Full text of Commercial and Financial Chronicle : January 14, 1954, Vol. 179, No. 5290

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/

SUtlHESS

ua&ur'sr**r'<Ml
JAN i 6 iS54/

ESTABLISHED 1S39

Reg. U. 8. Pat. Office

New York

Number 5290

Volume 179

EDITORIAL

We See It

By AUGUST MAFFRY*

It is,

of

The

has chosen the "middle road" in the

sense

of United States investment
was in 1920's,
foreign market's collapse in 1928, and virtual

cessation

after 1930

much

to

make

neither

fish

nor

menu

fowl

taken

as

a

causing

attractive

ican side,
held.

as

in

Concludes

character

and

amount

direct investment abroad will

Direct

follows,

investments

greatly from

under the

-

definitions

are

which

those

element

involve

used.
signifi¬

are
a

To

that did not

as

of

tions.

the

the

forecasts

are

amount

of

branches

i
;

.

t
,

in

is,

con-

of

part

not

are

forecasts
from

separate

but an inte¬
Unlike the predic¬

outlook,

it.

tions of

a sun eclipse which have no
impact whatsoever on the course of

the

sun,

business forecasts, particu¬
one di¬

larly if overwhelmingly in
Theodore J. Kreps

the

on

complicated

the

when

so,

business

gral

involved is fully
in foreign
foreign affiliates of

investment

Portfolio

Especially
themselves

domestic corporations.
August Maffry

as

dozens of

ure, if not immeasurable.
Is forecasting possible? What rational filiation can possibly exist in the composite succession of business events?

the

capital

and

sees

j dreds of possible combinations and
j permutations of those factors in the
| future. Many are difficult to meas-

investment

controlled

He

numerous.

j tradictory factors at work and hun-

American
preponderance
of

Furthermore,

Bullish Factor

a

professor the business outlook is

a

J direct investment abroad in terms
/ either of number of investments or

rection,
the

noncontrolling investment or, to be precise,
which involves no important element of
ownership, control or management. It may consist either

influence

profoundly

may

of business.

course

They

some¬

contrary,

times help to

investment

body is convinced that commodity prices are going up

\
*A
the

36

-

Continued

•

on

page

bring

on

the outcome predicted.

If every¬

(as the business community is disposed to be when

36

Continued

presented by Mr. Maffry before the Annual Meeting of
American
Economic
Association;
Washington, D. C., Dec.
paper

on

address

*An

Commerce,

by Dr. Kreps before the Los Angeles
Los Angeles, Calif., Jan. 12, 1954.

there

page

32

Chamber of

1953.

29,

NEXT WEEK—The "Chronicle's" Annual
week and, as in former years, will include
views of Leaders in Industry, Trade and Finance on the outl(J<>k for their owu
businesses and the nation's economy in general during 1954.

ANNUAL

economy

exist in 1929.

«

ownership, control
and management. In the language of
economics, they are entrepreneurial
investments.
Although such invest¬
ments
may
be
made
in
theory
either by corporations or individuals,
practically all direct investment in
foreign countries of American capi¬
tal has been investment by corpora-

important respects.
He is obviously not a slave to the idea of spend¬
ing for spending sake or even indifferent to
budgetary considerations. He is apparently an
advocate of sundry measures which must inevi¬
tably cost the taxpayer large sums of money—
funds which really ought to be left in the hands
of the individuals and corporations for such law¬
ful use as they see fit to make of them. At the

personal

ber of healthy props

war.

conventional
cant

is relieved here and there in

DEALERS

capital outlays, but contends a catastrophic depression
cannot occur, and lists as an encouraging factor a num¬

Overproduction of Bearish Forecasts
what

In

of the President's State of the Union deliverance

Review

would be definitely "bearish." Looks also for
cyclical decline in private expenditures, particularly in

Definitions and Limitations

whole

page

may

program

of American

differ

not

period since last

that

disquieting New Deal-Fair Dealish tinge

on

do

of taxation, will probably be with-

area

nor

Continued

can

American

to

Predicts, however,

reach four million some time during
1954, provided there be no war. Says failure to carry
through less than President Eisenhower's economic

unemployment

investors, the strong inducements needed from the Amer-

experience

The

Kreps, though stressing the impact of sentiment and
on
the course of business, points out well

advertised recessions rarely happen.

shock to world

severe

their securities

good red herring,
although doubtless each will find bits and pieces
more or less to their
liking. '
:
as

—

Holds that although foreign countries

economy.

ahead

view the President's

course

foreign countries; pointing out heydey

with

Congress do in the
fully pleases neither the New
Deal-Fair Deal wing of either party nor the ad¬
herents
of
traditional
American
concepts of
proper or wise public policy.
Doubtless both of
these elements—usually labeled the extreme left
and extreme right wings—will be much inclined
to

Dr.

Export-Import Bank

Mr. Maffry traces
in

what he would like to have
months

University

Advisor,

forecasts

clear enough that the President

course,

Economic

Former Vice-President and

Final

Copy

By THEODORE J. KREPS*
Graduate School of Business, Stanford

Vice-President, Irving Trust Company

appraisal of the 1954 platform of the
Eisenhower Administration must obviously await
more explicit delineation of programs. Only broad
outlines and the general tone of the President's
thinking on current public questions are revealed
in the State of the Union message, and it would
be unwise to undertake final judgment upon more
specific proposals contained in more recent mes¬
sages until it is possible to see more clearly how
they combine with other parts of the general program not yet fully revealed.
.

a

The Business Outlook

Our Investment Abroad

As

Cents

Price 40

7, N. Y., Thursday, January 14, 1954

REVIEW AND OUTLOOK ISSUE
Outlook Issue will appear next

and

Slate and

in

Established

0. S. Government,

NATIONAL BANK

■

-r

'

.

State and

Municipal

Bankers

Head
telephone:

to

Office:

HAnover 2-3700

28,

Uganda

in

India,

New

land

bank & trust

Protectorate.

company

Capital

The Bank conducts every

banking

OF NEW YORK

description of
business.

and exchange

Bond Dept. Teletype:

Net

LAMB0RN & CO., Inc.
WALL

99

NEW

STREET

.

To

t.l.watson&Co.

