice-

of

Director

and

Phoenix

-f

V

"Journal."

name,

NATIONAL

FIRST

Cash

Real

for ten years.

reports that the First Na¬
tional Exchange Bank of Roanoke,

learned

is

land, Jr., and Frank J. O'Rourke
were promoted to Assistant Cash¬
iers.
In
the
trust
department,

Cur¬

the

of

Comptroller

rency

it is stated, re¬
flects the close relationship of the

&

Associa¬

Oil

it

on

Pennsyl¬

the

of

Crude

Grade

mittees

as

Bank

Company of New York

Trust

tion and has served on many com¬

New

Chemical

the

of

Vice-Presi¬

Ball,

located in Corona and Little Neck.

director

a

vania

The

C. Ray, Presi¬

Providence

new

_

C.

Raymond

Associa¬

Petroleum

to Citizens

Ije ■/.:

t{.

*

at the close

the

In

Cashier.

and

department, George D.
Bushnell, Paul C. Raymond and
Allen P. Stults, Assistant VicePresidents,
were
elected
VicePresidtnts, and Weymouth Kirk-

2, page
2267.

■

is at 38-25 Main Street, Flushing,

Mr.

National

of.

bank

11,

entering his present busi¬
Sonneborn is a trustee

before
ness.

the

of

name

Dec. 31

on

Cashier, as Vice-

Klug,

banking

appeared in our issues of Dec.
2298, and Dec. 23, page
' ftftftftft/ftftftftftftftftft^ft-ft

ger

Provi¬

H.

,

proposed mer¬

Reference to the

nouncement

an¬

election

the

12

Secretary

in

John

President

/ft/ft ■ft/ft:;

according to an an¬ institution with the Citizens Sav¬ $2,000,000
dividend.
by Thomas J. Shanaings Bank; with which it occupies 7ftftft'vftft' ■'
han, President.
ft,-'
:•; /.
,''ft-ft/:/
joint banking quarters;
j Among
Jan.

on

In¬ 7\ftftftft'

York

New

"Jan.

on

Rudolf

board

of

Bank

nounced
of

*

Assistant

'

1920."

in

organized

Both banks were

ger.

branch in Cran¬

announced,
the

The

ft, '

ft".;,

offices

Co., Lovett

from
Arthur

*

a

ston, changed its

Bankers

and

OFFICERS, ETC.

REVISED

re¬

-ft
ft-

Street Bank & Trust

dence, R. I., and

NEW BRANCHES
NEW

*

with main

Co.,

his

before

,

Thursday, January 13, 1949

CHRONICLE

FINANCIAL

Sisson

a

H.

Secretary.

Trust

Light

Officer,

and

Assistant

an

/

.

•'

Volume

169

Number 4768

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

(173)

17

New York Security Dealers Association Elects

!

Officers for Year 1949
George Geyer, of Geyer & Co., has been elected President of the
New York Security Dealers Association for the year 1949. Other offi'

'

'

i
>

George Geyer

David

Morris

H.

D.

Knox

TITLE GUARANTEE and TRUST COMPANY
CHARTERED 1883

John

J.

C. E. deWillers

O'Kane, Jr.

<Aew-

/76
cSwaclwci

ty/cv/t
7,

elected at the annual meeting were David Morris, David Morris

cers

& Co., Vice-President; Herbert D. Knox, H. D. Knox & Co., Vice-Pres¬
ident; John J. O'Kane, Jr., John J. O'Kane, Jr. & Co., Treasurer, and
Chester E. deWillers, C. E. deWillers & Co., Secretary.

Condensed Statement of

Expand Area of Mid-West Exchange Parley

(Consolidated

According to the Associated Press, the New Orleans, Pittsburgh
Stock Exchanges will sit in at the next parley of repre¬

and Boston

sentatives of the

to

Condition at Close of Business December 31, 1918.

include Lawyers Title

RESOURCES

PRESIDENT

Mid-West

exchanges studying a proposed merger.
previous issues of the "Chronicle," the new
organization would comprise several Mid-Western stock exchanges to
be tied together by a central trading floor in Chicago. The original
group comprised the exchanges in Chicago, Cleveland, Cincinnati.
Minneapolis-St. Paul, St. Louis and Detroit. However, the Detroit
Stock Exchange later announced its withdrawal from the proposed
merger. The next meeting of delegates of the various exchanges con¬
cerned, according to James E. Day, President of the Chicago Stock
Exchange, is to take place in Chicago on Jan. 21.
As already announced in

r.

Cash

•

-"7

^

on

••

hand and due from banks

Call loans. V..;;...

Mortgages

(After deducting

TRUSTEES

Pogue Decries Loss of Equity Markets

21,245,298.42

Walter Beinecke

million

obtained from

was

Only one-fifth of the new capital utilized by a group of 30 oil
companies during the year 1943 was obtained outside of the industry,
Joseph E. Pogue, Vice-President of the Chase National Bank, stated
at a luncheon meeting of the Junior Investment Bankers and Brokers
Association

Baltimore
Jan.

c o m

oil

30

nies,

p a

representing
about

thirds

two-

of

the

1 markets

quately in
Pogue said.

in¬

opera¬

tions

some

$2,992

million

of new

capital

during
year

million
rowed

the

bor¬

Coqueron of the bank's petroleum
department.

Capital obtained outside the in¬
dustry, Mr. Pogue said, came from
issuance of $513 million of

the

debt, supplied
and insurance

mostly
compa¬

nies, and the sale of $116 million
of

common

stock.

Both

borrow¬

ings from the public and the issu¬
ance

for

of

were

nil

1948.

"The
needs

ings

preferred stock

handicapped by excessive
In addition, our in¬
vestment banking institutions
have not yet devised means for
attracting the savings of those
groups

whose

obtained

indicates

share

from

that

of

capital
public sav¬
the
equity




income

has

361,933.88

Jacob L. IIoltzmann
Harold Wardwell Hoyt
William V. Lawrence II

LI ANILITIES

Capital

Byron A. Long

$ 3,000,000.00

Surplus

3,000,000.00

Undivided Profits

George McAneny

715,143.27

$6,715,143.27
Joseph V. McKee

Title Insurance Reserve
Reserve for

Accrued

1,402,717.50

Contingencies

Letters of Credit and

have

not

invested

in

Charles W. Nichols, Jr.

791,703.36

Expenses and Unearned Income

in¬

creased, who are not heavily bur¬
dened by income taxes and who

494,830.78

,

Acceptances Outstanding..

:

;

enabled the petroleum

Purcell C. Robertson

Deposits

54,895,715.11
J. Herbert Todd

$6^665,568.15
declared,
industry to

expand

oil

sufficiently to convert the
shortage of last winter into an

ample oil supply for all consumers
in 1949.

Charles F. Noyes

365,458.13

The high rate of capital forma¬
tion in 1948, Mr. Pogue

Barnard Townsend

Securities valued

at

$1,293,022. in the above

to secure
or

deposits of public funds and for other
permitted by law. >
S
.

Of the total of $3,646 million of
available in 1948, $2,400
million or 66% were diverted to

deposited

statement are

purposes as

;

'

-

.
,

Edwin L. Weisl

required
Willis D. Wood

'

capital

capital expenditures; $400 million
or

11%

went

Dunking and Title Insurance Offices

6

east

into

building up
working capital and $553 million
or

15%

45th st., manhattan

370

east

149th st.,

used

debt and

$293 million or 8%
for the redemption of

securities and for other

investments.

176

broadway, manhattan

160-08

175

Jamaica ave., Jamaica

remsen st., brooklyn

196

montague st.,
brooklyn

north, long island city

Title Insurance Offices

holders and minority interests. The
were

..

bridge plaza

bronx

distributed in the
form of cash dividends to stock¬
were

remaining
small

Duncan G. Harris

Liability for Letters of Credit and
Acceptances

for this

are

heretofore

or
obtained through the
stock, Mr. Pogue reported

banks

307,068.28

Customers'

American enterprise."

the basis of estimates prepared
in collaboration with Frederick G.

long-term

reasons

$-329

on

by

our

"The

con¬

as

trasted to

Stewart Forshay

Other Assets

functioning adeeconomy,"; Mr.

regulations.

ternal

sale of

not

clear. The savings of the in¬
vesting public are being siphoned
off by high income taxes and the
cost of living. Our equity markets
also

from

William H. Deatly

887,800.34

are

petroleum in¬
ated

1,402,717.50

$64,665,568.15
are

dustry,

gener¬

Gordon S. Braislin

Lawyers Title Corporation of New

oi>
on

11.

The

Herman Berniker

860,488.74

'York

stock.

common

1,899,717.32
assumed)

not

Title Insurance Reserve Fund
Title Plant of

William Barthman

1,647,219.64

Accrued Interest and Accounts Receivable

Vice-President of Chase National Bank says oil industry in 1948,
used approximately $3 billion of new capital, of which only $116

Albert B. Ashforth, Jr.

3,444,807.53

.

of $1,934,080., liability

mortgage

Barnard Townsend

$32,608,516.50

Real Estate

on

v.'V

1,384,000.00

15,080,025.24

Other Marketable Securities

First

.

$16,144,491.26

.

U. S. Government Securities

Loans and Discounts.

v-*.'

:

Banking and Title Insurance OfTiccs

Joseph E. Pogue

Corporation of New York)

st.

george, s. i.

•

mineola, long island

»

Member Federal Deposit Insurance Corporation

riverhead, long island

•

•

white plains, n. y.

Member Netv York Clearing House Association

h

18

COMMERCIAL

THE

(174)

FINANCIAL

&

Thursday, January 13, 1949

CHRONICLE

Prominent Personalities
\Editor's Note—This is the first of a series of thumb-nail
sketches about leaders in the mutual fund business.- May we >
introduce Mr. Bullock?]

ATIONAL
ies SERIES

By HENRY HUNT

HUGH BULLOCK

Prospectus

upon

request from

investment dealer,

your

or

"Based

from

Economic

own

RESEARCH

&

SECURITIES

NATIONAL

extensive

on

data

developed

Hugh Bullock, only son and successor to the late Calvin
Bullock, who founded the firm in 1894, takes his responsibil¬
ities seriously. Just turned 50 (although he doesn't look it),
Hugh is a veteran of both World Wars and says that work is

Investor's Syndicate's
department, 1949 will

by

Advisory Board and research

be the third testing

period of the American postwar economy.
"The first test in 1946 was evidenced by withdrawal of whole¬

CORPORATION
sale

120 BROADWAY, NEW YORK 5. N. Y.

the part of chain and syndicate stores in an effort
prices.
»
sharp break in farm commodity prices in 1947 marked the

buying

on

"A

of the economy.

test

\

.

moire

third, and possibly final, phase-.of our postwar -readjust¬
ment is already indicated by declining retaii sales, disappearing back¬

RUSSELL BERG FUND

elements

INC.

mild recession, possibly
a substantial improve-

\

.

.

"(1) An increase in unemployment.
"(2) A general decline in corporation. earning power.
"To offset these negative factors and retard a severe economic
the following present favorable indicators:
Continued high level of new building and other construc¬
;;
..-/■■.v-'
"(2) Large government expenditures for European aid and arma¬

decline

Prospectus

on

tion.
'

'

'

*

INVESTMENT

MANAGER

AND

•J

s

UNDERWRITER

:(.V.:\Jr

& Company

75 Federal

TELEPHONE LIBERTY

7yV';

"The outlook for the second half of

favorable

the

on

1949 is far more promising,

mentioned, plus these

indicators previously

moi^e

disbursement

•Bullock

Associate Justice of the Supreme Couft
preeminent liberal of his day, espoused many

directed.

•

r

must

who

HUGHW. LONG & CO.
WAll

STRtET

leading and forceful advocate of the principle

.

'

to

all—labor,

V

;

■

Brandeis

"Justice

died

a

■V' ' ''

millionaire—a

rare

'V;"

V f,

individual

on

5

the

Few indeed can

bills, taxes, etc., and become a millionaire; but there are a gr^at
many more people now than
in Justice Brandeis' time who'iean
pay

NEW YORK

N.Y

have

*

sold

ex¬

share¬

considerable number of

a

o'.

.

and

men

ing surplus capital."-

provide for
dren.

i

-

_

unaccustomed

women

"

,

..

.

to

invest¬

^

comfortable retirement and a nest-egg for their chil¬

a

"■

■
^

•

strength of personal accomplishments these days.

INCCKPQr Alio
48

a

business and investors alike—there
be many a 'conservative' member of our capitalistic system
would welcome Justice Brandeis as a champion of their cause

today.
■

deal

fair

of-a

was

today,

,

"

"Because he

also

England.

fills the needs of

were.unpopular in the eyes of the 'money interests'; biit
has since been recognized as a man of great wisdom and depth
intellect by a great many people—even many of those against

ideas that
he

Investment-"Fund

-

Hugh Bullock feels that the mutual fund .business • is
just beginning to grqw and that "it is the nearest thing to
democracy in American finance; it is in tune with the
presentv trend toward a broader distribution of v/ealth; it

"Opinion9* by the Late Justice Brandeis

whom his 'selfish interest' attacks were

Canadian

funds

holders in

"Louis D. Brandeis, late

of

British neighbors, Hugh is a con¬

our

clusively in Canada,' in addition to its larger American*
funds of which Dividend Shares is the. best known.
Calvin

•,

perhaps been underestimated.' It should total between $2 and
$3 billion, and with the bonuses paid by the various states, will
greatly enhance consumer purchasing power."

of the United States, a

the

sponsors

the latter paft

has

An

this

who keeps his apartment at a-ciool 65 degrees, found
Hugh's office most, comfortable.
Originally a Denver, Col6.t firm, Calvin Bullock opened
offices <in New York in l927y^a^6bdon office in 1928 and
;a Canadian office in Montreal' in 1932.
Calvin Bullock

will become

"(2) The return of G.I. insurance premiums during
of 1949.
The size and significance of this financial

in

ever,

These reconstruc¬
programs are ^ nearing completion.
Improved technical skill
spurred on by the threat of further unemployment should result in
goods at lower costs; a boon for the consumer who once
a vital factor in our national economy.

rare

Anglophile today and, like most of his English
friends, is also a fresh-air fiend.
Your correspondent, how¬

.

more

is

that

firmed

nearly $50 billion for new plants and equipment.
tion

of those visits with

j

important encouraging factors:
'"(1) A remarkable improvement in man-hour productivity may
be expected.
Since V-J Day American industry has appropriated

2"9S5<>

Hugh's father, for whom he

reverence

a

day and age.
:
■; ""
■'
;
In the early '20s, Hugh and his father spent many months
in England
and/Scotland studying the methods used by
investment trusts in those countries.
Possibly as a result

,

"(3) Indfeased^ mohey fciffcUlation through the payritent bf indi¬

based

Street, Boston

collected by
holds

vidual states' soldiers' bonuses.

Investment Counsel

ill'

Bullock

Hugh

.

ments.

•
.

Russell, Berg

J

-

for

are covered with tattered flags,
military portraits and other war' memen¬
tos -dating
back to Napoleonic times.
Most of these mural decorations were

are

"(1)

Request

you

Its Walls

_

Capital Stock

job than most of his

the

on

dropped In on Hugh at 1 Wall
the first time, you could be
excused for. mistaking the-inner office
for
an** historical
museum ^instead
of
headquarters for'one of America's lead¬
ing investment management groups, with
some $200;000,000 under its supervision.

mixed

During the first half of 1949 two depressive

indicated:

are

a

by

If

Street

.

ment later in the year.

time

employees.
|

logs, and the so-called 'cold war.'
j
"The ensuing year, based on present indications, will be a

and hand¬

dark

Tall,

he keeps his erect figure slender
playing tennis, ridihg or swimming over
weekends.
During the week, he spends
some,

"The

one, economically speaking, marked by
in the first half of the year, followed

only hobby.

his

,

to reduce merchandise

second

Calvin Bullock

of

President

Mr. Crabb Comments

"Times have

deis'
of

has

utterances

time.

1914,

For

ten

become

example,
before

on

the

years-

organized:

;

'

changed, but the wisdom of
even

many

apparent

more

of Justice Bran¬
with the passing

the subject of investments, he wrote in
first mutual investment company was

.•

rT"-S-

■

;

.

.

C 'i

"

s'i

American Business

'For

Prospectus

'

THE

upon request

Certificates of Participation

Abbett & Co.

Chicago

—

—-

Los

New Orleans

Angeles

ress

'

.

IN

.

has

.

.

.

(Series K.1-K.2)

and

David

picture

motion

anything in
of

there

1947,

t

J

only 25,000

'

,

'

-

'

'

to

video receivers

in

600,000 television receivers

Luncheon

I

Ralph

FUND, INC.

The

Of

Board

of

Massachusetts




*

Fund,

dividend

of

of

has declared a

14

American

,

your

may

be obtained from

local investment dealer, or

E. E.

Crabb, President

.

gan

the
„

Difectoi
Airlines

'

'

Association

of

Ne-vv

Baldridge of Mor¬
Stanley & Co., Chairman ol
Program

nounced.

held
Manager

a

Overseas

the

York. Robert C.

per

Principal Underwriter and
Investment

be

Investment

quar¬

share
1949,- to share-

cents

payable on February 21;
on record as of January 31, 1949.

Prospectus

Meeting

Damon, President oi

guest speaker at the
January luncheon meeting of the

Investors

holders

;

Congress Street

Directors

inc.,

Stock

Tlie Keystone Cotnpany
of Boston

S.

.

will

local investment dealer or

50

There

;

American Airlines and

;

terly

•

,ear,ly days of the

radib itself.

Inv. Association

Dividend Notice

Boston 9,

even

Sarnoff, President of RCA, estimates that 2,000,000 sets

*"*■

Prospectus from

your

yes,

are over

INVESTORS STOCK

«

i

-

r

Its prog¬

industrial history of America

were

Today there

^iVFSTOa.

COMMON STOCKS

-

and,

the

-

(Series S1-62-S3-S4)

.

34% Television Fund

18 months has surpassed even the

States.

J PREFERRED STOCKS

*

the time

"

and this is just the beginning!

March

"In

SHARES OF CAPITAL STOCK OF

the
been

never

BONDS

I

'

the facilities, the training and

V,

(Series B1-B2-BS-B4)

4

from

proper

in the last

automobile,

equal it

in

.

selection

intelligent judg¬

a

the United

investing their capital

intelligent

an

"Television is the fastest growing industry in America.

INVESTMENT FUNDS

1

a

than

A

INCORPORATED
New York

the ability,

lacks

COMPANIES

»,

make

to

Sanders' "Brevits."

*

Funds

investor

investigation. ^Unless his purchase is to be little
gamble,, he needs the advice of an expert who, com¬
bining special knowledge with judgment, has the facilities and in¬
centive to make a thorough investigation'."—Quoted from Vance,
better

LORP-ABBETT

INVESTMENT

Custodian

j;

'He

essential to

Shares, Inc.

Keystone

small

a

these many corporate securities—indeed, tp pass an
ment upon a single onfe—is ordinarily impossible.
"

(

•

'The number of securities upon the market is very large. Only
a part of these securities is listed on the New York Stock Exchange;
but its listings alone comprise about 1,600 different issues
i and
each year [many] new listings are made. . . ...
r

P-m.

The

Committee
luncheon

an¬

will

be

Tuesday, Jan. 11, at 12:1(
in
.Oscar's
Oldelmonicc

on

Restaurant at 56 Beaver Street.

the

parker

corporation

ONE COURT STREET. BOSTON 8.

MASS.

INVESTORS SYNDICATE
Minneapolis, Minnesota

-•

The. Investment

New

1947,

York
as

was

the

Association

formed

Junior

in

ol

May

Investmenl

Bankers and Brokers Association

Volume

will

169

Number 4768

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

produced in 1949 and close to 5,000,000 annually by 1953
expected that 18,000,000 video sets will be in use.
"By the beginning of 1954' it is estimated that television will
be giving employment to over one million persons and will have
placed over $7 billion into America's economic structure.
when it is

"Most investors realize the importance of including some

'growth'
holdings but also realize the difficulties of picking
the winners.
This is just as true in the television business today
as it was at a similar time in
every new industry. The solution lies
in careful selection; ample diversification and continuous
supervision.
securities in their

National

Industrial
Stocks Series is
a
supervised investment in
growth-type companies and currently includes these 20 issues (34%
of current holdings) representing the television field.

"Admiral

Corp.

Cornell-Dubilier
DuMont

"Motorola, Inc.
Philco Corporation
Radio Corporation
Raytheon Manufacturing
Sparks-Withington Co.
Stewart Warner Corp.
Stromberg Carlson Co.

Electric

Laboratories

Emerson

Electric

Mfg. Co.
Emerson Radio & Phonograph
Farnsworth Television

&

Radio

Finch Telecommunications

General

Electric

Company
'

York in

The National Association of Securities
counter

in

companies

included

percentage of stock¬

Stockholders

State—

% of
Total

217.778
132,266

10.5

Connecticut

118,764

9.5

York

Pennsylvania

113,259

may

be

expected

to

of

shares

during the year ended Nov. 30, 1948,
at a record high, the regular dividends from
net investment income
alone totaling over $4,400,000.
[.
Mr.
nomic
and

4.6

30,324

2.4

27,202

2.2

25,488

2.1

Missouri

business activity over
Vice-President, in charge of investment research of Group Securities,
Inc., in the company's 15th annual report released Jan. 3. V
Group Securities, Inc., reported a total of dividends paid on

classes

4.7

57,998

Jersey

L-w-.-r—

Wisconsin

decline

moderately in
signs of an important recession in general
the next 12 months, states Frank L. Valenta,

various

58,203

Ohio

In

the

made

local
was

to

survey,

stocks

cover

interest,

or

The .survey of
dences

was

a

the

of

wire

indicative

companies
and

of

national

of

the

and

interest in over-the-counter
results

of

the

survey

are

throughout

the

Securities

of

Dealers, Inc.
it applies to
expectation that this

information

help
in

will

each district

structive

value

as

of

con¬

further

ade¬

prove

in

of

the

lieve

territory

served
concerned.

that

for its study the
Quotations Committee
Association took 362 of

a

is

survey

York

the

be

relative

the

ment of

our

economy to

Terming such
"It is fortunate

a

a

a

whole.

NATIONAL BANK

further step in the postwar adjust¬

normal peacetime basis."

adjustment "necessary," Mr. Valenta continued:
will be achieved without involving

an

that

OF DETROIT

it probably

price collapse such

any

as occurred in 1920-21.
Continued govern¬
support will prevent any serious decline in farm
prices, and
a
continued high level of business
activity will achieve the same
result for industrial prices."

ment

DETROIT, MICHIGAN

Complete Banking and Trust Service

New York Institute of Finance

Adds Course
"Retail
of

a

new

to be offered in

give

Work

brokerage

"How to Sell Mutual In¬

on

vestment Funds."

Sales

and

man,

Manager of The

Cohu Corporation, instructor, will
have the assistance of nine other
executives

the

in

ment Fund field.

Mutual

Invest¬

They are: Arthur
partner,
Arthur

Wiesenberger,
Wiesenberger & Co.; Harold E.
Aul, Economist, Calvin Bullock;
Frank L.

Valenta, Vice-President,

Distributors

Louis

H.

Whitehead

title

Whitehead,
Louis H.
Co.; Douglas Laird,

and Co., Inc.; Kimball
Valentine, partner, Vance Sanders

C.

& Co.
new

courses

are

"Anal¬

Cash

Hand and Due from Other Banks

on

Margin

Stock of the Federal Reserve Bank

V

.

...

W. Seligman & Co.

Loans:
Loans and Discounts
Real Estate

179,860,173.89
51,648,232.05

Mortgages

231,508,405.94
,

Less Reserve

.

s

.

.

.

i

Accrued Income and Other Resources

Accounting Background for Se¬
curity Analysis—Albert P. Squier.

Branch

•

..

Customers'

Liability

on

2,246,939.13

•

.

.

Buildings and Leasehold Improvements

Security Analysis I and II—J,

229,261,466.81
4,592,907.51

.

1,708,693.04

,

Acceptances and Letters of Credit

2,359,236.26

$1,276,482,959.02

Galanis, Shields & Co.; Charles

F. X. McGolrick.
Investment

LIABILITIES

Account

ment— Stephen

Manage¬

M. Jaquith, Inves¬

Analysis 6f Railroad Securities
—Pierre R. Bretey, Baker, Weeks
& Harden

Current Developments in Utili¬
ties—Harold H. Young, Eastman,
Dillon &

Deposits:
Commercial, Bank and Savings

tors Counsel, Inc..

Co.

United Slates Government
Other Public

Accrued
Dividend

,

Deposits

.

.

Expenses and Other Liabilities
Payable February 1,1949

Acceptances and Letters of Credit

»
.

.

.

•

<

$1,117,909,009.37

«♦

59,184,069.80

>•;».

31,219,854.50

$1,208,312,933.67

3,693,162.28

3

•.

•

.

.

•

600,000.00

.....

2,359,236.26

;

.

Reserves

Operating

Affecting Security Values—Louis
H. Whitehead, Louis H. White¬

3,805,194.51

Current Economic Developments

Company Securities" to be taught

ysis

of Public

Utility

by W. Truslow
known utilities

mercial

Law

Hyde, Jr., wellanalyst, and "Com¬

Applied

head Co.

Securi¬

Commodity Trading Principles

under
Irwin
W.
Brodsky,
Legal Advisor, J. & W. Seligman

—Victor L. Lea, Standard Brands,
inc.:

to

ties"

& Co.

Correspondence

Other

courses

being offered

are:

Accounting Principles I—Melvin G. Ott, Robert Winthrop & Co.
Accounting
rome

Principles

J. Kern

Business

Finance

II—Je¬
»

—

Irwin

A.

Brodsky, legal advisor for J. & W.
Seligman & Co.
r
Money and Credit—William K.
DeVeer, First National Associates
of Florida, Inc.

offered.

Common Stock

.

.

.

'*<

for

Jan.

10

the
at

Spring

the

15,000,000.00

Undivided Profits

7,712,432.30

57,712,432.30
$1,276,482,959.02

ment

are

pledged

to secure

public deposits, including deposits of $15,697,825.75 of the

Treasurer-State of Michigan, and for other purposes required by law.

of Fi¬

nance, 20 Broad Street.
Courses
start the first week in
February.
Institute

is

seventh year as a

completing its
private business

school.

successor

It is

the

to the

New York Stock Exchange Insti¬
which

tions in

•

35,000,000.00

office

the New York Institute

tute

.

United States Government Securities carried at $91,643,190.54 in the foregoing state¬

Registration

The

.

Surplus

also

.

Term starts
of

courses are

Capital Funds:

DIRECTORS

HENRY E. BODMAN

JOHN B. FORD, JR.

NATE S. SHAPERO

ROBERT J. BOWMAN

B. E. HUTCHINSON

R. PERRY SHORTS

opera¬

1941.

PRENTISS M. BROWN

ALVAN MACAULEY

GEORGE A. STAPLES

CHARLES T. FISHER

WALTER S. McLUCAS

R. R. WILLIAMS

CHARLES T. FISHER, JR.

discontinued

W. DEAN ROBINSON

C. E. WILSON

Work
and

of the Stock Exchange
Brokerage Office Procedure

—John

H.

Schwieger,
Depart¬
ment of Member Firms, New York
Stock Exchange; A, P. Morris, Estabrook &

Co.; George W. Elwell,
Francis I. du Pont & Co.




1,500,000.00

75,765,974.39

.

.

Problems—

Fitzgerald, Hirsch & Co.

Commercial Law Applied to Se¬
curities—Irwin A. Brodsky, J. &

M.

360,776,194.50
V 600,518,486.51

United States Government Securities

Other Securities

Long

Other

4:

RESOURCES

Transfer of Securities—Irwin A.
Brodsky, J. & W. Seligman & Co.

Vice-President and Secretary, Na¬

Hugh Bullock, President, Dividend
Shares; James Bridges, partner,
The Keystone Company of Boston;
Vernon Vivian, Vice-Pres., Hugh

Rimmels, East¬

Dillon & Co.

Advanced
Paul

Group, Incorporated;

tional Securities & Research Corp.;

W.

the

of the Cashier's Depart¬

ment—Edward R.

Douglas K. Porteous, Vice-Pres¬
ident

is

in

salesmen of dealer and

firms

Funds"

the Spring Term by the New York

Finance, 20 Broad Street, New York City. Ten recognized
this fast
growing segment of the investment business
thorough training tc<S>

authorities

STATEMENT OF CONDITION, DECEMBER 31, 1948

Selling Mutual Funds

Salesmanship of Mutual Investment

course

Institute of

will

on

Now James A. Leavens, Inc.
SHAMOKIN,

PA. —The

firm

of Leavens & Leader, Ma¬
Temple Building, has been
changed to James A. Leavens, Inc.

V:

TRUST

This bank acts

as

D E P A R TME NT

Trustee, Executor and Corporate Agent

name

sonic

There is

no

change in personnel.

Member Federal

Deposit Insurance Corporation

by

the

importance of each state

heartening indication for the long-term outlook, and one
seem to be
fully recognized, is that the sharply rising

balance of commodity prices is

available

to the over-the-counter market as

that does not

commodity prices of the past three years now appear to be .leveling
moving into a better balance. This anticipated stability and

na¬

by-product of this
indication of the

Valenta cited various favorable factors in the
present eco¬
as
a
basis for optimism.
He said: "An important

off and

the

Officials of the Association be¬

than 3,000

basis

the

As
New

the

to

newspaper

securities.

ual

will

Data

press.

in

market

through Association offices to any
newspaper, restricted in each case

aggregate of
individ¬

on an

more

the-counter

situation

most

great
relative

same—in the

Association, supplies

services,

slightly

stockholder resi¬
by

largest

over-the-counter,

tionwide financial columns of the

single state.

undertaken

the

quate representation for the over-

fices

where ownership

concentrated in

to

interest

is

that

districts of the National Asso¬

—in

daily quotations to approximately
100 newspapers and the principal

strictly

of

the

it

securities.

14

The Quotations Committee,
through the various district of¬

attempt was

no

determine

active,
assume

counter.

6.7

New

state

to

their circulation territory in indi¬
vidual
stocks
traded
over-the-

8.8

84,187

them

9.1

110,615

Illinois

thereby

Committee, ciation

information

adequate

17.3

California

Quotations

most

being ^ circulated

in order that newspapers through¬
out the country would have more

Total No. of

"D. G." Sees High Business
Activity in '49
Corporate earnings
1949, but there are no

National

holders follows:

of

The
more than a year ago
in connection with the work of its

the

also representative of the

in

extent

Association

The first eleven states in

number and

National Securities and Research bulletin.

a

a

i:n<$>

the survey, while California ranks

Maryland

—From

Dealers, Inc., has completed

A total of 1.260,421 stockholders is included in
New York leads all states in the number of stockholders

those

New

stocks

securities.

the study.

of

reasonable
are

dealt

of the geographic distribution of stockholders of 362 over-the-

survey

second.

Corp."

also

lead, followed by California and Connecticut.

Massachusetts

Zenith Radio

Being
they

Study covering 362 securities and 1,260,421 stockholders, shows
New

Sylvania Electric Products

.

in

Over-the-Counter Securities
j

19

those stocks most actively traded
the over-the-counter market.

The NASD Surveys Geographical Distribution of

Westinghouse Electric

Magnavox Co.
Mallory & Co.

its

(175)

be

2<T

COMMERCIAL & FINANCIAL CHRONICLE

THE

(176)

Thursday, January 13, 194$

Miss. River Fuel Com,

Blunt Ellis & Shnmons Opens in Chicago;
and Chicago Stock Exchs.
Offered at $30 Per Shr.

Securities Salesman's Comer
By JOHN

.

CHICAGO, ILL.—Organization of

investment and broker¬
.

11

Jan.

pleasant personality with background knowledge and you
fail, providing of course, that you expose yourself to business. nqt represent new financing by
tne
corporation.
ThesC
shares
we are going to try and be specific and relate to you an
actual case history of how an account was obtained in one calf,
it is were purchased from Standard
true that circumstances were ideal for such a result to be accomplished Oil Co. (New Jersey) last July by
a group of nine investment houses
so quickly as will be noted in the following:
As a result of a mail campaign an inquiry was received con¬ headed by Union Securities Corp.
• a

a new

Securities Corp. on age firm, Blunt Ellis & Simmons, the largest such company formed
offered 144,200 shares of in Chicago in many years, is announced by John E.
Blunt, 3rd, R.
common capital stock (par $10) of
Winfield Ellis and Richard W. Simmons, formerly Vice-Presidents of
Mississippi River Fuel Corp. at
<J>_
$30 per share. The offering does
Mr. Cronwall were formerly as¬
Union

by

OTJTTON

It is "what you lcnow" combined with the way "you use it" that
builds confidence and thereby opens the door to new aCcorints
Com¬
bine

groujb headed

An underwriting

can't

sociated with Lee Higginson Corp..

This week

in

cerning a small lot of an unlisted common stock. The letter was an¬
swered and the owner of this stock stated that he would be in the

dealer was located for a week, and. if the dealer
was* interested in purchasing this stock that he should telephone the
owner of the stock at the hotel where he was staying.
(Favorable
circumstance number 1.)
The dealer made the telephone call to the
hotelVand he was told that the party in question was located at a
certain manufacturing firm and that he should call there. It so hap¬
pened that the dealer knew one of the officers of this company, and
had done some business with him. When he called the new prospect
city where this

Dividends

of

$1.75

Mclivaine" and

Board

and proceeded to have lunch. (Favorable circum¬
stance number 3.) The pfospect wanted to 'talk about his .business of

the dining room

selling

textile machinery. It was something he had been doing for
•over 40 years.
The securities man let him talk. In fact, he encouraged
him to talk. But here is where he began to SELL. Here is where the

Co.;

A.

C.

Allyn

John

E.

3rd

Blunt,

R.

firm

as Manager of the municipal*
department.
Mr. Fitzgerald was

Ellis

Winfield

formerly
Walter

by

date.

Timing,

seeing

an

opportunity, and closing properly, all would

Among the

.

have been to

no

avail if the salesman in this instance'had* not'built
If you can talk about the other* man's business intel¬

CONFIDENCE.

Harold

body, President.
considered
of

the

P.

Good-

/
matters to be
interim report
Plan Committee,

an

Pension

ligently enough to get him to talk about it for. an .hour, bud, you're
Federal taxation, margins, mem¬
iri! It takes a combination of these three ingredients to open ac¬
ber firm operating economies and
counts: Timing
the ability to seize opportunities ... and cus¬
Association public relations ac¬
tomer confidence.
tivities. Business sessions of the
*•••
But nothing can be done unless YOU SEE THE PEOPLE WHO
Board will be held Thursday all
CAN BUY, MAKE THOSE CALLS
MAKE THOSE CALLS
day and Friday and
Saturday
AND MAKE THOSE CALLS COUNT. That is the difference between
mornings.
>
/
success and failure in this business.
u'
•
*
•
*
.

.

.

.

.

.

.

.

.

Buffalo

members

of

the

Asso¬

ciation

are
holding
a
dinner
meeting of Buffalo business men

Wadsworth V.-P.of
Union Securities:

J. A. Hogle & Go.
LOS

ANGELES, CALIF.—Sid¬

B. Hook has become associ¬
ated with J. A. Hogle & Co., 507
West Sixth Street, as Manager of
the Bond Department. Mr. Hook
ney

was

for

formerly Municipal Manager
Turner-Poindexter

&

Co.

Thomas M. Hammond, who has
been with -J. A. Hogle & Co. for
some

time,

has

been

appointed

^Union

Securities

Broadway,
nounced

worth

has

President

Mr.

been

with

65

York City,

an¬

R.

elected

the

of

Corp.

has

Wads-

been

associ¬

Union Securities

inception

in * 1938,

from

prior

to

Manager of the Bevefly Hills of¬

which time he had been with J. &

fice, 335 North Beverly Drive.

W.

Seligman & Co. since 1928.

Board

Thursday, Jan. 20,
which will be addressed by Mr.

Goodbody
Boylan,
of

of

Robert

of the
the

New

Board

will

also

be

on Thursday. On Friday
they will be the guests of the Ni¬

agara-Hudson

Co.—visit¬

Power

ing the plants of the

company

the afternoon followed by
the

Buffalo

Country Club.

a

The New York Stock

on

membership of the board
creased

Established 1913




from

San Francisco

seven

to

was

in¬

eight attd

Frederick

Andre

drew

Exchange,
of

Jan.

was

elected

1, 1949, to

fill the vacancy occasioned by the
increase.

V.

from

with¬

Smolianinoff

partnership

Cohu

in

Richard W. Simmons

Robert C. Townsend will retire
Lee

The

Higginson Corporation.
five other partners of the
firm

from G. C. Haas & Co. Jan.
H. O.

new

Eugene Hotchkiss, Gil¬
Osgood, James D. Casey,

are

bert H.

in

14.

Wood, Jr., general partner

Walker & Co., became

Wood,

limited partner Jan. 1.

a

Transfer of the Exchange mem¬
Jr., G. Paul Miller and Stanley E.
Cronwall. The new firm, with of¬ bership
of the late Loomis L.

fices at 208 South LaSalle Street,

is

the

of

member

a

White to

York be

New

Stock

Exchange
and
Chicago
Exchange and is the Chi¬

cago

correspondent

Stock

on
as

Dartmouth
a number
he has been active in the
from

graduated

in

College
of years

For

1922.

affairs of the Investment Bankers
Association

America,

of

Jan. 20.

will

Uhlmann, Jr.

the. Exchange

by

Mr. Uhlmann will act

individual floor broker it is

an

Transfer of the Exchange mem¬

Chicago

Mr. Blunt is a native of

and

Paul

considered

Clark, understood.

of

Dodge & Co., New York.

a

was

from 1942 to 1944, and
served four terms on the Central

bership of the late James E. Ben-,
nett

to

Frank

considered
Jan.
as

a

by

will

be

Exchange

on

Miller

A.

the

Mr. Miller will continue

20.

partner of James E. Bennett

& Co.

.

,

governor

States

executive

Group

man.

Mr.

<

the

on

Blunt

IB A

commit¬

the-counter

rules,

ness

conduct

is

trustee

a

also

and

served

has

committees

over-

on

finance, busi¬
legislation. He

of Hull

New School to Hear

Benj. Graham Speak
Benjamin Graham, President of
Graham-New¬
man

Asso¬

House

Corp. and
in

lecturer

ciation.
of

finance, will
speak on "The-

Chicago arid graduated from the

Stockholder,

University

as

Mr.

is

Ellis

active

civic

life

director

native

a

Wisconsin. He has

of

been

also

business

the

in

Chicago

of

and

Corporation

and

and

is

a

a

Business'"
the

t

New

School for So¬

Rothmoor

The

of

Owner

the

Aluminate

National

of

cial

Research,.
12th

Corporation, both of Chicago, dnd

66

The

Canadian

Street, Thurs¬

Ltd.

of

Toronto.

of

jnember
of

the

Management
Ellis

Mr.

Chicago

Council

Co.,

war

a

day,
5:30

is

of

Jart.

20,'

Mr.

p.m.

Graham

Boy

America, and during the
years was active in .the War

Loan

West

board

executive

the

Benjamin

is

[ guest lecturer

Graham

[

Drives, serving as Chairman

in the course
"Investment'

,

of the first War Loan Drive in Today" given at the New School
A. Wilfred May, Economist:
the Metropolitan Chicago District, by

Vice-C h

Drive,

irman of the

a

Second

member

as

a

National War Finance Committee.

Mr. Ellis also
the

and

Editor.

•

/

.

of the

and

Board

of

was

a

member

Governors

of

6t

the

Now Johnson &
The

firm

name

Bailey

of

Robert

G*

Johnson
&
Co., 61
Broadway,
Security New
York City, meriibers of the
Dealers during 1944-46.
New York Stock Exchange, has
Mr. Simmons was born in St. been
changed to Johnson & Bailey,
Louis and is a graduate of Yale
Partners, Robert G. Johnson and
University.
He
was
recently
Anthony J. Bailey, remain the
elected a
of the Invest¬

Association

of

governor

ment

Bankers

serving
tral

as

Association,

States

of

of

after

same.

'

Chairman of the Cen¬
Group

for

ident

as

retired

Clarkson

H.

& Co., Jan. 1.

East Orange, N. J., members New

director

firm

partnership in Auchincloss,
Parker & Redpath on Dec. 31.

1948. Mr. Simmons is

a

Exchange

from

Harry D. Miller of Nugent & Igo'e,
York Stock

4, N. Y.

Cor¬

Dec. 1, 1948, the

;

r

.

changes:

National

meeting of the board of

directors of Allied Products

QUOTATION BUREAU, Inc.

in

dinrier

Harry D. Miller Director

poration held

Chicago

guests

firm,"

own

Co.

has announced the following

Scouts of

Buffalo

the

At

46 Front Street, New York

York

luncheon

Over-the-Counter Quotation Services

NATIONAL

P.

Board

Forge Co. and
Spencer Kellogg & Sons, Inc., at

at

For 36 Years

Mr.

and

Chairman

Exchange.

The

of

on

Governors

Stock

Vice-

a

organization.

Statler Hotel in honor of

the

the

Corp*.,

George

Wadsworth

ated
its

New

that

at

his

of

Weekly Firm Changes

tee, including one term as Chair¬

many

are:

head

Fitzgerald &

New York Stock Exchange ;

he mentioned Warner & Swasey's new loom; he spoke of some

luncheon

V

:

Walter J. Fitzgerald, Jr. has be¬
come
associated
with
the
new

Co., Inc.;
Equitable Securities Corp.; Hornblower & Weeks; Tucker, Anthony
& Co.; G. H. Walker & Co.; Bafeman, Eichler & Co.; Alex. BroWn
& Sons; Dewar, Robertson & Pafn-

S. E, Firms' Ass'is to

partner

February 1.

really made a client.

man

Mr. Miller
in

Washington.

Madjson, Wise., where the new
firm will open a branch office on

&

coast; Johnston, Lemon & Co.; and
He asked about H & B Machine; Walker, Austin & Waggener.
of the
Also Boettcher & Co.; John W.
mlils with which he was familiar. He asked questions about the tex¬
Clarke, Inc.; A. G. Edwards &
tile machinery business, about new innovations of which he had
Sons; First Southwest Co.; Newheard; and the machinery man began to say to himself—this fellow
hard, Cook & Co.; Reinholdt &
seems to know a few things.
After they spent a friendly hour to¬
Gardner; William R. Staats Co.;
gether they adjourned to the prospect's room, the stock was ex¬
Stii'ei, Nicolaus & Co., Inc.; Bacon,
changed for the check, there were smiles all around, and our sales¬
Whipple & Co;; Blunt, Ellis &
man made his pitch for business.
Simmons; J. M. Dain & Co.; Far"I can appreciate, Mr. X,'1 said he, "that you possibly have some
well, Chapman & Co.; Masongood friends in the securities business that you have been favoririg
Hagan, Inc.; Stix & Co.; Straus &
for quite some time, and probably I might be overstepping a bit
Blosser and Wagenseller & Durst,
this time to ask you if we can do business with you again. However,
Inc.
.'"/V„■
we do have a very fine staff, and we try to keep right up to the min¬
ute on all the changing developments regarding investments.
Quite
frankly, I want to invite you to call me personally any time you have
any securities about which you want an opinion. .1 assure you we
will try and do the best job we can for you. (Favorable circumstance
number 4.) The prospect smiled and said, "That is right, I have had
ah account (though it is quite small) with an out-of-town'firm and
The Board of Governors of the
I had been thinking of making a change since' it rs inconvenient to
Association
of
Stock
Exchange
do business by mail. If you don't mind a small account like mine I
firms will hold its annual Winter
think I would like to have you take it over.'' They left with a promise
meeting at Buffalo, New York, on
of the new client to sCnd in his list of holdings and an engagement Jan. 20, 21 and 22, 1949, it was
two weeks hence when the securities dealer qpuld even qp o;i the
annotinced
securities

in

be" the resident

will

Louisiana to the Greater St. Louis

&

meeting the prospect in his room, they went together to

After

during the war
Assistant General

as

Counsel with the War Production

paid on the common stock of
Mississippi River Fuel in 1948 and
it is understood that earnings ap¬
proximated $3.60 per share. The
corporation, which was organized
in 1928, owns and. operates a nat¬
ural gas pipeline from northern
were

tactfully

and the invitation was accepted.

served

years

share

per

area, and is engaged in an expan¬
brought out this fact during the conversation.
This sion program which will increase
opened the door. The purchase of the stock was made over the the average daily sales capacity of
telephone. Here the dealei made his own break (favorable circum¬ its line from about 175,000 mcf per
stance number 2.)
He stated that he had a call near the prospect's day to 266,000 mcf per day.
hotel the next day, Arid offered to meet him and have a check in hand
Associated with Union Securi¬
if he had the stock for delivery, thereby saving the trouble and bother
ties Corp in the underwriting are:
of either mailing it or taking the long trip to the dealer's office. The
Kuhn, Loeb & Co.; Stone & Web¬
prospect liked the idea so much he invited the dealer to luncheon, ster Securities Corp.; White, Weld

lie

Chicago, and Mr. Osgood-was
previously associated with the
Chicago law firm of Wilson &

the

Bond

Chicago and

a

the

year

Past Pres¬

Traders

Club

Ungerleider Co. Admits
Ungerleider

&

Co.,

41

Broad

Street, New York City, members

director of The

of the New York Stock

Drake and The Edgewater Beach

announce that David R.

Seklir has

Hotels of Chicago.

been

firm

Mr.

a

Hotchkiss,

Mr.

Casey

and

admitted

to

general partner.

the

Exchange,

as

a

Volume

169

Stalin
.•'■i

-

Number 4768

THE

COMMERCIAL

Making Hitler Seem Like

a

ECA chief declares "Politburo
and

political,

well

as

as

-J'.''1

■

Baby: Hoffman

.

his

views

perhaps

MR. HOFFMAN: My

critical

our ■>

mates and

international

position
and

during

fully

,

Chamber

Commerce-

the

State

of

New

"Not only production goals, but
goals—we are pernaps even more

send

York,

*

goals.

of
Paul

American

G.

Hoffman

complacency,

'S

the ECA head said: "I don't think

have

we

this

l'ocus—in
in

that

in

conflict

the

impression has been—at
I
had
the
impression up
fairly
recently—that
the

least

until

Russians
an

world

a
sharp enougn focus,
words, it seems to me

other

really engaged in

were

effort

to

the

promote
of Communism.

spread

Communism.

is

It is

different

as

as

from

night, because the
they are trying to
Communism of poison;

Communism

spread is a

something

that
talking

get going
to these people
the world everywhere is

around
around

that

you

the Russian

Fifth Column is

operating;
they
are
spreading
poison, hatred, just plain cussedness,

and they are stir¬
chaos
and
confusion.

you

ring

see,

up
isn't

That

people
and

hood .:A<;A:\

"There is nothing of that in this
Russian

plan

is only, in

opinion,

objective.

the

purpose

of

second¬
that for

a

They use
getting

that

in

secondly, that

and,

my

ary

position

talk

power

a

for the

country

Kremlin."

about

is

there

has

We

to

in

want

to

"This

it

those

to

as

government, has

ity,

well

as

which

continued.

they

these

power

a

countries,"

industry /and

yvhat "counts;

'

•*

the

didn't

ments

didn't

know

all

about.

He

they

talk too much about

was

talking

was

acting.

were

it

what

all

and.
don't

They
this, but, be¬

lieve me, when you see the coun¬

that

tries

they

have

taken

fit

drive

this

menace

a

*

all

of

Asked

whether

is.

talk

about

it

the

as

danger

of the spread of Com¬
munism.
Let's talk about what it
is—an attempt

by the gang in the

Politburo to take
is

This

the

hadn't

last place they will
doing it, but if it

in

succeed

the world.

over

been

the

for

Marshall

Plan, they would have had West¬
ern Europe
by now. You just put
that
right on the line.
They
would have had France and Italy,

the

and
came
J-"

Marshall

Plan

simply

along and put them back."
■"

v

■

■

' ■'

:

Deficits
•

Asked

the

of

cause

export

"We have
the

Act

to

terials

facturing
the

significance

yesterday.
Number
we

are

1,

ally

behind

of

know

your

called

statement

a

aid

It

is

Greek

these

insisting

clear.
estimates that
on,




which

we

the

say,

$15

that.
Do you
fight them militarily?
by

MR.

HOFFMAN:

have got to have
three fronts.

I

want

said

views

all

You

don't

•

aid

That

is

are

not

out

that

objection

the

stress

because

the

on

I

also

important

didn't

I

can't

economic angle
that it was

that

prepared.
them to interpret

I

be

lieve.

didn't

want

my talk down¬
being an attack on any
military .expenditures.

I

i '

to

.

,

MR. HOFFMAN: You've got to
a balance.
You must have

so

recovery
■

wants

us

need

for

program

MR.

any

you

see

the

further aid after the

is over?

HOFFMAN:

hell
the

any

The banks'

of

1948

totaled

approximately
$515,000,000, compared with $435,000,000 at the close of 1947.
The notes

joint and several
Federal Home

are

of

11

Loan Banks.

have

no

is

PORTLAND, ORE. —James H.

issues that

Lynch has become associated with

I

want

Blankenship,

There

in

Blankenship,

Gould Firm

been

has

York City

the

last few

Gould

&

Inc., Wilcox Building.

formerly for

was

Blakely,

Mr. Lynch

many years

with

Russell, Hoppe, Stuart & Balfour.
J

-

•"

.
.

.

■

'

V

Trust Company
of Condition, December 31,1948

RESOURCES
<T.

......

$ 674,458,774.29

Obligations.

......

1,132,234,194.34

express

their
Other Bonds and Securities.

consider giving

am

not

68,027,926.90

Loans and Discounts

are reasons

458,734,635.66

Stock in Federal Reserve Bank

4,500,000.00

deciding
Customers'

know

Liability

Acceptances.

on

1,922,284.48

Income Accrued but Not Collected.

you

insurance

6,650,180.56

Banking House

Any

I

to

say

yes

much" out of

If

or

our

'

,

v

.

$2,356,427,996.23

.

$2,159,926,637.03

Deposits

Acceptances

comment • as

as

9,900,000.00

^

'

-

LIABILITIES

funds.
to

•'

'

,

1,954,426.48

Reserve for Taxes, Interest, and
Reserve for

am

Expenses.....

6,866,059.04
18,107,975.36

Contingencies

Income Collected but Not Earned

520,284.04

Capital Stock

60,000,000.00

Surplus

<■

90,000,000.00
19,052,614.28

Undivided Profits

no.

|

total

$2,356,427,996.23

•

Congress
United States Government obligations carried at $225,309,978.34

ship 50/50 American

pledged to

secure

purposes as

public and trust deposits and for other
required

or

permitted by law

in price, I am agreeable.
Member Federal Depoiil Inturance

QUESTION:

Plan

outstanding advances

to member institutions at the end

United States Government

is

On

you say

the

to

date

has

Corporation

overall

the Marshall
NEW

think

Mr. Smith.

Congress

I

Statement

.

.

Anything Con¬
to do, we will do.

me

thing, would
I

If

All

ate

Do

financ¬

home

so-

bottoms, regardless of the differ¬
ential

in

Con¬

these

and

'.",

.

to

It takes

have

QUESTION:

decline

National Bank

Hoffman, that you don't an¬ we now have to ship 25% of the
ticipate any conflict between our wheat in the form of flour. That
military security preparations and
'is a Congressional decision. :It
our
economic
security prepara¬

balanced program.

savings banks which are members
the Bank system and to the

seasonal

Continental Illinois

Mr.

a

savings and loan associations and
of

a

whether you are opposed?

up

is due to

Cash and Due from Banks.

This

marine

QUESTION:

isn't

resources

banksv

the good inflow of savings into the

•

concerned, in matters of that kind,

mean,

the

an

Your

MR. HOFFMAN: As far

...

that

Does

from

furor in New

a

which they
the
Italian

You

for

gress tells us

as

QUESTION:

l%s from cash

of

some

off,

Washington

MR. HOFFMAN:

mili¬

we

off

resources

obligations

expect

somewhat clouded.

the Act in this country.
There is going to be a lot of agi¬
tation to have: it changed, I be¬

putting"

was

ability of the banks to pay
$54,000,000 of the maturing

With

it.on

QUESTION:

want

raising

that there

them.

pay

cash

under

realize

tarily

stairs

to

clarification

free ballot, then

a

QUESTION:

going to go to war.
point at all.
I
impression to get

You

hold

to

us

so

come

J""'':' '■

i/i.

mean

the

that

•"

-

didn't want any

mature

retired from-

The

them

"Listen, why
million more
to ship these

HOFFMAN:

this.

MR. HOFFMAN: I didn't

notes

The remainder

issue will be

the people of a

as

ought to

we

consolidated

per¬

free to

are

through

to

to

is

want

people

notification

informal

..

mean

U. S. operations.

1%%
of that

OF CHICAGO

and

long

I would say

why

j.QUESTION:

As

country

you
on

have
abroad?"

you

to

up

we

causes

are

HOFFMAN:

MR.

to

'

Entire proceeds from the offer¬
ing will be used to refund $43,000,000 of the $97,000,000, series A,

Tito,

Mr.

It;.is

That

Fascistic,

sonal.

operations

spend

you

QUESTION:

and

agent. A countrywide selling group
of securities dealers. participated
in the offering. The notes, dated
Jan. 20, 1949, and maturing Jan,
20, 1950, were priced at par.

Congress

to

Government,

call

mean

an¬

the bag,

holding

American

I

want

don't

I

me

did

are

notes,

fcfy the Federal Home Loan Banks
through
Everett
Smith,
fiscal

ing and construction, according to

leave

Government.

v

couldn't

MR. HOFFMAN: All

asks

consolidated

1%%

series A-1950, was offered Jan. 11

*

clarification.

goods

eraJ. Home Loan Banks non-call¬
able

they

might propagate

we

three

Ppst-ECA Aid

quite

50/50?

than

Market

on

A. pew issue of $43,000,000 Fed-

ing Jan. 20, 1949.

formal stand against any¬
thing like the insurance or the

to

FHLB Notes

not.

or

"liberals"

and

the

made

what

lot of confusion.

because

ways—militarily, politically
economically.
What do you

Congress

....

QUESTION: You wouldn't take

■

That gener¬

whether

say

QUESTION:

know

v

..

the

do now, such as in the
country like Yugoslavia,

a

to extend

awful

in

don't

,"

.

swer that for you.
I think they
Plight not take formal action, but
might act informally.

Russian domination.

Congress to

said

I

of

that

Com¬

under

was

which, is, according
not
Communistic.

whether you want to say it now—
that you have to fight Communism

to..

MR. HOFFMAN: I

quite

inter¬

are

on

extent that Congress

that

to

wants

*

You

here—and

we

it quite clear that

don't

case

of the interview, follows:

QUESTION:

the

to

means

I

The transcript covering the bal¬

talk

all, because

■'

No, that isn't

munistic domination.

ma¬

Curtain, and we are
trying to meet that responsibility

ance

interna¬

would not want aid extended to

Iron

:i!

interested in is

country

manu¬

go

policy

ideology
one
The only thing

HOFFMAN:

at

ested

,

of

that

govern¬

of

statement

the other?

has made

aren't

purpose

goods

raw

to

propagate

to-the

economic

deficit of $1 to $3

a

was

any

the

are

true

the
•

„

Con¬

by

QUESTION: If they don't take

along later and

answer

tional political aggression?

abroad

send

the

for

used

that

see

we

billion, Mr. Hoffman said:
"There

you

get¬

controls,

the

object

with

way or

responsibility under

a

Ideology

of Greece or Italy, to come

mestic

ting behind the Iron Curtain be¬
Administrator replied:

\

gress?

MR.

are

very

that you are not interested in do¬

in

decided

HOFFMAN: "If

us

f. MR.

out

tions?

latest OEC report showing that at
the end of the program they are

going to have

goods

MR.
asks

that

shouldn't

who

ments

V

be

not

another month?

Left

program

recovery

see

that

gress, no action by February 2,
would you then extend
it
for

British Socialism, and those on the

had

Europe."

make

to

cause "we

Export Control..

power

'

not

correct

develop¬

a

that would make for

to say we

"Let's

into

a

Congress.

Americans objecting to the
Marshall Plan, both those on the
so-called
Right who object be¬

over,

and when you see what they have
done in China, then you realize

what

of

way

from

those

look at, and

these ' countries

in

•

directive

QUESTION: Mr. Hoffman, is it

in

have already proved their
value, because they have
already shown in many cases the
that

it

want

author¬

great

things

You

ERP- and Domestic

they

■planned

what that

me

MR. HOFFMAN: I want

'

means—you

in

QUESTION: If ihat 50/50 thing

i

precise

which

areas

and

any

QUESTION:

agriculture,

"We want those to

You tell

cleared?

of individuals, have the
say-so.
What .they do is

major

oil

go

ket rates.

made up

he

"That is the real thing

after—power.
If there
ever was a drive going on in the
world—a power drive.—Hitler was
a baby compared with this gang.
are

He

American bottoms,
as far as it is practicable, provid¬
ing the ships are available at mar¬

Commu¬

own

winning for themselves
in

sole

the

in

as

Asia

in

out

fiction?

;

in

areas

that

drifting

>

should

of how much

case

a

what

should

was,

I want Congress
give me a clear directive.
Congress determines whether they

they make in four years, but
a
case
of
knowing what
goals are, their objectives,

is

their

the

isn't

thing

States

direction,
and
it';gives •!you vthe
heebyjeebies. •
v

whole

means?

get it.

we

been

to do "is

do

to

have

Asia

still feel
shipping
ships?
That

United

being, at least, and if

see

you

HOFFMAN:

the

in

You

Congress." All

mone¬

what

Do

American

on

one.

got.

for the time

of

case

a

people

'The, danger of ;Cqmmunism in
Western Europe has been averted

which, if they
might be O. K.'q.

portipfi of goods we should ship
iii American ships.
That is tip/to

countries.

many

know

about it when

steel

the
ever

I think, quite
misinterpreted. It isn't up to me
for a moment to say what pro-

which

fiscal and

be

reform

tary

nistic trappings for the purpose of

position

by

be

(of the State Department)

money we spent in support of the
Marshall Plan the best bargain

about '50/50

same

50/50

(European) economies will
basically sound, and that means

.•;<

their

use

goals

would
to us,

case

MR.

adequately."

Hitler Was A Baby

"They

the

these
be

what the good
thought Communism

They thought it was sweet
lovely, alight with brother¬

was.

to

a

goods

What everybody wants to

even

ever

It

countries

QUESTION:

goals the gov¬
itself from, the

about
is,
production* and
agricultural goals. What we want

both

; "The
point I want to make is
(1) what we, the good people,
call
Communism
is
something
different
than
what
they
call

day

tne
for

talk

'

Warning

in

sets

"There are two separate sets of

T h urs day,.

Jan. ti.

Europe,

standpoint of its getting its fiscal
'house in order and getting \ its
monetary system in order, and
knocking down trade barriers. v

of

of

insisting

are

we

certain

ernment

the

at

goals

interested

a press

c o n i erence

held

'plan'-T^these esti¬

on—

frankly

'

than

word for

on

the subject
of our
being shipped back

MR. HOFFMAN: See Mr. Bruce

opinion is

that the results to date makes the

further aid then would not be on
the basis of a program for all of

better

any

about
metal

own

21

to us.

■

don't: know

days

Our Best Bargain

Stalinism is now putting on a world power drive far
exceeding the scope of the Hitlerism of 10 years
ago, is a basic conclusion reached by Paul G. Hoffman, Economic Coopera¬
tion Administrator, on his return from a
survey trip through Europe and Asia. Mr. Hoffm
a n
exr——
■
;, :
■■ 7—
'/A-—A ■■■ ■;.
■.
/-■■.. ..
V
pressed

(177)

and if you had it to
do again,
would you do it the same way?

Gang" is driving to taka aver world. Maintains there must be military
economic fronts, to contain Soviet operation^ Cites ECA's emphasis on fiscal
ant* monetary reform.
V
|
s ■■■>'.
U'

'

i:.:/

CHRONICLE

FINANCIAL

&

been

successful,

YORK

CORRESPONDENTS' E. J. McCKATH

AND

1#A. ANDERSON - M

STREET

>

••

r

22-

COMMERCIAL

THE

(178)

Blame Instalment Credit Curbs for Threatened

Viewing Europe

Lay-Offs in the Automobile Industry

Industries, Inc., after visit to European continent,
of needs of separate nations,
that country's exports.

Vice-President of Dresser

J. B. O'Connor, Executive

Regulation W threatens "spiral of unemployment" in auto

play in the rehabilitation of Europe, which is quite
apart from anything which can be accomplished by this or other governments, J. B. O'Con¬
nor, Executive Vice-President of Dresser Industries, Inc., reported in a statement issued
enterprise has a role to

Private

Following

the company's chief

Con¬

the

on

during

tinent,

which he vis¬

in¬

the

ited

dustrial

land

of

nomic

eco¬

recov¬

labor

accele¬
rated where it
most

as

open

present

at

of coal

hides, grains,

South American

Czechoslovakian

for

etc.,

coffee,

used in
the construction of refineries in
the South American countries, is
as
good an
example as any,"
O'Connor said, "of the fashion in
which Yankee ingenuity is help¬
ing break the stalemate created
by lack of dollar exchange abroad.

machinery, which can be

words, capital goods are

In other

South

ammonia

could

American country,

example, in undertaking a re¬
finery building program, sought
credits from U. S. Government

These institu¬

tions did not feel they

of

Group

could make

be " made

of

Com.

hence a plan whereby
goods shipped to Czechoslovakia
could, in effect, be exchanged for
ditions,

methane, but this
work¬
ers.
Under the circumstances, the
more
efficient process has been
shelved in favor of the method

a

Co.,

Koppers

"C

••

refining

and

which assures the

for

plants;

technology
instead

tem

of

the metric sys¬

use

dealing with feet

found sim¬
engineers to

and inches, it has been

American

for

pler

themselves to

confine

the job

of

creative engineering, leav¬

overall

ing the general engineering to be
done abroad by engineers regu¬

working

larly

with ,the

metric

system."
The

to

which

of

significance,

great

the

in

rate

Belgium is

making great progress in experi¬
work in the underground

gasification of coal," he said, "and
is preparing to continue this work
on a large scale."

opinion of Mr. O'Connor. He re¬
ports, for example, that in the
Valley, where most manufac¬

connection,

turing in Italy is done, there are

employment once more

developing

collar

in

tremendous

the

natural

gas

use

for

of

possibili¬

methane

industrial

or

pur¬

Sufficient drilling of wells

poses.

has already been done to indicate
that supplies
ucts

are

of petroleum prod¬
more
than adequate to

supply the needs of a substantial
amount of industry in that area,

which will then be in¬
of coal imports, today
numbering thousands of tons.
industry

dependent

"Here, again, the greatest needs
of

the

country,"

O'Connor

technicians

ican

machinery.
much

The

interested

and

ECA
in

American

is



t

very

assisting

in¬

should

ment

he

find
for white

believes,

to

of

in

needed

develop¬

the

engineering and chemi¬

cal projects.

"Dresser

O'Connor

Industries,"

on

the

common

stock

being paid at the
cents quarterly or $2

currently
of

50

pay¬

that

are

already

too

loaded

heavily

"One

by
he

the

of

German

difficulties

engineering

explained,

"is

the

faced

firms,"
lack

of

working capital and the inability
to

secure

other

than

short-term

the United

in

States has

job in the automotive industries
and consequently inroads of un¬

a

earn

$5,000 a year or more,
the high 18-month fi¬
Extension

rate.

nance

of

finance

months would cut
payments to about $75, they as¬
24

to

and make

the

once

Congressional directive

against undermining the national

production
order

in

employment

and

avoid

to

de-

man-made

a

it possible for j pression."

Guaranty Trust Go. Executives See Inflationary
Tendencies Still in Ascendency
In Annual

Report to stockholders for 1948, J. Luther Cleveland,
Kleitz, the President, say,

Chairman of the Board and William L.

however, that in last few months there have been signs of an

approach toward balance between supply and demand in some in¬
dustries. Wants Federal Deposit Insurance law amended to eliminate
assessments

on

participating banks when

The

from

proceeds

In

Annual

their

Report to shareholders of the Guaranty Trust

Company of New York, J. Luther Cleveland, the Chairman of the
Board, and William L. Kleitz, the President, after furnishing data

regarding the bank's operations for the year, comment on the "un-

price of

a

the sale of

be

used

in

with

Holton, Hull & Co.

Avenue.

Beach

He

CALIF.—Albert

become associated

was

Co., 110 Pine

formerly Long

representative for Maxwell,

Marshall & Co.

Any tendency in the
direction seems likely to

latter

encounter

a

powerful

offsetting

large Federal expendi¬
for
national
defense and
in

factor
tures

assistance.'
opposing

foreign

"These

forces',

com¬

unsettled state of

with tne

bined

relations, make the
coming year ob¬
The new Congress and the
for

outlook

Cleveland

J. Luther

William

L. Kleitz

the

Albert D. Gauthier With

with Holton, Hull &

with¬

international

company's general program of ex¬

D. Gauthier has

broaden

of recession.

111., when

proceeds will

connection

and

developing sufficient momen¬
tum to 'tip the scales on the side
out

newly acquired

The balance of the

pressure

continue

will

blast furnace and coke plant prop¬

erty near. Granite City,

—

—

is gradually giv¬
ing way to improved stability. It
is to be hoped that this trend

tially added to the company's gen¬
eral; funds.
It is intended that

chase

fund exceeds

reserve

billion dollars.

these additional shares will be ini¬

LONG BEACH,

with work to be spared.

out of seven persons em¬

one

ployed

tionary

panding and improving its plants
"has been exploring the pos¬
sibilities of using these German and reducing its indebtedness.
brains for the benefit of other
countries, since U. S. technicians

be¬

much

spread

hardships

wider," the statement continued.
out. Kaiser and Frazer pointed out

per annum.

says,

European and of South American

customers

relaxed forthwith,

be

fore

experts—the technical tal¬ the purchase is completed.

ent—so

as¬

serted, "are the services of Amer¬

particularly important in this

It is

American

of

mass

$783,750 will be used to retire the
according
to balance of the company's 4% pur¬
O'Connor, the No. 1 problem is chase money mortgage bonds and
re-employing the brains of the that $2,604,000 will be used to pro¬
country—and in so doing getting vide for the balance of the pur¬

Po

discriminatory blow

against certain industries and the

Germany,

manufacturers back on their feet.

ties

Dividends
are

mental

In

extent

Italy has
recovered from the ravages of war
is

"In another activity

down

have been reduced .by it.

"The

,

the

Italy to northern France.

cars

cars

cash

the

one-third.

afford

serted,

needed,
from southern

located all the way

can

production of organic chemicals,
alkylated
phenols
and
cresols,

.

and

who

period

ammonia installations are

a

modify

to

Most

styrene, polystyrene and phthalic
anhydride facilities; plants for the

maximum em¬

mining

after

Board

the

that

failed

far

so

regulation despite a flood of pro¬
tests and. the fact that sales of all

instal¬

W,

of

,

asserted

They
has

employment in auto manufacturpurchasers, they said, do "ing would have wide repercus¬
not object to the down payment, sions through the whole economy.
but only a select group of about
"The
danger
signals to date
14% of the nation's family heads, make 'it imperative
to heed at

the major prop¬
erties of. the ^company are 17 tar
distilling

month

ment of

at $31 per

Inc.,

w.

pointed

the highest

maintain

to

industries."

must
payments in excess of $100

make

Included among

more

would not employ as many

ployment—strip

regulation

the

officials

K-F

purchasers

ment

protective coastings and plastic
molding powders; two by-product
coke plants; 20 wood preserving
lignite."
'
plants and two foundry and ma¬
Belgium, one European country chine shop installations.
rhaterials useful to South Amer¬ to get off to a flying start fol¬
For the 10 months ended Oct.
ican industries had to be devised. lowing the end of the war, is to¬
31, 1948, the company's net sales
The successful execution of the day greatly in need of synthetic
were $163,301,525 and net income
plan depended in no small part ammonia plants for the produc¬ was
$8,173,892, equal to $5.03 per
on securing engineering talent to
tion of fertilizers, O'Connor dis¬
share on the 1,525,825 shares of
design and direct the manufacture covered. Because Germany, which common stock to be outstanding
of the industrial equipment in¬ once used to be the source of such
on
completion .of this financing.
volved in the exchange. This, we chemicals for the greater part of
For the full year 1947 net sales
of Dresser Industries were glad the Continent, is no longer able
were $162,457,305 and net income
to be able to do.
to meet the demand, he estimates
$6,165,783 or $3.65 per share on the
"Because
foreign
engineering that a score or more synthetic same basis.
under prevailing con¬

loans

such

of

under Regulation

that

public

share.

from

cheaply

modification

The

Jan.
10, 400,000
shares of common stock (par $10)
the

policies

automobile executives urged

automobiles."

underwriters which offered

75

to

said, "is a

ammonia.

as

credit.

consumer

of the 80th Congress

"adopt flexible and sensitive

possible level of production and
employment in the durable goods

ing that only the rich and highincome
families can buy better

Offers Koppers

Italian
a source of synthetic
Actually, the synthetic

lignite

restricts

which
The
a

First Boston

project by the ECA to use

for

sponsored sources.

be
gas

prob¬
in the rehabilitation of

the country," O'Connor

than

currencies other
good American dollars.
"One

lem faced

today in un¬

freezing

ing the situation to Regulation W
the
Federal Reserve
Board,

of

the

to

Henry J. Kaiser

Frazer

W.

of
the
occupying
to avoid a "spiral of unemploy¬
powers.
What is needed, as he
ment" in the auto industry.
sees
it, is a more liberal ratio,
They charged that the regula¬
possibly nine marks to the dollar,
to encourage export trade, with¬ tion, which restricts auto financ¬
ing to 18 months, results in the
out which recovery will continue
Reserve Board "virtually dictat¬
to be hamstrung.

"Indicative of the type of

of

because

secure

Joseph

should follow the

Board

Reserve

under develMarking the first major equity
opement in the Po Valley, would
be equally valuable for industrial financing of the new year, The
First Boston Corp. headed a group
purposes.
v
' .

from East to West
which the West needs, but could
otherwise

marks

the

Kaiser and Frazer stated that

governments

coming from fields

moved

the difficulties faced

natural

from

the

instructions

dollar, established by the military

demand, he points out, for syn¬
thetic ammonia Which is used in
the
manufacture
of fertilizers.
manufactured

three

of

ratio

low

immediate action
"credit
squeeze,"

for

Calling
against

the

over

the life

industry."

and

Equally interesting, in O'Con¬
nor's opinion, is the possibility of
developing in Italy a great chem¬
ical industry.
There is a great

Synthetic gasoline, which can

extend

of the mass

been

has

great American auto

blood of the

business, which would
help Germany to get back on a
self-sustaining basis, is limited,
O'Connor believes, because of the

year."

a

will

which

market

Export

and two ad¬

ating on natural gas

of families forced out

of all of Europe."

owning

with literally millions

better cars,

next three to five years.

hearth fur¬

of the

out a
engi¬ ditional furnaces are soon to fol¬
with the low. Operation of these three
available open hearths used to require the
importation of thousands of tons
countries concerned.

arrangement

"An

not

One

Dalmine Company, lo¬
cated at Bergamo, is already oper¬

being worked out by the Dresser
Industries group for the exchange

being

fuel.

a

nace

people are prevented from

striving to get back into produc¬
which

Regulation
W,"
the
"86% of the

"Under

the

tion

the

to buy

of their choice.

statement continued,

have orders from other industries

Italian

"know how"
and
materials

within the

of

destructive-

war's

the

car

Ruhr, O'Connor found,
German synthetic gas-producing
plants are all running in good
shape.
Most of them, he said,

steel industry is
another
which is beginning to
make extensive use of natural gas

been possible to work
combination of American

has

neering

of

"The

being

is

ery
J. B. O'Connor

mines,

traces

O'Con¬

In

—r—

families

middle-class

projects essential

to the recovery

ness.

found the

pace

direc¬

although
bombings and
today
shows few

badly damaged by

gium and Ger¬
nor

In other words, two to

to work on

men

which,

Milan,

is

tion

France, Swit¬
zerland,
Bel¬
many,

in

Typical of progress in this

areas

Italy,

of

financing.

becoming established
three month loans at prohibitively
in this area and is doing every¬
thing it can to help the. Italians high rates of interest. These firms,
if they had the financial means
who themselves have done a tre¬
mendous amount of work in clear¬ of meeting payrolls, could put a
many
technically-trained
ing away the ravages of war. great

weeks

statement ascrib-

executives, issued on Jan. 10 a

on

several

Corporation was

disclosure that the Kaiser-Frazer

a

contemplating laying off more than 25 % of its 15,000 employees at the
Willow Run plant near
Detroit^ Henry J. Kaiser and Joseph W. Frazer,
<§>—

January 7.<^
Back
from dustries

charge
industry.

Henry J. Kaiser and Joseph W. Frazer in public statement

private enterprise has to play role in rehabilitation of Europe. Tells
and advocates lowering exchange rate of German currency to aid

says

1949

Thursday, January 13,

CHRONICLE

FINANCIAL

&

outlook.
year just closed," say the
officers of the institution,

usually obscure" business
"The

leading

"has been one of large

ment at or
but

in
few

last

tendencies
ascendancy. In

inflationary

with

generally
the

production

business, with employ¬
close to the maximum,

and active

been signs

of

the

months
an

there have

approach toward

scure.

National

between

balance

in

a

supply

and de¬

number of industries,

suggesting that, in those sectors
of

our

economy

at

least,

Administration about to

office will face

take

problems of

exceptional gravity and complex¬

Barring further deterioration

ity.

of international

mestic

affairs
in

tered

relations,
can

be

our

do¬

adminis¬

the best interests

of all

the

people if they are approached

in

a

spirit

devotion

to

of
the

cooperation

and

national welfare

whole, with full recognition
indispensable contribution

as

mand

the

a

of

the

made by

der

a

infla- Only

industry and finance un¬
of free enterprise.

system

in

this

spirit

can

today's

,Volume 169
critical

needs

be

with

met

due

regard for the maintenance of the

long-term soundness of

indus¬

our

trial and credit structure.
"The

THE

Number 4768

immediate

objective

of

conservative

over-all

trarily
mate

restrictions

shut

off

loans

arbi¬

to

management

be¬

operations

the

the

of

bank have been in harmony

with
this aim. The company enters the
new year in a
strong position to
serve

present and future
the

ward

favoring

heavy

on the
sessments of banks for

proximately

higher

the close of 1947.

was

many

the

meas-

Corporation, pursuant to
law, completed the retirement of
the original capital of $289,000,000
which had been subscribed by the
States

Treasury

Reserve

provided that

and

the

should

foe retired only with capital funds
of
the
corporation
in exess of

$1,000,000,000.

After

therefore,

ment,

still had
amount.

alent to

retire¬

the

the

corporation

surplus of at least that

a

Since this fund is equiv¬
approximately 9% of total

capital funds of all insured banks,
it would seem appropriate to dis¬
continue

further

assessments,

thereby enabling banks to use the
saving to build up their capi¬

net

tal accounts.

"On

the

basis of deposit losses

by the public during the past 83
years and the loss experience of
the
Federal
Deposit
Insurance
Corporation since its organization,
it

that capital

appears

$1,000,000,000
to

meet

feel

that

the

present

and

Congress should
law

we

amend

that

so

of

adequate

emergency,

ments will not

the

fully

are

any

funds

when

is in excess of $1,000,Any such change in the
could
provide
that assess¬

fund

000,000.
law

should automatically be reimposed if the capital funds of
the corporation declined to $750,-

ment

000,000."
the

to

Annual

port, "the operations of the
pany in 1948 resulted in net

Re¬
com¬

oper¬

ating earnings of $17,976,883.80, as
compared with $17,420,474.07 in
1947.
Including security profits,
recoveries

on loans, etc., and de¬
ducting provision for reserve for
bad debts, net profits amounted to

$18,223,667.68 in 1948, which is
equivalent to $18.22 for each share
of

capital stock, as compared with
$18,284,755.29 and $18.28 per share
"Interest

loans

on

increased

principally

$4,070,033.65,

because
of a
rise of $139,000,000
in the
average amount of loans outstand¬

ing
on

higher

and

The

loans

of foreign

rates

annual

average

all

offices)

earned

rate

of

in

declined

of

$254,000,000

on

decrease

the

in

a

average

amount of investments. The
age

R.

annual

rate

earned,

aver¬

before

1 94

Amott

most

7,

inclu¬
For

held within

during

narrow

each

months

trading limits

month

period.

of

While

the

will

be

the next major

downward.

trary,

the

between

On

the

con¬

present

relationship
prices of1 real estate

.

the

securities and the current
as

trend

well

as

prospective

earning power of
the underlying properties should
provide

strong support base for
existing values.
a

At the present level of the

ket it

is

would

be

estate
the

Trust

are

of

security
as

of

to

record

from

gain

preceding

eight

1947.

reason

simple

of Foreign

partment
the
Bond

Bond

Branches, Foreign De¬

commissions, profits

United

States

Trading
Trading

of

Government

and

Municipal

Departments,

and

The

..

years

is

by the Amott-Baker Realty Bond
Price Averages, an index of 200

issues,

was $281 per $1,000 bond.
Nov. 30, 1948, the same 200

issues

$792

had

an

$1,000 bond, or approxi¬
three times greater than

at the close of 1940.

Thus, for the

market to register the

centage gain from
from

have

such

per¬

a

as

points.

many

results

New

Street

from

first
95

"Under

be

Corporation income bonds,
with stock, moved from 88 to 108
queen

and

mortgage

vanced

from

downside

24

to

few

a

1955
On

ford

To expect

better relationship

a

between security prices and
prop¬
values
than
when
prices

down

to

$281 level.

a

first

The

a

portance
In

of

continuous

fact, the need for

lection grows

refinancing

in

and

steady and

buildings,

stantial

degree of investor confi¬
real

trust of
As
of

to

estate

eight

market

as

dis¬

penses

sult

As

that

became

leveling off
1948, the

in

much

very

more

selective than at any time within
recent

years.; In

contrast

to

classes

condition
of

real

of

relatively

securities

pronounced

fluctuations

price-wise.

the

classes

various

find

we

Among
securities

apartment

hotel,

apartment building is¬
selling below their clos¬

are

1947

cured

level

by

advanced
in office

while

issues

building securities prices
a
special significance

takes

on

when

it

is

noted

commissions received by the Trust

of

orded

87

averages

office
a

a

that

out

of

a

constituting the
minority group

building issues

price rise sufficient

rec¬

not

period
were
Joseph
H.
Fauset, Steele & Co.; Charles M.
Lynch, Jr., Moore, Leonard &
Lynch,

and Francis
Chaplin & Co.

ness,

J.

McGuin-

William W.

Reynolds, Reynolds
Co., has been named to fill the
unexpired term of Mr. Dinkey on
&

the

Board

of Governors.

re¬

Fidelity-Philadelphia

suffered.

investors

Trust Company

doubtful and fearful

change for the
eral business
At

comes

;

radical

a

Organized 1866

in the gen¬

worse

•;

Statement of Condition, December 31, 1948

picture will have to

such

time,

obviously,

the opportunities for improvement
will have passed.

ASSETS

DIRECTORS

Cash

Hand

on

'

and Due i'rom Banks.

$ 55,295,390.33

.

■

As the New Year starts, I would
surmise from the conditions which
exist

now

in

some

and

from

what

that the pattern

will

show

real

concerns

securities—in

ahead

may,

LEDYARD
THOMAS

little

HECKSCHER

Securities

•

•

Loans
WHARTON

ROBERT

change

A high degree
selectivity will continue to be
cardinal

t

rule.-

selectivity

hope

research

avoid

to

Only

as

out

comes

PHILIP

pitfalls

and

following
of

a

market

on

the

where it is

robins

stanley

vestment issues and

ing

more

promis¬

a sense,

(1) the
is running down;

Company

have

lasts

enjoyed,

forever

to

up

and

we

(2)

market

to

a

comparable to that of
ago.

the

degree
on
a

a

.

.

the
to

general

record

a

.

CHE8TERMAN

J.

Telephone Company oi

H.
B.

MALCOLM

2,889,117.48
100,000.00

.

:
.

.

629,904.29

»'

I

•

.

V

.

.

1.00

505,428.56
.

>

.

.

81,060.87

V

.

489,034.77

'1

Other Liabilities.
Reserve for

Reserve

$

....

.

.

633,592.46

H

.

.

.

899,958.59
193,104,133.90

.....

Interest,Taxes, etc.

forContingencies

608,725.06

2,000,000.00

.

Total Liabilities and Reserves

,....$ 197,246,390.01

BULLITT

HINGE

K,

ADAM

.

Surplus.

i

V Ice-President

.

....

.

.....

.

Undivided Profits

.

.

(

*

.awwvwv#

Capital.

Morgan. Lewis A Bocklus

$

6,700,000.00

'

13,300,000.00
5.045.850.83

.

The Penn Mutual Lite Insurance

Total

Company
H.

HOFFMAN

DOLAN

PAUL DREWRY

FOX

Capital Funds

Total Liabilities,
Reserves and Capital

)
,

,

missioner of Internal Revenue.

C. PETERSEN

s

Executive Vice-President

.-

$222^292^24^4

JOHN STEWART
Preeldent

permitted by Com¬

•

,

—»

United Stales Government obligations and other securities carried in the above

Government. State and Municipal deposits.
Clearing House Exchanges, and for fiduciary purposes as required by law in the
sum of $37,240,502.74.
statement are

The Donner

.

♦After deduction of Reserve for Bad Debls of $325,OOO.OOas

Company
HOWARD

25,045,850.83

.

Funds

Treasurer

pledged to

secure

Corporation

few years

1948

even

average

con¬

static

.

basis

intelligent research and careful
analysis
the
opportunities
for
profit will continue to be present
in 1949 as they were in

,

600,000.00

1,484,071.44

.

$222,292,24084

Treasury

Capital Funds
THOMAS

STANLEY W. COUSLEY, President

of

tinue

.

.

However, for those capable

should

,

LIABILITIES*
U. S.

Pennsylvania
ORVILLE

.

obviates

possibilities for profit

.

Deposits

President

more

the present level of the

,

„

Fidelity Building Corporation j

Other Deposits

The Pennsylvania Railroad

now,

than five good years in real estate

.;,

\

.

boom

.

67,797,172.95*

Total Assets

•

Preeldent

speculations because

clock, in

.

I
•

Branch Office, 325 Chestnut Street

cousley

w\

The Bell

difficult to select the sounder in¬

11,692,885.25

...

.....

President
American Pulley

21,642,412.28

.

j

ADOLPH G. ROSENGARTEN. JR.

to

a
point
becoming increasingly

,

Other Assets

Preeldent

basis

seems

.

Prepaid Taxes and Expenses

Day A Zlmmermann, Inc.
James h.

$114,381,151.95

'

Accrued Interest Receivable

Sharpies Corporation

FRANCI8

general average. It
we
have
reached

a

.

.

.

Mortgages

Stradley, Ronon, Slovens A Young

losses that inevitably results from

.

.

T, SHARPLE8

Chairman of the Board
The

investors

can

the

59,085.761,62

Real Estate

of

from

.'

.

Vaults, Furniture and Fixtures

MORGAN

W. FINDLAY DOWNS

the

.

Investment in

DECHERT

A Clark

MARSHALL S.

,

PEPPER

Pepper, Bodine. 6tokes A Han, lit on

year

,

Stock of Federal Reserve Bank

W. B. Baundere Company
GEORGE

,

Other Securities

LAWRENCE SAUNDERS
President

.

•'

State, Count.v and Municipal Securities.

M. CARDEZA

D.

Barnes, Dt-chert, Price, Smith

the

from that of 1948.
of

U. S. Government

visualized

be

measure,

for the near-term,

se¬

buildings have
price. The advance

Bar¬
three-

rav¬

ex¬

grown

and

office
in

a

'

no

and

sues

ing

that

of

Directors for

as

year

PITTSBURGH, PA.—At the An¬
Meeting of the Pittsburgh
Stock Exchange Charles E. Din¬
key, Jr., was elected President.

one

on

earnings have

have

aver¬

and

been

heavy increase in

that before relief

me

the

estate

the

Named

of

consequence, many

a

J. Bauer, John B.
Co., Treasurer.

The

the

a

on

careful

the

of

prices

bour &

a

the other with the

hand and

such

years ago.

result

a

security

securities

the speculative

Dinkey Pres. of

apartment

and hotels have

hotels

aged by rent controls

of

dence in

providing

substantial stream

ket

sub¬

"compulsory" plans to oblige some indi¬
others' doctor bills and related costs.
William

Chas,

be¬

income for debt retirement.

apartment

not do any

can

viduals to pay

earnings in the face of rising ex¬
penses.
These j properties
have Other officers named were Frank
been more successful'in- the past Mi
Tiernan,
Preston,
Watt
&
year in attracting new capital for Schoyer,
Vice - President;
and

estate

a

of

essence

nual

of the market—as it

reflects

it does not and

se¬

to continue to increase rentals and

realistic market than the
and

course,

thing. Boil it all down and it is found to be the

Pittsburgh St. Exch.

market today is a much healthier
1941

in

increasingly impor¬

can

the

/

be!

be attributed primarily
ability of these properties

issues
to

V

stability of office building

The

is needed

care

research.

care

static in character.

come

it is and how much

severe

But, of

im¬

markets level off and

as

*

expensive it is."—Oscar Ewing, Federal Secur¬

such

price

static market illustrate the

budgetable percentages of

soothingly misleading this term "insurance"
One would almost suppose that in this, as
in other instances, it assures us all something for
nothing!

changes within the framework of

and

mar¬

wide

of

fixed and

in

or

can

51/2S, 49 to 39.
examples

and not

earn

How

stock, 94 to 80; Sherneth
income 53/4s, with stock,

These

would be

expenditures

or

from 76 to 61 and Bellevue Strat¬

a

erty

were

with

the

ity Administrator.

the

Broadmoor

are:

120,000,000

how

the

41.

insurance,

by all the people who work and

made

how

ad¬

examples of

declines

worst

IV2S,

between

cover

earnings, regardless of how often illness strikes

the New .York Athletic Club

second

then

merely by those who happen to be sick. They would

3s, with stock,
120, the Man-

to

would

*

130,000,000 people.

made

and Nov. 30, 1948,
110, the Broadway-*

to

went

occur.

in

even

three

relatively
strong bull market is not logical.
Moreover, at a level of $792 per
$1,000 bond the market obviously

Department.",.




86

a

advance just about

to

times

same

price of $792
price of $281 it would

price

large

of

per

mately

as

price

average

total of 200 issues

several

a

For example, at

one.

1948

includes

any

the close of 1940 the
average price
of real estate
bonds, as measured

other miscellaneous earnings. The
total

this

possible during

was

the

very

prices

rate

through

hotel

profits

from

readily apparent that it
illogical to expect real

same

point

mar¬

recorded

item

1, J948

tant

year.

this

insurance
and

Twenty-

Corp.

necessarily

that

stagnant

commissions,

and

follow

ages certain individual issues

in

Avenue

it

that

Corp. frst 4s, with stock, from 85
to 72; Savoy-Plaza income bonds,

on United States Govern¬
obligations was 1.16%, as
against 1.20%
in the preceding

Department

gains

example,

of the market supports the belief
that a leveling off process is un¬
der way, it does not

ment

Included

12

the action

taxes,

"Other operating earnings were
$1,908,504.51 larger than in 1947.

the

part, security prices in 1948

contrasted
se¬

from

through

sive.

$3,420,923.77

the result of

as

as

1947.

"Interest and dividends
curities

those

1.93%,

was

1.74%

loans.

on

(exclusive

compared with

largely

H.

is recording

1947.

an

1941

On

v.;

According

preceding

assess¬

be required

the

of

years

law

capital

Fifth

price

for

Jan.

each

the

The

banks.

found,

istered during

Deposit In¬

surance

Federal

creditable

be

a method of
paying
complete medical care by a prepayment plan.
Ultimately the system would cover every form of
physician's care, both in the home, physician's office
and hospitals. It should meet
hospital charges, den¬
tal and nursing charges, cost of
eyeglasses, hearingaid devices and the cost of prescribed drugs.
"In the beginning the system would apply to
those persons covered by Social Security and their
families—approximately 85,000,000 people .at this
time. When Social Security is expanded to cover
agricultural and domestic employees, the self-em¬
ployed and various Government employees, health

Eighth Street Building income 4s,
with
stock,
advanced
between

•

United

at

i n g up to
the gains reg¬

u r

state:
"In 1948 the Federal

record

will

short of

deposit in¬

ap¬

than

•

event; it fell
considerably

as¬

1%

whole

a

Among the individual issues to

others. In any

the Guaranty executives

surance,

as

disappointing

-

Commenting

"National health insurance is

the other classes of securities but

put the averages

to

sound

a

some

23

for

Harry R. Amott, President of Amott, Baker & Co., Inc., special¬
securities, has issued the following statement on
performance of real estate securities market in 1948 and its prospects
for the current year: The performance of the real estate securities
market in^
1948, while only to offset the losses of all oi
investors

(179)

Paying the Other Fellow's Bilk

ists in real estate

custom¬

preservation of

economy."

for

its share to¬

and to contribute

ers

CHRONICLE

of Amott, Baker & Co., Inc., holds market
real estate securities is in healthy condition and reflects substan¬
tial investor confidence. Urges care in selection of issues.

by

legiti¬
sound productive

The

that

not

that

access

for

purposes.

lieves

basis,

FINANCIAL

H. R. Amott, President

stability can best be at¬
tained by the extension of credit
a

&

Sees Support for Existing Real Estate
Securities Values—Reviews 1948 Market

economic

on

COMMERCIAL

trend.

i

BROAD AND WALNUT STREETS, PHILADELPHIA 9
Member

federal Reserve System

,

Member Fcdersl Deposit losursnce Corporation

^

fW

THE

(180)

24

COMMERCIAL

Wrong Heroes Stealing
Bows, says Rukeyser
Economic

commentator

claims to credit for

Dealers for their current
their previous com¬

castigates New

this

made

outlook. Insists good times de¬
economic house in order.
singled out for decorations and hon¬

an

on

Jan

10, as the
luncheon
speaker at the
annual con¬
vention of the

York

New

State Publish¬

Associa¬

ers

Hotel

Syra¬

equivalent

should not over¬
the newspapers publicized propagandists, they un¬
wittingly contribute to public mis¬
are in competition with other ad¬
information. In view of the au¬
vertising media, including radio
and television, which do not use thority of print, it is important to

obtainable
Merryle S. Rukeyser

D e a 1

for Interna¬
newspapers,

amount of money

regular • meeting

also

the

tion of the

Germans

were

4

economy

On

it

was

channeled

of American Iron and Steel Institute,

Walter S. Tower, President
says

involved in the boom.

been

"With the

stream.

energy

and better tools,

factors
vigorous lift to the

several special short-term
national

a

economy.

Bumper Crops a Providential

in balance,

Steelmaking capacity of the steel

industry, at 96,000,000 tons per

is now greater than ever before in war or peace, and further
large expansion is planned during the next two years, it was an¬
nounced Jan. 6 by Walter S. Tower, President, American Iron and

year,

Steel Institute/*

By

support the great increase in
steelmaking capacity, other pro¬
To

theirprograms
of e x p ansion
and improve¬
ment,

of

the

industry

in-

and

as

of Jan.

Tower

crease
was

through government-

f;

t

Mr.
are

planned over the next two years

furnace, coke and other

Minor Changes)

(Subject to

higher

appointed
salaried market,
for Aymar Johnson of,
Johnson & Wood, and in that ca¬
employee

pacity represented the firm on the;
New York Curb Exchange floor.,
until, in 1940, "he acquired, his
membership on the Curb and be¬
came a partner of the firm.

Coke, Pig Iron,
Ferroalloys

Gift

for

institution

ernmental

of peacetime

controls,

for

gov¬

ser

"Among them is the fortuitous

and
the
independent
Hugh S. Johnson. Their brochure
entitled 'Equality for Agriculture'
facturer,

published in 1922 was followed up
by
two
McNary-Haugen
bills,
which were unwisely vetoed. Now

Capacity (Ingots and Steel
Casting) (Net Tons)

parties are committed
policy of farm parity.

both major
to

a

"Further

lift

Crucible

96,120,930

Total

(Capacity,

Jan.

1948,

1,

94,233,460 Net Tons.)
Annual Coke

was

■

Capacity of Pig Iron

and Steel Producers

By-product

armament boom.

Canadian

manufacturers

The spending of

ser




the

tion

George
A.
McDowell & Co.), Wm. C.

3,345,750

&

Roney

C.

CO.).

:

:

is expected that

It

known

(Capacity, Jan. 1, 1948, was 62,505,840 Net Tons.)

Roney

Co.), Wayne
Spade (Watling, Lerchen & Co.)
and Frank Voorheis (Goodbody &
(Wm.

nationally

a

economist and radio com¬

will

mentator

principal

the

be

In addition to Exchange

speaker.

the

from'

others

Chairman of Board of

O'Brien

the
o n

current board mem¬

Eisinger of Cohen, Si& Co., Thomas F. Fagan

Jacob S.
monson

of

Moore

& Schley;

and investment indus¬

try, bankers

Charles Mo-

Elects New Officers
BUFFALO, N. Y.

DeLancey Rochester, Jr.,

DeLan-

Inc.

Brown of

Other officers

Rochester Co.

cey

elected

were:

Browning,,

Homer

Marine Trust Co, of Buffalo,

President;

Russell

Schoellkopf,\Hutton
Treasurer;

Charles

J.

Hutton

William

of

&

H.

and

Vice-

Huttonj

& Pomeroy,

W.

Secretary; Directors in
Mr.

class B governors

Stuart

succeed

Co.

and

as

elected

President to

&

ran,,

board Harold J.
Brown, Kiernan & Co.;

governing

The Bond

has

Charles R. Staples, Halsey,

members
the

—

Buffalo

of

Club

A

Jr. of Francis I. duPont & Co.,
Walter T. O'Hara of Thomson
& McKinnon have been nominated
for election to three-year terms

>

Buffalo Bond Club

class

as

and corporate exec¬

utives will attend.

bers.

elec¬

of

are

and

brokerage

Feb. 14 names
Edward C. Werle

will be self-deny¬

philanthropists," Mr. Rukey¬
declared, "it is suggested that

Erroll
Parcells & Co.);
McDowell (Geo. A;

Exley (Charles A.

_

the

at

Exchange

expected
newsprint

Bennet, Jri

Manley & Co.), C.

(M. A.

64,918,500

Total

Ex¬

An¬

Hotel

assisted by Edward T.

61,572,750

—___

Stock

will
Statler on
Tuesday, Feb. 15, 1949. Dan Byrne
(Paine, Webber, Jackson & Curj
tis), will be General Chairman,1
the

at

held

be

(Net Tons)

___;

Beehive

Armin H.
Co.), Presi¬

—

announces that the
nual Dinner of the Exchange

20
6,112,870

be

to

annual

the United States.

ing

from

filled

earnings, had resulted dur¬

curtailment of
profits of publishing newspapers

the

comes

offices

ing 1948 in a sharp

"While it is not to be

Exchange..;

change,

5,191,000

Electric

MICH.

DETROIT,

Vogel (A. H. Vogel &
dent
of
the Detroit

Govs, of NY Curb Exchange

resultant boom in newsprint com¬

that

served.

of the stand¬

Hold Annual Dinner

84,B17,040

__________

Bessemer

Werle Renominated as

readjustments would proceed

in

has

and

members

thought that, while corrective

pany

Committee

Detroit Stock Exch. to >

punitive

taxation, and for a backward step
in labor-management legislation.
In the circumstances, Mr. Rukey¬

present Chairman of the Exec¬

ing committees of the

for

time.

Ex¬

Curb

the

in the nas* on many

70,541,850

(Capacity, Jan. 1, 1948 was 67,
438,950 Net Tons.)

Open Hearth

of

since July, 1940, and a-'
governor for the past five years,
Mr. Werle has been continuously
active in Exchange affairs. He is:

Charcoal 69,475,450
1,066,400

Total

Steel

member

A

change

Capacity (Net Tons)

Blast Furnace

than expected

&

was

utive

CAPACITIES AS OF JAN. 1, 1949

substan-

joined the employ of John-;
Wood. In 1928, Mr. Werle;

1923
son

at

departments.

in¬

in 1948

tially

year,

editions

a

More

said.

in blast

Tower

The

1, 1949 is rated at

tons

70,500,000

pacity by 1,800,000 tons
during
1948,

Waiter S. Tower

Blast furnace capacity

increased sharply during 1948

total ingot ca¬

said.

and

was

creased the

Mr.

the industry

likewise being expanded

improved.

compa¬

nies

facilities in

ducing
are

order

an

came

exchange firm of Wade, Temple-,
ton & Co., worked for two years'
for Morin S. Hare & Co., and in.

—

pushing

New York
quickly be-!
clerk for the stock
the

He

Exchange.

Stock

in¬
circumstance
of
a
providential dustry by industry, the total vol¬
Edward C. Werle, a partner in the firm of Johnson & Wood, has
ume
of trade and' employment
gift in the form of a succession of
been nominated to the Chairmanship of the Board of Governors of
could continue on a high plateau.
bumper crops at a time when
the New York Curb Exchange for the ensuing year, Francis Adams
needs and subsidies provided un¬
Referring to the newspaper out¬ Truslow, President of-the Exchange, announced. It w ill be Mr. Werle's
third consecu-^usually high selling prices. Since look, Mr. Rukeyser advised the
Charles J. Kershaw of Reynolds
tive
term
as
farm
income usually
constitutes Canadian newsprint suppliers to
&
Co.; Mortimer Landsberg of
emulate
the
Chairman
o f
statesmanship
and
one seventh of the total national
the
shown
in
pricing
country's Brickman, Landsberg & Co.; Ed¬
income,
farm
prosperity
has forbearance
second largest ward A. O'Brien; and Alexander
proven a governor for the whole policies by such American indus¬
securities R. Piper, Jr. of Paine, Webber,
economy.
The policy of balance tries as the steel and automobile
Jackson & Curtis. Mr. Piper will
market.
and parity preceded the New Deal manufacturers, in which, he said,
The
slate be a new member of the board.
by many years, and was formu¬ "administered prices" ; were less
than the traffic would bear.
Mr.
presented
t o Mr. Brown and Mr. Landsberg
lated immediately after the 1921
Exchange have served as governors in the
depression by the late George N. Rukeyser said that the skyrocket¬
members for past, while Mr. Kershaw and Mr.
Peek, a Republican plow manu¬ ing of newsprint prices, with the
^

.

of

floor

the

on

with further

increased expansion in 1948 was 1,800,000 tons,
growth on way.

—

given

George:

Ingot Capacity to

squirrel wagging his and the other two-thirds are pro¬ under schedule reported a year
tail.
The
observer
fallaciously ducing goods and services for ago.
Furnaces of the industry, oper¬
concluded that the motion of the themselves and their dependents,
squirrel's tail caused the log to as well as for the pyramid build¬ ating fully, can now pour more
than 180 tons of raw steel every
flow down the stream. It was the ers and their dependents."
minute for a full year, Mr Tower
old mistake of the cock in the
Must Put Government House
pointed out. The new record ca¬
play
'Chanticler'
who thought
in Order
pacity is 18% higher than the ca¬
that his crowing caused the sun
Mr. Rukeyser, who is author of pacity of 1940, compared with a
to rise.
"Financial Security in a Changing population increase of 11% during
"It is time to get down to brass
World," declared that perpetua¬ the same period of time.
tacks and find out what ingredi¬
tion of good times depends on put¬
While the 1348 additions were
ents have been put into the brew
of national prosperity.
With the ting the governmental economic being made, several new programs
house in order, and stopping in¬ of construction and improvement
politicians in the limelight, it is
flation. He said that his own fore¬ were launched,
Mr. Tower said.
too easy to overlook the immense
cast for the coming months was Cost ^>f
postwar expansion ex¬
social contributions of an elite of
creative men
the process engi¬ predicated on the belief that a ceeds $2 billion.
coalition between Northern Re¬
Schedules now call for the ad¬
neers, the machine tool designers,
and the brilliant men in manage¬ publicans, led by Senator Robert dition of 2.200,000 tons in 1949 and
A. Taft of
Ohio and Southern
500,000 tons in 1950. Thus, a total
ment, not to speak of the. thrift
headed by Senator capacity of more than 98,000,000
and industry of 60,000,000 self- Democrats,
Harry F. Byrd of Virginia and tons by the end of 1950 is indi¬
supporting Americans. In addition
Senator
Walter
F.
George
of
to the long-term factors of sup¬
cated, barring any enforced re¬
plementing
the
human muscle Georgia, would moderate propo¬ tirement of facilities which cannot
sals for reckless Federal spending, be foreseen or estimated at this
with increasing quantities of me¬

have

board in February.:

new

Clarence L. Eckstein and

newspaper

a

chanical

at its

Jan. 4 to be¬

on

effective with the organiza¬

come

with psycho¬ Herrel appear on the slate for re-{
logical <gas masks. For example^ election as trustees of the Curb
on the very first day Adolf Hitler
Exchange gratuity fund to serve
•
<
:
announced in a "speech that the for three years.

probably levelling off at the pre¬
vailing peak.
He warned that
costs
of
producing publications
had been frozen at a high break¬

misjudged the economic the large number at work itself
outlook," Mr. Rukeyser declared, generates trade on a high level.
"they are now publicly taking the If the gainfully occupied were en¬
bows for a high level of economic gaged at the pre-New Deal ratio
activity and a high level of em¬ in making goods for the market,
ployment.
They imply that they the availability of non-govern¬
planned it That way,' whereas the mental go.ods and services would
record shows that in the late sum¬ be vastly greater.
In 1929, gov¬
mer
and autumn of 1945 these ernment, national, State and local,
Federal
Government
planners was expending one-sixth of the
were predicting near-term defla¬
national income, compared with
tion and unemployment running one-third today.
Thus, we have
from 7,000,000 to 13,000,000 per¬ shortages
amidst 'full
employ¬
sons.
ment.' This springs from the fact
"Now counting on the shortness that double the normal ratio of
of the memory of the public, they employed persons is working for
are
crowing about the fruits of government, instead of for those
their program for putting more who are responding directly to
government into business.
The the demands of customers. Onethird of the population is build¬
error is like that of the man who
observed a log floating swiftly ing pyramids—goods and services
perched

the Curb board of governors

provide the reader

i ;
Mr. Rukeyser told the publish¬
ers
that newsprint prices
were

the pent up demand
goods, which was un¬
during the war, has

shots, and

the

They

newsprint."