Markets

Active

Banks

Dealers,

Commission Orders

SUGAR

CANADIAN

—

Refined

—

Liquid

DIRECT WIRES TO

Exports—Imports—Futures

,

r

if i

<

;




BRIDGEPORT
-

T

.vV

: PERTH
I

AMBOY

NEW YORK 4,
DETROIT

GENEVA,

N. Y.

PITTSBURGH

NEW YORK

-

•

BANK

NATIONAL

Of THE CITY OP NEW

YORK

SWITZERLAND

Puget Sound

CANADIAN
BONDS & STOCKS

Power &

Light Co.

COMMON

Regular Rates

MONTREAL AND TORONTO

NEW YORK STOCK

115 BROADWAY

CHASE

THE
Bldg.

Analysis

upon

request

DEPARTMENT

Goodbody & Co.
MEMBERS

DIgby 4-2727

Brokers

f

Established 1832'

Exchanges

Maintained

and

Teletype NY 1-2270

American Stock Exchange

Bond Department

Executed On All

Canadian Exchanges at

Members N. Y. Stock Exchange
Raw

NY t-708

SECURITIES

-

NEW YORK 4, N. Y.
-

other

CANADIAN

YORK 5, N. Y.
50 BROADWAY

and

CHICAGO

Trusteeships and Executorships f
also undertaken

Inc.

Board

N. Y. Cotton Exchange

£3,675,000

Fund

Reserve

THE NATIONAL CITY BANK

£4,562,500
£2,281,250

Authorised Capital

Paid-up

New

Exchange

Exchange,

of
Trade
Orleans Cotton Exchange

Chicago

Kenya, Tanganyika,
Uganda, Zanzibar, and Somali-

Exchange

Cotton

York

Commodity

Ceylon,

Aden,

Burma,

Chemical

Stock

American

Bishopsgate,

Pakistan,

Exchange

Stock

»

London, E. C. 2
Branches

York

New

>

Bonds

Members

the Government in

Kenya Colony and

Municipal

H. Hentz & Co.

of INDIA LIMITED

Securities

1856

EXCHANGE

1 NORTH LA SALLE ST.

CHICAGO

PoMBUOif Securities
6rporatio71
40 Exchange Place,

New York b.N.Y,

IRA HAUPT & CO.
York Stock Exchange
Principal Exchanges
1

Members Neu>
and other

111

Broadway, N. Y. 6

WOrth 4-6000

Teletype NY 1-702-3

WHltehaU 4-8181

Boston

Teletype NY 1-270*

Telephone:

Enterprise

182*

2

The Commercial and Financial Chronicle

(154)

The Security I Like Best

Active

Trading Markets in

participate and give their

GERMAN

a different group of experts
field from all sections of the country

reasons

for favoring

DOLLAR

they to be regarded,

FRANK

as an

Over

Cryan & Co.
City

New York

1

Claude

private
investor and the professional financial analyst have one investment
objective in mind at all times

trading

experienced

.

each

is

seek¬

ing constantly

New York Hanseatic

120

Broadway,

WILLIAM
So.

120

St.,

a

Chicago

3

five

Frank

Ameri¬

statement

M.

Cryan

in

every

of

sense

York

American

120

Stock

the

Stock

REctor

en-

than

more

1,100

50

studied

demonstrate

a

companies

of

2-7815

progres¬

the

able

to

were

comparable record

ba§is of

standards

our

of

the

comparison
of Claude
growth during the past
five years, we have selected nine
s

companies engaged in

one or more

surplus

7/1/48-

carried over
total of $7.3

a

for that Period.
all

That

figure

deductions,

is

including

Federal Income tax and Minority
Interest.
As of

(4)
assets

30,

June

$15.3

at

were

1948, total
million and

had increased to $28.2 million as
of June 30, 1953, a dollar increase
of $12.9 million, or some 85%.
(5)
from

Trading Interest In

figure
gure

changes

American Furniture

Bassett Furniture Industries

Quick
$2.2

assets

current

million

Camp Manufacturing

other

121%

„

LD 39

of

1943 to

same

$10.7 million

over

mil-

(6) In comparison with the

ceding * figures,

quick

•

.

pre¬

current

showing

from its percentand 587% respec-

seen

299%

■ •

$6.1

^

*

million,

only

or

The net result showed

an

Inc.

The

r>

■

j

)948' During this period, other
important achievements were ac">mPhshed, deluding a reduction

lnv.ff.tment® a".d advances of

$2.8 million, reduction

fixed

in

an

individual

com-

pany, regardless of the size of its

operations

as

results,

and

growth

with

'

...

measured

the
.

in dollar

of

comparison
,

.

leaders

company

carried

a

f°rm

earned

surplus

general

balance in the

totaling

Jun™m8.'H

on

u

.

Neon,

Inc.

history.

to

the

conclusion that Claude Neon
presents

RED

growth

a

situation

without parallel.

'

CROSS

together with

agement,
in

must carry on I

change

a

operating policies by the

management
the

responsible

are

phenomenal

new

growth.

line.-

management,

new

many

previous activities of Claude Neon

I. G. FARBEN
And Successor

Companies

have been
ities

eliminated, and activ-

concentrated

tronic,

home

in

Present

the

appliance

elec-

and

air

conditioning fields.

activities

are

ap-r

field

the

of

electronics,

gunfire control

computers,

its

electronic

are

appa-

tronic

devices,

vision

radio

broadcast

and

tele-

equipment,

quartz crystals, and marine radio

telephones.

In

the

electronic

consolidated

COMPARISON 1952

have

to

vs.

Computers
outsold

are

all

re¬

other

-Net Income-

%

1952

Bought—Sold—Quoted

Philco

2.

Radio

3.

Int'l

4.

Oppenheimer & Co.
Members

New

York

Stock

Exchange

25 Broad St., New York
4, N. Y.

Phone: HAiover 2-9766

General

6.

Sunbeam

^

Electric

Corp

7.

$367.0

35G.9

Carrier Corp

5.

€90.6

191

24.0

32.3

135

162.0

333.7

206

28.1

29.9

106
266

1952

133%

$10.5

$11.5

divisions

54.4

107.7

196

2.7

4.5

2,624.0

162

123.8

151.7

160

5.8

6.1

106

5.9

9.1

1.4

"52

1.3

302

28.9

76.1

254

9. General Instrument-

14.0

30.4

215

—v

2.7
•

-

0.4

•

$290.4

$495.7

171 r*

$22.7

$27.5

121%

$12.1

$36.0

299%

$0.41

$2.6

587%

wires

to

our

Interest exempt

branch

offices

from all present„

Federal Income Taxes.