"Of course,
for durable

economic
savants of the

the

down

print within quotation marks the
and
errors
of widely

fallacies

.

"A1 though

miscalled

guilelessly

reporters

filling a vacancy created;

by the resignation, of Bayard C.;
Hoppin of Hoppin Bros. & Co.,
which resignation was accepted by>

Million Tons

after V-J Day

e w

ganda.^'-If

governor

propa¬

.

cuse.

N

phessurfc

this

Estimates Rise of Steel

the

at

tion

be.vrrwdernized in

"peeds to

ity,

if they
undertake to keep their costs and
their prices at a level which will
enable their customers to live and

a
master
race,
Garry
Onderdonk of L. A.:
reports should have Mathey & Co. is Chairman of the1
read: 'Adolf Hitler, Chancellor of
on
leaf raking and boondoggling
Nominating Committee which also'
would not have a similar net ex¬ even point, and urged elimination Germany, today bucked the pre¬ includes Joseph J. Harris of Har^
ponderance
of
world scientific ris & Co.; "Arthur C. Brett, of
of waste so that newspapers could
pensive effect because if prudent
opinion, when he said that the Goodbody & Co.; James F. Byrne,
and thrifty citizens do not ap¬ survive and continue their impor¬
Teutons
constituted
a
master Jr.; O. Viking Hedberg of Auerprove Federal expenditures they tant public service.
tend to offset the effect by pull¬ !
"News writing," Mr. Rukeyser, race.'"
bach,
Pollak &' Richardson;:
Charles J. Williams of Edwarcf J^
ing in their own horns in spend-,
Duffy & Co., and Henry Parish,
ing for capital goods and other
items. Thus the men in the Polit¬
II; of Carl M. Loeb, Rhoades &:
buro unwittingly created psycho¬
Co.
'
- : ' ••
;
logical circumstances conducive to
Mr. Werle began his career inexpansion.
Wall Street in 1919 as a page boyr

di-

agnosis

Shearson, Hammill & Co. is namedto serve for two years as a class B

JournaMrii 'at" 'Columbia Univers¬

They will best serve

VanTuyl of

C.

change^ Robert

17 years on the

served, for

look the fact that

plete misjudgment of the economic
pend on putting government

being
ors in the American effort to lift living standards.
Merryle Stanley Rukeyser, economic commentator
tional News Service and editorial writer for the Hearst

view.

term

s

tead&lsj^^ff of the School of

themselves in the long run

flourish.

high activity in contrast to

The wrong heroes are

who

they might show greater enlight¬
ened self-interest in taking a long

1940

Thursday, January 13,

FINANCIAL CHRONICLE

&

Mr.

Dorries,

addition to

Dorries

are

Reber, Reber, Mundt

Co. and Charles H.

Wiest, Vie-

of the Ex¬ tor, Common, Dann & Co.

V

Volume

169

Municipal Bowf' Market Outlook

banks

report^

yield on municipals have practically doubled in last two
and, because of prospect of higher Federal taxation and

.average

years,

of support

continuation

showed

for

Co., members of the San Francisco and Los Angeles
dealers in state and municipal bonds, areJssua circular on the orutlook of the municipal bbnd
market for 1949 and 'a statement of reasons why investors with large
incomes should

increase

Exchange^

ing to their clients

cerning

outlook

the

munic¬

for

than 25%

ipals', the circular states:
.

"As

ceptance of business risks,- lasted
a sGant two years.The campaign

of

President

G09.

The above estimates of

municipal issues,

Truman,

normal

together, with his possible political
obligations to labor leaders,, and

a

the unexpected defeat of

000,000

conservative

so

members

(

many

2

to
businesses contemplating
expansion of facilities, nor does it
tempt the investor to place his

lation

capital at risk.

in

debt

expansion

reduced

tors

is

inclined

are

grade bonds
capital
bonds

borrowing

as

rather

seek

than

second-

likely

to

major

continue.

bearish

municipal
1944

now

of

maining discussion
.

"In

the

ten

municipal

new

65%

low,

and

excess

the

of

level.

1939

buyers able to ab¬

An

of

the

privately held State

municipal debt may be help¬
(See Table II.)

"In

income

generally

tax

problems

our

ings banks, and insurance

sav¬

compa¬

in

stocks to hold?"

"In

supply

Held

*

of

municipal

holdings declined
of the smaller

re¬

(000,000)

the

market

mercial

to

'

bonds,

only

but

in 1946.

holdings

State and

and Munici¬

of 46% in

47,

and

tween

Year

(June 30)

!

Com¬

from

7

(Capital

billion

tio

bonds/Moody's
of

89%.

1,335

1,551

849

325

16X.

12,858.

prospective

the

ings of the next few
corporation

'

:1934—

*17.0

1,030

1935-

*16.9

792

to

a

assuming

1936-

*17.1

*

rate continues.

;

15.1 '

1937-

11,197

19,261
15,204

2,862

"So far

J

-

790

1938-

1,119

15.0 "

1939-

15.5

bonds

tractive

ipal

exempt

2,405

6,760

In

2,547

7,709

873

13,208

2,716

383

13,962

8,744
9,515

16,088

376

16,288

3.274

18,676

3,209

11,110

1,264

22,775

3,455

12,809

-

3,556

26,696

5,358

18,365

-

4,716

32,628

7,130

23,622

36,000

8,300

25.800

"

497

1946..

12.8

*

998

1947-

13.6

'

2,228

"

of

as

a

bond,

the

the

aver¬

income rises,

As

purchasing taxincreases rapidly.

bonds

$20,000 to $22,000

income

Aaa

10,777

651

12.9

much

of this figure.

18,021

624

1945.:

yield

a

as

13,335
11,193

1,062

155

net

cor¬

A munic¬

10.799

736

680

236

yielding

bracket, for instance, the average
corporate w.ill produce a net
qf only 1.41% after taxes, while
high grade municipals will give

353
'

carrying

corporate

13,360
13,958

1,069

13!2

bond

will

high

a

high grade

a

Bau yield,.

5,615

'

a

tax-exempt return far in
"The

are

above

based

current

excess

calculations

income

tax

However, the basis for future
reduction1 ;is

not

now

Electric

water power

is

expense

with

80%

try.

The

entire

2,600

'2,500

$1950$1951-

18.2

2,500
2,500

$1952..

20.9

sharply since
election, investors in medium
and high income tax brackets
ap¬
pear justified in the purchase of

"Before
funds.

„

fear

deducting, bonds

tCommercial

and

held

state

and

Chronicle.

municipal

investment

,t

:y

(000,000

omitted)

'■

r

/■'' '•

\

.....

and

Commercial

Trusts

1937—

Corpns.

...

Personal

Banks

$8,800

$2,800

Insurance

3,600

Savings

Privately

Companies

Banks

Held

$1,800
2,200

$800

$15,300

400

1,700

.200

14,900
14,000

$1,100

7,600

1,100

1942—
*

•1943—

7,500

'

3,500

Total

Mutual

and

Assns.

>

1,100

trust

■■

'

'

■

"

■

Held by

Individuals

June 30

and

^Estimated.

TABLE II

t

,

in

Financial

t

.

Federal,
State and

'

the

around

Local

ratio

Governments

75%

on

support level not too far below

4,400

the present market. The principal

Ci 3,500

1,000

1,600

200

13,400

4,000

3,800

800

1,400

loo

13,000

3,400

6,800

4,100

700

1,200

100

12,900

2,900

1949,

6,800

5,000

700

1,100

100

13,700

2,900

interest

'

•

,

-Net Return on Corp.

Bds. After Inc. Taxes-

Surtax Net

Tax and Surtax

Income

in Bracket

(Aaa grade)

(A grade)

(Baa grade)

26.40%

2.05%

2.33%

2.60%

$ 6,000-$

8,000

2.78%

of

-

3.16%

3.53%

=

depreciation

therefore, lies in
rate

level
we

for

higher

a

corporate

to

bring

1.85%

2.10%

2.35%

1.63%

1.85%

2.07%

buyer with

49.28%

1.41%

1.60%

1.79%

$44,000-$ 50,000—

63.36%

1.02%

1.16%

1.29%

$90,000-$100,000—
Over $200,000

76.56%

.65%

.74%

.82%

82.1275%

.50%

.56%

.63%

about

higher interest rates.

41.36%

a

purchase

The

substantial

income appears
the

of

If

you

Of

course,

means

on

in

with Russia

war

The

Many

utility
of

need

regarding
companies

higher

amongst

urge you

cities
case

labor

one

should

different

indus¬

expense.

a

final thought,

to avoid utilities in big

that

might

be

bombed

of World War III.

CO.

CINCINNATI,
Statement

~

of

were

from

United

OHIO

Other
*

States

and

1948
?

and

Federal

Banks

Municipal

Bonds

Loans

72,424,389.57
86,300,205.48

5,635,524.36

Bonds

7,320,530.74

Securities

and

69,122,244.10

Discounts

Reserve

420,000.00

Stock

3,702,226.37
118,266.45
560,749.21

Banking

Premises Occupied
Liability Under Acceptances
Income Accrued Receivable and Prepaid Expense
Customers'

99,723.25

Resources

TOTAL

$245,703,859.53

-

LIABILITIES

Stock

Capital
Surplus

Undivided
General

—

Profits

$ 7,000,000.00
7,000,000.00
2,916,666.44

—

—

1,831,491.67

for

Dividends

Reserve

for

Taxes

Reserve

for

Liability

..

$ 16,916,666.44

Funds—

Capital

Reserve

Reserve

105,000.00

Payable

401,695.35

Interest, etc.
Under Acceptances

182,386.59
118,266.45

—

DEPOSITS:

222,839,594.55
2,783,254.17

"""Commercial, Bank and Savings
Other

S.

Government

1

525,504.31

Liabilities

TOTAL
*In

bond

of Dec. 31,

Bonds

State

such

taxable

as

RESOURCES
Cash and Due

addition

standing
**This

in

—

to

the

includes

this

item,

as

shown

we

have

$245,703,859.53

-

unused

loan

commitments out¬

amount of $2,942,813.16.
$2,413,555.01

of

trust

moneys

on

deposit

in

the

Banking^

Department, which, under the provisions of the banking law, Section 710-165

fully justified in
State

and

mu¬

of

the State of Ohio,
Member

is a
of

preferred

Federal

Member

nicipal bonds at current levels."

not

and not:more

ferent sections. As

in

are

which

large

that

tries, different companies and dif¬

rates.

street railway and bus companies

have

basket,

than 20% of his funds

public utilities,

vided

especially I

rates,

any one

investor should have his funds di¬

only "nigger in the wood¬
is the attitude of utility

commissions

in

than 5% in any one company. An

the Chinese Communists.

pile"

,,

however good that basket may be.

more

avoid

your

should not put

you

all of your eggs

This

as we

believe that

Importance of Diversification

have

long

authori¬

electricity; but not otherwise.

has

or

public

your

the average.
This should benefit the utilities so

corner

stocks

public service commission is fair,
then buy the stock of the com¬
pany supplying your home with

as well as great quantities
coal, oil and natural gas.
Al¬
though there may be some fur¬
ther price increases on some of

products, yet the

one's pur¬

company

this rate-making problem;
it is reflected by your local news¬

trucks,

turned downward

jump

one

on

of

U.

haps retard the forces that

33.44%




in

believe the No¬

$10,000-$ 12,000—.
$14,000-$ 16,000—
$20,000-$ 22,000—

'

electric

attitude
ties

wire, millions of poles, arms,
insulators, thousands of

these

always keep

is

mer¬

territory in which you live.
yourself, should know the

You,

little

electrical
industry
isr
large purchaser of supplies, in¬
cluding millions of miles of cop¬
and

of

to the

it

mer¬

inflation.

It is wise to confine

Operating Expenses

vember election results will per¬

operating

of

chase

much-talked-of

Total

market

securities, but

TABLE III
Combined Normal

risk

can

ahead

the

special

distinct handicap.

buy

chant

chemical

it has

a

fact, how¬
not free to

are

without

inflation hedges
steel, oil or
stocks.
A live

for
to

The

rates

chandising

papers.

General

per

their

better

The

bonds/

a

7,100

that utilities

permission, is

"fourth round" of wage increases.

Other

11

4,600

,6,900

'1947—

benchmark

our

("Bond Buyer's"

1944-,-

'1946—

the*

Moody's Aaa Utilities), producing

$4,000;

Formula."

raise

risen

municipal bonds.
So far as the
huge potential supply of bonds is
concerned, our recent experience
indicates adequate buying power

1945-

■

has

tion
ever,

of

case

double what

they were
provided they can¬
be caught by the "Deprecia¬

not

industry is low

Therefore,

from

worth

ten years ago

very

for

expense

the

2,500

be

20%, compared
in the printing indus¬

Notwithstanding the fact that the
market

In the

as

considering only the

of
replacement,
stocks
of
utility operating companies should

only

electrical

industry.
to

have

If

cost

e

new

companies, the labor

labor

selected

Hence,

companies

for safety
they should
hedges against

but

apparent.

'

"

19.6

k

Hedges

tax

16.7

•

a

in profits.

few labor troubles.

reason¬

of

15.2

•

t

income,

inflation.

and

by switching customers, the
total output could decline without
decline

a

recommended

be

not

rating

many

Inflation

as

levels.

rate

*1948-

5,700

for

fore.
a

capi¬

more

again

continuance

upon

|1949-

"

be

and

residential

Roger w. Babson

at

the advantage of

.

5,755

"15,321

with

bond

2.273

>

14.0

is

wife)

with

off

as

2,284

15.3

1943-

income

and

well

3.53%

14.8

1944-

at¬

very

with

tax-exempt

12,028

'

a

$16,000 combined income in the

age;

1942-

15.6

his

7,137

1941-

V

can

of

cannot

Take the examples as

5,863

2,957
3,228
3,494
3,423

1940-

basis if

individual

12,175

,

con¬

shown In Table III.

1,192
1,225

856

be made on

can

178

•

*:-Y

tax

cerned, purchases of tax-exempt

404

*

income

the individual is

as

2.60%;„ returns

9,358
,■

are

on

raise

to

give investors

Utilities of operating companies

short

—equalled only by

grade

$12,811

3,234
3,038

'

is

rate

Over the foresee¬

as

$3,191

728

this

be

23,870

•

tax

a high grade municipal
yielding 1.90% is equivalent
3.06% yield on a taxable

bond

thus

$26,150

v

The

years.

income

order

Utilities

As

now

offer¬

in

must

they should gladly
grant these needed rate increases.

in¬

capacity,

much

municipal

Real Estate

$8,002

tal

the

capital,

more

able dividend,

electric

gene

rate-making

customers

have

must

companies

ra¬

and

cus-

o m e r s.

now

safety

these
their

of

care

and

pre¬ customers, this could be a
blessing
vailing" both corporate and in¬ in disguise. Residential customers
dividual,. a ratio between 70% are much more profitable than
and 80% seems ample to absorb
large industrial customers. There¬

husband

•4,483

1,083

the

higher income tax rates

of

2,359

'

^ *17.7

/ *17.8 '

t

corporates)

of

porate yielding 2.78%.

1,190

.

Aaa

view

2.05%

*16.9

1933-

In

from

many

("Bond Buyer's" II municipal

Securities

*15.6

"

be

however,

utilities

busi¬

dustrial

of

—

take

with

general

combination

As,

ness, but this
decline will

was

municipal/corporate yield

age

that the stocks of the oper¬

was

bodies clearly understand that to

the

will

decline

Be¬

billion

19

to

hour

of

utilities

absorbed by investors on an aver¬

Estate

Total

19311.
1932-

output

of municipal bonds

Carrying

1930—

;

kilowatt

increase

an

many investment bankers: "In
uncertainties, what are the safest

market

companies offer the best
income. Totai<$>

securities,

1947-48.

1931

Real

*$14.5

$1,418

in

and

case

and

1929—

:

74%

to

1919

Other Than

,C-LV:'

for New

tRefunding

utility

and

The general answer

municipals relative to

in the supply

to

Issues

,,

business

1945-46 to 60% in 1946-

increased all large.

(ooo.oooy

Corporate

pal Issues
Less

the

Aaa utilities rose from an average

-Member Bank Loans Dec. 31-—

New

Municipal

■,

of

larger

$6,000 to
$8,000 of taxable income ($12,000

Domestic

Debt

the

absorb

tax-exempt

the price of

26V2%

aggregate supply at

peak

bank

(000,000)

-/

to

During the past few days I asked

ating

decline.

and

financing sharply after 1944, while all other

New Long-

net

State

issues

Term StaTe

..

the

outstanding debt.

order

"An

Privately

in

for

account

to

able future it would appear likely
that the rate will rise rather than

TABLE I
(OQO.OOO.OOC)

cation of investments.

view

order

hedges against

as

lives, but stresses importance of diversifi¬

one

Other

nies) held 37% of the outstanding

>1931-1940,

money

territory in which

investors obviously increased their
portfolios by substantial amounts

bond,

(governmental units, mutual

the

1948.

30,

38%; and

investors

1942,

without

Table I.

see

some

1946

in

for

years

1952,

the

the

new

background

a

of

this increase in supply?

ful.

remains in undiminished force.

"As

June 39,

on

municipal

and

on

noted

municipal

place the total pri¬

State

in

and

memorandum, only the huge

supply

held

excess

ution

Thus, of the

market

would

there be

appears

influences

deficiency. Allowing

grade

equities. The Adminis¬
tration policy of pegging the Gov¬
market

the

of

analysis of the estimated distrib¬

or

ernment

$600,-

sorb

high

haven, for their

a

a

Will

for

inves¬

and

to

$1,900,000,000
plus

35%

shock to business confidence is
for

of

discharge

annual

vately

The net effect of

deflationary,

level

new

upon

6% annual retirement, this calcu¬

ing

a,

based

are

$951,000,000)

x

accumulated

Con¬

of

is not, we believe, reassur¬

gress,

IJsjng

.

June

to

safest stocks to

among

Holds it is wise to confine purchase of electric company stocks

lion.

as a normal, the accumulated
corporate bonds had to
be re¬
deficiency during 1941-1946, dou¬ duced
considerably last year. Tne
bled to represent the new con¬
ratio of the yield on "The Bond
struction cost level, is $5,700,000,Buyer's" ,11 municipals to Moody's

would appear that the
'atmosphere conducive to the ac¬

it

promises

from this figure.

their

this

result of the recent elec¬

a

tions,

i—

averaged
$951,000,000
annually,
and in no year deviated more

Con¬

Mr. Babson places operating utilities as
hold, but says they should not be selected

i

re¬

municipal holdings
slightly (by $32,000,000) in the 12
to

Investments

as

By ROGER W. BABSON

•

are

25

of

year.

increased

have

to

last

Utilities

and

months

chase of tax-exempt bohis.

supply

(181)

ac¬

fraction

insurance companies

ported

,

'

large

a

increased'

State

&

pur-^

CHRONICLE

$600 000,-

Life

of government bond prices, bond buyers

consider the

another

the

fully justified in purchas¬
ing municipals at) current levels.
; "

Stock

FINANCIAL

000 increase in such holdings,

' counting

•

with substantial taxable incomes appear

.Kaiser

&

groups contracted their portfolios.
At
JHaHie" 30",
1948, commercial

~

8c Co.f members of Sail Francisco Stock Exchange,
"

COMMERCIAL

THE

Number 4768

claim against

Deposit Insurance

Federal

Reserve

the

assets

Corporation

System

of the bank.

in

26

COMMERCIAL

THE

(182)

&

FINANCIAL

CHRONICLE

Thursday, January 13, 194$
prices, these lower prices

Shareholders Told 1948 Bank Operations Reflect

materialize
down.

Tapering Off of Some Upward Trends

of wage

City Bank of New York attribute deposits
decline and reduced earnings' assets to government fiscal operations
and higher reserve requirements. Say "we face today a period of
low visibility," with some signs of industrial slowdown.
Reporting to shareholders in advance of the 137th Annual Meet¬
ing of the National City Bank of New York to be held on Jan. 11,
Brady, Jr., Chairman of the Board; W. Randolph Burgess,
Chairman of the Executive Committee, and Howard C. Sheperd, Pres-

Win. Gage

keep

taxes than did the Class I carriers

comes

as a

whole.

The

Class

spread

I

between

carriers

the

narrowed

showing of the
sharply in 1941 as

mounting, and in two of the

'Frisco

three years the

next

and

that

influences

war

road

of

were

turned

in

a

better performance than the

industry. The years 1945 and 1946 were
distorted by extraordinary influences but
again in 1947 'Frisco had
a
wider profit margin (14.0%)
than Class I carriers as a whole
(12.4%), Despite this improvement in the company's
showing dur¬
ing and after the war its transportation costs continued unduly high.
The road's transportation ratio in 1947 was 41.7%. That of
the Class
I

carriers

analysts

which

40.0%

was

being

as

continued

in

itself

is viewed by most railroad
existing high level of traffic.
1948 the company's transportation

too high under the

During the opening
ratio

to

half of

deteriorate.

It

was

2.3

up

points

from

a

year

earlier, to 44.1%.

C.

Howard

W. R. Bur|«M

Sheperd

ident, stated that "The operations $
of 1948 in the banking system and 1 the world all at once. Given these
in this Bank reflect the tapering expansive influences, an increase
off of certain of these strong up¬ in bank loans was inevitable sim¬

Deposits have been

ward trends.

declining,
mostly
because
the
government has drawn down its
deposits and paid off some of its
securities
held
by
the
banks.
Earning assets were also reduced
by action of the Federal Reserve
System in using its legal powers
amount

the

increase

to

banks

reserves

cash

of

required

are

to

Banks. In
cities, New
York
and
Chicago, this meant
turning government securities into
in

carry

Reserve

the

Central

the

-cash

to

amount of 6%

an

mestic

Reserve

of do¬

demand

deposits. Further
changes in trend are to be found
in
slightly higher money rates,
which have partly offset the re¬
duced volume of earning assets.
This
change in rates, however,
brought lower bond prices and
smaller profits from sales of se¬
curities."

combined

The

net

op¬

stated in the Report, were
$20,838,785 or $3.37 per share on
the
6,200,000 shares ^outstanding
compared with $20,163,976 or $3.25
per share for 1947.
If net profits
(after taxes) from sales of secur¬

year, as

$3.47
$22,493,382

and

in

or

Forward,"

or

totals

do

clude recoveries which

in¬

not

rela¬

were

tively small and were credited di¬
rectly to reserves.

heading

the
see

with

though
dustrial

"We face

"Looking

National City of¬
inflationary trends,

signs

"some

in¬

of

down."

slow

today

visibility,"
"Clouding

period of low

a

the Report.
every estimate of the
future is the danger of a breach

of world

try

concludes

which this coun¬
make every effort to
by maintaining its strength
peace,

must

avoid
both

military and economic, as
exercising great | wisdom
in its foreign relations.

well

as

"Nearer home

the inevitable

are

doubts which arise from past ex¬

perience .with long continued pe¬
riods of business expansion, ris¬
ing prices, and free spending by
government and people.
In the
past these movements
have al¬
an uncomfortable
country starts along

to

come

When

end.

a

the inflation road it is difficult to
draw

back, because

majority of

a

people find inflation very pleasant
in its early stages. The white col¬
lar
worker
and
the
person
of
fixed

income-are

tions.In

the

notable
the

end

excep¬

final

col¬

lapse catches everybody.
"Ancient

fallacies

discoveries

new

per

These

1947.

was $21,share in 1948
$3.63 per share

the

ficers still

added, the total

are

531,971

Under

ways

current

erating earnings of the National
City Bank and the City Bank
Farmers Trust Company for the

ities

ply to conduct current business."

justify

hailed

as

receiving
"There

trial

are

supply

the

—

filling

$4,874

vious,

the

this

creases

in

ments.

In

bank's

bank

the

loans

reserve

require¬

period,

same

discounts

and

the
rose

$206 million, and their proportion
the

to

bank's
from

creased

28%.

While
for

ments

total

23%

to

a

business

credit

in¬

assets

have

total

of

require¬
continued

large, much of this need

was

met

through the security markets and

leadership.
"Banking
flect
the
to

the

tained
in

keeping

have main¬

we

cautious

a

lending policy

with the

inflationary
'

trend.
"It

is

belief,"

our

says

the

bank

has

re¬

The
more

an

active

real

causes

of

in government

subsidies,
wage

inflationary force.

encouragement

spiral,

pressure

inflation

to

and

lie

spending and

the

of

postwar

rebuild America




the

and

of

tion.

We

have

and

resources
.

within the next few months.

use

In
a

1947

s;,,,

earnings

re¬

share.

to $2.99.

This

earlier.

was

November

still

a

of

operating income

was

off from the

showing

months

were

1947

period. Barring some unexpected and
substantial year-end adjustments, it is now estimated that for the
full year 1948 per-share earnings at least topped $3.00.
Although the stock has had earning power to justify some action,
has been paid on the common since the road emerged
from bankruptcy.
Month by month some distribution has been ex¬
pected by the financial community. Following the December direc¬
tors' meeting it was stated that final consideration of a common
dividend out of 1948 earnings had been deferred to Jan. 27 when the
dividend

no

board next meets.

While it is

generally expected that some distribu¬
at that time the payment will
presumably
proportions. Funds are needed for the equipment
program and also for rehabilitation of the recently acquired Alabama,
Tennessee & Northern.
Regardless of any dividend at this time,
analysts consider the stock to have interesting speculative poten¬
tion

will

the

basis

of

the

substantial

improvement in the
operating status and the favorable earnings prospects.
on

citizens

we

are

immediate

long-term
long

business
national

national
run

no

there

ply;

more

were

food;

to

welfare.

person

and

the
In

than

our own

people

were

bidding for
the
supply
while
whole

stormy

•

was

the
world

bidding

against them;
and (b) prices
went
Paul

S.

cause

Willis

up

all pro¬

duction
went

up—farm

transportation,

materials,
thing.

products,

No

one

be¬
costs

labor,
every¬

segment of this in¬

dustry—farmer, processor or dis¬
responsible for the

tributor—was
no

rising orices.
can

prosper

economy

except

is

as

sound

productive and at peace."

the
and

"The
been

further

up

de¬

American

given

people
have
much misinforma¬

so

tion about profits that they must
be utterly confused. There have
been

charges to the
prices are high

food

effect

that

because of

exorbitant profits. Nothing could
be further from the truth.
Here
the

are

facts:

To

start

with,

we

must

recognize that the American
home-maker does not spend her

dollar at

the

store for

grocery

single

item.

her

a

grocery
dollar for

ceries.

We

running

have

record

She

basket
been

gro¬

keeping

the

of

a

spends
of

sales

a

and

earnings of

a

of 89

and grocery manufac¬

food

representative group

turers who manufacture products
which normally make up the fam¬

ily grocery basket.
"In

1939

turers did

these

89

manufac¬

total business of

a

$5.3
billion, and earned $246 million,
or
4.60 on dollar sales. In 1948,
these

89

manufacturers did

of

about

same

business

a

$16

billion,

three times the 1939
volume, with
net
earnings estimated at $500
million or about 3.20 on dollar
The

homemaker

"While
an

Mr.

we

inflated

is not

so

dollar
profits of the manufacturer, which

fluctuate with the amount of bus¬
of

profit the manufacturers take

out

her

of

grocery

amounts

now

The record

to

a

dollar.
This
little over 30.

is that these 89 groc¬

manufacturers not

ery

only tre¬

bled their sales but their own net

profit

dollar sale

per

reduced

was

by 30%.
"The net profit on dollar sales
of the distributors
averages about

1.50.

If

and

both

the

manufacturers'

distributors' net profits were

entirely removed, this would
the

10

on

of baked beans.

can

a

save

somewhat less than

consumer

"Frequently when certain

are

still operating in

economy,"

Willis, "the good

continued

news

is that

Food

reached their peak
and since then there
have been substantial declines on
last

order

to

and

arouse

American

public.

short¬

food

the

added.

••

ward," continued Mr. Willis, "this
decline will be gradual and not

Food prices

rule do not

They

drops.
come

down

"Even

move

go

as

by jumps and

up

slowly

and

the

large

grain

are helping
to bring farm
prices down, it will take time to

crops

$47

was

1939.

It

income

the

total

all

employees
compared with

in

1948

$30

was

billion

compared with $9 billion in 1939
unless we also pointed out the
fact

that

the

tion

in

than

in

total

farm

was

much

1948

produc¬

1939.

greater

Monopoly Charges

"Occasionally there
to

are

charges

the effect that the food indus¬

try

is

monopoly.

This is, of
utterly ridiculous state¬

a

ment.

There

about

are

50,000

manufacturers
and

in

producing
food
grocery products, and all are
spirited
competition for the
dollar.

grocery

grocers

Some 400,000 re¬
fight equally hard to

get the people to come into their
stores

to

Products
and

buy

their

compete

brands

consumer

with

dollar.

There is
as

a

groceries.

with

products

brands

for

No company

product stands alone in

the
or

its field.

full freedom of choice

to where

prices at the grocery store.

and

brands

"While the outlook is for lower

1939

people drew compensation
1948; or to say that the farm

in

a

lowered

in

more

and

these

in

for

billion

costs

fully reflect
in food

that

out

slowly.

though

three times

was

was

about $148 billion in 1948, unless
we
quickly added that 16 million

tail

by any big drops.

it

compensation

.

"While the price trend is down¬

a

than

course, an

is the
biggest
family budget, this
reduction in prices is highly wel¬
comed by each family," Mr. Willis
in

the

They will, for

1948
profits
profits without stating

1939

prices

"Because

item

confuse

compare

July

butter, eggs, flour, soaps,
ening, and many others."

peo¬

ple attack the food industry they
evidently plan their statements in

point

Willis, President of the Grocery Manufacturers of Amer¬
ica, Inc., on Jan. 6, released a statement reviewing the nation's food
situation with a view "to help set the record straight." According to
Mr. Willis, food prices rose to their peak during the postwar period
because:
(a)^
——
the demand total food supplies are gradually
was
demand, and
greater catching up. with
than the sup- prices are now moving downward.

impressed

interest

slow

would be just as unfair for us to

Paul S.

high places and low.

self

re¬

ex¬

Relationship of Profits to Prices

larger

Grocery Manufacturers of America, Inc., says increas¬
ing supplies portend gradual price declines but warns all costs, '
including wages, must be held down. Denies high profits or monop¬
oly have contributed to high food prices.

banking

time for understanding, for

necessity will be

clines.

with

President of

our

^ound

too
ex¬

prices, and to that

will

instance,

road's

Downward: Willis

Food

give

through fair and

costs of

that 1948 business

posi¬

ready to

draws

supplies, these

on our

flected in
tent

the

authorized

be

decade, the
its

tra

be held to modest

swing of

restraint, for the subordination of

the

net

common

than double those for the like period a year

more

well ahead of the

with the need for reasoned judg¬

It is

the road's

on

of the preceding year but the cumulative results for 11

try

conserved

are

customers

we

if

program

iness done, as she is in the amount

■1yv;-

stock amounted to $2.25
For the first 10 months of last year per-share results climbed

weather.

"As

Thus, there is great promise
improvement in the road's operating

cumulative

further

even

performance.

dollars

strengthened

ment in both

port, "that bank lending has not
been

In the upward

the cycle over the past

service

With other banks

will

state of business and

serve.

our

companies.

operations

people generally whom

especially through private place¬
insurance

Con¬

new

shows, under Administration

gress

ments

with

and in

lines,

the wisdom which the

we ship too
freight rates
military pre¬

sales.

business

some

held

much interested in the total

of

tinues, and especially government
spending. Much will depend on

with

Probably at least half
37 diesel switchers are also in use at this time. It
expected that the balance cf those now on order will be delivered

signs of indus¬

some

slow-down

only

can
are

another round

is

liberal quota.

a

costs

of the proposed

the inflation¬
Of these we are today

to reduction in government
deposits and Federal Reserve in¬

de¬

with twice that number still to be delivered.

continuing

ary course.

million a year pre¬
bank officers ascribe

the slight

on

ning above 40%. In June 1948 it dipped to 39.2% and it has been
tending consistently downward since then. November results have
not as yet been published but for October the ratio hit a new low
of 37.5%, which was more* than three
points below the like month
of the preceding year.
The probable reason for the sharp turn for the better in the com¬
pany's affairs is not difficult to find. At the end of 1947 the company
had no diesel power. Around the middle of the year the
company
started getting delivery of the new diesel power. It is believed that
by now the road has at least 11 diesel freight locomotives in service

to

the completion of
capital undertak¬
ings, some buyer resistance to
high prices. But in other direc¬
tions, the spending pressure con¬

Commenting

cline in deposits, from $4,643 mil¬
lion
at
end
of
1948
compared

The industry ratio was up less than a point, to
40.8%. The marked change for the better started with the
opening
of the second half of last year. For a period of about two-and-a-half
years the transportation ratio had each month consistently been run¬

tialities

exhumed

are

rising,

heavily

Its average pre¬

during the six years 1935-1940 was only 7.2% com¬
pared with 15.2% for the industry. Its best showing
during the period
(11,0% in 1940) was the same as the industry's poorest
year, 1938.

Brady, Jr.

all

have

increases, if

paredness

Many railroad analysts have been particularly impressed by the
recent operating performance of St. Louis-San
Francisco. The show¬
ing in this respect during the past six months or so contrasts sharply
with the mediocre
long term record of the properties. In the prewar
years the company consistently carried a
considerably smaller pro¬
portion of gross through to net operating income before Federal in¬
tax profit margin

0%.

if

we

much food abroad, if

Executives of National

Wm. Gage

If

large

the shopper can buy,

family
at

a

of

wide

prices to choose from."

products
range

of

Volume

169

Number 4768

COMMERCIAL

THE

&

FINANCIAL

CHRONICLE

(183)

27

Chemical Bank Executives Defend Bank's Self(Pur

Reporter

Governments

on

Policing Job In Our Inflationary Economy
N. Baxter Jackson, the Chairman, and Harold H.
Helm, the Presi¬
dent, tell stockholders commercial banks have not contributed
toward inflation. Announce a net
earnings gain in 1948 of

By JOHN T. CHIPPENDALE, JR.
;
The government securities market remains on the buoyant side
with investors switching and making new commitments in order to
improve income..
Demand for longer Treasury obligations is broad,
with both the bank-eligibles and tap issues coming in for good buy¬
ing.
Were it not for selling by the Central Banks, prices of the
more distgnt governments would go substantially higher.
How¬
ever, the Federal Reserve Banks by feeding issues into the market
in an orderly manner have given the market an opportunity to ad¬
vance somewhat, but at the same time are keeping it from getting
too enthusiastic or bullish, until there is-clarification of the econOifiic

$706,719.

-

The annual report to shareholders of the Chemical Bank & Trust

.

.

.

.

.

trend.v'

Company, dated Jan. 11, and signed by N. Baxter Jackson, as Chair¬
and Harold H. Helm, as President, criticizes severely the ten¬
dency to force further regulations on the banks, measured not by

man,

anced
swer

in order to

is strong

lation
■

by the deposit institutions.

.

.

However, selling by

.

.

resistance

at

present

levels,

despite

their

compared with the taxable obligations.

I

attractiveness

The 'messages

eral

the defensive when such action

on

Also

.

certain amount

a

is warranted.

.

.

Despite all

.

the criticism that has been hurled at the monetary authorities in their

support program of government obligations, there

to be little

seems

in the various reports of the Chief Executive to indicate any change

in

the

that

course

managers.

has

V:'

.>

.

been

followed

V;*-

■

in

the

/v—

.

by

past

the

/V/'V.

•/

money

•

As a matter of record, the Economic Report characterizes the
/
policy of supporting prices of long-term government bonds at the /:

'

2Y> % yield level

tions.A.

..The authority to

.

mercial banks will

importance to the

increase

requirements of

reserve

doubt be granted

no

by the Congress.

member institutions

will

the

be

Requirements that the authorities will be seeking.

com¬

,i-. Of great

.

any

type of

almost

but

rules

rubber

Continuing,

to

measured

"We wish

again to repeat that

the deposit institutions should be penalized from

point, because the credit base is being limited.
the

other

through the

,

funds

V on

would

the

effectively

V

be

loss

a

in

banks

or

immobilized

as

of

.

if "SpeciM Reserves"

earnings,
.

•

..

opinion.

companies,

.

.

money

In

.

there

some

the life

powers over

considerable

diffrence

.

of

economic

yray?

.

.

The inflation spiral

appears

authorities will be

surprising to

,

While there
of

*
.

.•

and

would

tioiis

-

(v

deflation

a

see

managers.

money

on.

.

no

.

feel

doubt result
a

in

the

to

?

to raise the

as

To

be

trends will

sure,

should be greater deteriora¬

on

the part of the

economic condi-

ia

.

.

s
.

.

balanced budget

It

far

as

seems

V'-":

as

'

•

well

as

to

pro¬

though practically all

as

the money markets

appear

have been
are

the

on

concerned.

.

.

con¬
.

The

to have the situation well in hand, and

...

doubt be well

even

if new

or

addi¬
4..

taken

particularly by the savings
A buoyant rising market should not be exactly distaste- '

ful to the money managers because

it will give them

tunity to unload some of the securities that
ily last year in support operations.




the
in

most

a

Street, New York 16, N. Y.—Paper
—20c

year.

Co.,

ILL. —Reynolds

members

Stock

New York

the

of

&

Exchange, have opened an

Cruttenden
Salle

agement of John G. White.

York

headquarters

Tem¬
209

at

are

South La Salle Street.

Mr. White
Hornblower

was

&

The

to

Such

prices

as

subsidies.

&

Co., 209 South La

Street, members of the New
and /Chicago ;, Stock

changes.

Mr. Keith

was

Weeks.

departments

Carter

for

H.

should

countries

be

'

ffltppini gap 8SW3 <rg

REAL PROGRESS.

•••!!

Hp'!?) r'j''• t/'j c
El!

4a til •!.: liHij:!
if? 1-3$?! [jniiHi
i

The

1

Is.

!*i: ".I

J.l',.i

pFhp
iii&iii £ii <j&$ ii^i

following is

condensed Statement of Condition

a

as

of

Oecember 31, 1948:

by

Cash and Due from Banks

carried

U.S. Government

Loans

$20,186,221.69

Bonds

61,586,246.46

and

heavy

figures and

indefinitely maintained.
of

be

cannot

Our

tional economy and the

the

on

success

were

an

bought

oppor-

so

heav¬

982,784.85

Accrued Income

22,385.65

Receivable...

476,433.96

Other Assets

39,189.54
$127,052,786.60

LIABILITIES

na¬

balancing

present budget depend

our

12,847,838.60

all-time

our

income

Discounts

Customers Liab. a/e Acceptances

expenditures

more

national

and

Mortgages
Mortgages
Banking Houses

largely provided
through budget' savings in other
categories. The current huge pro¬
high

and

Deposits

$117,197,704.66

so

Reserves, Taxes, Dividends, etc..

pros¬

Acceptances Executed a/c Cus¬

854,480.25

tomers

22,385.65

this should not be disregarded in
the consideration of any new tax

Capital
Surplus

program.

Undivided Profits

ways

Instead,

To

we

encourage

to assist it in its

should find

business

if

tractive.

curities
of

certainly

not

in

made

lie

business
more

at¬

The holder of equity se¬
become the

has / indeed

forgotten

man.

capital

which

most

are

was

issuance of

features

in

The small amount

expenditures
financed
new

ferred stocks is

2,978,216.04

$127,052,786.60
F. RAYMOND

investments

equities

3,000,000.00

.......

and

PETERSON

Chairman ol the Board

ahead

3,000,000.00

.

constantly needed

expansion.

"Dangers

our

in

1948

through the

common

one

Cor-

brey & Co.

FROM MEW JERSEY'S LARGEST NATIONAL BANK

Necessary aid

defense

Ex¬

formerly

A5SITS

responsibility

foreign

military

H.

Clyde

—

Manager of the trading and sales

previously with

COMES A REPORT OF

Chronicle)

Financial

ILL.

Keith has become associated with

office in Chicago under the man¬

porary

to

CHICAGO,

jSiiiiljfi-ai!

gravely concerned

heavy

our

Af¬

Committee, Inc., 22 East 38th

Clyde Keith Joins
Reynolds Co. Opening
Cruttenden Co. Staff
Cgo. Br. Under White

perity of American business that

feeling now is that prices of Treasury obligations will
improve gradually with the eligibles favored, although the tap
bank.

fairs

Money—

Public

—

job,

economy.

our

commodity

are

largely

'

a

"We

duction

intent upon keeping1 it that way,

no

Their

and

—

Maxwell S. Stewart

price of commodities

in

goods

or

Washington ,8,

Avenue,

C.—$2.95

5,802,670.53

.

The

will

D.

2,719,098.59

.

tional powers have to be obtained in order to carry out the program;

issues

States—Public Affairs Press, 2153
Florida

corporation taxes.

.

y-'."

"monetary authorities

.

Truman, President of the United

F. H. A.

.

government market.

are

the

Ad¬

—

First

recent developments out of Washington

.^evidently

for

The

gers that may come from over¬
burdening them through increased

reluctant to take measures

shrplus to be used to retire debt should not be unfavorable

structive side

$111,310,483.56

of

Program,

to be losing its force and this

lowering of reserve require-> ;
complete change from what has been

Higher taxes to bring about

?the

Truman

during

increase

an

22,

dresses and messages of Harry S.'

quarter, total loans and
showed

York

180,000.00

fairly sharp down-trend in

a

'

a

last

discounts

New

22,209,916.73

seems

/;;/; *:—\

.

;

vide

Avenue,

Y.—Cloth—$4.00

Municipal and Other Securities.

if

measures,

is great fear of inflation, there is greater fear

STRONG MARKET INDICATED

,tj

the

diminished

com¬

Keyserling,

by Seymour E.

to be under

these

use

reversal of past actions,

ments which would he

going

N.

Women

loans

H.

Leon

Harris—Alfred A. Knopf, Inct, 501

1947.

Although the demand for
mercial

Hansen,

and others—edited

Federal Reserve Bank Stock...

more

watched very closely, but if there

many

tion of business conditions than had been anticipated, it would not
be

Berle, Jr., Chester Bowles, Alvin
H.

economic structure by bus¬

that will further limit, the credit base.
be

date

same

Almanac

iness corporations and of the dan¬

be need to

conditions continue the adjustment that

'.

done

self-policing

of government

place, will there

that the

means

in

$151,-

by

the

on

Please

Saving American Capitalism—A

tive bank credit is being employed

additional

and

new

member banks and insurance companies, and

will take

have

greater

W.

City—

Liberal Economic Program—A. A..

of

$1,435,190,391.55 at

103,355.34 than

Information

and
there is certainly no evidence to
support any charge that specula¬

.

powers over

banks

States

of

were

H.

York

New

exist today are largely the result

.A^umjng 4he. monetary, authorities get

this

think

Throughout

in all parts of the United

artificial

•

.

belief.

our

thorough

WHEN

IF AND
.

'

sum

Germany

The

—

1949—Farrar, Straus & Co., New
York—cloth—$2.50

this subject
to deposits

on

relation

support

quarters, however, it is strongly believed that

.

in

the year

will get authority to regulate tfie investment

managers

policies of non-bank investors.

^

be

The figures

and the national product we

..-.v' •••'••

to

seems

to

loans

of

reserves,

employed by

were

,,'

*7

period, can be charged with con¬
tributing In any important re¬

ing.

of payment

higher

.

pi^-As'-tO the monetary authorities getting new
insurance

the

kind

through

of loans made

the inflation which has
resulted in our high cost of liv¬

requirements

reserve

commer¬

in the postwar

to their customers

spect

seems to
be getting more than passAlthough credit would be contracted just as
through the use of cash reserves, there would not
.

the authorities.
;•

income stand¬

an
.

.

some

why

be constructive and

ing attention.

•

increase

an

of "Special Reserves"

use

of

hand,

.

This

that

believe

not

do

31

Postwar

fabrikoid—$1.50

(Special

by

states:

report

the

Undi¬

after paying divi¬
providing for appro¬

CHICAGO,

cial banks, because

:

reason

menace

a

yardstick."

we

should not be the case, since there seems to be no valid

up

Deposits

Co.,

Madison

the

to

$2,577,142.03,

Dec.

Wilson

of

Johnsen

group

fixed set of rules,

any

to

not

will be cut, with restrictions on their ability to extend credit.;.

1

small

ing and business can be adjusted

reserve

If there

...

to

system.

banking and to business. Bank¬

to

em¬

E.

$7,232,-

reserves.

The power
requirements

to

added

was

priate

by bank regulatory bodies.
If such increasing authority over
bank operations and the extension
of credit is granted, we fear what
the ultimate result may be. This
is a constant threat to our private

by

and

were

increase of $706,718.52

an

should

power

down

Fed¬

the previous year.

and

Congress for greater

on

be higher cash reserves, as in the past, then the earnings of-banks

On

Insurance,

dends

creates confusion and is

not only member, banks but all deposit institu-

over

demands

earn¬

taxes,

vided Profits Account the

ever-increasing

to the

alerted

require¬

operating

net

the Bank's

say

"shareholders

executives,
be

Harold H. Helm

"rubber yardstick."

movereserve

.

.

Truman has asked for additional powers for the Federal

Reserve System

a

opinion,"

our

banking

WHAT KIND OF "RESERVES"?

President

"In

by

and

"eminently successful."

as

Baxter Jackson

rules but

with the mdney markets to keep the forces of infla¬

of interference

tion

.

.

tax

our

expenses,

Deposit

There

are

N.

manage¬

—Julia

expenditures and

in

shows

409.22,
over

and

spend¬

...

ings, after
.

-L"/

1

ket^ with.a 2V2% rate for long Treasuries.

prudent

an¬

The report of operations of the
Chemical Bank, now in its 125th
year,

.

when

reports of President Truman, as far as the
concerned, all add up to the same score.... A con¬
tinuation of past policies, namely, a protected government bond marmarkets

money

the

ployees', welfare,

FISCAL POLICY

SAME

[
.

;

«

.

•

sav-

ings banks of the- latter issue is adding to the floating supply of
the eligible
*
*
The partially-exempts are meeting some

1

in

ments."

.

.

is not in government

reduction

a

buy higher yielding tap$.
Demand for the'longest
with the 2l4s of .1956/59 also under accumu¬
.

outlook. The

ment of Federal

Savings banks have been sellers of short and long eligiblesi
bank

economic

ing but

*•..

/, "

Dilemma

$>

or

pre¬

of the serious

already

unbal¬

i

LOUIS F.

SAILER

BENJAMIN

Vice Chairman of the Board

P.

5 COMPLETE BANKS SERVING PATERSON, NEW JERSEY
MEMBER FEDERAL DEPOSIT

INSURANCE CORP.

RIAL

President

.

'

28

THE

(184)

As We See It
we

of history or to

course

•

has been

sense

decade

a

day today.

from the President's "Economic Report"
are enlightening in this connection.
First of all, he seems to
be quite certain that "our unparalleled prosperity has not
been maintained by chance, and that we can lose it if we

Courageous and positive action
and some of the most serious

together in 1949 to combat the remaining

work

we

V

•

just

our eyes

tive of

reasonably long look

a

the problems of the

on

placed in the

mo¬

perspec¬

railroads

a

practical

of immediate and long-range economic measures

program

pointed toward stability and growth."

Advisers, transmitted herewith, there is

treatment of

of

growth possibilities

our

This shows how

living

employment,

our

can

reliance upon our

rise if

we

over

outputs and

our

detailed

a

the next few

encourage

free enterprise system,

years.

stand¬

our

and place major

some

the

"While

the officials of any

we

factors which
entering

are

a

were

of war-created demand and war-created

"If

has waned, and we must now

rely

fully

more

on

currently

which

to

controls.

sure

We must be

than

more

that withdrawal

than

productive

mounting unemployment to which this

believe that

with proper

prosperity

can

be continued and that,

action, the prospective volume of business in¬

vestment, consumer spending, and governmental transactions
should

promote

coming

year.

ample employment opportunities for the

'

adjustments in price and income relations

need to be made, and

these must flow mainly from the wise

action of the leaders in
ers

should draw

is the

enterprise

our

These lead¬

economy.

sustaining confidence from the fact that it

policy of the Government under the Employment Act

of 1946 to

"The

use

all its

maintain continuous

resources

to avoid

depression and to

prosperity.

-

we

any

stock¬

of

their

and honest

question.
summarize, it would appear
that if the public's attention could
-be sufficiently aroused to
view
the
picture from ,the angles I
have

have

rather

on our
or

deteriorate.

to

the

over

And it is

not, in fact, be forced to use such

would

these

relatively

freedom of action for
allow

^

■'

-

a

un¬

while

human and material

our

'

Playing "Banker"

~~

desire

policy should not obscure the fact that the
is

equally

committed

to

an

anti-depression

the economic situation has mixed elements, the Government
needs both

anti-inflationary

weapons so

weapons

and anti-deflationary

that it will be ready for either contingency. It

be necessary to employ both types of measures

concurrently in

combination, for

some

could rise too

dangerously.

of
as

The

sojne

prices

in¬

or

rapidly v/hile others could be falling

dictates of prudent policy which

same

higher taxes in

a

period of inflation would call for

sionary movement."

matically. The strength of

our economy,

the strength of

our

fact

adopt the salutary policies which
circumstances and to put
More

Lest

these

are

some

but
no

ical

as

as
a

well

them into effect."
of the Same

reasoner

take

same

should

a

gain the impression that

few paragraphs from
Here they are:

a

later

that

the

goal

any

particular

Act of 1946 calls upon
program

group.

we

seek is the

the President to present

an

economic
pro¬

I firmly believe that this

employment for 1949

million additional
the

means

that nearly

one

now

respon¬

and

job opportunities should be provided for

growing labor force.




Maximum production

means

that

thing

same

He

another

to

acting

as

en¬

banker

a

clearly stated, the credit rat¬

are

ing

easily

fluenced
risk

determined.
public

what

by

of

market

Again,
in¬

be

may

it

deems

the

fluctuations

and

again I repeat that current quoted
prices merely > indicate the im¬
mediate
loan

liquidating value of his

and

its

not

the

nor

ultimate

continuance

they

as

the

at

were

value

his

in¬

are

of

terest return. These items

The

still

time

of

his

point that should

be borne in mind

is that because

people desire

some

return

of

the

loan

a

possibly

fords the
lend

private

market

af¬

opportunity to

an

money on

attractive

any

open

public

over

attractive

more

Since the

have

take

may

that offered by

deal.

they

apparently

on

terms;

immediate

an

money

lent, other people

wide variety of

a

terms, it would be wise for them
to

give

it

consideration

their

whenever they are

permanent

in

a

position,

temporary, to grati¬

or

fy their desire to play at "banker."
It is fortunate that

is

be
a

such

sound

our

that

patronized

basis,

financial

the

industry

the

by

that

so

public
no

one

is called upon to make a sacrifice

has

all

but

a

become

that

we

change in

ture;

a

national

a

immediate

aid

be

adverse

tional

do not wish to risk

our

economic

change which
to

our

may

present

philosophy.