We

-

own

sales

?

Wilmington,

air"

of

shown

and offer:

$100,000

f

Delaware

constant

a

2%% Bonds

increase.

important factor in Claude
Neon, Inc. is its Research Depart¬
ment. Among approximately 4,000

Due

individuals employed by the com¬

October

To Yield

pany,; some 400 are rated as top
engineers, mathematicians, scien¬

1,

1989

2.50%

(and interest)

r'

tists and physicists, while 50 of the
400 are rated among tire top in all
the world.

Diversifications
Neon's

Claude

in

operations in the elec¬
home appliance and air

tronic,

„

conditioning fields, supported by
its engineering research depart¬

.

Gordon Graves & Co.
30 Broad Street, New York 4

ments, are elements that we be¬
lieve point to the continued suc¬

Telephone
"

and

WHitehall 3-2840

growth of Claude Neon.

'

Earnings and Finances Greatly
Improved

Per

share

creased

earnings

each

year

have

from

in 1948 to $1.02 in 1952.

capital
from

is

up

nearly

30,

June

1948

19

in¬

cents

in the

Investment

Working
$5,000,000

to

in

June

30,
1953, while total assets increased

Call

^

for

period from $15,300,000 to $28,200,000.
The company
is now in the strongest financial
position in its entire history.
same

has

As

been

pointed out and
on
the basis of comparative re¬
sults, Claude Neon has achieved
almost

unparalleled record of

growth and general progress
the past five years.
This

growth

and

expand
company

the

should

in

most

dustries

the

.

ing fields.

on

Japan
or

write

current

publications

Japanese securities

YAMAICHI
SECURITIES CO., LTD.
Established
Home

Office Tokyo

Brokers

over

111

&

1897

—

48

Branches

Investment

Bankers

Broadway,N.Y.6 COrtlandt7-5680

continue

future

rapidly

since

growing

.

and

in¬

enterprise,

namely, the electronic
.

our

Opportunities

is engaged in three

American

in

appliance

.

air

.

home

.

condition¬

The company holds

a

favorable position in all three in¬
dustries.
Such growth and progress is the
result
alert

of

an

a

extremely keen and

management, backed by

surpassed

research

facilities

un¬

and

closely knit organization.
The

directors

of

Claude

Neon

evidenced their faith in the

com¬

pany's future by recently declar¬
two

quarterly

each

plus

I

a

dividends

5%

stock

of

Quotation Services

believe

the

common

der

$5

lent

Over-the-Counter

divi¬

the

present

oppor¬

tunity of being able to purchase

154

298

Average

Mobile, Ala.
Direct

An

122

66.4

165.7

Claude Neon

104'

41.1

57.6

10.

have

and consistent

of 1948

1,623.0

Minn. Honeywell
8. DuMont
Lab

Tele. NY 1-3222




$275.4

Corp.
Corp

Business Mach.

1948

'

is

1952

1952

of 1948

it

but

dend.
%

1948
1.

that-the

10c

-Net Sales-

NY 1-1557

electronic

statement,

ing

1948

(In Millions of Dollars)

INTERNAL SECURITIES

Exchange

St.r New York 4, N. Y.

HAnover 2-0700

conditioning equipment for 1953
will
approach
a
new
high
of
around $5 million.
Sales in all

computer field, the Reeves Elec¬
tronic' Analog

Stock

New Orleans, La. Birmingham, Ala.

not included in'the company's

are

of
concen-

York

Through Anemostat Corpo¬

the

electronic, home

principal products

puted

GERMAN

in its

pliance and air conditioning fields,
In

price

25 Broad
.

ration, activities in the air condi¬
tioning field are rapidly increas¬
ing. The figures for that company

During ratus, gyroscopes, industrial elec-

the past five years under the

aggressive

for

,

i

trated in the

.

man-

in

the
Waring Blendor, the
Waring Steam Iron and Durabilt,

the

Fields of Activity

almost

Changes in Claude Neon

that

in

is

strongest financial position

leads

,,

is

,

,

The overall result today
Claude

similar

operations

by

combined.

increasing steadily, and these in¬

an

|^534

,

in

of

industry and with companies with

Your

as-

set? of f22,000 and a reduction

of

made

,

ranges

company's

\

.<

iai?qr^nt+HaSSf™ 9S+ °f
m
ajT10lmL ^
.2^1 TflimKn lime 7°
n!o
«?
®?i-

New

home appliance business has been

increase

ZT?eXontne ^"he

case

Steiner,Rouse&Co.

highly important to Claude Neon,

ln

It should be apparent to the
the

"

,

from $35,000 to $125,000, and sales
of same
in the future
will
be

179%.

reader that growth is possible in

.

TWX LY 77

Claude Neon,

far superior

a

be

may

ages

Lynchburg, Ya.

I

of 1948.

Inc. made

tively

STRADER JAYLOR & CO., Inc.

171%

were

computers

manufacturers

computer

are

1948, while net income in 1952

as

Life Insurance Co. of Va.

percentage

comparison

panies shown in 1952
was

Dan River Mills

this

y

Members American Stock Exchange

arose

the

on

jn 1953, an increase of $8.5
lion, or almost 400%.
*

nerrentagp

shown in the
accompanying table.
Net Sales for the nine com-

of

Commonwealth Natural Gas

of

and
and

Bought—Sold—Quoted

Common

—

Members

electronic

cess

dollar

Union Gas

estimated

-

years

company

earned

^ate jn

_iFor
Neon

$50.0 million.

million, or 6.7%, of total Net Sales

of growth to that of Claude Neon

comparison.

BROADWAY, NEW YORK 5
Tel.

over

gaged in every conceivable phase
of industrial
enterprise show that

on

Exchange
Exchange

annual

an

after

study and analysis of
1,100 individual companies

the

five

the five-year
$109 million.

over

basis and

to

that

up

A

not

New

the

over

1953,

word.

Members

during

(3) Over the five

industry.
following will back

can

the

over

Louisiana Securities

M.

clude

to approach

almost

in

The

tyC PONNELL & CO.

sales

sively stated, net sales in millions
were $12.1 in 1948; $10.4 in
1949;
$14.8 in 1950; $20.9 in 1951; $3o.u
in 1952; and in 1953 are estimated

during

past

lei

Since 1917[

of

On

situ-

o n

years

Rights & Scrip

of $3,630,000

average

period totaled

without paral-'

Specialists in

1948, and increased to

(2) Net sales

a

the

1953

Frank

—

Partner, Frank
Co., New York

City. (Page 41)

This

re-

veals

1,

years.

Claude

Neon, Inc.

t i

SHOLTON

of

crease

situ¬

growth

Representative:
A.

Salle

La

5

New York

in

results

Alabama &

Stock—Sidney R. Winters, Part¬
ner, Abraham & Co., New York

1948-1952,

years

concentration

-

(1) Monthly Net Sales averaged
$1,030,000
over
the
first
six

ation."

Exchange

Teletype NY 1-583

Mid-Western

as

Brooklyn

similar period 1953, or a 252% in¬

Wall

"growth

Member

Stock

BArclay 7-5660

Street

1920

a

achieved the
following
(dates in all cases July
vs. July 1, 1948):

an

de-:

in

of

months

is

generally
fined

Corporation
American

what

for

because

five

these fields and close supervision
of
operations, the management

Neon, Inc.

The

the

Inc.

Senior

M.
Cryan &
City. (Page 2)

Five-Year Record of Progress

CRYAN

M.

Neon,

Cryan,

to

Week's

Participants and

Their Selections

Claude

be, nor
offer to sell the securities discussed.)

Senior Partner, Frank M.

BONDS

Associate

particular security-

a

intended

not

are

This

,

,

^

(The articles contained in this forum
are

Established,

...

Forum

A continuous forum in which, each week,
in the investment and advisory

Readmitted to

:

Thursday, January 14, 1954

....

per

of Claude Neon

share offers

an

for 40 Years

un¬

excel¬

buying opportunity for

the

National Quotation Bureau

alert investor who desires to
par¬

ticipate
a

in the future

company

growth

which has already

Continued

Incorporated
Established 1913

of
es-

46 Front Street
CHICAGO

on

page

41

New York 4, N.Y.
SAN

FRANCISCO

Volume 179 -Number 5290 ...The Commercial ancl Financial Chronicle

Taxation, Incentives,

INDEX

And Fi
Harvard University

U.

Consultant to

S. Treasury

Our Investment

-

licrasKiu

"

Articles and News

\

page

-

i- The Business Outlook—Theodore J. Kreps

By J. KEITH BUTTERS*

,

l

.

Associate Professor,.Graduate School of -Business Administration,

AND COMPANY

Cover

Abroad—August Maffry_

"STRANGER IN

Cover

PARADISE"

<

Department

Taxes, Incentives, and Financial

/ "

/

Capacity—J.

Keith

3

Butters

Come

in

Stranger.

v

No Ground for

Dr. Eutters maintains economy

damage

range

will not suffer serious longif national defense and fiscal stability

even

require continuation of current high level of tax rates for

1

Asserts tax structure has only relatively
on-basic incentives motivating
Cites primary importance of defense from
aggression from abroad.
*

economy.

the

During considerable portions of
the

last

decade

of

several

'the Harvard Business School have
Ibeen

in

engaged

intensive

an

years

'series of stud¬
ies

10

to

and invest.

to

and

investor

taxes

-

"incentives and

this

paper

is

impossible the expansion of
existing enterprises; and that they

take

a

have caused such large numbers of

jbroad look at

independent businesses to be sold
or

^research

the

merged

panies

in

Jwhich

tration

we

"have been

en¬

Butters

the over-all

|ze these studies
broad

a

findings and

which

level

as

cnaiacier-

whole.1

a

of
the

At

of

generalization,
be said about the

to

weight

of

these

the

charges,

evidence

un¬

covered in this series of researches

tends

minimize

to

stress their

eral

rather

importance.

than

If

a

to

gen¬

I shall
first simply enumerate these find¬
ings in order to give direction and
focus to the later discussion.

specialized

can

^findings of these studies?

The

basic

impact

incentives

both

the

on

which

William

and

World's First

Hamilton
1

the

.foody of the

private

fects

of

last

first, and most significant,
finding is that the empirical evi¬
dence of these investigations sub¬
stantiates none of
the
extreme

•charges that are frequently made
•concerning the harmful effects of
•often

the

on

alleged,

*An

address

It

economy.

for

example,

1

Specifically, this

paper

the data obtained

on

terprises
the

on

pated

by

John

author

Growing En¬

on

Lintner

three volumes
as

is based mainly
study of the

the

in

in

whicn

in

the

and

series

and

me

I

partici¬
studies

of

■conducted

through the Harvard Business
-School under a grant from the Merrill
JFoundation for Advancement of Financial

Knowledge.

I

wish

acknowledge

to

indebtedness

to
my
coauthors in these
especially
Professors
Lintner
E. Thompson, with whom
1 have worked most closely.
I have also attempted to take full ac¬
count of
the findings of the other four

Lawrence

,

volumes in
and

in

the

Merrill

addition

■discussions

with

under

a

;

se»*:e%
benefitted from

Professor

cerning the research
«-ently doing on the

Lintner

which

he

subject

The

from

grant

foundation.

Foundation

have

I

is

of

con¬

cur-

of

profits

the

Foundation

series

have

not

as

the

over

been

manuscript and should not be re¬
garded as being in any way committed
views here expressed.

Paul E. Conrads Defends Stock Split-Up and Stock Dividends.

Eisenhower's

of

Labor

Law

Message

achieved

Financial Capacity

on

Greater Than

the

To

has

formance

of

data

point

conclusion
much

the

the

per¬

economy,

consistently
that

tax

the

it

our

Leon H. Keyserling Explains His Tax Reduction Views

the

done

so

by restricting the fi¬
capacity of key groups
than by impair¬

economy

for

conclusion
the

rate

effects

of

holds
of

especially

taxes

expansion

of

the

on

Manchester, N. H.




•

enterprises, particularly of small
companies with promising growth

Teletype

Text of Eisenhower's Message Urging New Farm Price Policy.
for

Flexible

National

City

Credit

Bank

Policies

Cited

in

17

NY 1-3370

Dlgby 4-1680

v

"Letter"

22

Regular Features
As We

Bank

See

It

(Editorial)

Cover

Stocks

Bookshelf.

trading markets in

22
48

Insurance

and

We maintain firm

Business

Man's

Securities

Canadian

225 unlisted

*

stocks and

11

Dealer-Broker Investment Recommendations

bonds.