'

struc¬
prove

day

na¬

*

day.

George E. Stokes With
Schirmer, Atherton

cycles and have the key

(Special

all this i.

be

accomplished by the application of a strange
mixture of Keynesian (or pseudo-Keynesian)
notions
with those of Karl Marx and many other economic

to

The

BOSTON,

Schirmer,

Atherton

Congress Street,

changes.
conducted

these notions prevail, it is idle to expect
anything approaching sanity in public policy—and that
as

•

Chronicle)

E.

Stokes has become associated with

New York and

•

Financial

MASS. —George

crackpots who have gained notoriety from the days of

is that.

deposits

or

The

a

in

or

The terms and contract

business if

interruptions forever and

long

bill

a

given to the maintenance of this

commonly termed

(4) Worst of all, he evidently believes that

So

a
a

when he buys a bond.

terprise

a

As

much

as

from

John Law down to the present.

goal is attainable.
"Maximum

borrows

necessity

to their eradication.

can

is

discounts

for them.

it

of
business always at the top of what would be the cycle—
if one must continue to think in terms of the cycle—that
is he envisages a continuous upward movement with¬

That is why the Employment

purchasing power.'

indeed has assumed, full

stand the economics of business

had

when it is pointed out to him that

are:

(3) He is convinced that he and his advisers under¬

aimed at continuous 'maximum employment,

duction and

Some

(2) He plans to abolish it by keeping the' state

out serious

he

fact

is lending money

a

greatest prosperity for the whole country and not the special

gain of

ernment must assume,

message.

remember

unavoidable.

the business cycle.

T

President would have the temerity (polit¬
we

important of these

are

(1) The President believes that the National Gov¬

sibility for abolishing what is

other) to proceed actively in accord with

credo,

section of the

"We

required by changing

generalities with little practical signif¬

icance, that
such

easy

are

more

world

"banker."

money in a bank.

can

Meaning

From all this certain conclusions
of the

the

the official of the bank

customer,

setup

The Real

in

time he extends credit to

every

adjustments designed to counteract any serious reces¬

great nation, depends upon our capacity and willingness to

play

banker

than

;

prospects will not be realized auto¬

to

matter

on

"These favorable

everybody

at one time or another has

borrower.

an

preventing depression., And in times like the present, when

tax

Most

purchase, dependent on the
earnings and balance sheet of the

In fact, curbing inflation is the first step toward

call for

-

greatly increased.

initial

vigorous Commitment by the Government to

Government

comes

suggested, I cannot help but
their
interest
in
equities

feel

and in however, the

now

kind of selective controls

security

our

anti-inflation

may even

'■

■'

"But many

may

we

imperil

policy.

would lead.
"I

standards of living

the alert, to

ever on

mand factors is not accompanied by a reduction of

activity and the

our

time

same

that would be most highly desirable.

pleasant restrictions

lessening of temporary de¬

or

committed, and at the

are

expand

But

resources,

and services.

we

the future without any

generated purchasing power to absorb a full output of goods
make

publicly owned

discussion

for

occurs

could have the amount of national defense that

we

economy,

purchasing power

the acceptable

need, make the contribution to international reconstruc¬

maintain and

The momentum

security and welfare

and selfish concepts as to

narrow

somewhat tem¬
possible that
the aftermath of war. In 1949,

period of harder tests.

own

corporation available to

would be

limits of Government action.

tion

•great, it has rested in considerable part on
porary

because of

we

prosperity of the postwar years has been

Fur¬

my

experience, I have always found

and de¬

conserve

security and welfare of the people,

to sacrifice that

do not want

we

•v

paragraphs later he returns to much
the same theme and proceeds to set forth his philosophy
(or that of his advisers), as to the responsibilty of the
National Government in the premises. Here is a sample:
Then

utility," corporations.

thermore, at least from

To

that is consistent with the

formulate and execute

during

activities and agree¬
able to answering any reasonable

"In the annual economic review of the Council of Eco¬
nomic

but
"Now is the time to

remarks

the year.' Monthly
available on all the
and also' on numerous

are

company's

should bear always in mind velop our natural and human resources, retain our faith in
that our purpose is at the same time to build strong bul¬ responsible Government,, and do not relax our efforts.
warks against deflation and depression, and thus to con¬
"We want the greatest amount of economic freedom
solidate our past gains and move forward to new levels of
prosperity for all.

by

fre¬

of

course

holder

long-range national objectives.

our

supplemented

pertinent

quent
reports

dangers of postwar inflation, we

sustained

reports

interim quarterly reports and

the

unemployment and under-utilization of

Our immediate tasks must be

ment.

ards

sufficiently clear and vigorous.

and action have not been
"As

exist because our thought

still confronting us

difficulties

annual

It must not be less

shall suffer inflation.

'7.\w;

ahead, not keeping

A few passages

leave the future to chance.

It must

"We should think and work with

*

has contributed to our progress,

foreign,

public

Examples

Some

,

suffer

our resources.

'

--.U;

•

•

or we

shall

our

Concerning Depression
In Financial Industry <
(Continued from page 4)

domestic and

productive capacity.

and consumers,

,

two

or

more

or

we

plant should strive

total of market demand by Gov¬

sum

proportionate to

not be

broadly similar nonbandied about in political circles from

the fact that for

that the

business,

should be

observe with greater care the
essential nature of man, find some of these notions al¬
most incredible—or would, at any rate, were it not for
the

Thursday,- January 13, 1949

4% increase in total output. Maximum purchasing

ernment,

who have taken
inquire more carefully into

all live, or those

the time and the trouble to

„

3 to

a

power means

(Continued from first page)

real world in which

CHRONICLE

increased labor force and modernized

our

for

FINANCIAL

&

COMMERCIAL

Mr.
his

&

Co.,

50

members of the

Boston Stock Ex¬
Stokes
own

formerly
investment

business in Boston under the firm
'

name

of Stokes & Co.

Volume 169

COMMERCIAL

THE

Number 4768

CHRONICLE

FINANCIAL

&

struction

Truman Budget Sets New
(Continued from first page)
when approved by
the
Congress, becomes the plan of

funds

action

tional

the, Budget,
for

ment.
of

the

It thus

Federal

embodies

tremendous

ticularly

in

American

Budget is
tant

importance,
times, to

par¬

the

the

to

en¬

The preparation of the
of the most impor¬

one

duties

of

represents

plan

decisions

these

people and

tire world.

Govern¬

the

President.

It

carefully prepared
carrying out the many

for

a

activities and

services

of

govern¬

ment which the

Congress has au¬
thorized, and others which I am
recommending, in response to the
needs and desires of the American

people.
This

is

the

since

pared

fourth

the

Budget

close

of

pre¬

World

War II.

The character of the post¬
world
still
presents
many

war

complex
swered

problems

and

unan¬

questions.

This Budget is
expression that can
he given at this time to the
pro¬
gram which the Government of
the

clearest

the

United

States

in the world

that

should

follow

today.

It is founded

the

in

support

are

Funds

at home.

assistance

is

of

included for the

are

omy

conservation
ductive

of the

resources.

phasis is placed
badly needed

on

of

mote

the

the

education,

security of

health

of $41.9 billion for the fiscal

year

requirements for the present year.
Under existing law and with con¬
tinuing high levels of economic
activity, revenues for the fiscal
year would be $41 billion.
This
an

estimated def¬

icit of $873 million.
In a period of high
is

not

the

sound

deficit.

this

A

time

operate

at

a

for

-

of

present

our

to

reduce
I

new

raise

of

the

collection

receipts
would

of

in

be

the

normal

lag

our

upon

in

The

it

actions

necessary

requests

amount

to

for

and
To¬

are
expected
billion dollars,

21

to
or

expenditures.

International affairs and finance

for

account

1950,

billion

6.7

expenditures

in

in

dollars

fiscal

the

with

compared

dollars

of

these

funds will be spent as part

economic

strong

support

of

year

billion

7.2

Most

1949.

of the

we

are

to the free nations of
Europe, whose recovery

is the key to
and

in

dom

continued indepen¬
safeguarding free¬
other parts of the

to

many

Our

world.

in

Euro¬

repay us many

of

terms

increased

improved

and

for

in

investment

will

organiza¬

peace.

in

existing

circumstances,

is not enough
independence
free peoples. Under the Charter
strength

continued

assure

the

United

designed to in¬
the North

security of

To further this ob¬

area.

jective, I expect later to request
plies

providing military sup¬
countries and to

those

to

certain

other

countries

where the

provision of such assistance is im¬
portant to our national security.
It is not possible now to

accurately
and

in

I

will

what

have therefore

be

predict

needed,

included

no

allowance.in the Budget. The fact
additional

that

quired

to

New

meet

will

funds

the

be

demands

While

deny
additional

believe

we

participation in

the

United

and

Nations

that

re¬

of

work

active

of the

support

for

In millions]
1949

1950

_

Estimated

Estimated

$42,211

$39,580

$40,985

33,791

40,180

41,858

deficit(—)_

+8,419

—600

•

—873

be

receipts;

,

been- reported




higher in

expanding

other

in

maintain

to

1951,

as

programs now

material

and

equipment,

which will be delivered and paid
for in the next few years.
The

military

mended
most

in

this

powerful

forces

recom¬

build

to

foundation

excessive

strain

be

permit

on

our

pro¬

and which will
expansion
should

rapid

tain

has

been

the

devoted

economies

to

The recommenda¬

achiev¬

which

should

obtained

be

through more effec¬
tive organization and conduct of
government operations. There is
no easy way of attaining this
type
of economy, but the size and com¬
plexity of our governmental ac¬
tivities

require

that

devote

we

continuing attention to improving
the

management
of the
public
business.
Further, we must make
it

possible

for

responsible

Fed¬

ana
en¬

actment of

legislation to increase

the salaries

sistant
and

the heads and

of

heads

of

the

ness

as

expenditures,

as¬

departments

agencies. The Budget includes

tentative

needed to
I

estimate of

also

that

recommend

Classification

Act

be

salaries to

the

revised

permit the payment of
istic

the funds

provide these increases.
to*

real¬
employees

more

career

and to correct the dislocations and

inequities created in recent years.
Government

The

its

and

em¬

ployees should be assured that the
salaries
levels

for positions at all
compensation for

paid

fair

are

the work performed.
Fiscal

prudence

consider

requires

the

thai

Government's

we

which will lead to increased effi¬

on the
basis of a
alone, but in the light
of the continuing national policies
already adopted. It must be rec¬
ognized that expenditures in the
fiscal year 1951 are likely to be

To

and closer

economy

of

activities.

make

more

this

toward

coor¬

goal,

rapid progress
to which I am

firmly committed, this Budget in¬
cludes

a

for

request

improvement

a

manage¬

fund

of

one

million dollars to be appropriated
to

President

the

him

to

carry

and

on

worth-while

reflects

be

tially

above

material
tional
face

anticipated

national

the

estimated!

level

cannot

We

Ex¬

defense

to rise substan¬

in

decline

except
our

any-

interna¬

responsibilities.
We must
squarely the fact that we

foresee
1950

savings which should result from

those for 1950.

for

expected

1950.

im¬

The Budget

certain

penditures
can

for

by

year

larger than

and

necessary

management

provement activities.
also

utilized

not

program,

single

a

deficit in the fiscal year

under

existing

(Continued

tax

on page

military prepared¬
in the present uncertain pe¬

a

man¬

eral executives to take the actions

sus¬

with¬

years

ductive resources,
the need arise.

fort

great deal of ef¬

a

mil¬

of

can

recom¬

further the

recommending the immediate

areas.

In addition,

ment

itary strength which
tained for a period of
out

for

been
the

To strengthen

agement of the Government, I

a

;

dination

time

defense at this
a

in other

has

planning

has

lower

increase in

postal def¬
Similar changes are reflected

icit.

in

in

mind

national

our

is

in

to

ciency,

peacetime.
The principal objective we should
have

rates

mended

the

Budget are
this Nation

maintained

ever

laws,

30)

proper

riod.
Two

other

commitments

the

of

government will continue to have

major impact on Budget ex¬
penditures in the fiscal year 1950.
are
interest on the public

These
debt

and

our

ices

and

benefits

veterans

of

program

serv¬

for

provided

their

and

dependents.
Together they total $1F billion, or
26% of the Budget.
*
A general decline in the num¬
ber
of veterans
drawing read¬
justment benefits reduces expend¬

itures for veterans to $5.5

billion

$1.3

below

Interest

year.

on

billion,

the

current

the public debt,

however, shows an increase from
$5.3 billion in 1949 to more than
$5.4 billion in 1950.

Expenditures
of

the

for

all

activities

Federal

Government, ex¬
required for the
four items—international, national
defense, veterans, and interest on
the public debt—total $10 billion
or 24% of the Budget.
clusive

of

those

Programs devoted to social wel¬
fare, health, and security require
expenditures of $2.4 billion.
Of
this amount nearly half is in di¬
rect

grants

assistance.

States

to

for

public

++■

^

Development of our natural re¬
including atomic energy,

sources,

is estimated to cost $1.9 billion.
Programs devoted to agriculture
and agricultural resources require

expenditures of $1.7 billion.
vision for transportation and
munication facilities and

tional

defense

com¬

the

activities, requires

1948

other

activities

of

govern¬

was a

mighty big

additions to the

ment—for

housing, education, la¬
bor, finance, commerce and in¬
dustry and the costs of general
government—amount to

lion,

or

Telephone Birth Rate?

our na¬

$1.6 billion.
All

Have You Heard About

Pro¬

services,

of them supporting

many

$2.3

bil¬

Your
is

more

own

for

year

telephone world.

particular telephone

valuable

of calls go

5% of the total Budget.

rectly

concerned

with

today, millions

through clearer and

quicker, because of the

many

things that have been done to
extend and

improve service.

interna¬

tional and national defense activi¬

You

can

call

and there is

more

of it because-

1,800,000 miles of
.were

domestic

more

needs.

are

activities

many

of

government, authorized at various
periods, which impose continuing
financial obligations and tend to
represent

Budget.

fixed ^elements

A

made

assure

that

careful
of

they

essential

of present

these

the

review

has

programs

meet

needs

conditions.

in

in

As

only

to
the

A total of
invested in

$1,500,000,000

new

Local and

Distance facilities in

the

veterans'

nearly
were

can

call you, because

3,000,000

Bell telephones

added

population

—

community.

to

the

many

telephone

in

your own
•

-

Long Distance service is faster

a

light
result,

hospital

con¬

BELL

was

Long

1948.^

We broke all records for the
new

telephone

struction, the dollars
the

we

con¬

put into

job and the number of tele¬

phone people

on

the job.■;

We're

going to keep right on
working and building in 1949 to
make your

telephone service

bigger bargain than

the

cutbacks have been recommended
in

people

circuits

new

added.

volume of

people, and

more

ties, while the remainder provides
for

most
NOTE—-Estimated expenditures, are based on existing and proposed legislation.
Estimated receipts .exclude new tax proposals.
Throughout this Budget, payments
of refunds of Government-receipts are reported as deductions from total

■v

past,'they have

defense

expected
a result
under
way and the large orders already
placed
for
aircraft,
ships,
and
to

of

been

the

expenditures

There,

Actual

in

recom¬

Expenditures of $6.4 billion are
program" emphasizes
even
included
within
the
foregoing
strongly the need for in¬
Budget totals for new legislation.
creased
revenues
in
the
years
Of this amount, $5.6 billion is di¬
ahead.

1948

or

national

for

postal

an

activ¬

improvement

under way.

now

more

[Fiscal years.

Surplus ( + )

authorizations

only where it is
public interest to post¬
as in the case of some

projects, and

power

ing

1949..

1950 total 15.9 billion dollars. De¬

BUDGET TOTALS

.

for

this

to

Receipts
Expenditures A_ 1 __A.__ 1

1950, compared to 11.8

dollars

Nations,

measures

the

defense

14.3 billion

them,

ities

2S

a

programs.

half of all Budget

total

will permit this Nation to main¬

national

our

international

our

billion

national

to

tions in this Budget move toward
this objective. I believe that they

like all those
of the war, is dom¬

defense

funds for

.

many

by

Atlantic

country
of large

taken

Budget

of

dollars in

Budget, ex¬

I

year.

1950 Budget,

crease

of

been

that .this

for

estimated

are

this

In

reflects

next fiscal

the

necessities

countries

heavy prior com¬
requiring
larger ^ex¬
penditures for a number of con¬
tinuing programs in
the r fiscal
year 1950 and the presence of in¬
flationary forces in our economy,
has

for

therefore,
we
have
been
discussing with
some
of
the
Western
European

mitments

it

my

they

of

preparing this Budget reflect that
policy.<* ;:
Because

re¬

expenditures

gether,

to

the

expenditures;
The
Economic Report,
submitted re¬
cently to Congress, emphasized
the compelling need for financial
prudence by the government at
time.

in

of trust
recommenda¬
strengthening the con¬

economic

government

this

ex¬

addition,

increase

an

under

national

to

considerably less.

of

be

and

But

taxes, however, tax
the fiscal year 1950

effect

ceipts

tion

presenting this financial pro¬
gram to the Nation, I have care¬
fully considered the present eco¬
and

will

there

pres¬

therefore, recom¬
legislation to
by $4 billion. Be¬

situation

clearance,

slum

forces.

penditures

is,
as

programs

tional health program. In

strength

In

nomic

and

times

tax

revenues

cause

such

panded social security and the na¬

commitments,

inflationary

am,

mending

sures.

for

pean recovery

public debt, to provide an ade¬
quate base for the future financ¬

ing

An

dollars

million

500

included

contin¬

gencies, to permit reduction of the

and

additional

is

dollars

included for aid to education,

dence

surplus at
vitally important to

margin

a

million

of 290

Western

policy for

government
is

provide

to

this

of

extending

prosperity

public

government

framework

the

estimate

inated

1950, about $1.7 billion above the

it

Within

Budget, provision is made for in¬
augurating certain essential eco¬
nomic and social programs which
should no longer be delayed.
An

since the end

and

our

result in

year.

the present program are

The

people.
To
support this program, the
Budget provides for expenditures

would

fense

governmental action.

to pro¬

important steps we can
peace, we must also
adequate national
de¬

mended

provision

measures

are

toward

expenditures
contemplated
for
1950 are only $1.7 billion above
the
level
of
the
present fiscal

policy and the desires of our peo¬
ple and that an extensive reviewby the Congress will result in its
acceptance as a sound program of

Nation's pro¬
Increased em¬

take

nations

penditures in 1950 of $2.5 billion,
or 21%,
over 1949.
Public works
already authorized and now under
way also require higher expend¬
itures.
Despite these and other
unavoidable increases,
the total

the

neces¬

most

fense

believe

increased.

the

pected to result in additional ex¬

ments for

armed

our

materially

strength

pone

free

public works have

new

not in the

of

management

included

the economic recovery and grow¬

maintain

judgment, the minimum require¬

strengthening of our econ¬
through the development and

sary

ex¬

tion

provided for other members of
the family of
nations, and expend¬
forces

are

tributory social insurance system.
The plans of each Government
agency have been thoroughly re¬
viewed, and the amounts shown
in the Budget represent, in my

con¬

strong, positive ef¬

direct

program

conviction

prosperity

itures

defense

must

States

fort to achieve peace in the world
and growing

Substantial

increases in our na¬

Necessary

accounts

on

the United

tinue to exert

desirable.

housing

foir

been

ing

be

recommenda¬

program,

tions

Peacetime Peak

normally

would

which

(185)

TELEPHONE

SYSTEM

ever.

a

30

(186)

THE

COMMERCIAL

&

CHRONICLE

FINANCIAL

Thursday, January 13, 1949

on

(Continued from page 29)

•

ment

program

recommenda¬
level
below

my

over

veto, is causing

my

military aid, and that even
higher expenditures will probably
be required in future years.

responsibilities will not

tax

us

to go in the next fiscal

1949.

Furthermore, in the fiscal year
1950, the present large excess of
receipts of trust accounts, with its
anti-inflationary effects, will be
sharply reduced by the scheduled
payment to veterans of a dividend

The Budget of the United States
Government is large because its

tion of the present high level of
personal income is assumed, these
receipts in the fiscal year 1950

responsibilities

will remain below the correspond¬

for

new

of about 2 billion dollars from the

service

national

life-insurance

Finally, it must be apparent that
in times like the present we must
be in a position to make new plans
if conditions

change. I do not con¬
sider it prudent under such cir¬
for

cumstances
finances

the

or

balance.

In

precarious

times like the present,

prosperous

should take the necessary steps
reduce
the
public debt and

place the Government finances

on

It is not

an

step for

easy

take to recommend

to

me

taxes.

new

I

,do so with a double conviction,
first, that under present circum¬
stances
not

a

prosperous

afford

and

second,

country

can¬

unbalanced

an

that

budget,
thorough

after

for

concern

sive

a

strong and

domestic

tion

is

economy.

today

of

the

national

based

this

on

a

in

bul¬

world.

concerning

finances

sober

This Na¬

the

make

we

progres¬

strongest

freedom

The decisions
our

and

must

be

understanding of

Budget Receipts
the

basis

of

of

full

con¬

employment and

approximately the current levels
of economic activity.

Income Taxes—Income taxes

individuals

and

corporations

on

are

the major source of revenue of the
Federal
Government.
Receipts
from

these

taxes

represent

over

two-thirds of the Budget receipts
at

Direct taxes

on

Excess

1949

1950

Estimated

$20,997

$18,530

$19,135

899

797

tinue
of

11,515

the

and

Federal

323

194

revenue.

in

reached

the

fiscal

year

2,396

2,610

3,324

The

disposal of war surplus is
nearing completion, and
conse¬
quently by the fiscal year 1950
miscellaneous receipts will be ap¬

proaching

a

tinuation

staole level.

more

taxes

of

The

—

full

422

407

reduction

net

no

debt

rate

for

increases

to
*

be

employment

railroad

retire¬

in

in

the

January,

latter

be

tax

recommended

at

for¬

These

would

measures

employment

col¬

taxes

payments

for

benefits, but the funds would

be

in

make,

sible

fiscal

times
"'"1

'

*..

",VS

,

transferred

and

would

3,809

________

appreciably affect

1,750

2,276

Refunds

—

This

Budget reflects

81
the

Appropriation to trust
Existing legislation
Proposed legislation:

recent

nancial

funds:

1,616

2,420

■1,754

change in Federal fi¬

reporting,

under

refunds of

receipts

deductions

Health insurance

from

than

as

which

shown

are

receipts,

260

Expanded coverage, old-age &
survivors insurance

'

2,272

in terms of

practice

by

year

or

equal

result

and

which

which

for

cial

include

billion

all

the

from

of

accounts

well

the

as

general

expenditures.

and

as

rather

These

re¬

in

reducing Budget receipts and expenditures for
and therefore have no effect upon the amount

operating costs

overpayments

duties.

Such

AND

refunds

Function—

*

prospective
and

1948,

then

rates

set

from

services and

year

the

retroactively

lower

the
paid

$-3,709
14,268

6,567

Appropriations Authorizations

$6,349*

___

13,219

$2,455
'''

6,799
.

82

5,496

5,701

1,9-33

2,358

2,271

92

349

1,853

388

227

1,987

452'

^

^r

75

■!

85

414

575

1,805
1,616

1,662

745

Employment
from 57 to

ian

in

1948

million workers who

a

ployment

remained .at

1,861

1,549

Finance, commerce, and industry...

1,757

944

648

88

183

....

General government

i
-

102

107
187

187

1,504

public debt
contingencies......

1,187

1,224
5,450

5,4#0

150

T

—385

$33,791

$41,858

*$38,536

Industrial out¬

service

businesses

which

had

persisted

more

metal

and

selective.

products,

Met¬

building

—

-4.

-J*

addition,

this

Budget

includes




3,036

million

dollars

of

appropriations

recommended to

liquidate prior

resulted

directly and indi¬
strikes, especially m
mining and in east coast and
coast shipping and trucking.
from

Profits

in 1948 again surpassed
previous records and were ris¬
ing throughout the year. Corpo¬
rate profits after taxes amounted

all

v

to about $21 billion, contrasted with
a

in

record level of about

$18 billion
With sales booming, the
profits to sales was again

1947.

ratio of

maintained
taxes.
sucn

at

after

5%

around

As I pointed out a year arm,

profits

levels

are

'needed

excess

of the

furnish

incen¬

in

to

tives and equity funds for indus¬
trial
exoansion and to
nromote
sustained

though

economic

some

thrived

health,

al¬

businesses have not

nearly

so

well

as

others.

The supply of money and credit,

late months of the year, although
other components
of the index

partly becausce of

the expansion of bank credit was

the year.

prices has been a welcome sigr
the battle against inflation.
T

'

7
*

But the sharply
divergent movements of prices—
both up and down—confront ur
with urgent problems of adjust¬
past

two

years.

—

$6,039

to

sustain

maximum

em¬

ployment and production through¬

increased

ing the

war,

thereafter,.!

enormously dur¬

continued to expand
During
1948,
how¬

ever, partly as a result of restric¬
tive actions adopted by govern¬
mental authorities and voluntary
restraints observed by
demand

for

a

banks, and

decline in the

short-term

capital,

substantially slowed. A large gov¬
ernment
surplus used to retire
bank-held

debt, together with the
growth of credit, re¬

slackened
sulted

in

a

slight decrease in the

amount
of privately
held bank
deposits and currency. While bank
loan expansion was less in 1948

than

in

1947, this .was in good
by increased lending
by other financial institutions.
part

offset

Credit

expansion

has

important element in the

Wages went up during 1948, but
year

1947.

which

and

most

out the economy.

horizations.

in

as

lighting ma¬
durable goods
moved upward, while some other
groups weakened, with fafm prod¬
ucts leading the decline.
Lower
food prices brought the consumer
price index down a little in the
fuel

and

hope that it proves more enduring
than
similar
pauses
during the

...

•

—•••••

$40,180

in¬

With few interruptions ever since
the removal of price controls. The
trends of prices became more ir¬

ment

Total

output

in government 4%

and

3%

4%

3%, while employ¬

the

movement

of

200

45

in

and

Prices ceased the broad upward

in

•

1,160

5,325

•

—

Adjustm't to daily Treasury statement basis

put increased

3

With bumper

This halt in the upward march

■

■

,

18

82

184

5,188

the

agricultural

crops,

of

482

1,586

*

between

west

low-

:

Production for the economy as a
was

coal

were

the

level

industries,
settlements
obtained without prolonged

rectly

Unem¬

level of around 2 million.
i

tion

and

added to the labor force.

same

most

negotiations or strikes. Neverthe¬
less, considerable loss of produc¬

ranged

averaged more
59' million.
This
included

than

stoppages in 1948 were at

the

were

nearly 62 million civil¬

workers

over

350

1,091
1,267

Transportation and communication
Labor

Other

'

Education and general research
Agriculture and agricultural resources
resources

11,745

Report

continued to rise throughout most

1950Net New

Work

about

Situation

terials,

$7,219

benefits

health, and security
Housing and community facilities.......

*In

J

I evaluate it.

as

In

materials,

Estimated

the

in the increases obtained by workers in different lines.
While some

High Points in the Economic

als

In millions!

Estimated

on

government's business.

program to deal witn

a

regular and

,

1950

Social welfare,

for

ex¬

by

1949

authority

carrying

groups managed to keep ahead of
situation, rising living costs, others fell beboth
policy. hind

propose

guides and

January through April,

resulting

represent

economic

the situation

rose

$4,782
10,924

International affairs and finance

on

of

herewith), I shall first cover
the high points in the current and

withholding" of individual income
for

billion,

obligational

$44.6

new

recommended for

as

gress

ment

Actual

yv;

National defense

Interest

the

Advisors (transmitted to the Con-

1949, because of the unusual "over

—Expenditures—

.Reserve

are

ceptionally high in the fiscal

1948

Natural

taxes

AUTHORIZATIONS

FUNCTIONS

[Fiscal years.

'

of

Revenue Act of 1948. Interest

amounts,

deficit.

BY MAJOR

Veterans'

totaling

spe¬

(Continued from, page 6)

creased about 9%.

taxes

liquidate

to

authorizations

contract

Tiuman Delivers Economic

higher than in 1917.

of

not true

used

tions'-and "other authorizations,?

expend¬
and

Treasury
expenditures

whole

are

be

less those to

permit the placement of
specific contracts but require later
appropriations to liquidate these
contracts, and special authoriza¬
tions to use the proceeds of Treas¬
ury borrowing to finance certain
types
of government
programs.
Together, "net :;new
appropria¬

1950 of

the

net

re¬

new -

$6 billion for fiscal year 1950, in¬

Estimated expend¬
year

Message sets
appropriations

which

govern¬

fiscal

the

for

"Net

clude

spends money, regardless of
department or agency car¬

itures

$41.9

the

new

authorizations

■

forth—set forth the broad

so

ment

Budget

net

other

prior year contract authorizations.
"Other authorizations," totaling

major functions—national defense,
international affairs and finance,
veterans'
services
and
benefits,

of the government but are for the

$40,985

$39,580

BUDGET EXPENDITURES

■

'V1 l."* '

and

major functions. These

funds

NOTE—Payments of refunds of Government receipts are now reported as
deductions
from
total receipts;
previously, they were reported as. expenditures.
Overpayments by taxpayers are not true receipts of the Government nor ure
they, when refunded, properly chargeable as operating costs of the Government.
Payments by wholly owned Government corporations and enterprises for retirement
of
capital stock and surplus,
which
were
formerly
reported
as
miscellaneous
receipts, are also excluded from both receipts and expenditures, since they do not
represent operating costs or true receipts of the Government.
These improvements
reporting

!

The complex Budget of the gov¬
can best be
summarized

2,097

2,709

$42,211

surplus

:

.

ernment

return

of

prosperous

Authorizations }■'

1,700

Refunds of receipts

each

minimum

Expenditures

be made from
prior years..; ''
give a comprehen¬

appropria¬
tions,". totaling $38.5 billion for
fiscal year 1950, represent total
appropriations requested (includ¬
ing
permanent
appropriations),

trust .-accounts

to

not

'

'*. "

Budget

ap¬

will

my

the

quested.

us

with respon¬

in

bil¬

authorizations

and

to

order

and

am

these,

as

esti¬

new

picture of the financial re¬
quirements of -government pro¬

Congress.

the

policy

such

'

1950,

consistent

reduction

the

sive

grams,

to

of

from

those enacted in

debt

permit

example,

be made

billion

$7.9

xorth

should

by

recommended in this Budget, and

tion enacted by the 80th

recommending

enacted

1950 expenditures, $34

will

propriations

Budget receipts.

DEDUCT—

iri

lion

programs

the outset in added
of

For

mated

reduction in 1949 is the tax reduc¬

The increase in taxes which I

ex¬

increase

July, 1949.

have

sizable

authorizations

later.

In

any

of

terms

result in expenditures until a year

debt

for the fail¬

reason

achieve

to

in

I

1950.

moved

greater than the added

407

the

measured

the Congress for any year do not

billion.

$251.6
major

The

ure

purposes

January, 1949,
that for old-age and survivors

operation.

Miscellaneous receipts:

in

accounis.

impact and direction of
government's program can¬

be

other

June 30, 1949, is estimated

on

itures

tax

lections

1,700

_______________

.

con¬

social insurance programs now in

260

Expanded coverage, old-age &
survivors insurance

debt.
Instead of the Budget sur¬
plus of nearly $5 billion estimated
last January for the fiscal year
1949, we now face a deficit of $600
million.
Accordingly, there will
be

expend¬

exclude

penditures alone in any one year.
Many of the commitments ma:te
under
the
appropriations
and

a

ries them out.

result

Health insurance

1947.

-

of health Ipnd disability insurance
and expansion of coverage for the

7,900

,

con¬

trend

upward

years,,
reflecting the
high level of business
activity.
Miscellaneous
receipts
have been declining from the peak

I

140

7,715

,

re¬

miscel¬

expected to

are

gradual

They

The full

not

corresponding change in
the rate of reduction of the public

recent

ward to

12,112

**7,402

*

:li>

;l_

meant

continued

653

9,851

Employment taxes:
Existing legislation
Proposed legislation:

Existing legislation
Proposed legislation

miscellaneous

taxes

of

sources

and

'

L

and

laneous receipts are the other ma¬

for

profits taxes

Customs

but the gen¬

recommend that the rate

_

^

Excise

insurance

corporations:.

A

years,

ceipts—Excise

ment
Estimated

Corporation income taxes

Excises

war

terprises.
•

the- last- 12' months* has

in

the

In millions]

income taxes

look

brings gradually rising revenues
from employment taxes. Further¬
more,
under existing legislation,

individuals:

gift taxes.

increase

to

prosperity that followed the

Employment

The Revenue Act of 1948, passed

1948.

year

on corpora¬

reconversion period has brought
steadily rising profits and higher
tax yields.
V.-.v;.

present.

SOURCE—

and

els of the

Excise taxes

year.

the

assume

year

sharply from the high lev¬

receipts in the current fiscal

1948

Estate

clined

jor

estimates

government corporations and en¬
;

y

substantially in the fiscal years during fiscal year 1949, other than
that made possible by a small re¬
1949 and 1950.
With the end of
duction
in
the
Treasury's cash
the war, the rates of these'taxes
balance
during the year.
The
were reduced and collections de¬

existing tax
legislation, Budget receipts for the
fiscal year 1950 are
expected to
total 41 billion dollars, an increase
ojf more than a billion dollars over

Actual

Individual

the fiscal

expected

are

eral

fact.

BUDGET RECEIPTS

on

tions

:

*

-

change' in- the Budget -out*., the

Thfe

income

though the continua¬

Receipts from taxes

position

(Including proposed changes in employment taxes and
miscellaneous receipts.)

Direct taxes

Even

ing receipts in the fiscal

review of the cost of each Govern¬

[Fiscal years.

collections in

our

tinuance

Therefore, I am recommending
that the Congress enact new rev¬
enue legislation.

individual

our

The

sounder footing.

a

The

of

International

Government

unbalance,

large.

are

reduction

Budget reflects the realities of

On

in

be

to

in

even

to

year.

wark

fund.

we

permit

a

v

sharp

a

represent
our

allowance

any

expenditure,

Retirement of the Public Debt

tions

without

an

itures made from trust

which

even

refunds continues to be shown

as

Tiuman Budget Sets New Peacetime Peak

of inflation.

been

an

process

In the first months

contract

there

was

considerable

disparity: of 1948, it

was

offset by the large

1 Feasury

.

Number 4768

169

Volume

home

surplus.,«When that .surf

a

plus disappeared, the Government
aid not have authority to take
other-action wni-ch would effect

of

\

public debt,
creased

portion

to

had

consumers

in

gain

of

increase

8

the years.

in¬

by Government and by industry-

et; retained
and

earnings

business

the

of

business

investments

largest

percentage

showed

increase

from Vl947

Other

to
1948.
Among the
components, consumer in¬
and expenditures increased
government payments rose

less,

by.: Government that will only moderately, and net foreign
investment declined substantially.
produce low-rept, public housing,,
slum clearance, -and rural housing; Expectations of continued infla¬
tion have added to the incentives
for families of low incomes; acr
for
business
investment,
while
tion by industry to-reduce costs
the price rise has acted as a brake
so that decent homes can be built

despite an

at

on

prices that

the demand of consumers with

:witb.
Income from most
relatively
fixed
incomes.
The
"
•
major sources was greater than moderate incomes can afford.
proportion of consumer expend¬
The major portion of the
in 1947.
But in the. latter half of
housjr itures in the total national prod¬
1948, income from farming fell "ing job must be done by private uct has never been lower in
any
relative
to
the normal seasonal industry.
Here the bottleneck is peacetime
year for which statis¬
At
this
pattern and that from other un¬ cost.
time of national tics are available. This is not an
incorporated business and from stock-taking I urge all elements immediate
problem so long as the
rents ceased
to rise, while ..that of the building industry substan¬ sum of
government expenditures,
Irom dividend payments increased,
tially to lower costs so that housp business
expenditures,
and
net
sharply.
Income' distribution is ing production may reach new foreign investment is still rising.
less unequal than it was in. pre¬ record levels. The
present decline It could become a critical prob¬
tional output.;

war

but this improvement

years,

of

inflation

of

and

in income taxes

housing starts points up the
danger that inflated building costs

lem

bring down upon the indus¬
try. If housing costs are lowered

changes

in 1948.

earners

in

has probably been halted as a re¬

sult

wage

declining relative importance in
a. constantly growing total econ¬

can

V :

the

and

other

these

as'

down

turn

to

or

factors
to

even

begin

assume

a

calls for a
program
value, builders will be able-to vigorous ; anti-inflation
up less than income in 1948. While
personal : saving
increased, this continue to build in volume and now, while at the same time we
must pursue those policies of ad¬
the
was
not reflected in the rate at
building industry need ,nqt
expansion
which
which .people accumulated liquid fear..a continued downward trend/ justment;. and

went

expenditure

Consumption

consumer,

better, omy. s; This ; situation

gets

Third.
stick

In order to have

yard¬

a

appraising strength and
weaknesses in our economy and
the adequacy of government pro¬
grams,

need

we

concrete

objec¬
tives for economic growth,
and
particularly standards for a bet¬
ter

balance

between

production

and consumption, income and in¬
vestment, and prices, profits, and

which will be conducive to

wages

sustained

,

bank de¬

and

currency

—

.

A

farms.

se-

'

;

•

•:

and

taled

equipment
other

about

above

the

than

farms

$19' billion,
level

by

outlays

y

to¬

slightly

reached

in

the

latter half of

1947- although with
higher costs the physical volume
Of such investment, was. notquite

maintained.; Expansion
wi-.h

up

peared
in

postwar
be

to

•

to

catch

-

demands

nearing

ap¬

completion

lines, but substantial fur¬

some

increases

planned in

in

; capacity

are

number of industries

a

—chemicals,
petroleum,
metals,
utilities, and transportation,-Even
where expansion goals have been

met, modernization to reduce costs
"$■' and improve products should con¬
tinue to, require substantial in¬

vestment, though at a rate of
growth ; lower,V.than that of the
past two years.
Inventories

-

of

likewise

nesses

in

crease

,

the

year,

;

-

.

;

(

lionfarm

busi¬

continued

in¬

to

value

tnrouguoui; me
increase amounting to

about $7 billion.- Of this amount,
$4 billion was accounted for by

price increases.

Restocking after

wartime shortages appears to have
been

virtually

for metals and

terials.

completed
some

except

building

ma-

y

Corporate

financing- of invest¬
ment in plant and equipment, in¬

<

The surplus of exports of goods
in 1948 was substan¬

and services

from

turn

we

the facts

transmitted
detailed

herewith,

ployment,

shows

of

consideration
economic

our

sit¬

sustainable basis.,. It-

a

even

more a

decrease

ifi;

exports, because foreign purqhas^
lacked

ers

dollars

with

which.to

a

rather than

others

the

are

surest

standards of

'

First.

should " remember

We

buy from us, and because of irirest
prosperity
for
creased supplies of needed goods,
-country and not the
produced abroad.
The impact jof

the

whole

special gain

of any particular group.
That is
this decline has
been selective.
why the Employment Act of 1946
Foreign countries have continued calls
upon the President to pre¬
to buy products which they conrsent an economic program aimed
sider essential, like wheat, petro¬
at continuous "maximum employ¬
leum, agricultural. and industrial,
ment, production, and purchasing

machinery, and chemicals.Other power." I firmly believe that this
items have been cut very dras¬
goal is attainable.
tically.
Maximum
As

shipments under the Euro¬
pean Recovery Program continue
to expand, some increase in the

ance

our

and

conserve

our

ernment,
This

do

and
;

efforts.

develop

our

relax

not

tion

range

level

of

the

by

needed

now

Council
the

on

of
ac¬

long-

which I set forth

programs

of

new

investment

which

loans, and stock -issues less
important sources, than in 1947.

erally

more,

earnings

favorable

in the last two

go

Recovery Program funds for
chases

outside

the

pur¬

housing starts has been falling of 1
rapidly. This does not mean that
the
housing shortage, has been
overcome.

Rather

it

means, as

pointed out in previous

I

re¬

power means

United

States.

market

export

that the

business, and
and foreign,

demand

total of

sum

jnder

this

program

will,

again

were

a

public exceeded cash payments by
about $6 billion in the calendar

and

only at

a

rate of $4 billion in

is
a

a

large

result

qf last

year

crease

in

One of the main

anti-inflation pol¬

an

Treasury

of

the

tax

surplus.

reduction

and the necessary in¬
government
expend¬

itures, this powerful

weapon

is not

available. Tax receipts, it is
true, have been rising but this has
been largely due to the inflation¬

now

ary

rise

pay

rolls.

in

turn,

in

incomes,
This

was

profits

and

inflationary rise,

aggravated

by

the

less

homes.

A

continued

decline




in

blind

us

equally important fact that

not

risen

people have
the cost

with

apace

ol

living and that they have become
the

victims

inflation.

of

perity that is too
distribution

pros¬

in

fruits

its

of

A

uneven

much

the

cannot

We

quirements

fulfill

must

of

the

essential

our

re¬

pro¬

if doing

even

temporary

so

may

exercise

should

We

think

and

reasonably long look

a

ahead, pot keeping

our

eyes

just

on'/the; problems of the moment.
Our

immediate

placed in the

long-raiige
While

we

tasks

must

I

controls in

our

must

The principal source of additional
should be additional taxes

revenue

corporate profits, which can
applied without unduly inter¬
fering with prospects for continued business expansion and with
upon

be

promptly

must not

unduly hold back under¬
takings that are needed to pre¬
serve
and' develop our employ¬
ment opportunities and our pro¬
ductivity in later years. Policies
needed to develop our resources
and to prevent depression in the
long run must be reconciled with
policies needed to curb inflation
in the short
We

must

for education

opment.

pursue

affirmative

for housing and health,

programs

and

resource

devel¬

Yet the fight against in¬

flation

prevents us from under¬
taking these long-range programs
with the speed and on a scale that

governments

reduction.

would

otherwise be desirable.

In

Ris¬

expected to
add to deficits in 1949, and these
are

the recommendations made in this

Report

and

in

the

will

be sufficient

and

contingen¬
'

v

Another
estates

small

tax

The

upon

already

yield from this tax was re¬
by one-third by the Rev¬

duced

Act

enue

the

be

gifts.

and

-

of ; additional

source

should

revenue

'

profits, after taxes

1948.

of

should "also

Careful

directed

be

study
the

to

increase of rates of individual in¬
taxes

come

the

in

and

upper

Some additional

excise taxes may be desirable, but
some excise taxes,
particularly on

existing
insurance
exert

the

greatest amount of economic
freedom that is consistent with the

fect

security and welfare of the peo¬
ple; but we do not want to sacri¬

have

fice that

security and welfare be¬

of

cepts

narrow

as

cause

to

the

selfish

and

the

of

amount

fense that

con¬

acceptable limits

government action.
we

and

maintain
ards of

at

and

If

we

could

national

de¬

com¬

same

the

time

now

stand¬
and in the fu¬

kind of selec¬

that would

it

is

our

the

be most

able.

And

are

we

expand

living

economy,

highly desir¬

controls.

such

rather

we

But

would

we

these

have

action

of

for

while

a

imperil

our

security

human

and

material

than

allow

or

our

resources

to

,

addition

to

billion

increase

in taxes

The

by

commit¬

vigorous

the

ment

is equally committed to an
anti-depression policy.
In fact,

curbing inflation is the first step
toward
Dreventing
depression.
in

And
when

mixed

times

the

economic

present,

situation has

elements, the Government

needs both
ons

and
so

either

the

like

anti-inflationary weap¬

anti-deflationary
it will

be

contingency.

It

that

weap¬

ready for
may

national

flexible

needs
in

of

the

even

the

rise

could

too

some

or

rapidly

while others could be falling dan¬

prudent

The

would

dictates

is

a

Federal

and

of

a

is ,pnly one
by which we can
budget surplus. The

taxation

a

limitation

careful

fiscal

our

call

of expenditures

policy under

which is consist¬

ent with our needs.

tions

of.

this

,

The implica¬

policy

requirement

will be discussed at length in my

Budget Message.
.

Debt

management—The

manner

a

that

be

public
managed

will

make

a

maximum contribution to the sta¬

bility of .the

economy.

An impor¬

tant factor in this program will
continue to be the maintenance of
stability in the

government bond

market.

Such

stability

bond

ment
most

in

the

govern¬

market

has

been

significant

smooth

element

reconversion

in

from

a

a

the
war¬

time economy to a civilian peace¬
time economy.
It contributes to
the

underlying strength of the fi¬

nancial
It

structure

of

the

country.

engenders business confidence.

It has

made it easier for business

industry to obtain the capital
necessary

for

their

recon¬

version and expansion projects.
The
bond

stability of the government
market

was

maintained

of throughout 1948 by the joint ef¬
of

and

the

tax

of

essen¬

only a surplus of revenues
expenditures, but also a sur¬
plus achieved at the lowest level

fort

for

It is

not

for

call

eco¬

;

expenditures.

that

tial

consumers

evolving

present circumstances contemplate

period of infla¬

which

policy

higher taxes in
tion

same

be

means

other

funds

gerously.

Rolicy should
should

business

accumulate

concurrently in

incomes

tax

course

Increased
of

of measures

prices

I

above.

and

nomic events.

and

some

$4

which

promptly adjusted to the changing

to employ both types

for

ef¬

that of the

recommended

The
be

be necessary

combination,

This

1

in

Sixth.

extended

in

idebt will continue to

deteriorate.

ment

and

programs/

anti-inflation

an

over

possible that

not, in fact, be forced to use

may

ons

run.

that

assurance

social

obscure the fact that the Govern¬

deal

so

government
revenue
from taxation by $4 billion a
year.

would

our

with the problem of inflation, we

in

do

the

We want

economy.

objectives.

of

be

to

legislation to in¬

recommend

under

Government to an
anti-inflation policy should
not

perspective

~national
,

be

re¬

less prosperous times.

require the
of selective

dom

Second.

more

to

us

it would

now;
difficult

defense, interna¬ oleomargarine, should be repealed.
tional reconstruction, and domes¬
I also recommend an increase
tic improvements and welfare— in
social
security contributions

resources.

work with

enable

debt

our

grams—national

relatively un¬
pleasant restrictions on our free¬

we

will

It

our

middle brackets.

Fifth.

over

Economic

expensive

to the

any

Budget which will be transmitted
to the Congress in a few days, I

but

that

fact

cannot

without

cal

all

levels

record

controls

ing expenditures of State and lo¬

for

at

The

tive

try has

been pricing itself out of

duce

is

•

against in¬

cies.

ends.

ture

effects of the tax

market

flation.

total purchasing power is now

shall suffer unemploy¬
ment and under-utilization of our
or

a

This

now.

compatible
our

domestic

ports. that the construction indus¬
the

budget surplus

to

have

to

most effective weapon

dividends,

government,

by

consumers,

demand, since the sellers of such
should be propor¬
goods will generally spend here tionate to our productive capacitv,
the dollars they
receive.
How¬ Itt must not be more or we shall
ever,
the expansion of exports, suffer inflation.
It must not be

icy

creased,, by well over a million
residential units during 1948. But
since last May the number of new

a

This will not reduce total

supports of

in¬

plant should strive
3% to 4% increase in total

European output. Maximum purchasing

than

was

increased labor force and

essential

policy

investments

mitted,

are

our

policy—It is

fiscal

for

for

market is tight, countries
being authorized to use

now

housing, supply

Fiscal

and

tic

that,

means

Production in

principle that economic sta¬
bility and economic justice are

which

the second half.

.

the

to

gen¬

decadesy

to

to

As

Tlic

dedicated

are

struction

are

ratios

We

tribution

.

equity-debt

Report.

Fourth.

modernized

While -stock market financing has year 1947. Measured after adjust¬
been
less important during the. ment for seasonal factors, the ex¬
postwar years than in the late cess ran at an annual rate of $12.5
1920's, this has been offset by billion in the first half of 1948,
greaterretained

Economic

on.

Certain Industries

need, make the con¬
international recon¬

-

bank

concluding section of this

force.

strong anti-infla¬
went
into plant, and equipment
tionary factor in the early,part of
increased., Of the total, 65% was
1948, due to the excess of receipts
internally financed," For the part over expenditures. But this factor
externally, financed, bonds • were declined substantially during the
a
"-more : .important source,>- and year..; Federal receipts from the
r.

the

exports can be antici¬
pated. For certain products, espe¬
cially those for which the domes¬
.

„

part

in

of

labor

welfare

pledged to

are

action later

Promote

crease

study

is

to

our

Economic Advisers shows that

have

growing
Maximum production

We

from drastic

us

sound

natural and human
resources, re¬
tain our faith in responsible
gov¬

provided

the

enormous

their

prompt action when needed. We
not wait to act only in the
eleventh hour of crisis. Moderate

em¬

and

how

can rise if we
place major reli¬
free enterprise sys¬

upon our

tem,

employment for 1949
means that nearly 1 million addi¬
tional job opportunities should be

for

with

for

must

a

living

and

encourage

and quickest way of getting there.

that the goal we seek is the great¬

presenting to a
invested
by the

people

responsibility
and security.

few

output,

our

is

next

last.

on

to

American

growth

our

the

over

This

years.

there

treatment of

possibilities

actions

reflected

uation

am

Congress

new

1. Policies to Combat Inflation and

progress.

program
of action,
tially less than in 1947, being $6 4here are several broad
principles
billion compared with $11.
This which I believe should guide us.
reflected in part an increase in These
principles should help us
imports, a necessary development to keep clearly in mind where we
for placing our international trans¬ want to
go and how certain roads

-

have

As

of

Policy

tions which I

measures, taken in time, can save

economic

Annual

the incomes of many

it is
ventories : and
customer
credit hoped, - be offset in part by fur¬
ther increases in imports.
\
,»required $26 billion in 1948,' $2
billion less than in 1947, but that
Government fiscal transactions

that

the

,

ther

„

over

With these principles as a
guide,
turn now to the recommenda¬

-

I

In

bal¬

promote

to

major

■

continued

high level throughout. 1948.

a

be.; needed

a

;

investment

businesses

•

:

^

Plant

.

proportion, of
invested in housing,;

unincorporated

at

perform

.can

larger

savingwas

Business

will

Municipalities

.-

anced economic growth
role in reducing -costs., byyears'.
modernizing their obsolete builds
ing codes, which add to costs un¬
Guides to Economic
.businesses',:: .and necessarily. . .
i

posits, insurance policies, and
curities.L

.

Legislative Recommendations

Economic Review of
the Council of Economic
Advisers,

the

,

assets

31

ments designed to counteract any
serious recessionary movement.

for

,

comes

action

in total na¬

4%

to

over

' ,'(

appreciable

no

incomes

real

housed, but

the maintenance of maxir

,:Tbe housing shortage is one that
calls for prompt and bold action

meant that,

which

prices,

(187)

•

employment

mum

capita about in pro¬
the increase in conr

per

sumer

•

1948

in

income

Consumer

.