8

Einzig—"Recession Not Likely in Britain"

20

From Washington Ahead of the News—Carlisle

Bargeron__jL

11

Indications of Current Business Activity

39

Mutual

34

Funds

NSTA Notes
News

...

About

Banks and

Observations—A.

28

Bankers

Wilfred

45

May

5

Our Reporter on Governments..

20

Our

Singer, Bean
& MACKIE, Inc.
HA 2-0270

Teletype

Exchange PI., N. Y. 5

40

NY

1-1825

&

NY

1-1826

47

Reporter's Report

Public Utility Securities

It also applies, though
perhaps not to such a pronounced

degree, to the effects of taxes on
the flow of venture capital from

Securities

33

Railroad Securities

prospects.

private individuals to
enterprises.
Moveover,
areas

where

the

disincentive

of

to be

powerful—such

centives,

taxes

the

business
in other

have

been
as

work in¬

formation

of

enterprises, and the sale,
or

ef¬

alleged

in

Now

—

Registration

Salesman's

Security

The

44

Security

I

24

Corner....

The Market... and You—By

The State

Like

com¬

Wallace Streete

12
2

Best

panies—our findings have tended
on

and

Chicago

*

page

•

TELETYPE N. Y. 1-5
Glens Falls

•

Schenectady

•

Worcester

Copeland Refrigeration
Corp.

48

You

Canadian

*No

article

this

Giant Portland Cement

week.

24

Rohr Aircraft
Twice Weekly

1

B.

DANA

Reentered

COMPANY, Publisher*

Place, New York 7, N. Y.

as

HERBERT D. SEIBERT, Editor & Publisher

President

Thursday, January 14, 1954
Every Thursday (general news and ad¬
vertising Issue) and every Monday (com¬
plete statistical Issue — market quotation
records, corporation news, bank clearings,
state and city news, etc.).
Offices:

Chicago 3,

111.

135

South

La

C.,

Eng¬

second-class matter Febru¬

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E.

ary
25, 1942, at the post office at New
Xork, N. Y„ under the Act of March 8,1879.

2-9570 to 9576

WILLIAM DANA SEIBERT,

London,

Copyright 1953 by William B. Dana
Company

CHRONICLE

Reg. U. S. Patent Office
WILLIAM

Gardens,

Drapers'

land, c/o Edwards & Smith.

COMMERCIAL and

York Stock Exchange

•

Brunner Manufacturing

5

of Trade and Industry

Washington

Corporation

American-Marietta Co.

merger,

liquidation of established

Continued

Aerovox

42

Security Offerings

Prospective

27

new

ST., NEW YORK 4, N. Y.

Nashville

New York 5,

business

PREFERRED STOCKS

Boston

☆

15 Broad Street,

Telephone

ing the incentives of these groups*
This

TELEPHONE IIAnover 2-4300
•

16

Manager

Trading Dept.

15

the

to

has

more

nancial
in

that

impaired

Spencer Trask & Co.
'

Unlisted

State of the Union Message

Need

1

☆

JOHN F. REILLY,

REctor

Albany

*

Incentives

on

extent

structure

Exchange

'

Eisenhower Outlines Administration Program in

FINANCIAL

Members New

Burnham and Company

14

Coming Events in Investment Field
Restrictions

Sold

—

Members New York Stock

Challenging

■

25 Park

25 BROAD

Bought

13

14
a

Year for Banking

Published

specialized in

Universal Major

Recommending

Changes

Henry C. Alexander Says 1953 Was

The

have

9

Corp.

10

is obvious

employment and income

fcy the

For many years we

NYSE_.

on

read

the

Taca

5

"Exchange Distribution" Plan in Operation

the

on

have

levels

record

fects

Thompson have
read this article in manuscript and have
made helpful suggestions for its improve¬
ment.
They are in general
agreement
with
the findings expressed
in it.
My
■other colleagues who participated in the

t

Company

the

on

employment

years

■

Reeves Soundcraft

during this period.

Rockefeller

,

Professors Lintner and

Merrill

structure

limited,

more

both

in

15

to

my

■studies,«md

from

that

fore the Annual Meeting of the American
^Economic Association, Washington, D. C.,
©ec. 29, 1953. '

10

even

is

by Professor Butters be¬

Effects of Federal Taxes

tax

levels

and real income realized

The

taxation

and

economy

the

aggregate
Effect of Taxes

•4

4

Space Clock Introduced by

structure of this economy. The ef¬

Over-All

Industries

to J. Luther Cleveland

German Dollar Bond Trading Resumed
NYSE

Climate

Kleitz

L.

Watch

motivate

.■evidence underlying them will be
developed in more detail in the
paper.

Cinerama Productions

statement has to be made in

flat

unqualified terms, the strik¬
ing fact is that, by and large, the
tax structure appears to have had
only
a
relatively
limited
and

,then, what

in Decades According

Text
factual

some

all

Blythe Stason__j— 16

concen¬

country.
is

Cinerama Inc.

16

com¬

significantly

industrial

.

there

foundation
the

generalizations

in

While

-

K.

J.

gaged, and to
;t r y to sum¬
marize

degree

with larger

affect

to

as

WHitehall 4-6551

Great American

made

out

WALL STREET, NEW YORK

Telephone:

13

_*

Capitalism—Ruddick C. Lawrence

Business Operating Under Most Wholesome

enter¬

of

studies,

9

Nuclear Power—The Legal Situation—E.

save

objective

these

Cobleigh

their

new

Obsolete Securities Dept.

of

prises from being formed on an
adequate scale; that they have

^and at related

U.

prices!

our

♦

NYSE Monthly Investment Plan—An Idea for Democratic
•*

!

decisions. The

to

v

It is also claimed that

have prevented

CLU—Ira

hear

you

15

incentives

work

8

Paradise

in

6

Stock Market Forecast for 1954—G. M. Loeb_l

willingness and capacity to

business

and

basic

the

individuals

•

fects of taxes
on

'■■■■ Clues
to

be

.

have destroyed or seriously

impaired

the ef¬

on

the- last

when

Slichter

H.

You'll

99

heavy tax burdens which have
imposedvon the American

economy- for

4

People Will Have Money to Buy in 1954—Roger W. Babson_~

/*

been

at

us

1954 Sharp Recession—George C. Astarita__

a

Wage-Fixing Arrangements Promote Inflation?

—Sumner

other several years.

private

Do Our

an-

limited and specialized impact

3

(155)

Salle

St.,

(Telephone STate 2-0613);

W» V. FR1NKEL I CO.
INCORPORATED

in

39 BROADWAf NEW YORK 6
WHitehJl 3-3960

Teletype NY

1-4040 & 4041

Other Publications
Bank

and

Quotation Record

—

Monthly,

$33.00 per year. (Foreign postage extra.)
Note—On

account of

Direct

PLEDGER

the fluctuations In
.

the

rate

of

exchange, -remittances for for¬
must

eign subscriptions and advertisements
be made in New Yortr funds.

&

LOS

Wire

to

COMPANY INC*
ANGELES

1

4

(156)

The Commercial and Financial Chronicle

tutes

No Ground for

1954

a

ing.

Sharp Recession

are

recession

last,

predicting

or

even

a

writer

%

issue with the

Unfilled

opinion.

The

1953

Record

both

that

impetus"

cited

in

writer's

finds

now
xxv,w

itself

in

mild

a

recession

which probably will continue
for
some months. The
year

should witness

business

only

than that for
can

the

the

volume of

the

of

1953

confidence

factor

re-

Primarily,
ing

are

pessimistic

predic-

predicated upon declin-

commodity prices, rising in-

To

the

and

jeopard-

way

the extent

the

forestall

may

" *'v

-

-

...

p

j

tures- unfilled

orders

$28

scramble

a

being

ment

**

,

for

goods, the
would disap-

credit

the

is

.

form

another

of

ele-

again

reduced

backlog of unfilled orThese factors will be ana-

lyzed

for

the

rehabilitation

the

discuss

has expanded

in

mid-1947

from

to

credit

$11.5

$27.2

billion

billion

in

expansion of the economy and
population. Total installment debt

in 1938-39 amounted to about 10%
them in proper
perspective, but of national income and today the
let it be said that all
such factors, percentage figure is considerably
at any given
time, are only high less. The history of installment
or

low

in

or

balance

balance

depending

out

or

of

York>

payments is

a

sound

one

and there

salutarv
saiuiary

a
a

th^
and

that

L.

Kleitz

that in

stated

the

t

np,~pd
nessea

«nation

wittoiu

movement
movement

to ^
1

which

program

w

is

oper-

and

the

the

strike

mean

in

viewing

ou,2?ok Wlth. confldence-

a

note

sour

larger

but

categories

u

of soft goods and services.

•

7^e

^nef.al

mone+tary

banking situation
1953

will

than

as

of

it

was stronger in

had

been

for

many

the

the

economy,

nessed

salutary

a

nation

wit-

movement

to-

Keep jin mind that the present ward
the restoration of free marof the
economy.
If pecting any untoward events in high trend of prosperity is not ab- kets,
jn the money market this
business should continue its
normal, reflecting as it does a resulted in
presthe future,
a moderate rise in inent
declining tendency for a prodynamic economy brought about
terest rates during the first half of
n
tracted
as the result of an
period
these
expanding pop- the year, a
elements
Defense Expenditures
perfectly natural result
could cause
trouble; if business
Defense expenditures constitute ulation, a redistribution of the of the long-continued
increase in
should resume its upward
wealth
and
the
silent
course
a misunderstood
factor in that nation's
debt, and one which should have
such factors would
lose their im- actual expenditures are often con- workings of technological devel- been
allowed to occur long before,
portance.
But
now
to
analyze fused with
appropriations.
One opment. What was abnormal were
"More recently there has been a
these danger
spots.
is current and the other cumula- tbe depressed conditions of the decline in interest
rates on certain
Perhaps the most drastic de- ^ve» an(I therefore appropriations Prewar period, and comparisons
types of open-market
ture

the

upon

fu-

to

appears

be

cline and greatest discussion
have

income

garnered

proved

dex

to

past

the

by farmers has

same

business

history.

reliable in-

conditions

Then,

too,

as

dound

to

dustrial

the

benefit

community.

strong financial

of

in

lower

agricultural prices inevitably
the

pe

in

Today

condition

ex-

of

economy.

all,

of

the

>

a

major

„

be cut while actual expendi-

can

extent they are, taxes should be
reduced by at least a like amount
an(I therefore a deflationary gap
seems most unlikely.

Because to-

tal Government expenditures

in-

count for

the

a11 outlays and

the

his income minimize

possibility of

to the
not

for

re-

t™"aHnd *e limited £hrinkage
ltted
the

reason

course

e

not

no

threat

Because most, if

pric^ adjustment

approximately 25%

ac-

of

cannot be cut sub-

stantially, all other factors

bear-

'I"® on,the economy d0 80 on only
75% of total business. The

defense

program is

by far the largest ele-

with it therefore

which

progress

Panymg

misleading, partly

are

moderately lower levels during its
period of readjustment in 1954, it

sented

might

two

that

Such^ho^wever,
case

ing

and,

security

recent

prices

valuations.

to

a

upward

an

of

consti-

because

stocks

common

historically cheap in rela-

tion

all

to

chances

in

Railway

Canadian Dollars)

or

Burns Bros. & Denton, inc.
DIgby
Street, New York

5

investment yardsticks,

would

business.

and

high

with

the

•

Ottawa

•

Elimination

cost

facilities

reduction

excess

combat

in

^

dend
some

Winnipeg

of

in

part,
a

Because

old

together

new

at

more

a

overtime

labor-

demise of

profits tax should

vicissitudes of
economy.

favqr

letdown

any

saving devices and the

occur

Montreal

a

to

seem

wages, introduction of

TWX: NY 1-1467

feoSe^nrroSradL^
°m„at

serve

jeast,

the

competitive

over-all

divi-

payments are conservative,
shrinkage in earnings could
without

a

reduction

in

such

payments.
The total valuation of all stocks

wh^

th

the m?st wholesome economic ch-

ades- The Federal Administration
.

chnwn that it understand* th*

needs Gf

taken
Tb

free

a

steps

reformulation

poiicies

jn

affairs

such

relations,
b

for

more

fields

Ye"

dealings has

in

an

has

progress

than

more

these

been

pared for further cuts in
Tax

policy,

^gement policy^re

dividends.

process.

the
.

one

gress.

has

mination

serve

which

all being
a

view to

to

rather

shown

its

deter-

national inter-

than

group

interests.