-

......

CHRONICLE

constitute, .dpficitSi-Hi^rease the general in¬ have sought to reconcile these
only to tne improve-' flationary pressure.
objectives in a way that strikes
living standards for-mil-,
the Nation's Economic Budg¬ the safest balance.

still inadequately

also to

the maintenance

assure

FINANCIAL

building ..would

ment of

orderly market for the vast

an

&

imeac, not

are

-

time

same

COMMERCIAL

liions of lowrincome families -who,

restrain inflationary ex¬
pansion of bank credit and at the
tively

THE

•

;

adjust¬

the

Treasury Department

Federal

(Continued

Reserve
on page

System.

32)

*'<

32

THE

(188)
■

FINANCIAL

&

COMMERCIAL

CHRONICLE

to continue rent control for

sary

two

at " least

years,V and - to
strengthen its enforcement. I rec¬

(Continued f

com

ommend that this be done.

31)

page

Even if the most

-

previous

oc¬

casions I have recommended that

adequate

provided

be

means

that

order

at all times be in

may

in

authorities

monetary

position

a

to carry out their traditional func¬
tion of exerting effective restraint

excessive credit expansion
in an inflationary period and con¬
versely of easing credit conditions
in a time of deflationary pressures.
The temporary authority to in¬
crease
reserve
requirements of
member banks of the Federal Re¬
upon

System, granted by the
'Congress last August, will expire
serve

June

30, 1949.

The expiration
of this authority without further
on

"action

tomatically
volume

release

of

bank

spective

of

time.

The

the

at

Congress
should
promptly provide continuing au¬
thority to the Board of Govern¬
the

Federal

ors

of

tem

to^require banks

plemental

Reserve

Sys¬

to hold sup¬

to the lim¬
its requested last
August, 10%
against demand deposits and 4%
against time deposits.
This au¬
thority to the Board of Governors
reserves up

should not be confined to member

banks of the Federal Reserve Sys¬
tem but should be applicable to all
banks insured by the Federal De¬

posit

Insurance

Corporation.

Authority for the regulation of
installment
credit,
likewise
expires
under
present law on June 30; 1949,

consumer

which

should
exert

be

continued

stabilizing

a

in

order

influence

to
on

the economy.
•

Promotion

duction—There

supply
which

in

so

maximum

I

to

to

as

production

pro¬

in

and

of

areas

impede
an

ex¬

limit

to

related to national

se¬

deal

immediate

with

this

legis¬

problem

of

capacity and supply. It should
impose upon the government the
specific responsibility and provide
the funds to make careful surveys
of future supply needs and
pro¬

ductive

capacity. It should fur¬
require that these specific

ther

studies

be

correlated

general requirements of

with
an

the

econ¬

omy operating at maximum em¬
ployment, production, and pur¬
chasing power. To the extent that

facts

reveal

provide
deal

the need, it should
additional authority to

effectively with inade¬
of capacity and supply..

more

quacy




Present

fertilizers.

and

long-range needs re¬
expansion of ex¬
isting capacity. It is essential that
public power programs be ex¬

porary;

quire

our

enormous

for construction of dams and gen¬
erators.
Such expansion should

mission
start

lines
the

on

where
St.

facilities

—

The

compre¬

electric hensive housing bill includes sub¬

of

shortages

Urban redevelopment and com¬

munity

stantial Federal aid to the States

needed.

A

localities

and

to

them to

enable

make more rapid progress in clear¬

ing slums and in assembling land
for balanced redevelopment. Such
action

be taken nOw without

can

adding significantly to inflation¬
ary pressures, and it is an essen¬
tial basis for future progress.

include the construction of trans¬

demands.

While the Annual Economic Re¬

view of the Council of Economic

River

Lawrence

Advisers this year does not deal
and
power
project, at length with programs, such as
of aiding waterway
should be made immediately. The
economic reconstruction abroad, it
education, health, and social se¬
programs in the important rivei
is essential that those exports be
curity, which are directed toward
basins should be examined anc the
controlled, both to minimize their
improvement of our human
adverse impact on the domestic prompt action taken where needed
resources,
my
Economic Report
to provide improved coordinated
last January stressed the intimate
economy and to make them most
connection between the conserva¬
fully conformable to our foreign development plans.
Agriculture
With certain ab¬ tion and improvement of these re¬
policies. I therefore recommend
that the existing powers of con¬ normal postwar demands for farm
sources
and the prosperity and
trol over exports be extended, and products diminishing, problems of productivity of our economy. The
that the machinery for enforce¬ adjustment to longer-range con¬ Council this year firmly reiterates
ment be strengthened.
ditions are becoming more press¬ this principle.
Because the programs flowing
Commodity Exchanges—Exces¬ ing. We need to fit a prosperous
sive speculation in grain's, cotton, and equitably treated agriculture from this analysis have not yet
and other agricultural commodi¬ consistently into an economy seek¬ been authorized, I submit the fol¬

to carry out our program

related

and

price

selective
should

are

third

the

essential

harmful
the

when

products
the

to

of

I

But

While

that

imposition of price

the

unless

mend

justification is

session

recom¬

the

coverage

of the

Fair

1

an

on

have

to

ever,

the

limit

would

authority, how¬
adjustments

wage

force

a

break

in

a

price ceiling, except where wage
adjustments are essential to rem¬
edy hardship, to correct inequities,
or to
prevent an actual lowering
of

living standards." I then stated
my
belief, which ,1 still firmly
hold, that wage increases based

where

some

current situations

wage

in¬

creases
cab be granted by em¬
ployers without price increases. I
firmly believe that the normal
processes of collective bargaining

will

result in sound

ments without the

wage adjust¬
actual applica¬

tion of any governmental author¬

ity
and

related

to

wages

Government

efforts

to

hold

make

down

prices and profits
the

cost of

Rent

if

and

business

genuine
excessive

to reduce

living.

ward

providing

decent

housing,

for those whose low incomes con¬
fine
of

them to slums in these

Control

—

The

present
neces¬

have

we

time,

need

we

shifts

But at the
to
composi¬

measures

in the

farm

output realistically
adjusted to our domestic and ex¬
We should supplement
measures
with: others,
in¬

port needs.
such

cluding the provision of adequate
storage facilities, the improvement
of,
distribution,
and
adequate
credit facilities.

income

at

and
present
families lack
their

high levels, many
adequate diets. We should
maintenance
level

of

with

real

in

the

assure

future

consumption
food

crisis facing
met, and the
basis for the continued improve¬
ment of our system of education
made firm.
Only with Federal
resources can we meet adequately
Education

of

will

This

The

be

cost imposed by ex¬

the increased

panding enrollments and the gen¬
eral rise in expenditures for main¬
tenance and operation.
I recom¬
Federal program for
elementary and secondary

mend that a

to

aid

education be initiated.

We should

plans whereby the oppor¬

make

higher
education
expanded through co¬

for

tunities

be

would

between the Federal
and public agencies

operation

Government
and

including

private institutions,

system of general scholarships
fellowships. And a study

a

and

initiated

be

to determine

authoritatively our national needs
for educational facilities and the

methods of provid¬

most feasible

ing them.

a

consistent

needs.

—

must

education

should

Even with farm production

national

help to stabilize domestic markets
;7
^ : /;

Health—The high percentage

of

rejections under the military re¬
cruitment programs has provided

for farm products.

stabilize

To

construction

—The

are

an

indispensable

support to such a program.
We
also need to augment the num¬

European Recovery Pro¬
of
is designed to further world ber
doctors,
dentists,
and
recovery
and reconstruction.
It nurses in order to overcome the

gram

be

.must

continued.

will facilitate

a

Its

return to

success
reason¬

able freedom of world trade.

The

proposed Charter of the Interna¬
tional Trade Organization, which

signed by 54 nations last year,
the foundation for this re¬

was

days

grossly inflated housing prices.

lays

turn.

3. Policies to Promote Balanced

shortage

present serious national
of medical personnel.

disability, and unem¬
insurance—-Millions of
workers are excluded from 'the
benefits of our old age and un*
Old

age,

ployment

systems.

insurance

employment

Such exclusion denies to individ¬

The present

inadequate author¬

uals

protection to which they are

Economic Growth

ity for the conclusion of reciprocal

entitled

While alleviating the hardships
of inflation and overcoming mal¬

trade agreements expires, June 30,
1949. I urge that immediate ac¬

of

which threaten
prosperity, we must

adjustments
future

our

con¬

tion be taken to restore the Trade

Agreements Act to full effective¬
ness
and to extend it for three
years.

Housing—The steady decline in

housing starts since last May

grams
of high priority needed
now to conserve and increase the

new

strength of our nation. In addi¬
tion, we should be prepared with

for

fully formulated plans for others.
We cannot accept the dangerous

the unenacted

idea that inflation's end will auto¬

matically bring about a period of
The continuing
prudence in Government
expenditures must not be trans¬

stable prosperity.

adds

fresh

evidence

of the

legislation.

housing

I

need

again
of

recommend immediate passage

portions of the com¬
prehensive housing bill; and the
need has now become so great that
its meager quota of 500,000 units
low-rent

of

housing

need for

years

lated

seven

If

are

over

five

years. ~

into false economy.

Natural

resources.

Government has

housing shortage makes it

abundant than

encourage

pro¬

non-inflationary

production

International economic relations

productivity vand designed to tinue to
develop our resources for
provide a rising standard of living
healthy growth. We should press
embody the American way.
The forward at once with some

facts show

farm

industry

•

the Government. The Government

the

employment economy.

basis;

of the
That the public assistance pro¬
1948, I said: "Where the Govern¬ gram for relief be improved to
ment imposes a price ceiling, wage meet the basic human needs of the
adj u'stments which can be ab¬ less ■ fortunate.
^
..V;--';;" < -.
sorbed within the price ceiling
The, housing program which I
should not be interfered with by
recommend will make a start to¬

should

need

We

even more

accom¬

and

Government

the special
Congress in July
to

message

my

alleviate

toward

moves

lowing recommendations:

striking evidence of the unsatis¬
factory
state
of
the ' nation's
foreign*: markets,
health. National health insurance
iand the minimum wage increased consultations
are
already under
is ttie only workable way to as¬
from the present 40 cents ad hour way toward preparing a new In¬
sure
that
all
individuals have
—a
figure determined in 1938— ternational Wheat Agreement.
access
to the medical care they
to at least 75 cents an hour.
It
I urge the Congress to reexam¬
need. I recommend the enactment
should be permissible to provide
ine existing arid proposed farm
of such a program this year. Fed¬
higher minima by tripartite action legislation in the light of all these
eral grants in support of hospital
of
employers,
unions,
and
the objectives.

ting the Government to order the
withholding of price advances for
a reasonable period
while public

In

our

yet attained to supply the indus¬
trial and consumer needs of a full

Labor Standards Act be broadened

a

inquiry into their
being made.

to

specifically:

That

should be supple¬
provision permit¬

It

feasible

survivors insurance be
substantially increased in order to
bring them in line with the in¬
crease in the cost of living;
age

possesses

with

is

That the benefits under the old-

its actual application might not be
mented

fighting further
should
recognize
hardship has already
are

hardship should be
plished without delay. I

the authority to act firmly.
With
such authority available, however,

required.

that

sure

price-support

long-range

tion

tion, of

we

severe

Whatever

problem

Government

Protect the Victims

this

authority.

the

meet

more

imposed on those whose in¬
comes have lagged far behind the
increase
in
the
cost
of
living.

firmly

cannot

for

been

such voluntary efforts,

1946,

we

inflation,

It is in this spirit that I

am

need

of Inflation

adjustments with¬

the

make

tion.

the

2. Policies to

Legislation to authorize selec¬
tive price control should encour¬

administer

must

same

inflation will not reap¬
pear this year under the composite
pressures
which
are
at
work
throughout the economy.

would

We

legisla¬
goal of
farm living standards comparable
to those of the rest of the popula¬

general

control.

1947, and in
spring of 1948,

commodity exchanges. I rec¬
that the Congress grant
more specific and ;more adequate
authority
to
prevent
excessive
speculation or the manipulation ol
prices.

price level is
Further, we cannot

age voluntary
out the actual

of

and

ing to operate continuously at
maximum levels of employment,
production, and purchasing power.

ommend

even

be certain that another upsurge

The experi¬

the

general

fairly stable.

fall

harmful

and

governmental , super¬
vision over speculative trading on

be

may

economy

wide

effective

or

year

winter

demonstrated

Sharp rises in the prices

longer.
of

the

the

in

ence

moving upward for

consecutive

in

ties results

fluctuations in prices.

upon

recommend

lation

critical

serious

economy

^programs
curity.

ond

shortages

are

certain

are

panding

supply

chemicals

some

requested, to channel such
into home building.

—

which
of

exercise moderation in

to

large volume of exports required

ficient results since the middle of

needs

panded this year, even where this
requires use of scarce materials

Export Controls—In view of the

controls—I recommend tnat

wage

irre¬

reserves

credit

power in many areas are not tem¬

wage

transportation.

Selective

substantial

a

materials

harder

convinced that
which have
been tried with partial but insuf¬

of the Congress would au¬

I have

als, our energy resources, espe¬
cially electric power and oil, and

the families who have al¬
ready been the prime victims of
inflation,
and
would make it

continue the priorities and
allocation authority in the field of

portance

-

Credit policy—On

most essential minerals and met¬

is

upon

price control authority
promptly be made avail¬
able to the government. My rea¬
of
this
situation
is
that
the sons for this have repeatedly been
amount
of series E bonds out¬
set before the Congress and the
standing was brought to the new country. I have not earlier and do
not now propose general or over-all
high level of $32 billion, and that
this was accomplished with the price control of the wartime vari¬
cooperation of the banks of the ety. Biit we are still in a situation
country,
thousands
of business where the prices of certain criti¬
firms and their employees, and an cal materials or commodities of
,army
of patriotic volunteer vital industrial or consumer im¬
workers.

"

again
by
rent
increases even
larger than the moderate ones
taking place under the present
system of control. Such a course
would
inflict
further
hardship

gress

railroad

of programs to re¬ available continuously and in bal¬
shortages which " threaten anced^proportions. If* it proves
economic
development.
These necessary, I shall not hesitate to
shortages include many of our use the allocation authority, which

lieve

optimistic in¬

terpretation

I also recommend that the Con¬

j

Through its vigorous promotion
of savings bond sales during the
year, the Treasury has placed a
large
volume of bonds in the
hands of individuals, who have
thereby aided in the battle against
inflation by adding to their sav¬
ings.
The most gratifying aspect

achievement

placed upon the
slight reduction in the cost of
living in recent months, it would
be
unwise
to
lift
living costs

Allocation powers—In my Eco¬
Despite the necessity for market
Report of
last year,
I
support, at times during the year, nomic
there was only moderate increase stressed the need for the supple¬
of
voluntary
action
in the total government security mentation
Jioidings of the System as a re¬ with mandatory controls over key
sult of the support program. There materials in short supply.
The
were
occasions, however, when need for mandatory controls still
the
bond
price support policy exists. I propose the temporary
proved its value in stabilizing the extension of the law under which
agreements
are
now
market arid the need for continu¬ voluntary
permitted.
ance
However,
there
is
of the policy was demon¬
grave danger that the problems of
strated,
acute
shortage cannot be ade¬
Only during the last few years
have we had experience in deal¬ quately met by voluntary agree¬
ments.
I
therefore
recommend
ing with the problems of manag¬
that the use of mandatory alloca¬
ing a- public debt of the size the
tion powers be authorized so that
country now bears. The policy of
they may be employed on a se¬
supporting the price of long-term
lective basis without delay where
government bonds at the 2lk%
they prove to be needed.
'
•
yield level has been eminently
Successful.

*

Thursday, January 13, 1949

an

The Federal

important role

in the development of our natural
resources

which is essential to the

vide

should be increased to pro¬
1,000,000 units within

for

we

to

every

consideration

this

and the benefits made
adequate.

year

more

Few of

our

workers enjoy sys¬

tematic protection against loss of
income

manent

through temporary or per¬
disability. We should in¬

augurate a system
against such loss.
have

I

included

of

insurance

in

this

Eco¬

nomic Report

only those legisla¬
tive recommendations which have
significance for maintaining max¬
employment,
production,

imum
and

purchasing power and which

require the immediate attention
Congress. There are a num*

of the

achieve levels of

housing
our

by

equity. I urge that the cover¬
age of these systems be widened

production adequate tc
needs, construction materials

in-the necessary volume must be

ber
on

of

other

which

we

important

projects

should make further

this year. Our conservapractices in many areas re*
V

progress

tion

.....

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

,

..

•-»

.

Volume

COMMERCIAL

THE

Number 4768

169

&

FINANCIAL

CHRONICLE

(189)

33

i

quire improvement, including the
regulation of timber cutting, the
protection of public range lands,
arid the develpment of our tideoil

lands

should

We

resources.

forward with

press

programs

our

of basic research and

exploration.

We should seek continually to en¬

bargaining

the

courage

and management along

'consistent
and

stability.

This

is

ability

own

our

in which our
affairs in
will be rigorously

master
way

our

Abundant

tested.

and

resources

rapidly advancing technology are

lies, however,

Our strength

themselves

less in these resources
than

in

will to use them ef¬

our

fectively. This task requires
adapting our private and Govern¬
changing cir¬

ment institutions to

We
out

committed

are

economic

our

to

working
in

problems

a

that combines economic and

way

with

progress

democratic

self-responsibility. This is the
spirit in which the Employment
Act of 1946
which
to its

conceived and in

was

shall attempt to live up

we

high

substantial.

salesmanship
turned

are

purpose.

measurable

activity,

business

earnings,
dividends,
commodity
prices, or book values—one comes
.to the same conclusion: the stock
market
has
been
conservative
;

turned

surprise
market

that

news

causes

It

the best

As

un-

a

prices

emotional

thing that
could make public spending de¬
cline
sharply for a short time.
Many corporations are also com¬
pleting expansion plans so it is
come

an

possible that there
If

by

chance

the

Euro¬

picture changes there might

spent

money

for defense

we

would

ness

that busi¬

sure

decline

possible
If

we'

the
the

compare

same

trends

,

v
,

this postwar inflationary
As compared with prewar
(1935-1939)
price levels, $1,000
will buy only $580 worth of food,

Periods

during
period.

How

different the

periods
the

of

have

figures

two

is

been

postwar
in

evident

profits:

on

corporate

on

the Dow Jones

the
same
$840 worth Of

items,
money
will buy
stock today.

but

stock

is

market

selling at

After World

Year

After World

War I

War II

$13.77

$13.63

6.74

18.86

3rd

0.00

*21.00

4th

8.20

?

war

an

1st

_____

2nd

___„

.

Poor's

the

Standard

&

365

industrial

stocks.

-term

uptrend

j

of

chai;t

that
•

in

has

this

been

the

rein¬

many

the
trend

as

as

evident

since

1900

the
market is selling about 9% above
that long-term trend. Most of the
■important bull markets of the last
50 years have not ended until the
At

country.

higher of the two
lines has

been

the line drawn

bull

market

present

parallel trend

tested.

At

present

through important

highs

since

1900

is

60% above the current level of the
market.

be

Conservatism

Since

1946

conservatism

flationary

of

the

stock

of general

in¬
is found in the

forces

fears of the 1940's

—

the fear of

a

repetition of the 1920-21 postwar
readjustment — the fear of Russia
;— the fear of a
ment. If the old

of,

business

In the
the

market "only

once" is correct, one

the
its
?

"What

discounts the

might

ammunition

can

bears

bring forth now?"
In
present condition the market

would

booms

lower

have

and can
parts. In the
active because
of

prices.

taken

are

to

care

prices decline.
phase of the boom,

and

second

prices

stimulate

de¬

mand for products needed at more

realistic

price

ments

a

to

levels.

Adjust¬

peacetime basis have

been

going on in some industries
during the last two years. They
will

come

in

industries.

only be surprised if

news

goes

the

future

in

other

however, to have a sharp
widespread correction such as

essary

and

had early in the 1920's because

commodity

prices

supported, wages of
of

influenced

still
people

are

many

living, the cold

war

has

neces¬

sitate^

a . defense program, and
European relief program has
kept up the demand for goods

the

abroad.

of the pent up
demands have been filled during
many

two

greatly

country to

care

of

unfilled

demands

in

foreign

for

our

section has

of

to build

power

economy.

been

its

so

activities

major importance. Further¬
the power

more

an

income

of the

to tax gives the
up

tear

or

down

Since 1937 there has

understandable suspicion

an

that the government can "plan it
that way"
and make corrective

phases of
election

our economy come

This

after

how¬
ever, the tense foreign situations
years.

year,

will make it necessary for the Adr
ministration to keep business as

Is

Healthier

Than

of

the

difficulties

in

1946

veloped within the market.

Par¬

ticularly

time

unhealthy

the

was

stocks

fact

of

that

marginal

at

that

many

and

of

the

smaller

companies had been forced to such
high'levels that they were rela¬
tively unattractive for holding in
a
peacetime economy. An index
times

priced stocks advanced 3%

as

much

as

the general mar¬

ket from 1942 to 1946—to

a

level

ma¬

countries

is

ever,

these vulnerable stocks have

lost

72lk% of their11942-46 gains

and

are

now

selling at about the

close

of

advances

and

to

1946

were

large

declines

large

in

stocks of the different industries—

% Decline

Coals

1946-48

up

Insurance...

40lk

Amusements

down 40

24

Drugs

down 39

up

Oils

down 46%

up

-

____

Leathers

up

Televisions

Rayons

42%

15

Ptg. & Publishing..__

down 35Vi»

up

13V2

Glass Containers..-.,

down

up

Shipbuilding

13

Meat Packing

down 30

In general, the groups that have
the worst in the last two

when

acted

those that got most out

years are

line with

of

1942 to

the

values from

prewar

the

still great differences

are

purchasing

power

within

market

the

of

levels.

Standard

made with

are

As
&

40yu

measured

Poor's

by

group

indices, it ranges from 30c for the
shipping stocks to $2.19 for Can¬

1946.

There

comparisons

prewar

adian

the

stocks.

gold

Figures

for
as"

of the leading groups are

some

itself

follows—

Purchasing Power of 81 Today

Compared with 1935-1939

as

Greatest

Least

Canadian Golds

$2.19

Shipping

30c

Rayon & Cotton

1.71

32

Containers (Metal)

1.63

Distillers

36

Leather

1.44

Paper

38

Tobacco

1.30

Coal
Air Transport.

Rail

Equipment

Y.

_

1.15

Mail Orders

1.10

Tires &
Brewers

59

1.09

Food

59

1.08

Radio-Television

62

1.07

Dairy

63

1.03

Casualty Insurance

63

1.02

Lev. Inv. Trusts

65

Banks

Companies

Operating Utilities
Telephone & Telegraph-.
Electric Equipment—
Miscellaneous Building
Major Groups
Industrials
-

-

800

i

ww-..

-

a

_

—.960

-

Low Priced Common Stocks

840

experienced

no

vestor would

such

use

in¬

figures

basis for buying

the sole

as

sell¬
ing stocks. Some of the industries
have been growing and becoming
more profitable. Others have ret¬
rogressed and deserve to sell low
in relation to others.

56
50

Chains

Products

rail

and

since 1947,
psychological influence
during the year will be the predic¬
tions of some cycle students, many
Also

of

or

Conservative

averages

of

whom

convinced that

are

the

be

last

year

for their belief.

background

The records show

that the ninth year of each decade
since 1890 has shown the culmina¬
tion of

of

bull market and the start

a

bear market.

new

a

The January rally expresses re¬

lief that the President's messages

unfavorable

were

mighf have been.

the

1949

of this bull

market. There is some

ested in the values that seem, to
such

,56
,

Rubber

investor^ howeVe^^will. be, inter¬
exist in

54

of the movements of the industrial

-

_

50

Shipbuilding
Department Stores

'T

:___

Cosmetics

Finance

50

Goods

1.15

•_

Food

Sugar
N.

1.16

Cotton

1.10

Miscellaneous

Drugs &

•

__

40

will

that many distortions had de¬

changed only 10c in

the

1946-48

Naturally,
One

the

lasted

new

It Was in 1946

was

from

the close of 1948 there

-_.^_$1.04
High Priced Common Stocks..880

Market

itself,

% Advance

\

healthy as possible. regardless of Hails- -i.—
Utilities
political strategy.'
The

in
in

While the Dow Jones indus¬

value

more

ulnerable

business

trial average

bull

The decline in this

markets.

of

1.20

our

greatly expanded population. The

chinery

strongest

(Glass)

20%

need

take

the

Containers

accounts for

but the fact
that was almost 3 times its pre¬
new homes,
automobiles, schools, public util¬ war (1935-1939) average. During
ity equipment and highways in the last two and a half
years, how¬
this

in

essary

did

low

new

have seen piece¬
adjustments within the mar¬

ket.

to

cor¬

a

1948.

in

as

market

to

two ..years

meal

into

able

Such

Just

last

1.22

years,

we

1933

were

Smelting

of low

Naturally

from

they

went

'

for

U. S. Golds—

by
in Washington. At

on

declined

Mining &

It still may not be nec¬

remains that

the

be

months

before

ended

war

of 39 months.

our

they

general

and

December of

in 1926

ernment

demands have

these needs

the last

that

only 9

the

and

the

1946

priced stocks de¬

another advance.

only three years. If
the monthly trends
since

fore

of

present the spending by the gov¬

course,

regardless

liberal govern¬

news

ask

been

find they have moved together

in

what

two

is

deferred

axiom

stock

well

have

both

rections of over-optimism are nec¬

to

In 1949 business and the market

have advanced faster than the cost

Perhaps the best explanation of
market in the face

same

business

After

we

Reasons for Market

postwar

filled

farm

this

in

two

Usually

followed the

long¬

well
inflationary

term

the

1st

the

are

first,

reflects

corporations,

longer

same

compare

national

This

vestment of part of their earnings

by

the

"Estimated.

be divided into

twenty

dollar

two

Low

1927,

in

will

-

.fairer, however, to take into con¬
sideration the long-term uptrend
of the market which is evident in

and

during the last ten years,
the

corrective

a

big bull markets of the 1920's

that

find

we

and

Jan.

we

.historically high level. It is true
.that it is now selling at a level
•*
that has been seen in only eight
of the
last 49
years.
It seems

,

Dec. 31st

indices

from

of

Industrials
Post-

One often hears the remark that
:J the

Earnings

business
averages

we

clothing, housing, and other cost-

of-living

the

stock

of

clined for twenty months

woufd not

it

predict

to

for the stock market how¬

course
ever.

were

for 34 months.- Low priced stocks
made their highs three months be¬

prewar

during

seen

and 1930's.

Fire

relief.

Even if

sort

same

will be

decline in demand from that

less

be

Differences in Two Postwar

the

the

above

the general market.*"

was

1935

is

movements.

as

prod¬

start

be

favorable.

be

The

phase

delay purchases. General expecta¬
tion of falling prices might be¬

and

to

out

element.

as

be

Public

course,

perceritage

levels

tendency to

pean

(Continued from first page)
of

and

same

can

to

They

demand

available.

start down there is

quite

The Stock Maiket in 1949

yet

increases

more

source.

level

have

considerable

competition
ucts

advertising and

in full force.

on

uncover

some

the

The influence of style

the power of

and

psychology is, of

cumstances.

social

period

a

to

blessing and a responsibil¬

a

ity.

labor

of

lines most

national progress

with

both

not

as

they

as

Judging by the

con¬

type of stocks that have done best

tainers, tobaccos,
drugs,
banks,
operating
utilities
and
electric
equipments.
Before buying the
groups where the dollar shows the
least purchasing power compared
with 1935-39, the investor should
make sure that the progress and

recently the advance is a belated
rally that was delayed
because of the uncertainty as to
the President's proposals. In gen¬
eral, the stocks that had the most
year-end selling to establish tax
losses, have shown the greatest
display of strength.
Some uncertainty will be over¬
hanging until the action of Con¬

groups

as

the future outlook of the industry

justifies such a condition. The
growth of some industries—rayon,

television,

airlines,

and natural gas

ethical drugs,

will

doubt jus¬

no

than

gress on

considering its conservatism

ever,

prewar

during the period of postwar in¬

they had in

flation and

years.

ments

Pychological and Emotional

During 1949 the market will be
affected by

the usual psychological

and emotional influences. At pres¬
ent there is doubt among

Theorists
the

market.

election

was

tional to

a

lows

wil

of

hasty and

gone

on

within

1946

there

good chance that the

a

the

stage

trend

after the

clear cut

have

last

three

years

will

not be broken and that the market

the Dow

major

Selling

too

give

should be

six-month

the

to

as

considering the adjust¬

that

the market itself since

Influence

of

the various proposals by

President Truman is known. How¬

general

tify higher ratios to the
market

year-end

another
rallies

of

its

before

typical
the end

of the year.

emo¬

case

to

F. B. Hutchinson With

those who believe the major trend
is

down.

Some

the bear side

industrial
their

Others
the

of

would

lows

clear cut

rails

and

lows

of

new

last

if

sell

both

to

be

in

broke

November.

they

1948, while

decision

bears would

converts

might be made if the

a

broke

rather

favor of the

given if the lows

of the last three years were brok¬
en.

Standard & Poor's Index of Industrial stocks, 1935-39




=

100

In the meantime it seems \tfise

to favor the bullish

interpretation

McMasfer Hutchinson
(Special

to

The

CHICAGO,

Financial

ILL.

—

Chronicle)

Frank

B.

Hutchinson has become associated
with McMaster Hutchinson &
105

South

bers

of

merly

with

Co. and
Trust

the

Chicago

Stock

Mr. Hutchinson

change.

Co.,

La Salle Street, mem¬

Braun,

was

Ex¬

for¬

Bosworth .&

prior thereto with Harris

and

Savings

Bank..

34

(190)

FINANCIAL

CHRONICLE

Thursday,' January 13, 1949

have to bite your fingernails
to the elbow for not

buying them. But they went
up some, and in their cases

Markets

Walter

&

down

Tomorrow's

"some" isn't at all bad.

Whyte

few

A

months ago

(Continued from page 3)
feet against $1,055 a thousand feet
totaling 14,600 miles of pipeline for manufactured gas. Then, too,
now
pending FPC, approval/' 3^'- instead of attempting to enlarge
675,000 will be required^ YYy:;k'! y facilities at a time when costs are
high and materials scarce, manu¬
Super-Abundant Reserves '
factured gas companies are con¬
While the oil Industry has been verting to the use of natural gas

earnings, maintain " "off-the-line"
sales, such as to industrial con-:
sumers, which are not subject to
regulation. Natural gas' prices to'
consumers

controlled

are

by state

it was
utility boards/ The new Congress'
is not likely to be as sympathetic'
going to
take stocks up • to hell and hard put to maintain its reserves, With its higher heat value, as a to the industry as was noped, and'
By WALTER WHYTE ■
the natural gas reserves are tre¬ means oF"meeting their expanded among other bills to be considered1
gone. Well, it didn't. So then
mendous and still growing. At the demand. Increasing use of natural will be one to grant more control
»
Advance checked by budget it was something else that
beginning of 1948, the American gas as a source of organic chemi¬ over conservation—or production:
'
Y
message. Expect higher prices was going to take them down Gas Association's reserves' com¬ cals to make such things as plas¬ —and end-use. T'
after all alarms are digested. to the subcellar. That didn't mittee estimated that the proved tics, ammonia, alcohol, printing
Classification of Natural Gas
and natural gasoline also
recoverable reserves totaled 165.9 inks,
happen either—or at least not
Companies
trillion cubic feet compared With spell an era of expanding natural
This would be a good time
so far.
I wish I was clairvoy¬
In
our
June l25
160.6 trillion cubic feet-on Jail. 1, gas markets.
Bulletin
we
to join the crowd, throw my
ant enough to tell you what 1947. Since
broke .natural gas companies into
1916, the reserve fig¬
Owing to the high level of in¬
hands up in horror at Tru¬
would take them up or down. ure has soared from 16" trillion dustrial activity, there has result¬ five classifications: (1) Producers
man's budget
message, and I can't do either. All I know cubic feet to 60 in 1935, to" 110 in ed a big boost in gas consumption —The majority of these companies
1943, and finally to thh k present by industries. Industrial consump¬ are small, and are not listed or v
join the majority of business I see on the
tape and that says all-time peak of 165.9, a gain of tion now accounts for about two- actively traded except as natural"
leaders
who
say
that Tru¬ stocks are
nearly* 940%. The reserves are thirds of total natural gas utility gas is a by-product of an oil com-,
going higher.
man's plan is the end of free
located mainly in the Southwest, footage sales, although, because of pany's
#
%
Jje
Y'Y
business; (2y Transmission:
with Texas holding 54.3% of total, lower rates, only accounts for 31% and
enterprise.
Wholesale; (3) Transmission:

Says—

.

COMMERCIAL

THE

inflation

that

-

was

•

•

'

■

'■

t

The

the

chose

cheap stocks is because in go¬
is ing down as they did they

while

But

I

reason

*

*

*
*

everybody
either shaking their heads or
viewing with alarm, I can't
but help noting that the stock
market
is
taking all
this
pounding in good stride.
I
don't pretend to say that the
market is the beginning and
the end of all of everything
that industry knows about the
future. But over the years it
has been a fairly good barom¬
eter of what people were will¬

have discounted their future
headaches.
I

didn't

By the
think

same token
the
higher

priced issues have done it. In
a
market collapse I thought
the blue chips would break
badly, while the cheaper ones
would do little. In a rally the

higher priced stocks, already
top-heavy
with
longs,
wouldn't do much while their

step-brothers
would
have
ing to believe and who were plenty of room to advance.
willing to back that belief My opinion hasn't changed.
with cash.

Stocks I mentioned last week

!"Y'!

*

i

*

v•>'

drifted off

the market has

little from the top.

Perhaps

Congress comes up with
something that wilC really
hurt, prices will go down con¬
siderably more. But until I
can see that, or see any indi¬
cations of it, I'll go along and

feel that the outlook for earn¬

ings isn't as bad as many peo¬
ple seem to think.
■
.

.

;

*

showing higher
prices.

More next

a

when

i

still

are

budget message tential

the

Since

'♦

'

; How high prices will go is
something I wish I could an¬
swer.
There are yardsticks I
Use that point to about 180185 in the Dow averages. But

that doesn't

mean

views
do

not

that it will

or that this range will
be the top of any new move.

have

been

harping on the
cheap stocks. In the past week
you saw what happened to
them." True,
none
of them

went

up

much that

so

•Orders Executed on

Pacific

Exchanges

Coast

Schwabacher & Co.
Members
New

York Stock Exchange

New York Curb Exchange (Associate)
San

Francisco Stock Exchange

Chicago Board of Trade
14

Wall Street

COrtlandt 7-4150
Private

Wires to

New York 5, N. Y.
Teletype NY 1-928
Principal Offices

San Francisco—Santa Barbara

Monterey—Oakland—Sacramento
Fresno




rent

Difficulties

been

difficulties.

without

estimated

by the

Gas Association that
will be

construction

Of

this,

25%

It

has

American

and

enlargement.
it is expected that over

will

internal

from

come

thus
leaving
approxi¬
$2 billion to", be gotten

sources,

mately

from outside sources.

SEC it

shown that, older

was

of 1945 have raised

of

which

some

na¬

$305' mil¬

PALISADES.

—Santa

Monica

been formed

CALIF.

and

Water

with

offices

14800 Sunset Boulevard

to en¬

Land

securities business. Of¬
A. L. Loomis, President;
VicePresidents; Lois E. Flagg, Secre¬
tary;- and
Dorothy G. Loomis,
Assistant Secretary.
Mr. Loomis
in

gage

ficers

a

are

C. L. Bundy and F. E. Lee,

formerly with Blyth

& Co.,

JOSE,

CALIF.—Paul

C.

Rudolph has formed Paul C. Ru¬
dolph and Company with offices
at 40-D

Mr.

utilities

major

natural gas

we

are

first four months of

1948

of

three

22%

1947

Was up

South First Street to

in

the

Rudolph
for

manager

securities
was

en¬

business.

formerly local

Bailey,

Selland

&

Production

Russell, Hoppe, Stewart Co.
to

The

of

was

up

period.

gas-type -water
44% over 1947.

up

as

fuel

becomes

burner

available

through

Financial

Chronicle)

PORTLAND, OREG. — Preston
Holt, formerly of Holt, Robbins &

Middle

Atlantic

market

not

states, a huge
previously supplied,
will greatly accelerate the demand
for natural gas.

-

.

A Federal-and-State

Controlled

ment

merit

of

the

funded

Furthermore, considerable
mon

stocks

is

debt.
specu¬

afforded

com¬

by the leverage factor

of the large debt.
Nevertheless,
despite temporarily boosting earn¬

ings,

a

cause

large debt could conceiv¬
trouble in a period of
recession. Even at a time of high
profits, Mr. *Hanrahan warns, de¬
preciation
requirements
would
necessitate

conservative

dividend

policies.

stated

by the Supreme Court that

exempt from regulation, produc¬
tion and gathering of natural gas
which ultimately goes into inter¬

limiting

transmission

Factors

same

6%

annual

re¬

rate. Often

companies,

to

boost

Gross Revenue

Curb'

tabu-,

reviewed

those:

feel have out-.

we

standing

growth and profit op¬
portunities.
To these companies

adding thumbnail sketches
of

the

unlisted

newer

transmission companies in view of
the current interest in them.
,
Natural Gas Stocks Show

Superior Action
A

study of the comparative

ac¬

shown in Chart II. The four stocks

making

the Natural Gas Aver¬

up

age are El

Paso, Pacific Lighting,-

Northern, and Southern. It is
to.

that

see

stocks

gas

easy

the 12-year period,

over

consist¬

have

ently out-performed the Dow Av¬
In

erage.

1939,. when* the

from

its

Dow,

1938

high, the.
high jumped
26% above its 1938 high.
From
1939 to 1942, while showing rela¬
tively the same acticn as the Dow, i
the Natural Gas Average lost only
Natural Gas Average

18%

while

the

declined 24%

Dow

high

from its

in 1942

1939 high.;

Both averages showed sharp

gains
Natural
Gas' Stocks moved much faster,
gaining 168% against the rise of '
from

78%

1942

to

1946,

but

for the Dow. Jn

excelling

the

stocks made

a

a

1946

'•

high.

1948,

again*

Dow, Natural Gas
new high, while the

Dow showed

(Millions)

Earnings

big decline from its
J
' -

'

Per Share

Per Share

1947

1947

H1948

'Arkansas

Columbia

Natural-

$21.2

$86.3

$0.80

Gas

J68.8

111.7

1.36

2.1

4.7

1.05

§49.9

^Consolidated

Gas

_

Consol,: Natural—
El

Star

——

^'National- Fuel Y—J

$1.25

"nil

$0.40

1.00

$0.75

1.60

0.50

;

0.75

1

''

Price

High Low

%

U/l

'

Ye

8.3-

.

Aoprox.

Range

-

1948

•

Pacific

5.7

.3.0

10.7

10.0

6.3

4.9-'

94.2

.4.51

4.10

2.00

2.00

10.5

5.14

7.50

2.40

2.40

76.0-55.2

67.6

3.6

40.6

1.87

2.30

1.00

1.00

24.1-18.0

22.2

4.5

14.7

26.5

0.97

0.80

0.80

0.80

12.2-

8.6

7.2

3.23

3.00

1.60

Y 9.0

23.6

t8.1

17.2

3.30

-.4.56

1.87 Mi

2.00

1:47.9

77.0

4.86

4.80

3.00
3.00

Panhandle

Southern

5.

Natural-

Gas

Washington
"N.

available.

.

3.00

_

__—

Gas__

:

5.5

U.2- 8.1

26.1

Natural

Natural

>

Yield'

14.7-10.2

\

0.77!/2

Lighting-

Northern
^Oklahoma

■^United

-

1947

1948 Price

3.2

Paso

'-Lone

'

Dividends

1936

r

-

■

1.80

51.0-37.4

8.4

42.0

.

'

?6.2-25 6
v
.

38.4

55.3-47.2

51.4

6.0

30.4

4.49

4.90

3.00

66.0-46.0

17.1

22.1

2.66

3.20

1.50

1.75

30.3-20.1

77.1

1.50

2.00

0.85

1.00

20.7-16.0

7.5

16.3

1.88

2.00

1.50

1.50

27.1-20.2

-

Curb.' tDecimals represent eighths of a point,
§1940 figures, 1936 not available.
!iEstimated.

Y.

El Paso Natural Gas (66)—Serv¬

creased

to

405

•

32 2

39.5-30.1

J46.8

U937

50.6

million

5.6

v:

6.0

I

5.3

}

■

<

7,1

20.6

5.2

,

6.4

t

24.0

figures,

*

5.5

.

29.2

'

v

i

not,

1936

feetj

cubic

Mexico,

daily from the current 100 milliont

Arizona, Texas and California, El
Paso is one of the fastest-growing
natural gas companies. The com¬
pany
is a wholesale pipe line
dealer
operating 1,182 miles of
transmission lines. Approximately

cubic feet daily, These two lines!
should lessen the effects of sales!

southeastern

New

Despite the problems facing it,
natural gas industry has em¬
barked on an era of unprecedent¬
ed growth. Because of its cleanli¬
41% of its total income is derived
Paul Fund a Director
ness and ease of use, the demand
from sales to 35 copper, utility
for it is virtually insatiable. How¬
Paul A. Fund, a director of The
and other companies at fixed rates,
First Guardian Securities Corp., ever,
primarily
responsible
for and
high copper production and
20 Pine Street,
New York City, greatly augmented demand is the
refining activity should' continue
has been elected a director of fact that natural gas costs less to be reflected in
earnings.
In
Fansworth
Television
&
Radio now than other fuels, having de¬ addition to the 26-inch
pipe line
clined
in
price since; the early
Corp.
from the Panhandle-and Hugotorr
1930s.
The cost of coal and oil,
Fields/ Texas, to Blythe. CaliY,
on
the other hand, has doubled,
connecting with a line of Pacific!
with coal hitting new highs re¬
With Wm. R. Staats Co.
Lighting Co. which was opened
Also, natural gas with late in
SAN
FRANCISCO, CALIF. — cently.
1947, El Paso is now lav¬
twice as high a British Thermal
Arthur H. Markwart has become
ing a second line to boost Cali¬
associated with William R. Staats Unit heat rating as manufactured fornia
deliveries. When completed
Co., Ill Sutter Street.
gas,
costs but 63.5£ a thousand in 1951, deliveries- will be inthe

or

we have

SALIENT STATISTICS ON NATURAL GAS COMPANIES

ing

Industry Abounds With Growth

have

and

dropped

while producers and gatherers are

the

lative attraction

panies

natural

•

Utility

ach^.*

long-term contracts
both for the purchase and sale of
natural gas, and the sound invest¬

Co., has become

associated with
Russell, Hoppe, Stewart & Bal¬
four, Wilcox Building.

stability

Stock

York

Below

lated pertinent data on these com-,

gas

mission facilities to the East Coast

turns to the

,

New

installations

total

business

At that time,

for... home tion of the
average of four natural;
heating, too, will increase quickly. gas stccks and the Dow Industrial
A boom in the building of new!
Average from
1937
to
1948
is

companies,

the

the

on

Exchanges.

While limited by winter shortages
of gas in regions of high demand,

debts amounting to 70% to 80% of

ably

Davidson.

(Special

like

the

over

was

industry, the rule, for
most part, has been 40% in state commerce falls under FPC
bonds, small amounts of preferred jurisdiction and earnings may be
stock or none, and the remainder restricted to a 6% rate on an
orig¬
in common stock. However, in the inal cost basis.
FPC also regu¬
newer
companies
large
funded lated the interstate transmission
capitalization are not... un¬
The argument for the
larger funded debt has been found

Integrated.

strongly indicated by the fact that
1947 production of gas ranges
40% over 1946, and in the

are

the

common.

(5)

discussed

companies which

mainly in the currently poor mar¬
ket for preferred or common H ~r\

Inc.

gage

for

Retail; (4) Exclusively Retail/:

and
we

sales, at
expanding at a
rate more rapidly than for the in¬
dustry as a whole, and it may be
expected that this will continue
for several years. Such a trend is
rate,

87 %" came * from

has been in the proportion of 50%
in bonds, and 25%r each in pre¬
ferred and common stock. In the

has

consumption.- These

higher

3% from preferred f In 1938, passing of the Natural
stock,
and
10%
from
common Gas Act brought the industry un¬
stock flotations. Traditional, sound der Federal control.
It has been

capitalization

and

only older, estab-;
a lished companies with stocks listed'

sales,

Santa Monica Land

at

con¬

of dollar

homes and the extension of trans¬

& Water Co.
PACIFIC

55%

sales and equals a quarter of total

$2.65 billion heaters

spent in the next 5 years

on

Residential

revenues.

in
cur¬

expansion is not being under¬

taken

bond

with [those of the
They are presented as
of the author only.]

Preston Holt Now With

Securities

Some

The natural gas industry's

lion

those

Expansion Creates

of total

sumption provides

tural gas companies since the end

you

Pacific Coast

Tremendous

Chronicle.

SAN

past few weeks I

annually, reserves are
currently equal to about 30 years'
supply.

this

in

expressed

necessarily at any

merely throw it in to show Paul C.
Rudolph Co. Opens
you what I think I see.
(Special to The Financial Chronicle)
the

feet

Thursday.
—Walter Whyte

I

For

the current rate of about 6 trillion
cubic

time Vfoincide

was

happen,

Arkansas and Missis¬
sippi together holding 16.2%, and
Oklahoma
and
Kansas
together
having 15.6%. With production at

However, Edmund M. Hanrahan, Chairman of the SEC, has in¬
jected a note of warning into the
picture. In a study made by the

Co.

:<«,

:R

[The
article

po¬

Louisiana,

to

the highly volatile copper in-'
dustry.: An increase in the ca-j
pacity of the Texas-New Mexico-!

Arizona lines from 80 million
bic feet to

cu-

246 million cubic feet:

scheduled for completion by 1959:
is also in progress. Aporoximatoly j
22%

/ of

its

natural

require-!

gas

by El Paso, the!
remainder being purchased unflfc*j
long-term * contracts.
Purchased i
ments is produced

and owned

to i be

reserves are

sufficient

Southwest'

and"

to

estimated'

surely j thnj

California

until;

1980.

Earnings for 1948
at

nearly $7.50

a

are

estimated'

share compared

with $5.14 in 1947.. Since

1936,

as

Volume

shown by

ing

the table, total

operat¬

frorr
$3.23 million to $-10.47 million, or
224%.
During 'the same-perio::
per share earnings have gone quite
steadily from $1.78 to the esti¬
have

revenues

mated

1948

While

grown

earnings

of

$7.50

the

company
is heavily
finances seem to be
adequate to meet expansion needs.
The high proportion of debt to

capitalized,

total invested

capital (79%) make
speculative, but a more
position should be

the stock

•balanced
achieved
ment

through gradual retire¬
and accumulation of surplus.

,A 3-for-l split will be made

some

•

Star

Lone

Integrated

(22).—Lone

natural

Star, an
company,

gas

has shown

good, but not spectacu¬
lar growth, doubling its gross rev¬
enues from $20.1 million to $40.6
million in the 1936-1947 period.
At the same time, earnings per
,share, although held down by high
.costs and revenue charges, have
risen
fairly steadily from $1.02
to an estimated $2.30 in 1948. The

is

conservatively capi¬
talized, about equally divided be¬

^company
tween

long-term

debt and com¬
Dividends are con¬

stock.

mon

servative,

yielding

about

4.5%,

"but may be raised.

"

Lone Star, in addition to op¬
erating 5,262 miles of transmission
and gathering lines serving north
central and central Texas, includ¬
ing Dallas and Fort Worth, and
southern Oklahoma, owns exten¬
sive

in

reserves

Field.

the

Panhandle

About 18% of its gas needs

produced

.were

in

dustrial

and

55%

Nebraska, Iowa, South Dakota
Minnesota.
Increasing
de¬
mand and, a- good outlook for the
service: area, mainly agricultural,
snould

the

in

1947,

the

re¬

continuation

the

mean

oi

growth trend fo:
Since 1936, North¬
Natural has shown a steadily
long-term

the

company.

&

the

total

of rates

to*..be

take

consumers

of

cause

FINANCIAL

which

the

among

about

j

on

Be-

|

ment

sold.

gas

CHRONICLE

lowest

in

the

country, any increase in gas costs
could readily be passed on to con4umers. While the area served is

with

fairly rapid growth,

and

upward

total

A good degree
of resistance to
earnings from $1.08 a share tCj
$3.23 in the same period. Under! cylical fluctuations will be main¬
tained in spite of an increased
a planned expansion program, the1
industrial load due to high resi¬
company will spend about

$12.9;

in

million

1949,

million

$20.5

million

$19.5

and

in!

1951 !

in

dential

Oklahoma
of

its

commercial

and

purchases

a

$52.9

feet

to

for

the

million,

600

three

to

million

years

the!

meet

cubic

feet

by;

ings

in view. Of the total rev-j
approximately 84% is pro-,
vided by gas for resale, the rates;
are

enues,

which

of

diction.
about
gas

under

are

Industrial
13%

the

of

requirements

gas

juris¬

total

take

natural

The bulk of the natural

load.

under

F.P.C.

consumers

is

long-term

controlled

purchased
and

contracts,

reserves

are

estimated

It is expected that 1948 earn¬
ings will drop to about $3 a share
from the
to-'.

$3.23 earned in 1947 due

rate

a

reduction.

For

the

shorter term, because of a planned
sale of 406,000 common shares in

.1949, earnings will probably
tinue

to

show

the

fiscal

1947.

yield

$3.30
on

the

is about 5.60% and the $2

increased

have

revenues

nearly 3 times, from $6.58 million
to $19.12 in 1948, while earnings
have gone from a deficit of 37c
$4.56 in the 1948 fiscal year. De¬

spite a fairly heavy capitalization
(long-term
debt
$22.7
million,
preferred 180,000 shares, common

827,013 shares), finances appear
adequate. New financing may be
undertaken by the company to
fund
$6.5- million
short-term
loans due April 1, 1949.-'~

con¬

decline, al¬
Panhandle
East.
though the recently raised annual
Pipe
Line
dividend of $1.80 should be main- (49%)—Of all the companies re¬
tained.
The yield* on the common viewed
here,
Panhandle
has
some

'

maining

82%

being

purchased.

Natural gas is sold retail to about

•410,000 customers,
are

domestic

natural

gross

is derived

income

87%

Approxi¬

consumers.

mately 60% of the
gas

which

of

fror*

resi¬

dential sales,

a factor contributing
stability. While the area served
is large and sparsely settled, the

to

growth
trend • of
the
company
should continue upward as the
Southwest

growth
$-35

highly

more

is

Lone

raised

$2d million

in

Star

developthrough
September

of new

capital

refinancing its
$25 million bank loans through a
$50 million serial note issue, and
it is not anticipated that further
financing will be

Natural

Gas

(37%)

including
City, and at
communities,
Oklahoma is an intra-state pipe
line
company
serving
Eastern
Oklahoma.
Pipe
lines
include
2,580 miles of transmission lines
and
2,840 miles of distributing
j

ulsa

and Oklahoma

(31%)—

an

deficit of 68c

estimated

$4.90 in

a

share

1948. A

wholesale pipe line company,^Pan¬
handle serves, Kansas,
Missouri,

total

Illinois, including Detroit, Indiana
and Ohio.
Already operating an
extensive system, lines and capa¬
city are being greatly expanded
to meet the surging demand of
growing
Mid-West
agriculture,
commerce
and industry. A daily
capacity of 425 million cu. ft. will

31% is provided by the

be increased to 600 million cu. ft.

wholesale

lines.

gone from a
to

re¬

communities

95

to

36

the

Of

revenues,

Gas

Northern Natural is primarily a
wholesale pipe line company, own¬

ing and

to

necessary.

Natural

■.,

tail

for construction by

Northern

Oklahoma

.

—Distributing natural gas at

ex¬

outstand¬

deliveries are
should
again

planned

gas and oil
t* rmogram for 1948

1952.

pipe line
earnings

shown by far the most

ing growth, and future growth is
strongly indicated. Except for a
rise.
Northern Natural's financial slight decline in
1943, total oper¬
position is strong and capitaMzsa* ating^ revenues rose in 1947 to
tion simple with a relatively jsnaalh about 10 times what they were in
long-term debt of $41 million audi 1935, from $3.61 million to $30.43
2,030,000 shares of common^out- million, a gain of 743%. With but
two Interruptions, earnings have
standing.
>
as

boosted,

line

the

transmission

pansion, and

V

term,

Also adding to the

prospects

million

about 5.5%. Over the longer

now

.

becomes

industrialized.

is

residential

sales,

trial and 17%

company's

27%

by indus¬

by commercial. In¬

operating 3,912 miles of

by

1950.

In

1948

and

ings,

it is

tinue

to hold

rate.

Because of large expansion

anticipated,
to the

will

con¬

$1.20 annual1

41,185,762 thousand cu. ft., needs, dividends probably will not
165,056,436 thousand cu. ft. for be paid for an indefinite period.'
12
months ended
Sept. 30, Company's
long-term
growth
1948. The company's natural gas prospects are
good.
reserves,
half-owned and halfTexas Gas Transmission
(10%)
purchased, are tremendous, esti¬
mated
Jan.

at

6V2

trillion

—Two

ft.

cu.

tures due in 1973

million
the

offered to

were

Proceeds

be

of

used

from

this

to prepay

promissory

$17.8

notes

and

remainder to be used for

1948

and

1949

construction

non-connected

on

1, 1948.

Recently it was an¬
nounced that $30 million of the
company's sinking fund deben¬

the
and

Central West

If

company.

FPC

approved
840-mile

new

a

operated by the

are

the'

by

line

from

Texas to Ohio would be laid at

estimated

cost

an

of

$73% million.
Against a current daily capacity
of 243 million cu. ft., the. new line
would
raise daily
deliveries to
million

of

the

ft.

cu.

The

formed

company was

Transmission

wholesale

pipe line systems in the South and

392

expansion program.

year

with

The

operations began in 1947, no com¬
data is available. Earn¬

parative

the

will

1948 equaled $4.56

compared

35

to

public.

annual dividend may be raised in
the current fiscal year. Since 1934,
gross

1938,

increased

have

holding

as

present

a

merger

of the
name, Memphis Natural Gas
Kentucky Natural
Gas
in
April, 1948. Earnings for 1948 are
expected to equal about 70c a
share on the larger capitalization
compared with 91c in 1947 and
company

same

Companies

and

Tennessee
Gas
Transmission
(23%) — Operating a 2,500-mile
pipe line, the company sells natu¬
;

share

earned in

to

at about 4 trillion cubic feet.

for

ended Aug. 31,

common

Since

to

Thumbnails of 3 Unlisted

Earnings
a

serve

from

reserves.

1951 and, as a result, higher earn-j

sales

gas

sale

natural

will also

area

revenues.

natural

85%

its

and

increase

the

gas requirements,
supply is sufficient to
meet requirements for
40 to 50
greatly augmented demand. Pipe
In addition, the company
line capacity will be boosted years.
from the current 390 million cubic! is beginning to develop its own

total

or

of

of

sales.

about

(191)

construction. The enlarge¬
facilities to serve
the

new

thought Appalachian

are

primarily devoted to oil produc¬
ing, livestock raising and agricul¬
ture, greater industrialization and
gross revenues rising
growth
is
expected,
from $9.04 million to $23.57 mn-i population
lion, in 1947, a gain of 161%, ana spelling further company growth.

ern

1950,

time in 1949.:

COMMERCIAL

THE

Number 4763

169

ral

wholesale.

at

gas

customers

Principal

Consolidated Natu¬

are

ral Gas and Columbia Gas.
the

beginning
the

to

of

East

doubled

have
the

and

Since

deliveries

1948

been

about

1948

expansion
program has been completed. De¬
li veries
lion

total about 660 mil¬

now

39c

in

1946.

another

million

111

estimated

cost

struction.

situated

Stock

than

more

ft.

cu.

at

million

300

Since 1945

gross

cu.

ft.

revenues

$14.31 million
to $20.41 million in 1947. Earnings
1949

for

estimated

are

against

1948.

about

estimated

an

Growth

$1.60

outlook for

Eastern

Texas

(12%)—This
and

at

the

Transmission

company

is the

own¬

operator of the 1,254-mile

Big Inch and the 1,479-mile Little
Inch lines serving Pennsylvania,
New

Jersey

boost

in

from

433

and

capacity
million

Arkansas.

of

major natural gas
here, we believe

stocks reviewed

that El Paso offers clients the best

profit opportunity, but carries the
greatest

degree

Northern

Natural

Both

Oklahoma

probably

the most conservative issue. Con¬

tinuing

to

combine

all

desirable

believe, Panhandle

Eastern. With the exception of El
Paso and Panhandle, the stocks
still close

to their 1948 highs
probably are not "buys" for
near-term
speculative
profits.

are

and

However, an excellent long-term
profit-possibility position should
be

around

Consolidated Natural Gas. As

and

at less risk. Lone Star is

attained

by accumulation
prices or at any
important corrective reaction. Of

508

raise

risk.

of

have good profit possibilities and

to

ft.

capacity to 933 mil¬
lion cu. ft. daily.
Company sells
natural gas at wholesale to five
companies
in
the
Appalachian
area and to two Philadelphia util¬
ities, as well as to Columbia Gas
and

well

r

five

the

system

the

cu.

A

million cu. ft. early in 1949 and
progressive increases thereafter is
planned. Subject to FPC approval,
a
$152 million duplicating line
would

as

\

Of

features is, we

is excellent.

company

er

not

Conclusion
k

an

have climbed from

$2.60

is

either of the other two

as

companies.

of

$50 million. By
1951, it is estimated that, if ap¬
proved by the FPC, deliveries will

for

not

ft.

cu.

daily.

have

paid on the present stock
may not be for an indefinite
period due to cash needs for con¬

daily.
In 1949, the
system's capacity will be boosted

be

Dividends

been

and

the

present

three

unlisted

transmission

companies, Tennessee Gas
to have the outstanding

outlook.

growth

appears

long-term

Texas

Eastern's

growth prospects are good, but as
the

issue

is

unseasoned,

highly

specuative.

Texas

Gas

The
little

has

it is

stock

of

offer

to

clients, and should, for the time
being, we believe, be avoided.

1949, Pan¬

handle plans to spend $26 million

Bank Sells Last of Guar.

CHART IP

Mortg. Notes

pipe line serving 220 communities

Dollar

CHART

COMPARATIVE

I

NATURAL

ACTION

GAS

OF

4

AVERAGE

&

Savings Bank of New York takes $1 million of loan made to
Dutch shipping companies.
World Bank sends missions to four

STOCK
DOW

member countries.

-

NATURAL

GAS

14

IND.

YEARS'

OF

-

AVERAGE

(JAN. 1937

=

100)

The International Bank for Reconstruction and

GROWTH

nounced

300

made to four Dutch

panies.

10.0

for the purchase of

six ships.
$12,000,000 in notes re¬
ceived
by the Bank, $8,100,000
were purchased immediately by a
group of ten United States com¬
mercial and savings banks.
was

Of

ao

200
NATURAL GAS AVE,
UTIL. REVENUES*

(MILLIONS)

shipping com-<S>-

The loan,

guaranteed by
the Kingdom of the Netherlands,

100

ao

T

the

Dollar

Savings Bank

paid

par

and accrued interest for the notes

50

n„„

which mature

follows:

gation Company.
Sends Missions to South America
%

and Far East

7

Earlier

in the

sending

missions

Dutch

shipping loan was
the first mortgage loan made by

100

the International Bank and it

the

DOW INDUSTRIAL AVE.

was

had

first time

that the

Bank

used its guarantee powers.

80

tha

Articles

of

Under

Agreement,

the

Bank, in addition to making direct
loans,

1948

its
its
44

46




guarantee

pate in loans, and

60

42

may

48

37 38 39 40 41 42 43 44 45 46 47

J

F

MA

M

J

J

A

S

0

N

0

guarantee,

or

may

partici¬

sell with

securities held

in

The four

shipping companies to

whom the loans

were

made

were

the

Inter-

four

of

its

India;' Turkey,

Colombia and Peru.
The

Bank's practice of

ment in its

to

the

its

member

sending

countries

very important ele¬
operations. According
a

announcement

a
country
mission either as a
result
of
preliminary conversa¬
tions regarding a loan; or prior to

may

request

need for and

financing;
the

a

discussions

loan

or

to

examine

the

possibilities of Bank
in

suggestions

order

of

to

Bank

obtain

experts

for the

improvement of its fiscal

policies

or

ation;

portfolio.

to

member countries:

has become

as

week

ational Bank announced that it is

missions to

The

40 "

and the United Netherlands Navi¬

International Bank.

marketed
ft.)

30

Rotterdam-Lloyd, the Nederland
Line, the Holland-America Line,

$300,000
July 15, 1955; $600,000 Jan. 15,
1956; and $100,000 July 15, 1956.
The notes are guaranteed by the

(PTWffls0NCU.

36

Development an¬
Savings Bank of the City of

Jan. 12 the sale to the Dollar

on

New York of $1,000,000 2%% guaranteed serial mortgage notes held
in the Bank's portfolio since last August, when a $12,000,000 loan was

tion of

general financial situ¬

or

to assist in the formula¬

a

long-range development

program.

36

COMMERCIAL

THE

(192)

Thursday, January 13, 1949

CHRONICLE

FINANCIAL

&

Indications of Business Current Activity
following statistical tabulations cover production and other figures for the latest week or month available (dates
are either for the week or month ended on that date, or, in cases of quotations, are as of that date) :

The

shown in first column

Latest

steel

Indicated

93.3

*97.8

1,830,600

1,802,500

95.6

1,802,500

Private

1,723,200

Public

Crude

to

runs

5,640,750

5,615,150

1

5.698,000

5,637,000

1
Jan. 1
-—-Jan. l
Jan.; 1

18,859,000

bulk terminals, in transit and in pipe
gasoline (bbls.) at

-Jan.

distillate fuel oil (bbls.) at
(bbls.) at

—Jan.

fuel oil

Residual

18,216.000

$503,384,000

505,899,000

construction

—

$843,544,000

231,017,000

188,476,000

144,347,000

54,195,000

36,670,000

173.6

1S4.P

207.5

i—

242,671,000

172.2

1

—

Municipal—

2,490,000

2,346.0Ot

7,776,000

7,269,000

7,405,00t

9,121,000

8,897,000

9.392,000

PRICE

INCOME

INDEX

FAMILIES

items

All

211.5

202.7

169.9

170.0

167.9

CITIES

LARGE

IN

1935-1939=100— Ay
Ail

MODERATE

FOR

of November 15:

—

foods

—

Cereals

104,063,000

100,286.000

95,235,000

94.039,000

24,306,000

26,537,000

15,983,000

Dairy

77,151,000

79,271,000

83,993,000

49,934.000

86,181,000

86,381,000

51.426.000

Fruits

products.——

:

;

246.7

236.1

227.0

7

Eggs

86,284.000

„

bakery

Meats

24,373.000

and

199.5

203.0

193.4

244.3

a.

products

Fats

RAILROADS:

freight loaded

freight rec'd from

connections (number of cars)

584.623

i

609,239

804,183

590,534

642,663

Sugar

632,119

514,690

1

Jan.
Jan.

(number of cars)

Revenue
Revenue

and

543,202

Clothing
electricity

U.

Total

ENGINEERING NEWS-

—

—

construction

municipal

and

State

Federal

$83,693,000

$78,100,000

$124,485,000

6
6
6
6
6

Jan.
Jan.
Jan.
Jan.
Jan.

construction

S.

construction

Private

Public

and

Other

$35,675,000

45,627,000

31,683,000

30.500,000

46,412,000

53,193,000

50,841,000

44,623,000

35,451,000

46,968,000

38.747,000

34,230,000

10,961,000

6,225,000

12,034.000

EMPLOYMENT
OF

Jan.

(tons)

coke

Beehive

*9,536,000

11,435,000

11,470.000

931,000

967,000

1,137,000

736.000

120,000

*139,700

151,400

1

95.4

92.5.

191.4

169.1

137.9

129.9

.

198.7

198.8

133.9

153.9

153.7

143.0

L3,367,000

PAYROLLS—U.

S.

DEPT.

October:

of

goods

_•

goods

1

13,143,000

*6,792,000

6,631,000

6,685,000

6,062,000

163.2

;

*13,477.000

6,313,000

6,554,000

manufacturing"

127.900

1

-Jan.

anthracite

Pennsylvania

8,676,000

1

Jan.

(tons)
(tons)

183.2.

191.6

—

:

AND

Nondurable

lignite

and

coal

Bituminous

„

MINES):

126.9

95.4
—

„

LABOR—Month

Durable

(U. S. BUREAU OF

OUTPUT

137.8

_—.

Miscellaneous

All

COAL

refrigerators.—

Housefumishings

34,334.000

78,853 000

and

electricity

fuels

Ice

.

.

115.2

138.0

Gas

RECORD:

190.2:

118.7

137.9

I

;

201.6

118.8

;

194.7
196.4

173.1

201.4

sweets

Rent

Fuel,

ENGINEERING CONSTRUCTION

CIVIL

and

199.6

193.0

173.3

!

oils

224.7

193.5
206.9

139.4

vegetables

239.0

189.4
206.4

_

and

Beverages

ASSOCIATION OF AMERICAN

272,367,000

337,645,000
265,901,000

71,744,000

and

CONSUMER

17.163.000

2,542,000

9,249,000

1
1
1
1

-Jan.
—Jan.

at

(bbl6.)

oil and

Gas

18,175,000

2,528,000
8,200,000

lines-

Finished and unfinished
Kerosene

1

-Jan.
Jan.

(bbls.)
output (bbls.)
Gas oil and distillate fuel oil output (bbls.)_
Residual fuel oil output (bbls.)

Kerosene

Stocks at refineries, at

Ago

$451,112,000
208,441,000

1

5,291,237

5,784.000

Jan.

average

output

Gasoline

5,610,650
115,888,000

(bbls. of 42 gallons each)
stills—daily average (bbls.)_

oil output—daily

Crude

Month

Federal

INSTITUTE:

PETROLEUM

AMERICAN

Previous

Month

construction

State

Year

Latest

of

NEWS-RECORD— Month

Jvcociiiuei:
Total U. S. construction

;s

-

CONSTRUCTION—EN¬

ENGINEERING

GINEERING

Ago

*97.8

"''"'-'v

-v

(net tons)

and castings

ingots

Ago

Jan. 16

Equivalent to—
Steel

CIVIL

Year

Month

Week

Jan. 16

(percent of capacity)

operations

Previous

Week

STEEL INSTITUTE:

IRON AND

AMERICAN

164.5

160.4
185.0

Employment indexes—
All

manufacturing

Durable

138.7

145.9

141.1

331.5

:

goods

188.1

143.1

goods

Nondurable

381.7

350.1

422.6

339.9-

341.7

311.2

Payroll indexes—

STORE SALES INDEXTEM—1935-39 AVERAGE=100

DEPARTMENT

RESERVE

-FEDERAL

SYS-

All

Jan.

,

204

435

*473

205

1

manufacturing

Durable

'

432.9

goods

Nondurable

All

5,277,680

5,704,823

"5,562,232

5,691,770

(in 000 kwh.)

output

Electric

1

INDUSTRIAL)—DUN

AND

(COMMERCIAL

&

GRAY

INC.

STREET,

MERCE)

Jan.
-Jan.

(per gross ton)
steel (per gross ton)

iron

Pig

Scrap

4
4

Jan.

(per lb.)

steel

Finished

sale

For

3.75623c

3.75623c

3.75628c

3.22566c

$46.82

$46.82

$43.00

4

$46.82
$43.00

$43.00

For

$39.00

$40.00

Unfilled
(short

PRICES (E. & M. J. QUOTATIONS):

23.425c

23.425e

103.000c

94.000c

21.500c

21.500c

15.000c

21.300c

21.300c

21.300c

14.800c

17.500c

17.500c

17.500c

10.500c

—Jan.
.— Jan.

own

1,148,422

and

at

J.

" ".«■ •-

i

t

'v./

•••

domestic

refinery

101.04

100.82

100.69

Jan. 11

112.75

112.00

111.25

110.88

Jan. 11

113.80

118.00

117.00

116.22

118.80k

116.22

115.24

114.08

111.25

110.70

Bonds

Govt.

corporate—

Average

101.10

Jan. 11

S.

Jan. 11

Jan. 11

U.

23.454c

.

—

vAaa
Aa

104.66

104.14

103.47

107.98

107.27

106.56

Jan. 11

113.12

112.75

111.62

industrials

116.41

115.32

117.00

IT:'::

-

York

S.

Ian. 11

York

jan.

■

3.10

Industrials

"

Group

fAntimony

pound)

(per

COMMOD-

■

•

•

Antinmony

Fuels

-—

commodities
•

—

Metals
,

materials

All

$2.05000

$2.00652

$2.10000

$2.05652

2.30

2.34

Aluminum,

17.000c

17.000c

15.000c

2.89

2.95

Magnesium, ingot

20.500c

20.500c

20-500c

3.16

3.16

Zinc

17.300c

16.786c

**Nickel

40.000c

40.000c

:

(per

"

3.54

3.51.

3.32

3.36

3.00

3.02

3.03

3.02

2.83

2.86

2.91

PRICES

452.8

394.1

394.0

392.3

227.3

227.5

190.6

205.7

U.

—

244.3

279.6

305.5

294.9

337.1

241.9

—-Jan. 3
Jan. 8
Jan- 8
——.Jan. 3

190.6

226.3

Jan.

combined

242.3

172.1

172.1
104.1

190.6
225.9

236.2

149.7

154.5

142.9

135.9

150.1

141.8

153.9

134.5

217.6

227.4

149.0

148.4

142.8

143.6
156.8

150.8

1

155.2

155.2

217.1

216.4
>

......

•

(tons)

-production

,.1

—,

percentage of activity
Unfilled orders (tons) at

___

and

__

__

__

305

__

_

crops

320.

351

352:

367

284

311

272

262:

and

164

172

_

192

204

271

262

_

265

233

232

__

_

EARNINGS

243

$825,325,812

$878,120,864
651,909,449

_______

_

eggs

OF

CLASS

—

I

ROADS

RRS.)—Month

AMPER.

187,093

Total

operating

revenues

136,219

Total

operating

232

:

37

93

78

362,854

452.124

of

(ASSOC.

November:

expenses

:

235,601

;

'

144.3

142.0

142.6

>313

•"*:

260

eggs

190,868

7

233

adjusted—

218,071

318,673

294

233

174,319

;

149

186

283

---

products

and

275-

209

__

._

139,123

46

1

__

products

Operating

ratio—per

i__

,

637,471,662
$90,304,661

Net railway operating
after

income

income before charges

charges

"7110,876,857

(est.)..;

63,000,000

85.000,000

.

DEBT

DIRECT

$80,131,333
. .

:

65,954,48T
44,000,000

'

/IV

—

GROSS

STATES

73.78

$100,778,745

J 84.065,711

150.6
UNITED

$755,876,093:
595,462,585

74.24

77.24

cent

Taxes

Net

AND DRUG REPORTER PRICE INDEX — 1926^36
———J—■—
—Tan:

PAINT

AVERAGE=1(M)

crops

81,780

1

_

__

116,925

1
1

377

157

animals

Dairy

,

iIL,

__

Fruit

•

Jan,
Jan.
Jan.
Jan.

350

246

-i

ASSOCIATION:

(tons)—:

received

crops

Truck

Poultry

189

_______

Poultry
Seasonally

"

305.

30L

339

_

Meat

181

___

Dairy products

■

Orders

__

318

412

_

__

281

234

_

Livestock

RR.

NATIONAL PAPERBOARD

grain

224

184

hay

271

236

191

and

Oil-bearing

161.0

225.8

263
228

—

.

_

220.4

190.6

grain

Truck

178.8

195.2

INDEX

_______

_

grain

Fruit

223.8

239.6

172.1

—

AGRICUL¬

OF

products

Feed

310.8

195.2

FARMERS

DEPT.

Cotton

270.1

243.5

BY

S.

Tobacco

•

8
8
8
3

10.500c
Not avail.

15:

farm

289.2

244.9

307.5

o

$1.30000

Unadjusted—

244.0

134.6
240.8

224.2

210.2

Jan.
Jan.
JanJan.

$1.77500

August, 1909-July, 1914=100—As of

Food

250.0

1

pound)

iper

poundi

(per

RECEIVED

.

3

ingot

poundi—East St. Louis

NUMBER

TURE

8

plus,

99%

>

3.42

''i.

210.3

machinery
groups

$1.75000

$2.00000

pound)

248.4

.Fertilizers
Farm

$1.95652

$65,692

pound)
pound)

2.80

Jan- 8

and

Fertilizer

$93,000

(per

209.2

drugs

Chemicals

33.500c
Nominal.

Nominal

$93,000

__

(per

3
3

materials

Building

Nominal

...

ounce)

(per

-Jan.
Jan.

Grains

Textiles

(per

39.000c

§Cadmium

3

Cotton

Miscellaneous

pound), Chinese, Spot

(per

refined

V

tCadmium

Jan.
-Jan.

Livestock

*

36.030c
33.000c

39.000c

in cases, Laredo

3.12

3

products

Farm

$79,000

41.670c

38.500c

2.45

-Jan.
Jan.

oils

and

$77,913

41.670c

__

(per poundi,

Feed

Foods
Fats

$82,154

(E. <fc M. J.)

(per pound), bulk, Laredo

GROUPS—1935-39=100:

BY

$35,000

3.10

3.50

3.47

-Jan. 11

INDEX—

FERTILIZER ASSOCIATION—WHOLESALE

INDEX

84.156c

$35,000

Antimony

Crops
ITY

102.400c

$35,000

Antimony

All

(NATIONAL

102.400c

_

38.500c

Dec.

COMMODITY

MOODY'S

85.385c

103.000c

103.000c

i_

.

99',i

or

U. S. price)
(per flask of 76 pounds)____

2.44

3.23

11

Jan. 11
Jan. 11
-Jan. 11

Group

Utilities Group

Public

Straits

ounce

3.13

2.81

•;-

•

Railroad

45.000d

$4.02750

2.84

2.71

—

;Baa

45.023d

$4.02750

2.75

3.02

—Jan. 11
,

42.500d

$4.02750

3.06

2.42

—-—Jan. 11

-corporate-

Average

ounce

74.625c

tCadmium
-Jan. 11

Bonds

Govt.

14.800c

'

2.43

DAILY AVERAGES:

——Jan. 11

U.

(per

York, Chinese

(per

Platinum,

MOODY'S BOND YIELD

73.566c

(per pound)—

Quicksilver

114.85

Jan.

Group—

15.000c

21.500c

21.300c

'

112.75

Group
Utilities Grou

Public

21.438c

70.000c

New

New

105.52

Railroad

21.200c

23.425c

Exchange—

New

103.97

11

-an.

,

21.500c

:

and Sterling

Gold

110.15

110.15

Jan. 11

Baa

..

21.300c

'

Louis

London (pence per ounce)__„
Exchange (Check)

Tin

23.200c

23.200c

...

refinery

Sterling

'

2,663,731

pound >—

Silver,

'

:

.

2,587,385

QUOTATIONS)—

Silver,

DAILY AVERAGES:

BOND PRICES

MOODY'S

2,522,831

;

M.

York

New

St.

654,426

499,765

(per

(per

Silver

615.978

472,073

month

of

.

&

1,154,192

1,088,051

-

642,485

505,937

(short tons)

use

Electrolytic," export
Lead

8,083,000

COM¬

October:

of

sale

for

(E.

Electrolytic,

21.425c

103.000c

21.500C'

an.
>an.

23.425c

103.000c

-Jan.

refinery at_.
(New York) at
Lead (New York) at
Lead (St. Louis) at
Sine (East St. Louis) at
Export

;Straits tin

21.200c

OF

for Month of December:
pound 1—

Average
23.200c

23.200c

23.200c

Jan.

—

8,126,000

tons)

tons)

PRICES

Copper

:

at

refinery

Domestic

>

v

Electrolytic copper—

orders

(DEPT.

tons)

(short

producers'

METAL

METAL

Month

—

1 short

Shipments

COMPOSITE PRICES:

AGE

IRON

goods

CASTINGS

IRON

16,209.000

*8,280,000

*8,403,000

LG,576,000

:

goods

87

122

123

BRAD-Jan.

♦16,683.000

8,306,000

8,270,000

manufacturing

Durable

Nondurable

FAILURES

;

employees in manufac¬

turing industries—

INSTITUTE:

EDISON ELECTRIC

<

331.2

goods

Estimated, number of

'

r

AND

omitted):

GUARANTEED—(000's
'

As

WHOLESALE PRICES NEW SERIES—U. S,
1926=100:

'

All commodities
Farm

'

.

DEPT. OF LABOR—
Jan-

,

Jan.

products

All commodities other than farm and foods

Textile

\

Jan.

.

products——

Fuel & lighting
Met a Is

&

Building

metal

of

Dec.

General

31

fund

$252,854,401

$252,562,994

4,208,411

4,385,070

3,097,078

$248,645,990

$243,177,924

$253,884,175

balance—.—

$256,981,254

f

materials.
products.

-

materials

—Jan.
:—-Jan.
JanJan-

■*162.2

175.5

4

165.5

*162.4

161.3

;

4
4

.

4

,

*177.3

*169.6

*169.7

182.9

*152.5

*133.4

*145,1'

*145.2

147.2

*137.5

; 128.5

<■

,

y

*137.5

4

175.2

'♦173.7

*173.7

4

*200.1

*203.0

132.8

*133.0

*134.7

Computed annual

interest

AND

137.8

2.215%

rate

RYE—U.

AGRICULTURE—As

Winter

193.5

-

'

V

__

WINTER WHEAT

153.9

198.7

4

debt

147.2

145.1

137.1

4

Net

198.0

■*179.2

168.1

152.6

4

■

of Dec.

S.

1,

DEPT.

\

2.214%

■

2.144%

OF

1948

wheat—

lv

Acreage
Production

—

•J 61,370,000

58,161,000
990,098,000

964,808,000

——

-

"

Rye—

v

1

....

-

Livestock
Meats

Jan.
——;

—

———:

-

-

i—:

170.3

♦170.9

*173.3

209.9

*221.4

*227.6

244.9

225.9

-——

fEstimated—Subject-to revision,




tflncludes 401,000

...

*228.7

*235.4

245.8

192,3.

Jan-

^ Hides and skins—————"
-♦Revised figure.

Productions

251.2.

...Jan.

192.5

*206.3

236.1

---.7

♦Revised

•

barrels of foreign crude ^iins,.

.

.

■ 1

;

■

3,790,000

3,381,000

Acreage

Special indexes—

,•

%

of

crop

of

1948

89.2%

figure. tBased on the producers' quotation. ,4Based on the average of
and platers' quotations., TBased on platers' quotations. -11Domestic, five
but less than, carload-lot packed in'<5a5e$rf.6.b. Trew^Ytfrk.""^"*'T
,

the producers'
tons
..

or

more

—!!^OJ|.,Port Colborne, N-..S, U. S. duty .included. A.

^

^

Volume 169

Number 4763

&

COMMERCIAL

THE

FINANCIAL

CHRONICLE

Probably some funds will
appropriated to start it'going.

gram.

What

Changes Ahead in Business?

be

Reciprocal

(Continued from page 2)

veterans, state veterans'
payments, and so forth.

have

in fact conclude that if
themselves
continue
to

ter may

do

this?

There is little

forecasters'

in

rate

the

At present they still have
jobs- and money, and many still

The

fourth

rise

at

annual

an

rate

quarter

goods at take-it-or-leave-it prices.

ate

them

nearly

re¬

goods

same

the

decide

to

free

funds

withhold

that

point

be

taking

Candidly,

a
drop
invalidate

would

necessitate

of

and

the question, of

on

the probable trend of
government
can

ring

forth

will

be

loud

and

(the

up

clear.

relief

is

felt

only in his forecasting func¬
tion) and will tend to turn back
itself any serious decline else¬

on

where

should

it

President's

Some

year.

eventuate.

State

The

Federal

housing for

forces.

upshot of the foregoing ob¬
that insofar

con¬

as

the economy in general, no

important set-back is likely dur¬
ing 1949.
On the : basis of the
synthesis
first

might

expenditures, the prophet's voice
They

armed

I

have

half

1949

Product could

Gross

reach

National

$265 billion,
mov¬

ing slightly above this level.
the

same

time I think that

ployment will
in

1948

be

on

sources

flood

comment that the

similar

At

unem¬

slightly higher

the average,

and

living will decline moderately.

These expectations

not incon¬

are

sistent, since both the labor force
and

productivity

will

of

manhour

per

increase, raising the volume
output

consistent

given level of

(Continued from page 9)
in

You

people

»

and
On
building
government subsidies and
overall, the hous¬ aid to produce materials in short
ing program is nothing lor us tc supply, such as steel, as he re¬
be worried
ferred to, we question very much
about, as we see it.
But

Rent controls he wants
ued.
I think we all

contin¬

that.

expect

National

cluding

health

search,

hospitals

: in¬

program,
medical

expanded

re¬

insurance

and

for medical and surgical
services,
we think will be started this
year.

It

will

be

long-term

a

program

and similar to the educational
pro¬

gram,-which we think
be started this year.
Social

also

will

security

will
be
ex¬
panded. We expect they are going
to include the
farmers, the domes¬
tics

others

and

Security
Social

under

program,

Also

now.

we

the

think the minimum

Security benefits of $25

a

month, which he referred to in
his speechjhis morning, will prob¬

ably be increased.
On

the

ment
some

have

the

of

Wagner

Act, with
think we
very bad situation at

amendments;
not

a

we

all because of the provisions that
the President has suggested be in¬
cluded in it, namely, that it be so

drawn as to" prevent strikes
to
vital industries. If we can prevent

strikes

industrial

our

which
der

wage

matter

has

has
As

cents

he

some

been

time.

asked

that

present
It is

sion

get about 60

that

65 cents

he

an

will

scarce

is

conclu¬

to

hour.

The legislation
on

for

rate

40 cents an hour.

our

for

government

on

price ceilings
we

think

to

come

legislation

was

will

finance

improve the national farm

expect will become law.




and

would think that if
needed

to

assure

much

for

the high

the President's talk.

much

It

is

good

to

news

back of

the

us.

consideration of the
have carried on to the

what

the

is going to

you our

business-situa¬

be

the next

over

six months..

Over all

The first

half

of

'49

will, in

opinion, probably be the best
of

the

year.

However,

half of the year

the

1949 will

favorably with most good
prewar years. Business is currently

compare

such

on

high

a

plateau

that

to

six

that

he

going to ask
Credit Corpora¬
tion to supply storage for
crops.
We would expect that
they would
was

Commodity

so.

the

matter

production

of

industrial

measured

as

by

the

Federal Reserve index, we expect
decline of about 5%
between

On

credit

controls,

consumer

we

believe

credit controls

and

also the bank credit controls,
particularly with respect to re¬
serves, will be included 'in some
legislation during the year. How¬
ever, we doubt very

they would

much wheth¬
those

use

controls

;

,

the foreign support, and we

One

of

things to

the

us

is

ure

185

most

interesting

in the President's

mes¬

If

On

the

matter

in
on

reach

of

construction,

some

difference of

we

quite unani¬

are

the belief that

dollar-value

a

a new

high record this

will

year.

The actual volume of construc¬

in

1949,

about the

that in speaking of the
foreign situation, he did not men¬

the

as

believe, will be
last year. How¬

increase

will

be

ac¬

counted

tion

we

same

the

ever,

sage

did
a

was

Russia
not

in

any

way.

Thus, he

emphasize that there

great fear

on

was

the part of the Ad¬

about

a

Russian

war.

As you recall, he recommended
for
St.

the

third

Lawrence

fourth

time

the

Seaway,

and

,we

or

through.

It

is

a

long-term

pro¬

for. by
the increase in
construction costs. We don't think

decline

which

the

become

an

in

construction

President

costs

wants

will

important factor in the

next six months.

We expect there
approximately a 25% in¬
crease in public building, that is,
schools, hospitals and institutions,

will

be

while

we

business

million.

So

the cost of living,

as

meas¬

now

decline

of

and

3

to

June

currently at 173; if

5%

30.

get

we

billion.

period

to

up

a

January,

1948.

believe

residential

construction

somewhat lower.

!

will

and

be

Of

provide

about

In

the

matter

of

expect

we

of wage

increased tax rates.

and

wages

fourth round

a

increases in

indus¬

some

the

last

will increase this
year.

We

think

On

price

trends

generally,

we

think farm products will be down

about

5%

the

products
with

first

six

The govern¬

down

about

prices

remain

to

3

for

raw

increase

slower

in

this

rate

country but at

for

the

first

seeable future.

year.

On

the

and

matter

of

investments,

bank

total

to

are presently esti¬
$63 billion.
We expect

at

them

see

during

increase

record annual rate up

of $30

about

$129

billion

as

billion

in

1947.

The

months

in

rate
1949

for

the

first

is expected

off 5 to 7% from the rate

prevail¬

ing in the first six months of 1948.
Note this

reduced

tail trade
now

far
re¬

$55 billion, where¬

was

we

would

In 1941

rate

the 1947 rate.

are

expecting it to be

$122 billion.
In

the

have

a

and

inventories

slightly

will

increase

the next six months.

over

New

orders, we expect, will de¬
cline up to 3 to 5%. And we be-

bieve shipments will

decline 3 to

Current inventories

some

trouble ahead

are

ap¬

in the inven¬

tory situation, not so much, may¬
be, the first quarter, possibly the
second, and more likely the third
quarter of the year.
We expect both

long-term

money

the

orig¬

were
20%, ad¬
currently at 24, and

the Federal Reserve-Board has the

to bring them up to '26%.
We don't think the additional in¬
crease
in
bank
reserves
of 2%

will become effective the next six

months.
On

'v,

the

■■>

matter

of

instalment

credit, regulation W,
there

will

be

change

any
next six months.

For

of

just

where

another

as

we

don't

think

in

the

indication

are

economically, I
savings of
individuals, that is, currency, de¬
mand deposits, time
deposits and
have

note here about

a

U.

of

inventories,
shipments, we
little concern, particularly
subject of inventories. We

the

on

matter

orders

new

in

recall

power

six

to be

You

reserves

vanced to 22,

high levels.

$117

year.

increase

reserves.

inally

to that time

with

ad¬

which currently
They are up $2,-

further

any

bank

the

approximate

the

the

to

We do not think that there will

1947.
So even if you do get the
5% decrease, it will still be up at

compared

loans,

5%

months;

largely

$25 billion.

be

only

Retail trade in 1948 is expected

six

200,000,000 since last

billion, which prevailed in

record

due

in

vance

pect it will be down about 5%, as
compared with the first six months
to

the next

increase

are

would

loans

earnings

assets of banks
mated

we ex¬

down

a

six

I also want

,

decline

$24

we see no change
price of gold for the fore->

in the

Speaking of the farm, the 1948
farm income reached a new
high,
estimated at $31.1 billion.

income

country

years—currently

to mention that

the largest drop in the farm prod¬
ucts.
V, ■•'■■h ;•

This

\
con¬

a

We think it will continue

months of this year.

you might say, over all the
declines will be moderate, with

'48.

'

.

to flow into this

erally,

bring farm

billion.

continue at that

•

,

several

billion.

the matter of prices gen¬

on

it will

level

same

$28

S. gold stock has had

tinuous

unchanged.

during the first half of the

the

years,

.

U.

5%,

for

three

year.

down
to

about

at

level for the first six months this

months,

products

wholesale

Thus

as

so,

debt, at the end of '48, is
billion, down
$27
billion
from Feb. 1, 1946, when it was at
its all-time high of $279 billion.
Money in circulation has re¬
mained

to

$45

if that is

course,

ment

tries, of perhaps 8 to 10 cents an
hour.
We do not expect strikes

near

ex¬

to

$252

strikes,

of

for

$43

necessarily result in def¬
financing, if we didn't have

icit

any

previous

of

it would

5%

a

will

expect
penditures

is

decline it will bring us down to
rate that will be higher than

ex¬

year ending
1950, which the President

we

be¬
It

we

will tell you about in a few days,

by the Bureau of Labor Sta¬
tistics Consumers Price
Index, we
a

and June 30th

budget for the fiscal
June 30,

ured

tween

slight debt retirement of
$1
billion.
But the new

a

about

60,000,000 peo¬
ple employed and at high wages.
On

small surplus. Be¬

a

now

pect

there

will still be around

construc¬
basis

Banking

the

tween

to

5%.

bring it down to 184
index, which is a

opinions, but
tion

now

proximately $55 billion, a new alltime high. We feel there may be

de¬

the

on

there has been

mous

than

is

increase

to

get this 5%

we

high peacetime level.

very

tion

so.

194.

cline it will
or

which

1,750,000,

more

in

was

The current fig¬

and June 30.

now

year.

and

ably result in

about

think

months.

On

a

that the

er

economy

Budget

unemployment,

exceed

view

we

tioned

the

On

1941.1

period last

same

The

At the present time the labor
force is about 61 million persons.
By June 30 we do not expect the

we

buyer's market.

a

As

bond financing will hold
the next six months

question of government
budget and debt, it is our opinion
that the budget for the fiscal
year
ending June 30, 1949, will prob¬

over

The first six months of '49

we

expect business in
1949 to be off 4% or 5% from the
peak levels that have prevailed in

second

what it

the

123%

a

fi¬

financing will be less than during

expect will be off about 3 to 5%

have

step, which is to give

half

have

than

favorable

more

Following

'48.

increase

still

domestic

of

we expect the volume of

comparable to the first six months
last year, but we believe
equity

1%%." 1941 personal

will

we

matter

37

during

up

income was $95
billion, so if we
get our decline to $212 billion this
year,

the

corporate

possibly

The
wholesale commodity
price
index, which is the 900 series, we

of

people expected. The mar¬
ket, I think, is reflecting it today.
it

Oil

nancing,

$212 billion annual rate

to

off about

or

slightly,

prob¬

spots

was

most

tion

down

materials

program, and we expect that that
will come about.
He also men¬

exchanges think that that will probably go

we

control

this that it would go through.

And

very

manufactured

we

ably

in¬

is

about 3 to 5%, semi-manufactured

ownership;

So

1948

government

the

for the first six months
of 1949. We feel it unwise at this
time to forecast beyond the first

will become effective.
The matter of control of
specu¬
lation
on
commodity

point,

1949, it will be a
try, or other critical industries.
poor year for
wishful thinking,
On the matter of farm
but a good one for realistic
supports,
ap¬
the President came out
definitely praisement of changing conditions.
for the maintenance of
Here are our specific views on the
parity in¬

ministration

commodities

next

in

that the petroleum un¬
sea
is to remain under

was

Federal

somebody else in the steel indus¬

think he will do

know,

you

asking for
The

the

of the minimum

increase, he
per hour.

75

the

income

decline

California

should not judge a 5% or 10%,
subsidy. "or even 15% decline as catastro¬
However, it may be that the gov¬ phic, but rather as a normal ex¬
ernment
will
be
able
to
bring pectation
following
industry's
some pressure on these
companies catching up with the backlogs, the
to increase their production under
filling up of inventories and the
the threat that if they don't do so
current transition from a seller's

oand

*

in

in

steel, would

this year.
As to the foreign policy, as you
recall, he said he wanted to ex-

.

the

other

as a

con¬

industries,
activity can

tinue.
On

as

of

then

vital

to

supplies, such

government aid

the

and the reenact-

manufacturers

these

do

matter of repeal of

Taft-Hartley Act

the

want

Social

included

not

whether

here

interested

are

our

supplies

in

don't think there is any imme¬
diate concern about them.

message we

Viewpoint on President's
Message and the Outlook

TVA

we

any

employment.

of

regions, to us was a threat to our
utilities; but it is so far off before
things could be really put
into effect, and be competitive to
our present
utility operations, that

message

with

his

those

that wholesale prices and the cost
of

that

to

and

development be

(193V

dicated to be around $215 to $220
billion. During the first six months
of 1949 we expect the rate will

expect
re¬

to, such as
reclamation^ pro¬

control,
and reforestation,

gram

go

referred

was

ideas of

crease

and

no
reason why that shouldn't
through.
The development of natural

next

materials.

business

As to displaced persons legisla¬
tion that he recommends, we see

the

developed

with that for the second half

than

relief,

the

of

include

would

cerns

ing assumed.
a

end

servations is

5%

or

revision

downward. A guess must be
made,
and
on
that clearly unscientific
basis no substantial change is be¬
For

the

of

construction.

The

form.

4%

it

drastic

a

for

the

quarter it was still in excess of
92%.
Even a further drop of a
point or two could not ruin the
far

the

share

the third quarter of 1948
almost 93%;
in the fourth

thus

small

tance.

Congress

goods

in

picture

the

per

year.

they part of the increase now in pros¬
pect, both Federal and state, will

from

combining the right price and
desirability. The ratio of con¬
sumer spending to
disposable in¬
was

chance

part

any

ward

not

come

by

dollars

current

spending program, that rate
would
obviously accelerate to-

We may still see them spend else¬

where

during the

new

reduced.

were

half-billion

a

if

And

enter the market when prices for
those

to

from an economic stand¬
it is of very little impor¬

ever,

should speedily enact and effectu¬

But

seem

aid

the strengthennig of the anti-trust

of

liqued assets. We have al¬
ready witnessed their rejection of
distributors'
offerings
of
some
also

no

through them again.

year.

also

have

have

through them before, I
reason
why we can't live

by the same time laws, we have all expected. There
Net Federal expendi¬ is nothing new about that.
On the civil rights
tures, even barring the foreign
program, we
aid component and assuming only think that that will probably go
the
present defense plans, may through after a long fight. How¬
this

point.

we

will be re-enacted.

lived

see

$16 bil¬

a

en¬

years,

thereabouts

or

this

on

We

1948 to $18-19 billion

quarter of

art in the

ruminations

annual

lion

spend, no developments are threat¬
ening elsewhere that will serious¬
ly reduce their income. Will they

well rise from

period of three

a

also think

we

opening

in the routine usually fol¬
lowed in raising outlays. The lat¬

We may

people

the

taken

already

acted for

legislatures

steps

Will People Continue to Spend9

agreements,

which he recommended to be
and

administrators

bonus

trade

Personal

.

short-term and
rates to advance

S. government securities. In¬
dividual savings are expected to

advance

during

the

first

six

months of this year.
The rate of
increase will probably be
slightly

higher than during the
riod

last

currently

same

Personal

year.

estimated

are

billion

dollars.

We

should

reach at

least

pe¬

savings
at

$170

think

they

$175 billion,

by June 30th.
On

the matter

of

foreign trade,

imports for 1948

are

be up about 25%

over

whereas

down

exports

about

continuation
in

imports

trend

E. C.

of

A.

slightly over the next six
months.
Municipal bond yields

in

to

imports,

'48

We

the

and

'47

for

15%.
of

expected

were

expect

a

rising trend
the declining

in spite
shipments. ■
exports,

of the

very

should

advance

yields '
bonds
no

is

high

on

should

fractionally,
grade

corporate

likewise; but
appreciable change in yields
expected during the next six

months,

as

move

it is believed the

sup¬

port peg of Government 21,fcs will
common

stock

yields,

the

Moody's Index of 200 stocks shows

currently
you

a

know

high yield.
be little

to

an

the

yield of 6V2%, which
is historically a very
We think there will

change in that yield over

the next six months.

in

General

business

over-all

0:1

to

generally, taken
basis, our views as

outlook

for

the

next

six

months add up to a moderate de¬
cline when compared to the same

period last
it

But let

me

we

do

not

expect

recession

or

a

year.

clear that

severe

remain at par.

On

Business
As

and

but

more

Soft

of

a

spots

are

number

a

of

many

make

other industries

going

are

ahead full blast and have

a

able

have

.

,

outlook.

a

depression,
transition period.
occurring now in
industries, while

Also

(C-'orttinued

we

on. page

favor¬

38)

,

in
„

38

COMMERCIAL

THE

(194)

FINANCIAL

&

it

If

Viewpoint

President's Message and the Outlook

on

Let

look

at

the

figures

on

they

earnings,

all

medium

grades

supply, high govern¬ corporations, after taxes, are esti¬
mated between $20 and $21 billion.
employment
Let us take $20 billion as an easy
private sav¬
figure.
They paid out 40%, or
ings, relatively high farm income
$8 billion dollars in dividends. If
and the near record personal in¬
in 1949 net earnings are off 20%
come.
Such conditions are not the

railroad

income

(Continued from page 37)

this

mind the cushioning effect of our

huge

us

basis:

1948

net

attractive;-. Wer likethe

are

bonds, affording

money

mental spending, full
at high wages, record

from

the

high yield

and

appreciation

sibilities.
Un

'•-..h
matter

tne

stocks,
same

our

as

on

of the

aim;: some

pos¬

preferred
position is about the
of

D.

T.

allocation

and

railroad

of

steel

for

yield basis, it is

equipment.

Taking the
railroad industry
and assuming
a 45% total corporate normal and
surtax, the railroad net operating
income
of

for

the

is expected to

'49

considerable

six

what

for

that

will

the

bonds.

a

six

ating

First

the

as

10, 15 or even 20%.
stock outlook

on

therefore

is

if

ularly

a

The common
selective basis
partic-?

favorable,

believe

you

dividends

that

next

as

year

we do,
will be

50% of earnings rather than 40%
as.

in the

past

income

year.

last

oper¬

for

are

getting which are which.

if

pe¬

cor¬

offset

taxes

excess

the

income

Thus

estimate

we

utility corporations' net
after

the

taxes

first

six

months this year will be at least
.equivalent to that of last year.
As to the

of indus¬

net income

trial corporations we found it dif¬

ficult to generalize.

widely
ration

as

They vary so
to industry and corpo¬

that

it

statement

just

us

possible for

to make

on

doesn't
a

industrial

might be properly charac¬
by the comment which
Sheridan,
the
famous
dramatist
and
politician,

July,

and

August,

for the last

seem

general

corpora¬

tion

earnings.
However, I am
going to cover them in this man¬

lower in

were

September,
and
than in the same

October,

1948

months

of

Irish

building also is slowing

terized

speech by one of his
gentleman has said
much that was good and much
that was original but what was
of

made

is

by the amount of their in¬

creased income.

say

decreased

months

Richard

increased to 45%

of

seven

And so
afraid that what I will have

am

to

the pre-tax increase in income.
amount

starts have

I

the tax increase will about offset
The

find many strong forces
of maintaining a large
activity

business

of

at

relatively high price level.

there

almost

still

are

from

little

a

pool of reserve buying
power.
A significant fact aoouc
these savings is tnat the distribu¬
tion is wide spread—60% or over
$100 billion are owned by fam¬
ilies making under $7,500 a year.*
<7) There is one final roadblocK against a severe depression.
Our Nation is fighting a cold wax

(

against Communism.
N otning
could hurt our cause more than

employment has

Although

.(I)

declined

a

rivals:

good
was

a

"The

was

not original

and what

original was not good."

But
goes.

regardless of hazards, here
As a spring-board for this

(5)

1947.

Department

which

had

shown

Commercial
up.

the peak
60 million

a

consistent

lion.

;

•

(2) Farmers
nancial
have

in

condition
been.

ever

debts

in the best fi¬
which

Their

mortgage
their cash

smaller and

are

they

and other forms of savings great¬

at

than

time in the

any

his-

a

look

cording to preliminary estimates,
reach an all time peak in
excess
of
$220
billion.
.From

may

whatever business angle you look

shape, their future is rosy, and it
will continue to be so long as the
Government

Federal

ucts.

sion

guarantees

high prices for their prod¬
It is hard to get a depres¬

ment Store sales.

ing

down

in

There is

consumer

a

slow¬

buying,

particularly in consumer durables
such as washing machines, vac¬
uum
cleaners, radios and refrig¬

be

the

stronger

barring

that,

such

ments

has

front
that

war

to

come

basic

a

develop¬

unlorseen

as

increase in
spending, inflation

pected

unex¬

an

or

government
on the price
end, and
is al¬

an

readjustment

under way—that the sup¬
ply of goods in most lines will ue
ready

sufficient

a

to

inflation¬

overcome

and thus bring into
sounder balance price relation¬
pressures

ary

unduly

ships

distorted

a

re¬

sult of war-induced shortages

as

and

scarcities.
to

As

readjust¬

A few think we

lysts is divided.
headed for

are

the

far

how

will go, the opinion of ana¬

ment

real bust—not

a

a

of

panic like 1929-32, but something
similar to 1920-21. Most of them,

(3)
Although soft spots
are
showing up in many liens of con¬

however, think the readjustment
will be of mild proportions.

going

when the farmers
faring so well.

steel, non-ferrous metals, farm
equipment,
freight
cars,
and
heavy electrical machinery.
As
pointed
out
recently
by
the
American
Bankers
Association,

previous year. This is the first
since 1941 that there has not
a sizable increase in Depart¬

been

take

support, for the next four years at
least, farm prices at profitable
levels.
Farmers may never have
another year as good as 1947 or
1948
but
they are in excellent

the

year

us

may

deflationary forces have
pull.
They believe

the

that
are

the nation

at

let

We

depression.

*

gain for each of the past several
years, appear to have leveled off
during the fourth quarter of 1948.
On
the
average,
they may be
about equal the sales volume oi

thev year which has just passed.
The national income for 1948, ac¬

discussion

serious

people at work at high wages in certain, therefore, that our gov¬
this country. A few years ago 60 ernment will use every financial
and economical power it has to
million
jobs
was; considered
a
combat
any
'serious
business
Utopian goal—an ideal for which
These powers are broad
to
strive
although the
chances slump.
now.
Congress would make them
for reaching
it seemed remote.
much broader, if necessary.
These
people are making more
Deflationary Factors
money
than ever before in the
These are the main inflationary
nistory of the country. As I said
earlier, the national income is factors in the current economic
currently ninning at the annual picture.
When we weign them
rate of about $220 billion. A year against the
deflationary factors-,
what is the result? While the op¬
ago it was afc*a rate of about $295
oillion; in 1940 it was about $78 posing
influences
seem
to
be
pillion and in. the so-called boom about equally balanced, most im¬
year of 1929 it was about $85 bil¬ partial
business analysts
think

them

sales,

Store
a

tre¬

a

mendous

of
American
agriculture,
furthermore, the Federal Govern¬
ment
is
virtually committed to

(Continued from first page)

the

same

However,

year.

porate taxes

the

over

volume

of real de¬

year

we look at the
the- picture, how¬

of

side
we

ever,

er

Business Outlook for 1949

during the

Pre-tax

utilities

of

other

a

When

constitutes

That

curities.

ory

effective

months.

about 10%

that

of

some

grade corporates, we don't think

the

first six months is expected to be

riod

of

securities.

to
We don't like the highest

public utilities industry
certain rate increases

become

first

up

very likely that
attractive.
about

think

of

expect

we

now

we

types

months

exceed by

amount

are

I want to say a few words

period of 1948.

same

In

first

they

entering

pression.