Against this background, the busiand

ness

financial

warranted

in

community is

viewing

near-term and the

both

the

long-term out-

look with confidence "

Waller, Woody Admits
Three Partners
CINCINNATI, Ohio

Walter,
Woody & Heimerdinger, Dixie

A.

—

Muething.

Melville D. Weingarten
Melville D. Weingarten,
partner
in

Such

gross

Stock

must

Jan. 4.

If,

Exchange,

passed

away,

can

WHAT'S AHEAD?
Cycles—The Science
with

be

Prediction

now

appearing serially In CYCLES
Monthly Report issued by Founda¬
Cycles, 9 East 77th
Street, New York 21, N. Y.
.

.

.

—

New
a

members

will

giving

results

year

are

receive
of

edited

by

Edward

R.

no

or

6

large

aid

an

Reprints

our

plus

a

Chart

Projection

of

to

1990 of

This is the prospect, and
who waits for

cyclic

Chapters and Postscripts
already

issued

the

reports

Dewey,

Also FREE of extra cost!

of

10

latest

stocks, prices, business. They

with

should

;

a

tion for the
Study of

earnings

pressure

funds

of

Postscript

Director.

higher

either

1954

as

various stock market
cycles
1944. It has worked for 10
Ask for Chart C-14.

made in

years!

upturn

business to make his commit.

ments

with

to ConMost important of
all, the

assets

confidence^

The

years to

recommendations

government

ests

re-

pre-

policy, foreign-trade
policy, and labor-

farm

sell

investment

The

an(j the way has been

research in

in

reS

fields

made.

budget has been substantially
duced

restored to the investor and com¬
mon
stocks in that event could

materially

Droved

one_year

Weingarten & Co., New York

likely, taxes are to be re¬
duced, made more equitable and
designed to promote business in¬

increase

a

future date, lead
reappraisal.
This

than two decades.

then

fiscal

as

economic

City, members of the New York

seems

centive,

h^s

need3

national

agriculture, and labor-

much

job

of

international

management
t

and

economv

to meet thoje

than

larger

a return of the confidence factor
which, in large part, has been
absent from the security markets

nature

many times pursued

is

some

contrary to that of business trends,

continuing
s

to




times

under-valuation

inevitably, at

figure

of

Orders Executed in Canadian
Stocks and Bonds

•

three

or

a

event should be brought about
by

(Payable in United States

Toronto

the assets repre¬
stocks
would

a course

Canadian National

to:

To replace

present

fact, dursecurity values

years

It

.

ex¬

them

causes

the New York Stock Ex-

by
these
probably require

as a matter of

strong resistance to

Wires

lion.

not'XaysThe

is

credit.

prolonged than is
now generally
anticipated. ?
"In coping with
any problems
that may lie ahead, business will

change is approximately $115 bil-

on

bave

its

that

dinger, and Carl
listed

ment of the economy and because

Specializing in Bonds of

37 Wall

re-

seems

remain

4-3870

additional

If the writer proves correct in
his surmise that business will seek

Today,

Tel.:

inyestments,

as a result of

assurec* for the future.

seem

for

and

ar}d early

In credit, as in other sectors

years.

purchases

consumer

outlook

bank

for

intensively studied

L JZaL*tw 1

these

demand

come.

banking and business situation

it should be realized that dein

warranted

com-

Automobiles and ap-

u

clines

declared,

financial

close to the follows,

come

may

is

and

na-

t<^the b°^ ^ n.ear"ter™ and long-term

t^ehfdlcf. 1®

1953 record.

business

inter- munity

^a"geQpvpaCIra^e
so thain eveir

Elr«
here

governserve

M^

mergers

nliances

the

ment's determination to

? terms of new the New York bankers

^

struction

pcades'
5
including

°

gr0und,

in

and the independents to

m°ney

the

mate that hag exigted in twQ dec-

coping with anv
any

in

Decause by tbe knowledge that it

financing and Ford's present huge
financing and rords present nuge

ler

of placing

purpose

New

the

record

i-

ders.

of

.^e struggle to remain com- ating in the most wholesome eco^ Gen'ral Motors^ recent farce "omip climate that has existed m

appears
high historically but well within balance
in relation to the present size of

Installment

expenditures

of

which

economy.

billion

c°J
a

,th

J. Luther Cleveland William
Cleveland w.n..m
Co.

What they problems that may develop, "busiis t at such oui ays be
ness wM beaided
andencouraged

su<:n

in

adjustment

^

trans-

factor

more severe

expen<?'"
and the

-

expenditures probably will
the

a

4

Prospect is not forbidding Capital
approach

of

signs

as

pect that any such changes will be
moderate- unless
the
business

prices, inventories,
'

heralded

iseems reasonable, however, to

A luminary
Add them all up the problems
pers0

are being
decline
in

banking in 1954. Reduced operat¬
ing levels in industry and trade,
diminishing inventories and easiing prices would combine to limit

the"possibility of a later economic
collapse, it should be welcomed,

any event occur to

consumer

turn to financial
markets.

tions

Should

may

high prices,

new

no

of

one

number of developments that

a

major

attitude

business

economy.
such
caution

that

of commodity

recent

....

security prices

pattern

business

with

one

of

but in

inventory

will not continue in the im-

inventory problem
Pear overnight.
Personal debt in

lower

part

izes the
-

high
The decline

cautious

more

in

of

increase in bank credit
since the middle of the year. This

the general level of
business activity.
!'
"If this interpretation of recent
trends is correct, it is, of course, a

are
experts are confounded by rising kets
tuniounaeu oy xiMiig 'va,r?,

cause

moderately

possibility of

should

rate

serve

seasonal

J.