We don't like

bonds.

billion dollars for the high grades, we do like the
background for a severe recession
this year, net earnings will be $16 medium
grades; but we prefer
or a depression.
billion; and if they paid out 50% the discount preferreds.
I would like to give you our
of their net earnings of $16 billion
As to common stock prices for
view as to the outlook of rail-1
they would pay out $8 billion this the next six months, we don't
roads, public utilities and indus¬
year,
which is the exact same think that the Dow-Jones indus¬
trial corporations, just briefly.
amount Of dividends they paid out trial average will be a good meas¬
As to railroads,
we expect
a
last year.
ure of stock price movements.
In
further increase in freight rates
I think there is good economic our
opinion
issues
should
be
of about 3% over the average of
justification for corporations to judged on an individual basis.
5% recently granted. We do not
increase
the
The
low
per
cent of their
price-earnings ratio
expect wage increases during the
earnings that they pay out in divi¬ prevailing for a great many of the
first six months of the year. We
dends.
If they just jump it from stocks of corporations that have
think tne President's State-of-the40 to 50%, we can stand a 20%
stood
the
prewar
test of keen
Union message,,today'was favor¬
reduction in earnings after taxes competition, in a buyer's market,
able
to the
railroads from the
and still pay out the same divi¬ make them very attractive to us
standpoint of continuance of O.
dends.
And if stocks sell on a even if earnings are to decline
$20

could be certain that we

we

were

at

and influences

factors

capable

'•

■■

work

counterbal¬

for

not

were

ancing

1949

Thursday, January 13,

CHRONICLE

sumers'
in

the

we

are

goods, there is firmness
heavy industries such as

have

had

never

major

a

de¬

pression in which these items did
not

give

the

first

warning,

lead

is

What

which

when

the

happening1'

must

civilian

economy

the

of

war

were

we

re¬

At the

places the war economy.
end

that

is

inevitably take piace

faced

with accumulations of demands in
almost

goods
dustry

line

every

as

the

was

of

consumer

in the heavy in¬

well
At

as

dustries.

same

time

faced with both
labor shortages.

in¬
ma¬

back
on
it
national
income, erators.
terial
and
the decline and reach almost
The
(6) Used car sales are off at complete stop.
physical volume of production,
Nothing of the combination of short supply was
on
postwar
models. kind is in sight today. The steel made particularly acute because
employment,
dollar
volume
of least 50%
The
pre-tax earnings
of the
sales, unit volume of sales, cor¬ Used car prices have fallen rap¬ industry produced a record total of the great increase in purchas¬
heavy .-industries, such as steel,
The premium on the so- of more than 88 million tons o
poration profits—from every as¬ idly.
ing power accumulated during, the
auto, railroad equipment and in¬
pect 1948 was a boom year of called "new used car" has almost steel in 1948. This is more than war period, which resulted in an
dustrial machinery, should for the
become a memory.
Most of the all the rest of the world combined enormous effective demand in the
tremendous
proportions.
Furfirst six months of 1949 at least
| thermore, it was the third suc- high priced new cars can be had and still the demand exceeds the market. This created our postwar
equal last year s first six months cessive
year of a postwar boom, for immediate delivery upon the supply.
by
An even greater volume boom which was furthered
earnings. The same applies to the !
th continuance of heavy military
is predicted for 1949.
The $64 question now confront¬ payment of nothing but cash.
oil industry, rayon, nylon, auto
and
the
require¬
(4) While private construction, expenditures
(7) Following the elections in
ing American business is simply
parts, chemicals and construction
this: "Is the bloom off the boom?" November a severe break in the with the exception of public util¬ ments of the European Recovery
industries. However, a 45% cor¬
-•
;
Since in a system of private en¬ stock market reflected the gen¬ ity structures, will run lower than Program.
porate tax rate would be expected
The problem of the immediate
terprise the volume of business at eral anxiety over the future of in 1948, it appears certain that
to reduce the net from 10 to 15%
any
given
time
depends upon corporate earnings. The market public construction will show at postwar economy, therefore, was
for the first six months this year,
many
psychological as well as is still languishing. Incidentally, least a 10% gain over the '48 ratf a problem of catching up with the
when compared to the same pe¬
physical factors, a. question such the market reflects the appre¬ which was high. There is a tre¬ backlog of demand for goods in
riod last year.
supply.
That
is
exactly
as
this can
never
be answered hension, not so much of big busi¬ mendous backlog of local munici¬ short
Some of the less favorable in¬
what has been done in many in¬
with
a
categorical yes or
no. ness and wealthy individuals, as pal projects such as.schools, hos¬
dustries appear to be amusements,
that of millions of people of mod-: pitals, utilities, etc., which can't dustrial lines,'and was the only
There
are
a
number
of forces
radio (not including television, of
Fur¬ means of successfully preventing
pulling in both directions — up¬ est incomes. According to a re¬ be postponed indefinitely.
course), furs, jewelry, liquor, tex¬ ward and downward on the econ¬ cent study of the national income thermore, any great slack in pri¬ a run-a-way inflation.
As each
tiles, lumber, household equip¬
and its distribution, almost 70% ! vate construction can and will be successive
industry
catches
up
omy. Many signs indicate that the
ment and retail trade.
Earnings boom is over.
of dividends and interest go
to taken up quickly with major State with the backlog of demand and
after taxes for some of these cor¬
Federal
projects
such
as completes restocking, production
(1) Domestic farm products are people with an annual income of and
porations may be off up to 20% about
$5,000.
Those in the highways, public buildings, flood in that industry must necessarily
25% off from one year ago. less than
the first six months of this year,
drop back to normal replacement
When farmers are not prosperous $5,000 and over group, after Fed¬ control, and the like.
:
-as compared with the same period
Labor and mate¬
the country as a whole cannot be eral income taxes, get only about
(5) Government spending will requirements.
last year.
be tremendous.
The budget will rials are then diverted to those
prosperous.
Prices generally ap¬ 17.3% of the total. What is not
Let us assume the earnings of
be somewhere between
$40 and industries where shortages still
generally
realized
is that the
pear to have reached their peak
all American corporations are off
and show a considerable decline masses of our citizens are stead¬ $50 billion depending upon how exist, thus accelerating the proc¬
20% in 1949—what is likely to be from the levels of last
ily getting a larger proportion of far Congress goes with new social ess of catching up in those lines
year. Cost
their dividend policies? The 1947
national income,
of living figures so far have re¬ ■total
not only legislation and military expend¬ so as to restore a sounder and

'•

ner:

,.

,

.

•'

,,

„

—

.

;

.....

,

.

,

■

dividends of all American corpo¬

amounted to 40%

after

taxes.

dividends

In

will

of their

of their income

1949

we

represent

believe

50%

of

The

minimum.* for

re¬

better

mili¬

The

corded only a modest

from

salaries and wages, but also

itures.

prices of industrial

from

the

profits of industry dis¬
tributed as dividends.-,
(8) And finally, even the mar¬

armament

riage rate is falling off.
This is
not mentioned facetiously.
When

lion, and the figure might go as
high as $22 or $25 billion, de¬

decline, but
materials
earnings after taxes. In 1948 it as well as farm products, and spot
is estimated that the dividends of
commodity prices, all reveal a
all
American
corporations sizable drop from the levels of a
rations amounted to 39%

year

raw

ago.

(2) Employment has declined in
recent

months

for

the

first

there

are

fewer

new

families

tary
the

aid
Iron

and

to

capital

nations

and

this

side of

Curtain will be $17 bil¬

been

balanced

fact

completed

industrial lines

demand,
pressure

economy.

that

removes

reduces
and

*

restocking has
in a number of

lowers

abnormal

inflationary
the

current

Wherever
developments in level of production.
Europe.
This huge spending by backlogs exist in industry, a -dif¬
government will constitute a tre¬ ficult problem is presented to the

pending

com¬

time

upon

ing into existence there is less
during the postwar period. There demand for housing and every¬
businessman
in
has
estimating
the
recently been a sharp in¬ thing that goes into housing. The mendous inflationary force.
lief is that it will not be neces¬ crease in claims for unemploy¬ birth rate is automatically low¬
(-6) The savings of our people time required to meet them—1sary, with the exception of a few ment compensation.
Present without producing a temporary
ered, and the increase in popula¬ are at a very high level.
j
industries such as the utilities and
holdings of
liquid
asssets
are oversupply, which may force dis¬
(3) Freight car loadings are off tion reduced.
the oil industry, for corporations 3.5%
These and many other signs in¬ about $175 billion or about $125 tress merchandise on the, market.
and
passenger
traffic
is
to continue to plow back earnings down
10%. There is a distinct dicate that at long last the ex¬ billion more than in 1940. These First one industry, then another,
into huge plant construction pro¬ slowing up in the chemical and citing and pleasant ride up the savings are in the form of cur¬ has slowed down to the normal
iron foundry trades.
spiral of inflation is over and that rency, checking and savings ac¬ replacement level plus growth,
grams, the building up of inven¬
tories or the carrying out of large
(4)
Housing
construction a drop on the other side of the counts, savings and loan shares, and in numerous instances the
and United States Government se¬ marketfor
seems
.to
be
particular
wobbling.
New curve is about to start. •
products
expansion programs.
the

corporate

minimum.

net

income

as

a

Our basis for this be¬




-

.

Volume

169

Number 4753

THE

has been temporarily glutted.-The
immediate results are price weak¬

nesses,,

decrease

a

payments, high
tnen layoffs.
First

Real

Test

In:, 1949,

..

inventories,
to

and

(Continued from
lower prices for No.

Business

real

since

days.

prewar

Without the aid of artificial stim¬
ulants the going will be tough for
with

have

V

business.

■

in

We' will probably see
X5f
seasonal "swings -in

Already

business.

we

ifrqm

pass

sellers' to

a

in

a

Rather it is to be welcomed.
will

will

fail,

lose

out

Country

as

will

but
be

better

a

ing.

chance

of

be

last

three

years.

Only

.

by

..

on
a

however,

definitely

achieve

a

Don't

if

1-

•

.

.,

Postpone

"f

prices.

demand and

the

The

latter

still

are

no

$100

takers

or

at

even

above

so

a

at

the

start

of

1949, the? Institute

reports the

,;yyyy->C■ y.cL yy,

and

1,723,200 tons,

95.6% of The old capacity

or

1,281,210 tons for the

average week

one

in 1940, highest

year.

percentage rate of operation is based upon the
total annual steel-making capacity of 96,120,930 tons
as reported
by the producing companies at the start of 1949. ?:
"

this

.

.y.

ported last week. This was an increase of 129,538,000 kwh. above
a readjustment canpossibly-: be avoided—it can output in the preceding week and 414,090,000 kwh.'or 7.8% higher
only be delayed by artificial stim- than the figure reported for the week ended Jan. 10, 1948. It was
Vulants. V Why should we want to also 839,257,000 kwh. in excess of the output reported for the cor¬
jdelay. it longer? r American .busi-} responding period two years ago.
yyy, y
..nessJs «tix>ng~r-American agricul¬

Loadings of

,

•

readjustment .when

revenue

freight for the week ended Jan. 1, 1949,
holiday, totaled 584,628 cars, accord¬

ing to the Association of American Railroads.

This was a decrease
24,611 cars, or 4% below the preceding week and a decrease of
97,491 cars, or 14.3% under the corresponding week in 1948. It also

we

.

of

represented a decrease of 102,800 ears, or 15.0% below the similar
of"our people-Mhose with
incomes either fixed or virtually period two years ago. .<
yyjy
.•
i fixed—such
a
settling back to
/Tower living costs will-bring re- AUTO OUTPUT OFF DUE TO SHUTDOWNS FOR MODEL
1 lief sorely, needed.. And it is the 'CHANGEOVER AND TEAR-ENDINVENTORY
person in. this, class—a very large .yy Production of cars and trucks in the United States
and Canada
.class

;

.

and

important class—who is the was placed at .97,862 units compared to 81,968 (revised) units in the
forgotten niart .of these post- previous holiday-shortened week, according to "Ward's Automotive
years."
•y
Reports."
" :
'Y
.'V.-;'y

•

war

^

.

Certainly,

you Sales Managers
regret the transition

should, not
from

ket.

,

ing

;

a

sellers'

to

a

buyers'

mar-

If prices should keep on gomuch longer, you fellows

up

would

all

be'

out

of

jobs—your

companies could get along with-out you.
We have had a sellers'
market for

) ship; has

so

\ lost art;} You'
back

,

long that salesman-

just

about

become

are about to
into' your/own. again.

a

come

Ever

since 1940 the production
manager
;has been the hero on the economic
.

your
i
-

Plant shutdowns for model changeover and year-end inven¬
tory adversely affected output for the week.
>
;

Output in the similar period
in the like week of

This

.v

wish you

you

over.-

And so, I
and

salesmen

Happy Selling in 1949.




week's

a

year

ago

111,276 units and

was

1941, 115,936 units.
consisted of 71,147

output

built in the United States and 1,290

cars

cars and 24,360 trucks
and 1,065 trucks in Canada.

Jan. 3, -

with 269.53

week

a

previous and with 303.73

on

were

Cash wheat

Influenced by extremely heavy receipts, all livestock values

V

;

Hog prices fell

than $2 per hundredweight to lowest levels
since the ending of price controls. Demand for cocoa was
quiet and
prices dropped 2 cents under a week ago. Reflecting mounting sup¬
more

plies and the sharp break in hog prices, the lard market continued
easy with current quotations at the lowest of the season.
Trading in
butter

limited in volume with prices
comparatively steady.

was

Cotton

markets

were

seasonally

quiet last

week.

Prices

*
were

irregular and somewhat lower for the week. Trading volume in the
ten spot markets fell
sharply to 97,700 bales in the holiday period,
from 190,500 the previous week, but were above the
61,900 bales sold
in the

same

week

a

year ago.

Export inquiries

were

quite

numerous

but buying by domes¬

tic mills remained slow.
The mid-December

parity price for cotton

was

reported at 30.63

cents per pound. This was unchanged from a month
earlier, contrary
to a generally expected decline in trade circles.
The average farm
price of the staple on Dec. 15 was 29.63 cents per pound, the lowest
since June, 1946. It was almost 1 cent bekwv the November
average,

and 4.42 cents lower than in December

a year ago.
Entries of cotton
into the government loan stock for the week ended Dec. 23 rose
slightly

to

202,000 bales,

compared

with

197,500

bales

the

preceding week.

Total

entries for the season to date were placed at 3,789,000 bales.
Cotton exports during October,
according to the Bureau of the Census,
totaled 246,000 bales, and for the first
quarter of the current season
were

532,000 bales, against 294,000

a

year ago.

CONTINUES TO REFLECT
SLIGHTLY HIGHER VOLUME THAN FOR LIKE PERIOD

OF 1948

The traditional prewar

pattern of numerous post-holiday clear¬
sales began to reappear last week. Retail dollar volume in the
period ended on Wednesday of the previous week fell slightly below
that of the week before which included two Christmas
shopping days.
The past week's volume
slightly exceeded that of the corresponding
ance

week a year ago, and consumers continued to be
selective, but re¬
sponded favorably when prices met their approval, states Dun & Brad¬
street, Inc., in its current summary of retail trade.

Stimulated

by cold, inclement weather and encouraged by
clearance sales, shoppers flocked to apparel stores in large

numbers.

.

J;

'J-

:

Retail volume for the country in the
period ended on Wednesday
last was estimated to be from unchanged to 4% above that of a

Regional estimates varied from the corresponding levels
by the following percentages: New England up 1 to up 5,
East and Northwest unchanged to up 4, South up 1 to up 5, Midwest
up 1 to up 4, Southwest up 2 to up 5 and Pacific Coast down 4 to
unchanged.
'
■
;* V
y

year

of

a

ago.

year ago

.

Wholesale order volume

fractionally: in the week, with total
dollar volume approximately even with that of the
corresponding
week a year ago. /The number of buyers
attending many wholesale
rose

increased seasonally to more than three times the number
previous week, but was moderately below the number in the
comparable week of last year.

markets
in the

Commercial and

industrial

failures

remained

unchanged at 128
in the week ended Jan. 6 reported Dun <&
Bradstreet, Inc. Casualties,
however, were considerably heavier than in the initial weeks of 1948

and

1947

when

87

and

30

occurred, respectively,

below the 312 reported in the same week of 1939.
Retail failures

rose

but they

were

far

to 54 from 50 In the
preceding week and

with 31 a year ago. In
wholesaling, they rose to 18
16 and in construction To 16 from 13.
Commercial service
failures dropped to 7 from 15 and
compared

from

manufacturing to 33 from 34.
The Middle Atlantic States
reported 34 casualties compared with

,

38

a

week ago

and 26

a

year ago;

Department store sales

on

a

country-wide basis,

taken from
1, 1949,
change from the like period of last year. This compared
with an increase of 32%* recorded in the
preceding week. For the
four weeks ended Jan. 1, 1949, sales increased by 6% and for the
year to date increased by 5%.
as

the Federal Reserve Board's index for the week ended Jan.

showed

no

Retail trade here in New York the past week showed some
falling off in sales with department store volume estimated at

BUSINESS FAILURES UNCHANGED FOR WEEK

V

.

turn to take

congratulate

on

y.

I

stage.
The
sales, manager has
/-.been 'a' supernumerary, appearing
-only in mob scenes.
Now it is
r

holiday period.

many

which .included the New York

financially strong and healthy.
a matter of fact! to one
great

"real

17-month low of 267.91

/declined.

CARLOADINGS DECLINE FURTHER IN LATEST WEEK

ture is strong—the American peopie sus a whole have -a big backlog
V©f savings. Now "is the best time
a

a new

Jan. 4.

year ago.

Grain markets

the

electric light
estimated at

not

arg
;,As

a

on

RETAIL AND WHOLESALE TRADE

yV-' y

The amount of electrical
energy distributed by the
and power industry for the week ended
Jan. 8 was

-experienced

•for such

This compared

the like date

they
ELECTRIC OUTPUT MAKES FURTHER GAINS IN WEEK
ENDED JAN. 8 ; ,

solid

The longer this corrective proc- 5,691,770,000 kwh., according to the Edison. Electric Institute. The
'.ess is postponed, the more painful final figure for the week ended Jan. 1, 1949 was revised upward to
>iti will be; After a period of pro¬ read 5,562,232,000 kwh. as against an estimated figure of 5,470,000,000
tracted inflation such as we have •kwh.,'thus reflecting a ..gain for .that period-,instead of a loss as re¬

J

The index dipped to

new year.

change.

y

;

'

opening days of the

and closed at 268.36

the

The current

•'v

.

days of

the old year and the

is the absence

probability of

rate

new

year ago and

Corrective

Process

•

Dun & Bradstreet
daily wholesale commodity price index
fluctuated unevenly
during the past week as the result of mixed and
uncertain trends in leading
commodity markets in the final

some

A few of these

prewar

on

^ecbqomic equilibrium.,

COMMODITIES
The

working

-process can we eliminate the mal¬

adjustments, and

COMMODITY PRICE INDEX MOVES LOWER AS A RESULT OF
MIXED AND UNCERTAIN TRENDS IN LEADING

But

gray market material are down
ton from what they were early in 1948.

,

currants, steers, hogs and lambs.

that holes will

month ago,

/the abnormal requirements of the
•

is going down slowly.

This w eek's operating rate is equivalent, to
1,830,600 tons of
steel ingots and castings compared to
1,802,500 tons a week and a

on
an
expanding
which would be sounder

based

"The

a

lower

week.

maintain¬

boom

.

on

based;

the .postwar

states

schedule of operations is up 1.5
points, or 1.6% from the preXuous

readjustment and the
off in industrial * lines
: should lay the foundation of a re-

than

reasonable,-

having 94% of the steel-making capacity of the
industry will be
99.3% of capacity for the week beginning Jan. 10, 1949, as against
109.0% (old rate) in the preceding week,
pasing its comparison

The

economy

are

The American Iron and Steel Institute
announced that steel
production .this week is scheduled to set a-tew
record which will
be 26,300 tons larger than the
previous peak rep uted in the week
beginning Nov. 29, 1948. The operating rate of steel companies

•leveling

'vival

think

generally halt deflationary thinking.

nomically
healthier.
There
is
nothing abnormal in this process.
"Our economy is just shifting gears
"—changing, to a speed which it
-has

they

-

Prices

rye,

around the edges.
This fact
dealers attempt to move

a fourth round of wage increases.
factors could tighten up
pressure for steel; dis¬
card fears of a
recession; make the outlook for higher wages and
prices more clear-cut and
„

eco¬

will

prices

.

.,

means

sumer

the

whole

a

at

Only two commodities, sugar and potatoes, showed advances
a week
ago, while declines occurred in flour, wheat, corn,
oats, barley, lard, butter, milk, cottonseed oil, cocoa, eggs,

over

brokers and

quite

some

work,

of.

have

scrap

appear on schedules, but they will be
by other steel demands.
yy':,..■"-r
The big "if's" that bother all those who
try to make more out
of the current
signs in business than appears on the surface, con¬
cludes./"The Iron Age," are more defense
spending; more govern¬
ment spending; rearmament for Western
Europe; the fluidity of con¬

all.

people

some

thrown

new

It also

Some

money,

wide-open and drastic break

filled

-settling-back of production. and
prices.
Is this something to be

.businesses

The downward trend in foods continued in the first week of
1949,
with the wholesale food
price index, compiled by Dun & Bradstreet,
Inc., falling 9 cents to stand at $6.12 on Jan. 4, against $6.21 a week
earlier. This represented a
drop of 1.4% in the week and marked a
new low point since
June 3, 1947, when it stood at $6.09. The current
figure is 15.1% below the $7.21 recorded on the same date a year
ago.

.

unwisely adopts
policies which would so dis¬
courage investment in American
industry. as to stifle its normal
-growth.. It will amount to a re¬
adjustment— a leveling off and

at

FOOD PRICE INDEX TOUCHES NEW
NINETEEN-MONTH LOW

irregular with trading extremely dull during
was inactive with prices
holding in a
narrow
range.
Corn prices were steady to firmer aided by heavy
present mill price.
y,: ;yyy|y Y'T'r
government purchases of the yellow cereal. Trading in oats was slow
In the face of current steel
shortages and the government trial and
prices declined moderately under scattered liquidation. Domestic
balloon on more steel capacity—at
government expense and controlflour business continued in small
it means that steel is
volume with aggregate bookings
rapidly going back to a normal market and
comprising only a small percentage of mill capacity.
that the extra pressure
upon steelmakers is due for

•tax

Not

,■

But

tonnage is fhiding

the

depression unless

deplored?

to 27 from 40 a week ago. New
England failures totaled 21 and in
the East North Central States 19. In the South
Atlantic States failures
to 13 from 2.

>

J

1

y
a

fraying • badly

was

some

anywhere from $80 to $110

government

or

+'

Worse than that (for those
having-such steel for sale)
of buyers.
Some gray market

unforeseen at the moment, the
for 1949 is for a down¬
trend in business.
It will

feared

made

towards that stage.t

ward

a

has

is,

one

outlook

the

*

•

other grades.

and

scrap

steel people for many months.
general scampering of customers in the past week
to look over their
inventories, tone down some gray market pur¬
chases and take a second and
thircf look at their conversion deals
which cost much
money, this trade magazine adds.
t
The gray market this week has lost
a lot of its
steam, but hasn't
become too
badly deflated.
It

break-even points which have no
leeway in their budgets for added
promotion and selling costs may
find themselves hard-put to make
a.profit..
!'v'■!
Barring
developments
which

not amount to

prices high

There has been

industry
after another, companies with high

are

sign that
making.

no

the

pressure gage on steel demand
it will not reach a comfortable
level for

,:v:v

market

y vy

in

was

The

stantial,-.: mark-downs,
something
jwve have not- heard much about in
As

prices

what. they
iron Age.'

witnessing the re¬
turn
of January
clearance sales
-by department stores with sub¬

buyers'

'

this week

alone

we are

recent years.

scrap

.>*

-■

was

scrap

return'

a

ton."

a

39

rose

there was evidence that
gray market and conversion support which has often
helped to keep

.

/

West..

There

the normal up-and-downs of pre¬
war

$2 to $2.25

Industry

(195)

5) \

page

heavy melting' steel

CHRONICLE

■

Middle

companies, especially those
executive
personnel
who
had little experience with

many

FINANCIAL

Discussing the wide decline in scrap prices, this trade authority
sets forth the reasons for the
drop as being due to general uncer¬
tainty in the business outlook, increased scrap imports, slow buying
by steelmakers and unseasonably warm weather in the East and
;

therefore,
business
going .to have its

test

1

The declines ranged from

management is
first

&

The State of Trade and

overtime

Management

"

r

in

COMMERCIAL

failures in the Pacific States fell

about

4% under the corresponding period of 1948.

According to the Federal Reserve Board's index, department store
sales in New York City for the weekly period to Jan. 1, 1949, ad¬
vanced by 8% from the same period last year. In the
preceding week
an advance
of 48%* was registered over the similar week of 1947.
For the four weeks ended Jan. 1, 1949, a rise of 6% was recorded over
that of last year and for the year to date volume increased by 4%.
>
*

The

Christmas

larsre increases shown for this week reflect in
fell

pre-Christmas
on
Thursday.

oart

the fact

that

5n

1948

on
Saturday and the week therefore included five days of heavy
shopping as compared with three days in 1947 when Christmas fell

40

in

Securities: Now
•

(letter of notification) 12,000 shares of
cumulative convertible preferred stock, series A
3

$25). Price,

working capital.

Albion

V

..:

part of the costs involved

Jan. 10 United Light &

American

Light

each

for

common

United Light common.
Steel

American

five

shares

&

31, 1948, filed $10,000,000 first mortgage bonds, se¬
ries C, due 1979.
Underwriter—Names to be determined
through competitive bidding. Probable bidders: Halsey,
Stuart & Co. Inc., The First Boston Corp., Salomon Bros.
& Hutzler, Lehman Bros., Kuhn, Loeb &
Co., Glore,

Pump Corp.

indebtedness and

retire

Argus, Inc., Ann Arbor, Mich.
1 filed 115,315 shares- ($10 par)

of

Co., Chicago.

New

York

Inc., and First Securities

Boards Corp. of Palestine,

(1/19)

an

filed

30

Corp. (1/19)
$50,000,000 consolidated mortgage

Biackmoors

5' <letter ;of

stock.

30-year

vert

per

share.

No underwriter.

Inc.,

31

(letter of
500,000

notes

plus

stock.

To

each

$1

be sold

of production notes at

underwriter.

general funds of company.

•

Mfg. Co., Inc., Brooklyn, N. Y.

(letter

26

notification)

of

cumulative convertible preferred

37,400
stock.

Cantor, Fitzgerald & Co., Inc., New York.
share. Working capital, etc.

shares of 500
Underwriter—
Price—$8 per

Edison Co. of New York,

Consolidated

Inc.

-

29

filed

$50,000,000 first and refunding

bonds, series E, due Jan. 1, 1979.
Underwriters—Names
be determined through competitive bidding.
Prob¬
able bidders: Halsey, Stuart & Co. Inc. and The First

to
.*

Proceeds

Boston Corp. (jointly);

—To pay $40,000,000 of short-term notes and reimburse
the treasury for outlays made to acquire property and

Capital City Boating Corp., Washington, D. C.
(letter of notification) 50,000 shares ($2 par) 6%
non-cumulative preferred stock.
Price, $3 per share.
Underwriter—Lawrence R. Shepherd & Co., Washing¬
ton, D. C. To operate company, purchase an excursion
.

invest in the securities

amusement

of other

for construction. Bids

Morgan Stanley & Co.

tentatively expected to be opened

Jan. 25.

transportation

•

Consumers

companies.
Jan.

ital

Co.

Gas

of

Georgia,

Inc.,

5

Albany,

and to

additional

For

retire all

$200,000 7% bonds.
No
equipment, working cap¬

part of outstanding

or

•

258,675 shares ($10 par) com¬
Tom G. Taylor & Co., Mis¬

I?

Exchange

.

Cribben

•

6

stock

&

itive

bidding.

Probable

24, at Room 2401, 61 Broadway, New York.

•

KoolVent

Aluminum

Awning Corp. of Virginia,

Washington, D. C.
(letter of notification) 38,500 shares of capital
(par$l). Price par. No underwriter. For business
expansion.
jv
••'
5

Jan.

stock

Michigan Public Service Co., Traverse City,
Michigan

Jan.

7

(letter of notification)

(par 20c).

Allyn & Co., Inc., Chicago.' For construction and to re¬
imburse treasury for construction expenses.
Mid-States

14

filed

bank loans.

5 filed

to




Offices in other Principal Cities

r

98,750 shares

field, Lax & Co., Inc.

Proceeds—Of the proceeds, it is

Hissu

BOt*

dollar,

or

at

CO
de&
Voutv

oj

a

T.

Mer

BROKERS

Ltd., Toronto, Canada

$100,000

writer—James

Private Wires

(1/17-18)

Equipment Co.

($3 par) 7% cumulative con¬
vertible callable preferred stock.
Underwriter—Green¬
Jan.

Proceeds to selling stockholder.

Mines

(convertible into
to

18,000 shares of common

(no par).
Price $16,375 per share; (no par).
Underwriters—Cray, McFawn & Co., Detroit and A. C.
stock

notification) 2,000 shares of common
Price, $2.25 per share.
Underwriter—

(letter of

Erndale
Dec.

Halsey, Stuart & Co.

bidders:

Sexton

Reynolds & Co.

Chicago

■(1/24)

$3,500,000 first mortgage bonds, due 1978.

Emery Air Freight Corp., New York

Jan.

Pittsburgh

Corp.

Building

Jersey Central Power & Light Co.

>

Co., Chicago, III.
Jan. 7
(letter of notification) 1,500 shares ($5 par)
common.
Price, at market.
Underwriter—Swift, Henke
& Co., Chicago.

Boston'

*

—

Georgia
(letter of notification)

underwriter.

New York

;

(1/18)
Dec. 30 filed 82,500 shares ($10 par) common stock to
be offered for sale by five selling stockholders.
Under¬
writer—Central Republic
Co. of Chicago will > under¬
write all but 41,500 shares of the offering.
Insurance

mortgage

•

or

(by amendment)
Underwriter

stock.

'

soula, Mont. Price—$10 per share. Proceeds—To erect
and operate a bleached sulphate pulp mill with a 200ton per clay capacity.
.,
'

•

(1/25) VDec.

Jan. 4

boat and

Nov. 23
mon

-

Poison, Mont,

Jan.

Ltd., Montreal, Canada
Aug. 16 filed 200,000 shares of capital stock.
Price—
50 cents per share in Canadian Currency.
Underwriter
—P. E. Frechette.
Proceeds—For drilling operations.
Coleraine Asbestos Co.

with

.....

*

:

Idaho-Montana Pulp & Paper Co.,

Inc.; Harriman Ripley & Co.; Glore, Forgan & Co.; Mer¬
rill Lynch, Pierce, Fenner & Beane; The First Boston
Corp., Salomon Bros. & Hutzler; Otis & Co. Proceeds—
For construction or improvement of new facilities and
betterments of existing facilities.
Bids—Bids for pur¬
chase of bonds will' be received up to 11:30 a.m. (EST),

Clarostat

price of $1. No
For exploration, development and equip-

ment.

(letter of notification) 2,200-shares; Of Class A
stock, ($12.50 par) and 2,200 shares of Class B

A

Aug.

unit

a

Sons, Baltimore, Md.

&

rett

C.

For

Fairfield,

common

a

Humphryes Manufacturing Co., Mansfield, O.
Dec. 20 (letter of notification) 4,500 shares .($10 par)
stock.
Price—$22 per share. Underwriter—Robert Gar¬

($25c par);: To be sold in units of, one share of
and one share of Class B at $15 per unit.

notification) $25,000•<of production
shares of common, non-assessable

in units of 20 shares of

Proceeds—To develop, exploit and
television innovation.
;/
: j .
share.

per

distribute

Un¬
York.

Cantor, Fitzgerald & Co., Inc., New

Underwriters—Names to be determined through compet¬

Class

Idaho
Dec.

operations.

Underwriter—Emory S. Warren & Co., Washington, D.

Mining Co., Tonopah, Nev.
Oct. 8 (letter of notification) 1,500,000 shares (5c par)
common stock.
Price—20 cents per share.
Underwriter
—Batkin & Co., New York.
To repair and renovate mine
of company and to exercise option to purchase processing
mill and move and erect such mill on the company's
property and for working capital.
Mines,

—

Dec. 22 filed

Bradshaw

Silver

Price—$3

(1/24-27)1

160,000 shares ($1 par) class A stock.

Nov. 3 filed

derwriter

Inc., L. I. City, N. Y.

common

a

Bundy Lead &

Hotelevision,

,

Co., Salt Lake City

To finance drilling

V

mining properties.

common

private operation with indebtedness in form of
a corporation with only
long term farm mortgage.

•

& Oil

Gas

/ Citizens Credit Corp., Washington, D. C.

Jan. -3

To con¬

mortgage and other loans into
one

Utah

(letter

underwriter.

No

Plantation, Inc., Marion, Ala.
notification) 365 shares of common

Price—$100

-

of notification)- 250,000 shares of non¬
assessable (no par) capital stock.
To be sold by the
Utah State Securities Commission at 25 cents per share.
3

Jan.

Y. (1/18)1

(letter of notification) 100,000 shares of capital
stock.
Price—$1 per share.
Underwriter—Charles W.
Warshoff & Co., Newark, N. J.
For development of

outstanding

Central

SJeeJ

of manufacturing facilities,

Horwood Lake Gold Mines Corp., N.

National Bank, Boston, the

-

common

27

Dec.

foregoing

the

on

of

provement and expansion
Offering postponed.

for

short-term notes payable to First
proceeds of which were used
for the acquisition of property, construction, completion
and extension of facilities, and other lawful purposes.
reduce

•
•

subscribe

issue.

sinking fund bonds, series K, due 1979. Underwriters—
Kuhn, Loeb & Co. and Smith, Barney & Co. Proceeds—
For construction costs of corporation and its subsidiaries.

Jan.

to

subject to the fore¬

in the solicitation of subscriptions for the proposed
Proceeds-r-The net proceeds are to be used to

ager

®

Bethlehem

Dec.

shares

Company proposes to enter into a contract with
investment banker or security dealer to act as man¬

.

Expected after Jan. 19 depending on

market conditions.

holders in the ratio of one share of

period.

:V'.:
Dec. 30 filed 627,960^81131*65 of common stock (no par).
Underwriters—Kuhn, Loeb& Co. and Smith, Barney
& Co.
Proceeds—For construction costs of corporation
and its subsidiaries.

(no par) to be offered common stock¬
preferred for each 2G
stock held. Price—By amendment.
Underwriter—A. G. Becker & Co. will acquire the un¬
subscribed shares. Proceeds—To be used in part for im¬

preferred stock

basis.
Underwriting—
Stock will not be underwritten.
Any shares not sub¬
scribed for by stockholders will be disposed of in a man¬
ner to be determined after the close of the subscription

stockholders

Corp.

and

filed

29

.

City r

Steel

stock;

common

stockholder of the applicant may desire to purchase.
England Public Service Co., owner of 77.8% of
presently outstanding common stock, has waived its preemptive right to subscribe' for 232,076 of the 303,330
shares of common stock to be issued, on condition that
such shares be made available for subscription by all

convertible

Bethlehem

June

any

filed

4

of

share

Chemical Corp., New York, N. Y.
59,579 shares of cumulative convertible

Heyden

stock.

common

New

57,144 shares of 5% cumulative ($21 par)
preferred stock and 57,144 shares (no par)
comomn A stock, to be sold in units of eight shares of
each class at $169 per unit. No underwriting. Proceeds
•—To buy equipment and set up plant ready for operation.

Jan.

par)

going rights and subject to allocation, the right to sub¬
scribe for any number of shares of common stock which

Proceeds—For working capital.

Badid Insulating

($10

series, * right

3.50%

preferred,

one

pany's ($1 par) common stock on or before Dec. 31, 1950.
Co.,

shares

303,330

for

scribe

purchased company will issue a purchase warrant en¬
titling the holder to buy 80/100 of a share of the com¬
&

balance for related purposes.

for each share of 6% preferred, right to sub¬
one share
of common; for each two shares

common;

5V2% cumulative
Offering — To be offered
Initially for sale to stockholders at the rate of one pre¬
ferred stock and purchase warrant for each S1/* shares
of common stock held. *
With each share of preferred
convertible preferred stock,

Underwriters—Leason

ceeds—$600,000 to be used for spectator

mately 30 days on the following basis: For each two
shares of common, right to subscribe for one share of

definite.

Nov.

filed

1

Underwriter—None. Pro¬
grandstand and

Price—$100 per share.

$100).

Offering—Company proposes to offer the stock to its
stockholders for subscription for a period of approxi¬

Price—$8 per share. Proceeds
for working capital.
In¬

Sills, Minton & Co., Inc.

Pa.
June 25 filed 5,000 shares of class B common stock (par

Central Maine Power Co.
Nov.

Inc.,

Enterprises,

Sports

Pittsburgh,

Kidder, Peabody & Co.,
Pierce, Finner
Proceeds—For construction.

(jointly.)

Beane

(letter

'

Smith, Barney & Co., and Merrill Lynch,
&

27

Heidelberg

Forgan & Co., Blyth & Co., Inc.,

Sept. 21 filed 200,000 shares ($2 par) convertible class A
itock. Underwriters—Herrick, Waddell & Reed, Inc. and
—To

(Minn.) Gas Co.
of notification) $14,000 first mortgage
sinking fund 5% bonds, due Aug. 1, 1960. Underwriter—•
Braun, Monroe & Co., Milwaukee, Wis.
For working
capital.
Hastings

Dec.

Dec.

of

shares

capital.

Service Co.

Illinois Public

Central

'

;

the SEC has decided the transaction was
the registration requirements of the

as

of

Harwill, Inc., St. Charles, Mich.
(letter of notification) 125,000 shares of common
stock (par $1).
Price, par. Underwriter — Charles EL
Bailey & Co., Detroit.
To pay current liabilities, pur¬
chase property, building and equipment and for working

from

exempt

.

Oct. 27

Securities Act of 1933.

American

of

paid,

amount

not

Light common ($25 par). Underwriter—
None.
Offering—The shares will be offered at $12 per
share to holders of United Light common of record at
the close of business Jan. 31, on the basis of one share
of

,

846,400
securi¬
to 135
persons. This is an offer of recession, permitting original
purchases to cancel their subscriptions and receive the

in a pro¬

Light & Traction Co., Chicago
Railways Co. filed 634.667

American

•

C.,;

:

•

General Plywood Corp.
Jan. 4 filed voting trust certificates for 895,000 shares
common stock (par 50c).
•

$846,400 5%, 10-year debentures and
($! par) common stock. Offering—These
ties were sold by the company last September

pulp and paper mill.

to improve and expand a

gram

:

For development construction and pay

bank loans.

Dec. 23 filed

ing fund debentures. Underwriter—Paine, Webber, Jack¬
son & Curtis.
Proceeds—To pay off a long-term obliga¬
tion and to pay for

stock.

(letter of notification) 150,000 shares of common
Price—$2. Underwriter—John R. Marple & Co.,

Westfield, N. J.

shares

(1/24-26)
$5,400,000 15-year 4*4% convertible sink¬

filed

5

Co.

Corp., New York, N. Y.

Cenco

Securities, Inc.,

Co.

Board

Box

American
Jan.

and Madison Telephone

.

preferred shares (par

Price, par. Underwriter—Berrien
Benton Harbor, Mich.
$100).

Nov. 29

46,250 shares of common
Underwriter — Interstate
Securities Corp., Charlotte, N. C. To acquire all of the
capital stock of Weaverville Electric & Telephone Co.
stock.

Inc., Denver, Colo.

Front Range Mines,

Ashevllle,

(letter of notification)
Price $1.75 per share.

7

Jan.

,

Gas Light Co.

(Mich.)

(letter of notification) 500

Dec. 31

ISSUE

PREVIOUS

SINCE

Carolina Mountain Telephone Co.,

•

North Carolina

5V2%

(par
Underwriter—Otis & Co., Cleveland.

par.

To be added to

•

Akron, Ohio

Inc.,

Discount

&

Investment

Aid

Jan.

ADDITIONS

INDICATES

•

Thursday, January 13, 1949

& FINANCIAL CHRONICLE

COMMERCIAL

THE

(196)

6%' first mortgage bonds
shares at rate of four shares

5-year

common

price of 25 cents

per

share).

Under¬

De Witt Co., New York.
Price—95.
off, in part or in full, outstanding in¬
debtedness and for general working capital.

Proceeds—To pay

an d

■DIALERS;/!/
UNDERWRITERS

bosto>

\S6$

Stoc

Boston

York

the
k

£*c

hanteS
CvAc

*go

Volume 169

Number

4768

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE
(197)

stock

ital

NEW ISSUE CALENDAR

Rohm & Haas

Co., 3:30

———Preferred

p.m.

(EST)—

'

'

'

'

' ".

'

,

Jan/3

Corp

March

Bonds and Com.

•

N. C. & St. Louis RR.
(Noon, EST)—Eq. Tr. Ctfs.
"

*

,

,

,

J

Co.—

Debentures

Ry..

to

an

indebtedness of the
additional

working capital.
Miller
20

Manufacturing Co.,

(letter

common.

of

notification)

Price—$4.25

per

Detroit,
2,260

share.

A. McDowell & Co.

Mississippi

Power &

Mich;

shares

($1

par)

ceeds—To
Jan. 6.
•

Underwriter—George

Light Co.

in

as

7%

—

(1/24)
mortgage bonds, series H,

Names

to

be

determined

stock.

($100 par) cumulative pre¬
Underwriter—Allen & Co., New York.
construction

and

to

increase

general

•

Jan.

Rochester Consolidated
Mines,
6
(letter of notification) 100,000

15.

To

stock.

Price—50c per share.

develop claims..

Jan.

4

(letter

non-assessable

writer.

For

of

notification)

shares

(par $1).
operating capital.

40,838

Price,

Wash.

common

capital

No

under¬

par.

•

Mountain Mines
Co., Salt Lake City, Utah
7 (letter of
notification) 200,000 shares of common
Price—50c per share.
No underwriter.
For
operating expenses and additional equipment,
y
Jan.

stock.

•

New

Electric Razor
Corp., Baltimore, Md.
(letter of notification) 5,000 shares of
Class A
common stock ($1
par). Price, $10 per share. No under¬

Jan.

3

writer.

For the manufacture of
electric

chase of
•

razors

equipment.

and pur¬

New

Stages, Inc., New York
Jan. 7 (letter of
notification) 293 shares of voting profitparticipating stock (par $10). Price,
par/Underwriting—
None.
This is an offer of
recesion, the shares having
been sold Dec. 2, 1948, without a
filing with SEC.
Ocean Downs
Racing Association, Inc.,
Baltimore, Md. (1/13-19)
Dec. 16 filed $600,000 6% income
debentures due Jan. 1,
1974, and 60,000 shares (500 par) common.
Offering—To
be offered in units of
$100 of debentures and 10 shares
of stock. Underwriters—Harrison &
Co.; Bioren & Co.,
Philadelphia; C. T. Williams & Co., Inc.,

Woodcock, McLear & Co., Philadelphia.
a
racing plant.

Baltimore, and

construct
•

Ohio

Proceeds—To

Galvanizing & Manufacturing

Ohio

par)
No underwriter.

A:

Power Co., Nyack, N. Y.
$7,500,000 first mortgage bonds, series C,
Underwriting—Names will be determined by
competitive bidding.
Probable bidders: Halsey, Stuart
& Co. Inc., Harriman
Ripley & Co., Merrill Lynch, Pierce,
Fenner & Beane and
Kidder, Peabody & Co. (jointly).
due

filed

1978.

Rohm & Haas
Dec.

2

filed

Jan. 3 (letter of notification) 2,500 shares




Co., Philadelphia, Pa.

15,816

shares of

4%

of

Niles

preferred

cumulative

(1/17)

$100;

common

common

offer of recision, the stock

an

27, 1948.,

$30

having

No underwriting.
;/.■

Work¬

$1.12 V2 and 10,000 shares at $1 per share.
& Vaden, Inc.,
Raleigh, N. C.
working capital.

Underwriter—

Griffin

For

additional
(

Mrs.

Tucker's

Foods,

Inc.,

Sherman, Texas

~
Nov. 26 filed 200,000 shares of common stock
(par $2.50)
of which 80,000 will be sold
by the company and 120,000

shares by certain stockholders.
Underwriter—Rauscher,
Pierce & Co., Inc.,
Dallas, Texas.

Proceeds—For general

corporate purposes.
Union
Dec.

30

Light, Heat & Power Co., Cincinnati

filed

bidding.

$5,000,000
to

be

Probable

W. E. Hutton

'mortgage

\

:

& Co.

bonds

first

mortgage

bonds.

Under¬

determined

through competitive
Halsey, Stuart & Co. Inc.;

bidders:

Proceeds—For prepayment of first

owned

by

parent,

Cincinnati

Co., and for construction.

.

Gas

&
>

,

•

United States Plywood
Corp.,
Jan. 10 (letter of notification) 14,000

writers—Names

to

Probable

be

determined

through competitive
Kuhn, Loeb & Co.;
Forgan & Co. (jointly);

bidders include

Lehman

Brothers, and Glore,
Kidder, Peabody & Co., and Drexel & Co. (jointly); A. G.
Becker & Co., and Union Securities
Corp. (jointly).; An

additional 5,410 shares of
preferred and 67,627 shares of
common are included in the
registration but they are not
being offered at this time because of a
pending suit for
return of these shares under the
Trading with the Enemy
Act. Registration statement effective
Dec.. 13. Bids—Bids
for purchase of stocks will be
received at Department

of Justice, Office of Alien
Property, 120 Broadway, New
York, up to 3:30 p.m. (EST) Jan. 17.

St. Anthony Mines
Ltd., Toronto, Can.
Aug. 6 filed 1,088,843 common shares
(par $1). Price,
40 cents per share.
Underwriter—Old Colony Securities
Ltd. of Toronto.
Proceeds for gold mining
operations
Smith

(C. D.) Co., Grand Junction, Colo.
(letter of notification) 1,500 shares
($50 par)
51/2% cumulative preferred stock.
Price—$51 per share.
Nov.

22

Underwriter—Peters, Writer

& Christensen, Inc., Den¬
For additional working capital and to reduce
amount of short-term bank loans.
\

ver,

Colo.

•

South

Gate
(Calif.) Newspaper Co.
(letter of notification) 1,000 shares of common
(par $100) and 600 shares of preferred (par $100).
Price, $100 per share. No underwriter. For the pur¬
Jan.

5

stock

chase

of

South

equipment

and

Gate
for

Newspapers and
operating capital.

for

purchase

of

Southern Alberta Oil & Gas
Co., Pullman, Wash.
(letter of notification) 300,000 shares of
capital
stock. Price, 25 cents
per share.
No underwriter.
For
Jan. 5

development of oil

and

gas land.

New York

.

shares of common
be offered to employees of company at 10%
price, payment to be made by monthly
payroll deductions.
Estimated subscription

stock..

below

To

market

price, $21.25

share.

per

Working capital.

United States Television
Mfg. Corp., New York
23
(letter of notification)
1,000 shares common

Dec.

(par 500).
E.

capital.

Price—$2;25 per share., Underwriter—
& Co.> Inc., New York.
Working

Burnside

.'

'•.

•'•

'•//

United Utilities & Specialty
Corp.
Oct. 15 (by amendment) 125,000 shares of common
stock
(par $1) and 33,000 stock purchase warrants(to be sold
to underwriter at 10 cents
each).

Und(erwriters-4-George

R.

Gooley & Co., Inc., Albany, N. Y., and others to be
by amendment,
Price, market.
Proceeds—To
repay bqnk loans, working capital, etc.
named

Upper Peninsula Power Co.
•
Sept. 28 filed 200,000 shares of common stock (par $9).
Underwriters
Names to be determined
through com¬
petitive bidding. Probable bidders include Kidder, Pea¬
body & Co., Merrill Lynch, Pierce, Fenner & Beane and
Paine, Webber, Jackson & Curtis (jointly). ProceedsWill go to selling stockholders. Consolidated Electric
&
—

preferred

stock, series "A." (par $100) and 197,697 shares of com¬
mon (par $20).
Offering being proposed by U. S. Attor¬
ney General, Office of Alien
Property Custodian. Under¬

•

Co.,

non-convert¬

common

Willis

10c

Rockland Light &

..

Dec/ 30

bidding.

Petroleun^ Co., Inc., Seattle,

stockholders.

Taylor Food Co., Raleigh, N. C.
17 (letter of
notification) 17,000 shares ($1 par)
stock, of which 7,000 shares would be sold at

Dec.

stock

Reno, Nev.
shares

Proceeds—For construction and the retirement
of bank

Morris

stock

15 may be offered to other
persons.

ing capital.

Electric

borrowings.

•

This is

writers—Names

(1/18)

preferred

Working capital.

Price—Preferred,

share.

per

non-

preference shares,
Shares not sub-

Supplee-Biddle Co., Philadelphia
notification) 211 shares of

Indiana, Inc.

one

Co.

about Feb.

common

ible preference stock (no par) and 211
shares of
stock
(no par).

Underwriting—
of equipment

(parent).

stock to be sold to West Penn Electric Co.
Probable bidders for bonds:
Halsey, Stuart &
Inc.; Merrill Lynch, Pierce Fenner & Beane and
Hallgarten & Co. (jointly); Harriman
Ripley & Co. and
Lazard Freres
(jointly); Blyth & Co., Inc. and Goldman,
Sachs & Co.
(jointly); Kidder, Peabody & Co.; Glore,
Forgan & Co.; Lehman Brothers; Salomon Bros. & Hutzler.
Bids for the bonds expected to be
opened on or

•

Proceeds—For purchase

of common
.

by

Jan. 6 (letter of

working

share of class C given as a bonus
with each 4 shares of
class B purchased.
Proceeds—To pay balance of current

(no par).

Monongahela Power Co. (2/15)
10 filed $6,000,000
30-year first mortgage bonds to
sold through competitive
bidding and 67,000 shares

then

"scribed for by Feb.
No underwriting.

.

No

Jan.

and

of

Offered for sub¬

par, first by holders of first
of record Jan.
15; then by holders of

ex¬

liabilities and working capital.

Co., < Inc. and Prescott,
Hawley, Shepard & Co., Inc. Proceeds—Stock
being sold
by certain stockholders. Offering indefinitely
postponed.

be

($100 par)

offered

Public Service Co. of New
Mexico
filed 15,000 shares

28

common

stock

be

Renaissance Films Distribution,
Inc.,
Montreal, Que.
<
Oct. 29 filed 40,000 shares
(par $25) 5% cumulative
convertible class B preferred stock and
10,000 shares of
C stock (no
par). Underwriting—None. Offering—Class
B preferred will be offered
at $25 per share with

Monarch Machine Tool Co.
common

convertible preferred stock
(par $100).

.

Lumber

Sept. 13 filed 26,000 shares of
Underwriters—F. Eberstadt &

To

funds.

Expected about Jan. 18.

3

'

Supplee-Biddle Co., Philadelphia
Jan.
6
(letter of notification)
2,725 shares

Inc., Wash., D. C.

496 shares

stock.

Underwriters

Proceeds—For

Co., Minneapolis, Minn.
(letter of notification) $52,000 debentures.
underwriter. To reduce bank note
indebtedness.

•

preferred

stock.

common

•

been sold about Dec.

1979.

ferred

finance in part
company's construction pro¬
other corporate purposes.
Statement effective

Monarch

Jan.

(letter of notification)

working capital.

Dec.

(1/18)
Nov. 30 filed $7,500,000 first
mortgage bonds, due 1979.
Underwriters—Names to be determined
through com¬
petitive bidding. Probable bidders/
Halsey, Stuart & Co.
Inc.; The First Boston Corp.; Glore, Forgan &
Co.; Equit¬
able Securities Corp. and Shields
& Co. (jointly). Pro¬
gram and

$3

through competitive bidding. Probable bidders:
Blyth
& Co., Inc.;
Halsey, Stuart & Co. Inc.; The First Boston
Corp.; Harriman Ripley & Co.; Glore,
Forgan & Co.;
Merrill Lynch, Pierce, Fenner &
Beane; Kidder, Peabody & Co., and White, Weld & Co.
(jointly). Proceeds—
For construction costs.
Expected about Jan. 24.

company's wholly owned subsidiary, Modern Atlas
Corp.
The balance will be used for
expansion and

Dec.

at

Under¬

scription at

Public Service Co. of
Dec. 21 filed
$12,000,000 first

Bonds

retire

share.

Co., Dallas, Tex.

Jan.

ments.

per

stockholder

a

10 per

Gas

outstanding stock of
3, on basis of one new share for each
10
shares held, plus the
privilege of subscribing for addi¬
tional shares not
purchased by other stockholders. Under¬
writing—None. Proceeds—For construction
and better¬
record

(100 par)
share;
accounts; 27,500

trade
of

Southern Indiana will

16 filed
107,430 shares ($1 par)
Offering—To be made to holders of

7

due

intention

to

behalf

10,000 options at

By amendment.

——Stocks

February 15, 1949

present

on

Union

Dec.

W.

Pitney-Bowes,

and

the

offered

31,500 shares
public at $3

pro¬

and

property additions and betterments.

Southern

capital

com¬

Smith, Barney & Co. Price, by
Proceeds—Commonwealth will use its
—

ceeds to reduce
indebtedness
its proceeds for

Playboy Motor Car Corp.,
Tonawanda, N. Y.
Dec. 29 filed
1,000,000 Shares of class A 20-cent prefer¬
ential dividend series
($3 par) common stock and 1,000,000 shares of class B
(50 par) com. stock. Offering—To
be offered in units of one
share each.

Bonds

Co.—

to

capital.

January 25, 1949

Monongahela Power

offered

sold

general

————Bonds

January 27, 1949
Maywood Chemical Works (N. J.)

be

be

Underwriter

use

Inc., Stamford, Conn.
(letter of notification) 10,000 shares of
common
stock, as may be subscribed under the
employees' stock
purchase plan. No underwriter. For

Eq. Tr. Ctfs.

Consolidated Edison Co. of N.
Y., Inc.^_

to

600,000

benefit of the

working

of

filed

amendment.

Ramsey,

shares

20'

pany.

ex¬

Expansion of sales territory.
Bottling Co. of Washington, D. C.

to

and

For

.

®

(EST)„—Bonds

Public Service Co. of
Ind., Inc

29,000

Indiana

Gas & Electric Co.
(1/17)1
shares (no par) common stock
by the Commonwealth & Southern
Corp. and 75,000 additional shares of stock for
the

(25'c par)

Underwriter—Charles

par.

Personal Industrial
Bankers,

Jan.

—

notification)

41

owned

change share-for-share for 6% preferred stock
(par
$100) of Standard Loan Service, Inc. No
underwriter.

Class A Stock

Pacific

be

cumulative

;

Jersey Central Power & Light Co.
Northern

Southern

Oct.

..

1.

Jan. 6

y

Hotelevision Inc

"

.

writer—Willis E. Burnside & Co.,
Inc., New York.
For
working capital and payment of taxes.
Expected about

Preferred

a.m.

to

share

per

January 19, 1949

11:30

shares

shares

——Bonds

January 24, 1949

stock

40,000

(Noon, EST)—_—Eq. Tr. Ctfs.

Board

of

(letter of notification)

common

Common

Public Service Co. of N. M

Box

(letter

Dec. 21

Stock

Mississippi Power & Light Co

American

Corp.,

Pepsi-Cola

Horwood Lake Gold Mines Corp

Bethlehem Steel Corp

'

*

•

Price, par. No underwriter.
development of mining leases,

(par $10). Price,
Warshoff & Co., Newark.

January 18, 1949

Pennsylvania RR.

and

stock

Common

t

Insurance Exchange Bldg.

stock.

N. J.

—Stocks

Southern Indiana Gas & Electric Co
'.''

:

■

capital and for purchase of equipment.
Paper Associated Products

January 17, 1949
Mid-States Equipment Co.-

6 "

ploration

Debs, and Com.

V

.

For cap¬

Mining Co., Inc., Seattle, Wash.
(letter of notification) 50,000 shares

common

Assn., Inc

No underwriter.

par.

Pacific

Jan.

Ocean Downs Racing

Price,

structure./

•

January 13, 1949

(par $100).

Gas Co. and Middle West Corp. will sell

120,000 shares
34,000 shares, respectively; Copper Range Co., 34,0(10
owners 11,200 shares.

and

shares and several individual

Waukesha
Dec.

(Wis.)

Motor Co.

;

filed

7

200,000 shares of common stock ($5 par).
Offering—Offered to stockholders of record January 3
of

at rate

one

new

for each

two shares

held at $10 per

share.

Rights expire Jan. 24. Underwriting—Company
will pay fees to selected investment dealers for
securing
the exercise of subscription warrants. Robert W. Baird
& Co

Inc. will be dealer-manager.

Proceeds—To carry

possible increase of accounts receivable and inventories
and to provide for plant improvement.
•

Western

Oil

Fields,

Inc.,

Denver, Colo.

(letter of notification) 1,000,000 shares (lc par)
common.
Price, 10 cents per share.
Underwriter —

Jan

5

John G. Perry

& Co., Inc., Denver, Colo.
acquire additional properties.

and

To drill

a

well

Wichman

Philippine Mindanao Development
Cebu City, Philippine Islands
Jan 5 filed 2,000,000 shares of voting capital stock, one
centavo par value. Price—25 cents per share (U. S. cur¬
rency) Underwriter—F. T. Andrews & Co. Proceeds—
To provide funds for plant construction, diamond drill¬
ing, exploration and repayment of loans.
Co.,

Wiegand

(Edwin L.)

Co., Pittsburgh

200,000 shares (no par) common stock.
Underwriter—Hemphill, Noyes & Co., New York.
Price,
by amendment.
Proceeds—Will go to selling stockhold¬
ers.
Offering postponed.
Sept.

28

filed

(Continued

on

page

42)

.
„

»

42

THE

(198)

COMMERCIAL

•

(Continued from page 41)

&

FINANCIAL,: CHRONICLE

Thursday/ January 13, 1949
■

Mississippi River Fuel Corp. ;

Pennsylvania 'RR.r (I/ISJ7.
11 corporation is negotiating for. sale of approxi¬ V33ids for Hie purchase of $7,965,000 equipment trust cer^
mately $20,900,000 first mortgage piper line smking'furid / ^tificates,' series V, related -Nov, - f; 1948, -and "due in 1$
Annual instalments of $531,000' from NovV' 1,
bonds.
Sale may be negotiated through Union Securities
1949-1963^
will be received
Corp.
Reported Halsey, Stuart & Co, Inc; has formed
by/company at Room 1811, Broad Street
■Station, »Rhiladetphia,"up^ toiiddri (EST) J an. ■ 18. Prob-i
group in event issue will be sold competitively;,
able bidders: Halsey, Stuart & Co.
The.; The First Boston
•
Nashville Chattanooga & St. Louis RR; (1/19) rCorp.; Harrimanf Ripley "&• Co/ and Lehman Brothers

'

Jan.

'

Delaware Power & Light Co./

•:,

Jan.

5

reported

within the

r

has under consideration sale
of approximately 232,520

company

months

few

next

shares of

common stock, to be first offered for subscrip¬
stockholders ill the ratio of one additional share
for each five shares now held.
Probable bidders: The

First Boston

(jointly); Morgan

Corp. and Blyth & Co.

•

(J. H.)

tion whereby
to

•

resolu¬

•

Kentucky Utilities Co.

Northern

Jan.

12

Pacific

Railway

Proceeds for construction.

Corp.; Union Securities Corp.,
Lynch, Pierce, Fenner & Beane (jointly).

Merrill

and

May wood Chemical Works

(N. J.)

(1/27)

®

1948,

about

of

hour,
will

but

and

with

shows

be

quality

shown

for

than

more

no

television,
such

of

that

hook-up, three times
each

show

will

three hours

tude

be

in length.

j

the latest and

see

finest entertainment

it is

as

This

now

opening

But

if

premiere,

or

v

would

change

homes,

the* whole

that

form

entertainment.
It would

;

this

vision

stacles

theatres and concert halls will be
the

nucleus

There will be

A-.i

tainment

beyond
description.
There will

or

receiving

more,

taneously
the

be

and

offer—the

best

finest

in

to
of

serve

the

as

greatest

entertainment

mass

the world
knows, with our art
ready to lend its experience and

of

talents to

as

receive,

simul¬

in

return,

the-tremen¬

motion

will
a

Carnegie

.

be

Hall,

people

•v

will

Out

in

Washington

music-lover

Toscanini

ily

and'

Rubenstein

or

as

see

read¬

He

enjoy

may

opera.

;

*

a

rent liabilities totaled

Oak -Mfg.

-

first

nighters

claim such
Our
tain
est

at

a

a

in

new

genius

same

New

time

York

culture

ac¬

will

the

at

newest-talent

same




time.

-

15

factories

exercised

its

on

option to

for approximately

pany,

to the

or
abroad,
by the metropoli¬

the

Co., with

$200,-

000. This purchase, it was stated,
will effect an estimated saving

at' home

wiR be shared

$1,862,775.

F. Beswey,, President of the eom-*

at¬

tan resident and the Main Streeter

alike and

Dec.

unity because the lat¬
* or

cur¬

purchase the Crystal Lake plant
it has been leasing from Edward

the

theatre production.

country's

discovered
s.~-

the

and

in Chicago and Crystal Lake

may wait for months or years to
enjoy a Broadway stage success,
so

'$9,726,867

whole

Patrons of the theatre, who now

will, do

to

nually
tion.
,

company
m

of $36,900

rental and

an¬

amortiza¬

.

*

s

year

•

*

ended Sept. 30,

Worcester

(Mass.) Gas Light Coir
i
expected company to issue',$2,150,000
20-year
mortgage bonds, in r.ear future, to be sold at
competitive
Jan./6

sale.

Proceeds would be used' to refund

$1,000,000 bonds$1,000,000 bank loans and the -balance to replace
funds borrowed for company's extension
program." Prob-i
able bidders include Halsey, Stuart & Co.
Inc.:
retire

not

entire

for

ary

closed

fiscal

just

$2,011,845, or $3.39
common
share, while for

the

ended

year

consolidated

net

Sept.

earnings

$2,605,192,

were

30,

1947
were

$4.38

or

There

.

to

seem

be

school

two

of

thought on the market for
equity securities these days. On<

made up

per

Wilson Jones

orders

the

on

regular

exchanges, probably will tell
that

business

that- the
low

is

not

ebb.

so

But

this

is

not

so

with

securities

and

who make

business

a

of

shares

'

per

income

taxes.

thing of

ties

after

In

on

having

been

disposed
third

a

element

tended

that

to

money

provision of

791,000

Net sales

were

$2,760,000,

to

the

Their

31r

1948,

.

and

charges

and

Federal

i publichas

after

per

as

against
share

per

common

$896,714,/, or;'.
on-

stock

263,496

shares

forr the

preceding

-

of

fiscal year. Net sales for the 1948
were

year

417

for

1947.

higher

compared
the

year

■*";

contention

is

that

people to

a

real selling

their

own

distribution

stock to

than

a

total

822,000 shares of

stocks for

the

1

and it appeared

got

enough

-f
of

one

"this

is

•••/

•

(

those interested

a

case

to

appears

of

as
a

much

wrath

bust."

the

been

too

,.'•

Issues

in

as

if it had

-

River
Fuel
Co.,
just completed a piece, of

financing, • reportedly has

plans afoot involving the sale- of
$20,000,000. of new bonds and, if
the

Federal

Power

Commission*

construction plans, may
be seeking a
larger amount via
the

same

type

of

The currently
is

expected

to

security;

go

direct

to

their

common

'

funds for the retirement of
$15,- !

600,000

bank loans along with

m

funds for
Z

efforts, it

room

for

gument with. their premise.. "

ar¬
-

Proving Their Point

j; The;

-

in-

stitutional buyers and provides*'

f

of

later:

discussed issue

more

industrial-chemical firm,
results

5

v

<

■

Sight

equity

one

The

put

where

have

approves

v

account of three

appears, leave little

de¬

;;

/Mississippi

in

companies, two utilities and
an

the

satisfy their customer

New

go out

of

in

were

handful

a

mand.^

advice seriously

of

stock

only

been

you

;

firms

which

come

job.

f

%

75

most

but

share

$$.40

«.

-

sold,": and added, "here's a
real success that
brings down al¬

for this1 week has witnessed the

all

294,830 shares .of common stock,

that
.

well

rea¬

investors,

buy but that ydu must

ing

quar-

taxes, /was

$743,830, eoual to $2.52
on

that

As

Evidently they have been tak¬

$2,-

ended Aug,

net, income,

of

ease.

group which handled the distribu-^

it,

con¬

must be cultivated.

wait for

and do

ters-///;■ //
For the fiscal
year

dispose

of the heavy demand for

tion of the

pointed chiefly

are

institutional

can't

respec¬

tively, in the 1948 and 1947

278,479

who managed the
Kop¬
offering actually found them¬

.Some

:

•

■.

has

invest, that it is in¬

and

that they

$107,000 for Federal

and

in

seemingly
;;

long

of

that bonds offer insufficient

return

first

263,500 shares, after

income taxes.;

would

sequence

equi¬

new common

assured of success.

esti¬

the

third

a

on

selves in considerable "hot water"
their distributors as a con¬

field day what with two

a

short order and

294.830

$182 000, equal to 69 cents

share

common

the issue.

large issues of

$109,000, equal

outstanding,

that

took

block with comparative

The latter group has .had some¬

net income of

on

appeared
which

shares of Gulf States Utilities Co;

issue

share

it

with

the

customer.

provision of $67,000 for Fed¬

was

And

syndicate

Those

carry¬

ing their business direct to

son

cents

grbup; which brought

<

construction.

:

gone/

with SEC for
000 of

new

info

an

:

•

;

registration

issue of $6,000,-

mortgage bonds, plus

'•£ 67,000* "shares : of rhew
out

-

Meanwhile Monongabela Power

Co.,

stock.;'''v i./"

common1

'y:S£Ti

400,000 shares, of common stock of
/ Sale of these issues would pro-,
with $10,172,/ Koppers Co. found.its greatest dif¬ vide -the
companywith' funds

totalling $11,-

ended Aug. 31,

*

Corp., common, was likewise»
to announce quick oversub¬
scription of the issue.

pers

underwriters,

terested in equities for the

37

-

name.

able

the

second group the distributors of

Nov. 30,
to

well-known firm

a

Never Really Satisfied

Co., Chicago, and its

was

>

well had the '

/.'■

subsidiaries for the quarter ended

1948

you

good and
interest is at ?

public's

*

The consolidated

disposed of

was
so

the

Fuel

of brokers who execute

customers'

This

*

share

a

Another group
marketing 144shares of Mississippi River

share.
S&

$31

200

the

were

at

offering

com¬

year

of

advantage

of

Canadian subsidi¬

the

enough

preliminary
spade-work
been;
handled. .Here again, of
course,
the sponsors had the

Consoli¬

of the

get

<

Offering

within two hours

consolidated

fiscal year.

to

,

"

sales

for

being able

.the. stock.

$2,415,367

$29,118,944

and its

347,147,

.

During the

the

of

net

or

dated net earnings

net

amounted

his fellow American in New

as

York.

than

preceding

per

stock for the previous fiscal
year.
At Oct. 31,
1948, current assets

a

its

of

quarter of the preceding year the

stock and $1.54% per share on 618,120
shares of- class B
common

-

State,

" hear

can

be

him in Halls

see

$31,534,311

sales

net

(Continued from page 10)

probably 200 other cities.

volume

Consolidated

higher

earnings of $3.09per share on
369,978 shares of class A common

created.

great artist appears in

able to hear and
in

largest

products, in dollars and in nnitsy
-ever sold by it for civilian pur¬

eral

Illinois Brevities

variety and quality that an en¬
tirely new entertainment-seeking
When

the

mated

There will be programs of such

u

Sept. 39, 1948, the company

sold

television, and ready to

impart.
Together, they will cherish an¬
other
God-given
blessing
and
turn' it
to the good of peoples
everywhere.

pic¬
tures, operas, plays, sports, along
with current events of great im¬
port.,

public

ed

dous stimulus that television must

derived from
the arts can

programs

latest

ob¬

Pierce, Fenner & Beane; Union Securities

,

ports that during the year end¬

pany

over¬

/

i:.

■>

..

,<j

Corp.; The First Boston Cprp.; Blyth •& Co., Inc.-; Glore'
Forgan & Co.
;/;r.y:

//-

approximately

•

.

expansion, etc..-■ Probable bidders;

the

v-'l' *
•*
r
Outboard, Marine & Manu¬
facturing Co., Waukegan, re¬

per

medium

of

powers

already have ' been

continue

in enter¬

large circuits
numbering as many

theatres,
3,000

m,y

tele¬

trans¬

Meanwhile, motion pictures will

'

boom

a

long-distance

come.

of#a new and great

amusement network.

with large-screen

and

mission will be conquered.
We do know that
many

home, of course, but
profoundly
that
the

believe

are not prepared to say how
all the
technical problems

connected

t

ment for the
I

We

soon

to

w.;

total

: •..

of

$611,190.
.

poses.

:

•

This

j

.

Co.

to

$5,600,000, with current assets at $3,136,311 and current liabilities at

cation will be carried to extraor¬

might
of

?

you

for

common^ share
was about 19%

per

that

amounted

dinary levels.

better entertain¬

mean

gentlemen,

a

by.
enlightenment and edu¬

Public

some

tainment "in

giant,

of
—

to watch itself go

gadget should be
whereby the government
permit a toll for enter¬

found

television

and

must look squarely in the eye. For
television will enable the world

for New Yorkers to go to a Broad¬
way

combination

new

stage, screen
giant indeed.

be used

311,196, about 22% over the year
ended Sept. 30, 1947. Unfilled or¬
ders
at
Sept.. 30,
this
year,

to the multi¬
history of the
it, perhaps, while

convey

current

powering

for people to sit down in their
hometowns and

of

And the finest product of Hollywood will be part of this over-

event

an

will

a

time, some of
happening.

to

two

television,

screen

to

of

amounted

Power

company-has plans under consideration
$10,000,000 bonds,, the pro-*

preceding
year when the earnings were $2.32
per share.
Net sales totaled $5,-

it is

same

day, and 1

a

much of

as

course,

will

from

more

or

It will be

be

there

the

on

Large

an

scope

fine

they

week

a

half

reported

Electric

Co.,

income

net

provide

plan

.

$2.77
than

more

Governor

had a
which

outstanding.

(Continued from page 8)
matter

Woodward

Rockford,
$527,416,

and

Co.

Merrill Lynch,

Harris,

(jointly); Glore, Forgan & Co.; The First Boston Corp.;
Blyth & Co., Inc.
;•
■

Television—A New Impetus
To Motion Picture Industry

indebtedness

Halsey, Stuart & Co.Inc/ Equitable Securities Corp.;
Lehman Brothers and Salomon Bros. &
Hutzlejr (jointly);

$10,000,000 bonds, the proceeds to be used
for construction, etc.' Probable bidders: Halsey, Stuart &
Co. Inc.; Kidder, Peabody & Co. and
White, Weld & Co.

office of Alien

7

ceeds

of

sale

&

Wisconsin

•

Jan.

has plans under consideration

company

short-term

for sale, possibly in March, of

"Northern States Power Co. of Wis.

for

stocks, will be received up to 1:30 p.m. (EST) Jan. 27
Property, 120 Broadway, New York.
The company itself has formally agreed to submit a bid
of $847,500 for the stock.
at

(jointly); Salomon Bros. & Hutzler;
Inc.); Kidder, Peabody & Co. 4
".

Jan. 11 reported

the

.

•

„

Hall & Co.

Bids for the purchase of 6,930common shares (no par),
56,562% shares of participating preferred stock (no par)
and 8,081 shares of cumulative preferred stock (no par),
Constituting 23.10%, 29.28% and 32.85%, respectively, of

in
Proceeds from the bonds would retire

Pmbable bidders on bonds:
Halsey
Ind:f The First Boston Corp./Harriman'
Ripley & Co.; Kidder, Peabody & Co.
On preferred:
W. C. Langley & Co.; Kidder,
Peabody & Co.; Stone &
Webster
Securities' .Corp. ' and'
White, Weld & Co.
.(jointly); Lehman Brothers. •'■/- / ";••/;
Stuart

1964.
Probable bidders: Halsey,
Inc.; Harriman Ripley & Co. and Lehman

Co.

Stuart &
Brothers

5

15,

Si

issuej
nev}

mortgage/bonds and $5,000,000

company's

company

March

to

expected by the NeW York R.

.

1950,

bonds.

new

i

j

'of recapitalization.

(2/24)

Securities

tively $10,000,000

reported

y.

fyy 7,

funds required for:expansion.
Proceeds from preferrec}
stock would be used by, company to
carry out its

Corp.fr.

Probable bidders include: Halsey, Stuart & Co. Inc.; The
First Boston Corp.; Harriman Ripley & Co.; Equitable

t

the

will issue invitations shortly
for bids to be received Feb, 24 for $6,000,000 in equip¬
ment trust certificates, to be dated March 15, 1949, and
to mature in 15 equal annual instalments from March
15,

Jan. 10 company asked SEC permission to sell competi¬

first

preferred stock.

of the corporation as a first step in compliance with the
Holding Company Act, Probable bidders include Blyth &
Co., Inc., and Smith, Barney & Co. (jointly).

already announced.

program

:$2,750,000
1

the General Public Utilities Corp. has asked the

11

poppy

Commission- shortly dm- a petition by corporation to

SEC for authority to sell 880,000 shares of common stock

While no plans have yet been made as to
how much, or when, the company will borrow, it is ex¬
pected that additional funds will be required for the

•

New York State Electric & Gas

Jan.

the company could incur indebtedness up

$20,000,000.

$15,000,000 building

Jan. 5'reported actiort Is

(EST), Jan. 19. Probable bidders: Halsey, Stuart &
Harriman Ripley & Co. and Lehman Brothers
(jointly); Salomon Bros. & Hutzler; Harris, Hair & uo.
(Inc.);

Co. Inc.,

Co.

Hines

Island Edison

Staten

noon

Stanley & Co.; Harriman Ripley & Co.;. White, Weld &
Co. and Shields & Co. (jointly); Lehman Brothers. >

March 24 stockholders will be asked to approve a

/•'(jointly); Salomon' Bros. & Hutzler:'L:-::r

Bids for the purchase of $4,320,000" equipment trust cer¬
tificates, series E, maturing serially in 1 to 15 years, will
be received at Room 901, 17 Broad way,'New York; up to

tion by

ficulty in assuaging the feeliries

of

needed

distributors

of

contemplated improvements/

who

"'complained

for

new

construction

and
.

V

THE COMMERCIAL

Number 4768

169

Volume

&

FINANCIAL

CHRONICLE

income.

Have Prices Risen More Than Incomes?
tor vehicles.

(Continued from page 7)
Price

turners'

in

100

from

that

comparison

if

But,

we

the

of

component
Price Index
i 935-39

The

conclusion.

above

meat

forced to modify

are

meat

in

217.1

to

the

percentage

of dispos¬

inclusive.

personal income consumed
indicates that the pressure on our
income recipients
to
spend for

further

TABLE III

better off now than before the

war.

from 100 for the

rose

average

nually July 1, 1949 to Jan. 1, 1964,

in

under the

are

Consumers'

*

fall

be

play an important part in
comparison of dis¬
rising standard of living. The posable
personal
income
and consumption
is diminishing.
A
of
this type will exist
very fact that we can bid up those consumption expenditures will be decline
prices relatively while spending helpful; see Table III below for when real incomes are increasing
a
smaller portion of our dispos¬ summary.
During the five year and its presence seems to be good
able personal income (Table III); period
1935-39
we
consumed evidence that prices are not rising
should indicate that, in general, 96.2% of our disposable
personal as fast as incomes.
the people of the United States

since the

examine the

we

situation

will

a

it

Disposable Personal Income

,"

■

1947

and

Consumption Expendit/ures

of

the

*

which represents

145 lbs.

to

war

tost that

The

now.

are

relatively
is
an
indication,
higher real incomes, c,:
If

direct

we

nbject

of

motion

is

average

;;;

times

a

much

as

.being spent since the
of

the

"used

accurate

more

cult to obtain

Be¬

is

tually paid for autos have risen

in

the

a<

than disposable personal in¬

V/ '

come.

Thus

called

to

With

not

of

that

prove

Keynes

is

correct

in

States where

such

the rufe

are more

prima¬

reduce

we

statis¬

our

autos

buying

are

we

of

to

increasing

those

incomes

General observations

pro¬

saved.

to

seem

con¬

firm this belief.

savings of the war
During the first 13 years

that income accounting by the
Department of Commerce was in
effect

the

disposable

personal

income.
In the years dominated
by war, 1942-46, personal savings
skyrocketed to an annual average
.

ings should decrease the marginal

marized by Table II below.

propensity to
increase

Components

"~-^Fifsures

are

amount

v

^

Z'".

;■■-

usual

in billions of dollars except percentages)

vv/V;V:';Average

•

1st Half

1935-39

H

oss

national

Personal

%

84.0

100.0

231.6

100.0

68.6

81.8

195.2

84.3

208.0

66.2

78.7

173.6

75.0

185.5>

75.4

63.6

75.7

164.6

71.1

173.6

70.6

2.9-21.6

9.3

22.6

9.2

-

Disposable personal income
Consumption expendituresJ; yments

to

Source:

fn

ome

1947

^

%

>

1948 ;
264.6
10O.O

come

Department

of

2.47

Commerce

"Survey

Current Business'
Supplement, July, 1947, and appropriate recent numbers.

fund

or

from

81.8%

of

the

I-?, 1935-39 to

84.3%

in

1947

3i.6%

in

total
and

National

of

b percentage
come

disposable personal
decreasing
from

was

"d<.7% in 1935-39 to 75.0% in 1947
,\:

d

This increased pro-

explained

the

portion

1948

(first six months).
While personal income was rising

it

and one-half.

come

in

75.4%

the

first

half

of

by

taken

increased

from

pro¬

in¬
by the various governments.
personal

Owing to the drop in percent¬
of
gross
national
product

age

spent

on

said that

consumption it
as

perienced

nation

a

decline

a

may

have

we

in

the

for

are explained
;h part because of the increase in

b1 yments
litis

to

governments

income.

personal
sum

$2.47

was

From

from

1935-39

billion

(2.9%

f/ the gross national product)

by

1947

it had

I)i;tion -(9.3 %).

payments
Personal

If

the

to

governments

from

income declined to 9.2%

gross

Shu-first

but
increased to $21.6
It helps little that

six

national
months

product
of

1948.

in
In

summary, it will be observed that.

|n spite of the fact that
income

h^s.,t increased

be

pro¬

income.

Without

consume.In

vide, in itself,
these

used

finance

to




one

(1)
consumers are spending a smaller
percent of their disposable per¬
sonal
income
(Section III) and
(2) the prices paid by consumers
have

risen

less

than

incomes

(Section II) as evidenced by a
comparison of price indexes with
incomes.
Labor leaders who
drive

for

electric

fourth

round

should

take

consideration

road-switching

fact

that

almost

in

of

market and start

ward

labor

Inc.; Freeman

Co.; Gregory & Son, Inc.; The

Illinois Co.; Otis & Co.;

Master Hutchinson

and Mc-

Co.

&

DIVIDEND NOTICES
GREEN

BAY

WESTERN

&

RAILROAD

COMPANY

The Board of Directors has fixed and de¬
clared Five per cent (5%) to be the amount pay¬
able on Class A Debentures (Payment No. 53): a
dividend of Five per cent (5%) to be payable
on
the
Capital stock, and
three-quarters of
one
per
cent (% of 1%)
to be the amount
payable on Class B Debentures (Payment (Not
33),
out
of
the net earnings
for
the
year

1948, payable at Room No. 3400, No. 20 Ex¬
change Place, New York 5> N. Y., on and after
February 16, 1949.
The dividend on the stock
will be paid
to stockholders of record at the
close of business February 4,
1949.
W. W. COX, Secretary.
New York, January 10, 1949

of

THE COLUMBIA

our

pricing itself out
a

GAS

SYSTEM, INC.

A

everyone.

result
the

locomotives.

Associated in the offering were

into

increase at this time could

wage

2,000 h.p. diesel-electric

producing high real in¬

for

comes

the

locomotives;

passenger

nine

and

planning

are

a

increases

wage

passenger

locomotive; eight 2,000 h.p. diesel-

The Board of Directors has declared this day
the following quarterly dividend:

down¬

Common

spiral of income.

Stock

No. 57,. 15* per share

payable
record

February 15, 1949,

on

holders of

to

close of business January 20, 1949.

at

Symes Elected Gov. of

Dale. Parker

January 6, 1949

Secretary

San Francisco Exch.
SAN

FRANCISCO,

CALIF.

—

times

an

good reason that
services

were

sumed.

services

con¬

However, since these

A

share

by

services,

conclusion
for

improve

personal

its
us

by

to

our

income
to the

affords further

reason

is higher

ing.

At

ings

are

there

rate

any

is

spent
full

at

if

those

time

a

of the

San

will

be

from
elimi¬

consideration; i.e.. dis¬

Stock

be

sav¬

time of full
a

A cash dividend of 25

C. B, & Q.

cents

Equip. Issue

Halsey, Stuart &

Co.

Inc.

and

were

$3,210,000

Chicago, Burlington &

Jan.

RR.

equipment

trust

office

by

employment

Chronicle,
7.

DUPLAN CORPORATION
SEVENTH AVENUE, N. Y.

Board

of Directors of

Wentworth Manufacturing

SECURITY ANALYST

Company
'

has

declared

twelve

GOOD

RECORD

and

a

one

dividend
-

half

of

cei^ts

(12V20) per share on the out¬
standing common stock of the

Company,
Box

of

out

of

Box R 112, Commercial

Place, New York

Sec.

of

on

SPACE

branch

L. Gordon Hale,
THE

The

WANTED

Financial

January 18,1949.

11

SITUATION WANTED

REASONABLE SALARY

&

February 1 to

512

Quincy

AVAILABLE

town' firm.

on

stockholders of record

associates

awarded

has been declared,

payable

of in¬

negative effect

OFFICE

'

25* IN CASH

Halsey, Stuart Offers

other¬

one

1

t,

Exchange.

creasing inflation. An attempt to
spend such savings for
consump¬

do

living standards,

governments

1949

DIVIDEND

Board of Governors of the

Francisco

when

employment

wise, the effect will

condi¬
and

10,

February 15,

Treasurer

than prior

now

war.

Small
our

income

nated from

control

cents per

March

GEORGE L. BUBB

aftermath,

upon

paid

con¬

believing that aggregate real

brought

and

war

payments

those

be

1949, at 3 P. M.

gov*

ernment

will

to stockholders of record

wartime

current

Quarterly Dividend

quarterly dividend of 50

a

have

and

One-Hundred and Ninth
Consecutive

a

would

other goods

CARBON COMPANY

surplus cash fund to con¬
John P. Symes
higher percentage of our
disposable personal income since John P.
Symes of Henry F. Swift
the war, we have
consumed, ac¬ &
Co., has been elected a member
tually, a lower percentage!
This
sume

of

not

4,000 h.p. diesel-electric

during the past two years.
Although we have had the incen¬

preferred to marginal increments

forced

year

standard-

new

equipment:

ing

a

beyond

na¬

following
railroad

sumption to the extent of dissav¬

tion at

were

smaller portion of the gross
tional product in the last

a

additional

tions

£Ci*sonat income and consumption
xpenditures ' have comprised a

ordinary

increase in government services
favored by the people would pro¬

propor¬

f

the

than 75% of

more

estimated at $4,318,500,

advanced

reasons

this statement:

doubt

repre¬

sentatives of the people it denotes
a
decrease in the propensity to

about

two

are

than then.

now

disposable

It

personal

tionately since 1935-39, disposable

cost,

in compari¬

un¬

Like

percentage changes

The certificates will be issued to

consumption.

to exceed

people have

many

ex¬

of

fee first six months of 1948. These

ac¬

money

may be worthwhile to add
pensity to consume. Inasmuch as
disposable personal the decline occurred because of that the
so-called savings from
iccome,
consumption
expendi- the increasing share taken
by gov¬ the war years
may not be real;
Itt-qs dropped from 75.7% of the ernments the
argument may be
they may be part of the monetary
u'.-oss national product in 1935-39
advanced that-since this increase
lo 71.1% in 1947 and to 70.5% in was voted by the elected
illusion
surrounding war financ¬

{'■; 18.

less

of

even

personal

tive of

Tfhe personal income component
u the gross national product in¬
creased

spent

savings

governments

(from -personal income)__:

,

stated

risen

purchasing power
should cause consumption expen¬
ditures to become a larger
per¬
centage of disposable personal in¬

84.6

product

income_____-

amount

Hence, the existence of this

'/V- //

'

vl

to

2.525%,

available for consumption and the

in the United States With Indicated

'!-v

to

but should

consume

the

higher

support of

system is

of

a

TABLE II

is

2.9%

named above. These data are sum¬

mo¬

in

be

may

have

income

money

a

sumption because of the wartime

Gross National- Product

prices

at

1.30%

provide for not

with prewar years, hence real

(1929-41
inclusive), our
savings
from
personal
income
averaged annually $2.5 billion or

a

stock of

than
son

There

portions

deterioration of

our

prices

incomes leads

larger about this task by pointing out 6% of our disposable personal in¬
number
annually than prior to the percentage changes in some come (see above for percentage
pv5"~War although, probably, we constituents of the gross national consumed). The presence of this
hr.ve a slower standard of con¬ product
through
the
periods accumulated sum of personal sav¬
of

were

cording to maturity.

&

conclusion

income

,

are

The

briefly:

his statement that increasing real

comparison of 1947 of $25.6 billion or 18.0% of the
and; 1948 (first six months) with disposable
personal income \for
the average of the five year pe¬ the period. Since the war we have
riod from 1935-39.
We shall set been saving only approximately

war and, accord¬
enjoying a higher
standard of living. But in the case

we

1935-39

tical work to

more

thin-before the

ingly,

United

irregular habits

reference

consuming

are

we

specified income flows

in rily with a comparison between
income the present and the prewar period

money

income.

real

meat

behavior

than the exception.
Since we are concerned

'■

■

Your at¬

the

to

position

our

prices,

to

„i:

indexes 'do

accurately

ow

regard
ard

general

authorization,

A. G. Becker & Co.
IV

is

on
one of the main tenets
of the economics of J. M.
Keynes.
Space is not available here to

years.

disproportionately.

gregate.

disposable

consumed

based

rise

certain

more

of

accumulated

tention

be

to

seems

pattern.
irregular habits of corpo¬
personal saving and in¬

proportion
income

personal

possible for prices and incomes to

is diffi¬

measure

ac¬

duced

re¬

a

There is, also, the question of
present
expenditures
for
etc., interfere with the regular how
operation of this pattern it is consumption are affected by the

car" situation

but it

income

fixed

have risen because of

comes

vestment, taxation, loans abroad,

money

war.

into

some

and

assumption that the prices

safe

si

rate

to

of

a

•

Where

to

we may

kist.five

reconverted

cording

the 1935-39
conclude that at

compared

cause

pro¬

has approximately
(Federal Reserve Board)

dpubled
■when

where the

per¬

gregate of income is paid out in
prices for goods and services and

index

autos

other

to

smoothly functioning
will exist when the ag¬

economy

of

income

This

sons.

attention to the

our

of

amount

consuming more
iueat although its price has risen
we

cost of living

a

cost of production to one per¬
son will be
the sum of an equal
or

has increased from

to the

certificates, issued

■

annual meat consumption
142 lbs. prior

tnerage

The

semi-an¬

Philadelphia plan,

yield from

gauge

j
(Figures are in billions of dollars except percentages)
When viewed from the stand¬
index of
Average
1st Half
point of value aggregates in a
meat
prices with the index of
1935-39
%
1947 *
%
1948
%
closed smoothly functioning econ¬
Disposable personal income
66.2
pet-capita disposable personal in¬
100.0
173.6
100.0
185.5
100.0
omy with a fixed physical volume
come
reveals that our ability to
Consumption expenditures63.6
96.2
164.6
94.8
173.6
93.6
of production it will be noted that
Source:
Table II.
buy meat has increased 6.7% on
the average.
According to "For¬ prices will not rise more rapidly
The
conclusion
that real in¬ capital accumulation in the
than
income
because
a
price
tune" (October, 1948, p. 83)
ag¬
our

A; comparison

ICC

of

in

.-

$107,000

immediately re-offered, subject to

the

United States

Ill

and 236.7 in the first half of 1948.

cer¬

due

come.

A

equipment trust

2)4%

tificates,

employed instead of personal in¬ able

which

period of 1935-39.

prewar

1949,

tain items such as autos and meat

per-capita real

our

has risen 47.5%

income

our

this

From

appears

dropped

43

in 1947 and to 93.6% in
the first six months of 1948. This

income

personal

This percentage

.94.8%

bid up the relative

Index, was rising
1935-39 to 159.2 in

";JH7 and 169.1 in the first half of
.19-18,

posable

Apparently,, we have
prices of cer¬

to

(199)

25

Park

Commercial
25

Park

&

Place,

J

113

Financial
New

York

ruary
Chronicle

8,

N.

Y.

ers

payable on Feb¬
21, 1949, to stockhold¬

of record at the close

of

business February 1, 1949.
Checks will be mailed.
JOHN E.

McDERMOTT,

Secretary.

44

Thursday, January 13, 1949

FINANCIAL CHRONICLE

&

COMMERCIAL

THE

(200)

nut

BUSINESS BUZZ

plan

on

7U-

me

sen

iu

uiiauce

d

xuic

group

occasion

every

which offers.
*

*

on..

Having licked the problem of
the shortage of big radio tubes,
the television industry has been
outstripping its expectations productionwise, of only a few months
ago.
It is now guessed that out¬
put of TV sets this year will run

Behind-the-Scene Interpretations
from the Nation's

Mac Buu-Xonftwr

Capital

BONDS

MUNICIPAL

,

short of giving hard-headed observers in Wash
clue upon which they really feel they can count at this
and nature of legislation the President actually
desires and expects he can get^
Democrats keep adding to their
from the new Congress.
time

Annual Message

his

In

did

his many

tle

blunders. The most im¬
recent boner of the last
several days was the decision to
lower the minority representation
on
the Senate Foreign Relations
Committee. Republicans kept the

sent
the
lit¬

than

more

His language was

naturally

a

Ph.D.'s

hired

his

of

lingo

competes also for the time
their

both
of the inscrutable and the uni¬
versal to the very Utopia the
President himself had outlined

teeth

at

been

Budget

the

message

in

saw

the

indication

actually desires a
most restricted New Deal, for the
President budgeted for very little
df the many things he called Con*that

Truman

gress

-

to

r

"this

enact

"bi¬
and

-

year,"

throughout his Annual and Eco¬
nomic^ Report .messages.
Many

President to ac¬
relatively mod¬
erate
program,
simply because
action on
all the schemes the
President requested would start

on

men.
men

Democrats
kept Senator Wayne Morse from
desire,

heart's

his

seat

a

fm

who

pretation from the nation's Capital

leader¬
ship of Republicans in the Sen¬

fights in Con¬

several cat-and-dog

if it didn't also throw
the country into a tailspin. :
v
i
On the other hand, the Budget
is a much more liberal docu¬
gress, even

other messages.
Budget if you put down

In the

its

gest

of

means

financing.

little strong
even
for Mr. Truman.
Hence
one
has got to expect a Presi¬
dent's free-wheeling style to be
cramped by the technicalities of
would

That

a

be

a

their

Budget itself, it must
considered less as a literal

eral guide to

ing

of gen¬

White House think¬

fiscal affairs this January.
as outlined Monday

on

little

for
boys and

places

committee

-

own

eager

budget

by the President is held to be un¬
realistic on several counts. As the

In all this news about

the House

the pow¬
Rules Committee to kill

of the

er

radical

legislation, it may be noted
in any

that the leadership did not
way

vitiate another

of the most

important,functions of that
mittee. That is the power
vent the House

com¬

to pre¬

The

In

will cost.
i
:
f
general, it is believed at the

that

Capitol

President

the

still

receipts. Un¬
Congress is completely cock¬

underestimates tax
less

eyed in its own guesses, anything
the $4 billion of additional

like

requested by the President
chance.
The present in¬
clination of those who count in

taxes

has

could

Committee

Rules

not

ahead of
regular order (the regular or¬

only call a measure
its
der

but could

months)
and did

up

might

business

of

;

of

amend¬
could

consequence

any

the

ward

be

or

Congress is to raise not more

than

$1,200 million from a hike in cor¬
poration income taxes — if this
later

proves

be

to

absolutely
,

necessary.

budgeted $600
universal military

Truman

Mr.

million

for

project
likely to get little beyond the

training,

which

is

a

conversation stage in 1949.

Mr.
Truman's budget, in a nutshell,
tried to make room for the be¬
ginning of public housing, slum
clearance, prepaid medical in¬
surance,

and Federal aid to edu¬

chiseling
away at other expenditures. One
of the cuts, for instance, is in
cation, by chipping and

veterans' benefits. It remains to
be

proved

give

Congress will,
less instead of

that

veterans

'more.-""

\:r*

' *




-•

in

the

do

not

have to by-pass the
mittee

on

leaders

Truman's

House

is

there

not

the

does

years

the

their

feel

they

Rules Com¬

or

year

that

has

cost

times

as

them

much

just

get

bills

proposals,

they

considered

These

as

re-tooling

three

before the war.

costs will

leaders

*

!

to

The

MASS.

BOSTON,

Verrochi

Securities

Financial

M-

John

added

been

has

Chronicle)

—

to

the

Clayton Securities Corp.,

staff of

Devonshire Street.

82

Two With E. E. Mathews
(Special

show

to

The

Financial

Chronicle)

BOSTON, MASS.—Paul L. LaFrance
are

53

and Waldo H. Richardson

with Edward E. Mathews Co.,
State

Street.

to

Trading Markets:
Ralston Steel Car

y

part
have

reconciled themselves to

;■

Air

Oregon Portland Cement

privately

Riverside Cement A & B

the

defeat of

plan before first ses¬

sion of the 31st Congress,

extreme

more

V

most

the 70-group

changes

about

production

their

the

Forces

re-tooling for

model

manufacturers

while

$

biggest producers have not

extensive

(Special

several months retail
of replacement parts have

For

til this year.

more

formerly -with

Joins Clayton

fill low inventory.

in for sweeping changes un¬
The automobile in¬

gone

was

past

increased

previously,

so

drop down to

eight years for '49. For

dropped

represent for the most
part the first "complete" model
change since 1939, 10 years. There
are important exceptions of small¬
er
producers
making
drastic
out

a

It was nearly nine years

around

sales

but the

Before
the
war
age of cars was five

last year, but may

New 1949 car models now com¬

ing

of course, from

arose,

the average

Johnson bill.

the

Hayes

Trescott, Griffin & Co.

holiday in pleasure car

war

production.

net merit to

a

will shake down to around

industry

is
to
strengthen
the
enforcement
procedures and powers of FTC.
Time, it is advised, and care¬
ful study, will disclose whether
bill

dustry found

be offered from the floor.

long as

presumed illegality. It

the

Mr.

J.

with

$1.5 billion, based on manufac¬
turers' prices. The boost to this

noted, for example, that one

thing

output this

It is estimated that

than the disease

worse

their

['S'.-a..['J-'j K^^yy -;'y>. ■'

biles.

year

Chronicle)

will begin to settle down

output, and takes no
of parts for new automo¬

account

Financial

MASS. —Gerald

Co., 21 Congress Street.

Bache &

ment* parts

"stop,

The

Hayes has become associated

This is the purely replace*

in '49.

galizing the use of basing points

is

parts in¬

and zoomed to $2.5 billion

last year,

;/

that the cure of le¬

they fear

no

So

based

bill because

Johnson

is that the

which ran along at just
$600
million of output,
on
manufacturers'. prices

prewar,

approach to¬

listen"

look, and

provide also,, changes

ally also provide, that no
ments

take

matter of course usu¬

as a

under

from voting upon

out, it in¬
amendments or modifications to
cludes no guess as to how much
major Administration legislation.
the forthcoming military aid pro¬
President himself points

gram

.--v.

Observers are advising a

of

Democrats cutting down

dustry,

to

BOSTON,

automobile replacement

a

gress.

may
%

*

*,

document than as a sort

slights

:',y *

Best available guess

Democrat, took over
the chairmanship both of the full
committee and the "Capehart sub¬
committee" with the 81st Con¬
Colorado,

girls.

As for the

The

was

other

and

making

budget.

be

York,

of New

Hayes With Bache & Co.
(Special

*

*

Capehart subcommittee of
the Sehate Interstate Commerce
Committee. Senator Ed Johnson of

Senator Ives
kept off the

semi-progressive,

and are showing up in higher

prices.

of the

New Deal nature. A

a

up

bill grew

noisy hearings

out of the long and

suggest
the
incredible
view
that
the
Democrats are purposefully acting
as sensibly as a merchant with a
good trade who feels he can enjoy
insulting customers at will. Demo¬
crats instead say they were just

thereof and sug¬

timate the cost

thing of

Federal

the

by

interpreted

be

Trade Commission. The

Republican

a

nominally, for almost any¬

vote

This

one Class A
supposed to es¬

Utopia, you are

although

vote,

been

almost a sure

as

upon

not coincide with

the "Chronicle's" own views.)

confidence in his men!"

Labor Committee.

for

order

firm

a

the

than

ment

counted

have

could

Morse

ate.

and may or may

more

had a bit

"Oh, he's a good manager, but I wish he

conservative

relatively

this

scene" inter¬

flect the "behind the

dozen "progressives"
sought to kick over the

people expect the

and

install

to

television sets, and

(This column is intended to re¬

a

tually work for a

Retailers lacked sufficient

headache,

a

on

Only a scant
few days before this, Morse had ;
been the most outspoken of the
of

of

lack

shortage is giving the industry,

Foreign Relations.

group

another

the

is

; qualified

service

,

the

minority,

the

short, the

trained service and maintenance

indi¬

down

cutting

by

Second,

TV that ear¬

into

run

That

problem.

foreign policy,
Vandenburg to
than even he

has

industry

protesting this move, y

cated in

industry pro¬

lier in the year were

Republicans who have

more

anger

observers

people

their magazine,

newspaper,

duced the tubes for

aroused Senator

1

Some

be¬

tagging along on the

was

partisan"

few days before.

a

it

on

book.

a

or

another kick in the

cause

economics, to give an aura

only

Republi¬

first,

boner,

a

was

heard

might otherwise spend in reading

While the glass

This

be

of television

printed periodicals, and even upon
the design of homes. Whereas ra¬
dio competed for advertising, TV

cans.

in

will

more

effect

the

about

,

eight Democrats and five

and

More

be

for

10 million.

'49 will drop to

to

Committee

the

re-stacked

conven¬

reported for '48, the outturn

little crats, to emphasize the so-called
bi-partisan nature of the foreign
policy.
Democrats
immediately

_

million

16

tional radio sets expected to

pugnacious than when he was
on the political platform., - ; ,:
.
In
his
"Economic \ Report"
message,
the
President bor¬
rowed bodily a lot of the tony

less

It is "guestiagainst an output

down.

that

around

of

composition of Foreign Relations
seven
Republicans to six Demo¬

objectives a
specific projects.

President stressed

going

mated"

portant

He wrapped up
glittering campaign

promises in one package and
them
to
Congress.- True,

is

political

the

the President

expected.

as

all

on

out¬

going up, other radio production

to the scope

State of the Union,

The

around 975,000

While television production is

any

as

run

sets.

when finally tallied,
units.

put for '48,
will

factory has fallen

ingtori

million

2

around

Truman's burgeoning message

WASHINGTON, D. C.—President

outlook is correct,
for aircraft

will

Spokane Portland Cement

If their

Federal orders

not be the thing

LERNER & CO.
Investment Securities

the

expected

industry

This

outlook,

however,

private. The fly boys

last

jrear.

is purely

10 Post Office

Square, Boston 9, Mass.

Telephone Hubbard 1990

Teletype BS 69

in khaki will

with iron-clad rules

amendments.

barring
Senate,

can

it

anything

different.

is

can

amendment

HAnover 2-0050

be proposed as an '
even
if irrelevant

to the subject
*

the
Almost

In

Firm Trading

■■ ;•.

*

Tough-minded industry observ¬
here are advising taking a long
careful

look

at

the

FOREIGN SECURITIES

Hill, Thompson & Co., Inc.

All Issues

Markets and Situations for Dealers

HARi mams & co

by changing the law, to
the fear of industry that af¬

signed,

freight absorption is illegal under
the cement case decision of the
Supreme
cision'

is

Markets

Johnson

bill presumbaly legalizing freight
absorption.
This bill was
de¬
end

Teletype—NY 1-971

matter of the bill.

ers

and

'y,

Court, and as this de¬
interpreted or likely to

*

JUro'W*

~m

FOREIGN SECURITIES

Tel. REctor 2-2020

SPECIALISTS

50 Sffood Street

;

-

y.

-

New York 4* N. Y.

AFFILIATE': CARL MARKS & GO. Inc.

Broadway, New

CHICAGO

——

York 5

Tele. NY 1-26S0