Presldent o£ the Guaranty Trust

capital expenditures.

volume of

1953, and again

guess that

follow

Today inven-

enjoyed

to

demand for credit is

painful in view of the still large
acted.

a

1953,

£e 1B°a"i,>aiad William L Kleitz

nrv?itinn
Rv
tory position will takp nlarp
will take place, ay
the same token however, the adjustment should not prove too

1954, how-

ever,

high

a

the

on

can

tnrv

George C. Astarita

holders

exceedingly

recent drop.

a

consumer

„

further reduction in the inven-

a

result that the
economy

the

years

fore¬

owuvuij

probably suf-

medfate"future"and"tha*t"p5ssibiy

cast, with the

In their annual
report to sharefor
the
year

most

sufficient

remain

reflects

favorable- -and- -unfavorable

accumulation

the

last

annual

orders

prices

tories are high in absolute figures
as "a pefcentage
of business volume. It would seem

into that "loss

the

consumer

only for
capacity operBy all standards, unfilled

despite

but not excessive

ran

orders

prices

commodity

business conditions.

but

of

other

any

farm

change in either direction under

for

business
at the end

for

They cannot be translated into immediate business and

ations.

about

i which already have

set

peacetime

orders,

reflection of

are a

therefore the economy needs un-

in the future,

ensue

alarmed

movement

national rather than
group interests and express confidence
on near and
long-term economic outlook.

confidence.

difficult therefore to be-

seems

come

salutary

a

Laud government's determination

penditures.

part,

\ fered their major declines.^
Inventories are volatile and

majority

for many years and nation has
witnessed
toward free markets.

and therefore larger consumer ex¬

farmer should

or

takes

Cleveland, Chairman of the Board, and William L.
Kleitz, President of Guaranty Trust Co. of New York, hold
banking situation was stronger in 1953 than was the case

the continuance of

It

12 months,

J. Luther

mild decrease in

any

lies behind, improvement for the

a
sharp
depression

collected

taxes

and

age

expenditures should find
reflection in lower taxes

ready

a

fore-

most

during the following
Again
this

a

reason

filled

at

year,

Operating Under Most

Wholesome Climate in Two Decades

defense

commodity prices; inventories; consumer debts; defense
and unfilled orders. Concludes, study of the

casters

year

old

this

1954 recession, Mr. Astarita

forbidding prospect, and contends
present high trend of prosperity is not abnormal, but is result
of increasing population, redistribution of nation's
wealth, and
silent workings of technological development.
This

Business Seen

unemployment
insurance have equalled the in¬
crease in
the public debt for the
period between 1947 and 1952. For

expenditures;

situation does not indicate

reveal that

for

discusses the current and prospective situation with reference
to:

hereto¬

Its

would

Boettcher and Company, Members, New York Stock Exchange
Colorado Springs, Colo.
a

factor

cost, however, has been
fully saddled upon the American
people.
A true cash accounting

By GEORGE C. ASTARITA

Taking issue with forecasters of

sustaining

a

fore unknown in economic think¬

Thursday, January 14, 1954

...

ACT NOW! Send $10 today
above. Money-back if not

for

all

>

'

of

delighted with

may

miss

the

bargains

first

report.

after.)
seem

to abound

today.-

-

-

...

.

(Pro-rata

any

time

there-

♦

,

itk

i

Volume 179

Number 5290... The Commercial and Financial Chronicle

(157)

World's First

Observations.
The Investor Swung to the Left

"Mars"

In hailing President Eisenhower's State of the Union
Message

contaning "a great

as

week

many New Deal recommendations," Mr.
this column to have for once risen to valid as

to

seems

apt off-the-cuff commentary.

as

from

official

timepiece

entials

aid

to

world's

the

Director

"In

modern

a

and

public

press

.

.

all levels of government";
together with the urgent warning—a la Roose¬
Attlee

-

-

Tugwell - Keyserling

Wiltred

A.

philosophy—that economic
growth cannot be left to "chance," but requires

May

vast amount of

a

t h

of

e

Com¬

pany,

of

ors

to

the

is

in New York.

the President's

recommendation

.

that unemployment

be extended to 6M> million workers not

insurance

beauties of Welfare State-ism be further distributed by extending
old age and survivors' insurance to 10 million not now
eligible.
Consistent with such Welfare-ism is Mr. Eisenhower's renewed

request for Congressional action to raise the debt limit.

in

advance

of

any

action

suffice

—

time"

other planets, the

simultaneously records the
hours, date, month and year on
Earth and the planet Mars.
"Of course, the Hamilton

the

recession-depression area of intervention, the Presi¬
dent himself, apparently in self-defense against the
ever-recurring
"do-nothing" charge, now reiterates his lieutenants' reassurances
about the anti-depression antidotes on his
shelf; listing public
works and grants-in-aid among the measures for "economic pre¬
paredness." Incidentally, this recurrent soothing from on high
prompts the query whether the very promise of anti-recession
measures may possibly by itself—through its
psychological effect
and

on

clock

A nti - Recession - ism

In

"Earth

between

and the time

to

forestall

stage," Dr. Levitt explained, "but
it is important as the first attempt
to
demonstrate
the
inter-plane¬
tary time differentials a future
space explorer must consider
when planning j o u r n e ys into
outer space."

depression

("nothing-to-fear-but-fear" ad absurdum).

Space
experimental

is still in the

Clock

After

completing

a

series of

calculations

tronomical

lay off 7,650 workers on Monday of this week as a result of
production cutbacks. The company gave no reason for the

lower production

Created to demonstrate the dif¬

ferences

February, 1950.
industry the Chrysler Corp. was scheduled

new

Dr. I. M. Levitt

held at the Waldorf Astoria Hotel

covered; and that the

now

and

In the automotive

project.
The
reception was

.

many

holiday

spons¬

with "a progressive and
dynamic program for the welfare of 160 million people."
As one course of implementing such
ideology—in an attitude
that surely can be fairly characterized as "anti-anti-socialistic"—
.

plants resumed operations following the closings for
inventory-taking in recent weeks.. However, total
output of the nation's factories and mines was down moderately
from the high level of a year ago, with the most pronounced
as

number out of work reached 4,700,000 in

Plane¬

ident

in¬

terventionist

study, coordination, and planning

Recovery was noted in total industrial production for the
as a whole in the period ended on Wednesday of last week

nation

Watch

Fels

proper concerns of

velt - Truman

J

Lay-offs continued to mount in many lines. This was es¬
pecially true of consumer durables, farm equipment and textiles.
Claims for unemployment insurance benefits held noticeably above
a year ago and such claims are mounting, according to a 19-state
survey. The United States Department of Commerce's latest offi¬
cial count placed the jobless total at 1,850,000 as of Dec. 12.' Since
then, government experts estimate, the figure has probably gone
above 2,000,000. The increase is particularly noticeable, some labor,
sources say, because it started from a remarkably low count of 1,200,000 last October. So far, unemployment hasn't approached the
level of the last business shakeout in the 1949-50 winter.
The

of

tarium, Phil¬
adelphia, and
George P.
Luckey, Pres¬

society, banishment of destitution and cushion¬
the shock of personal disaster
are
.

Business Failures

declines in durables.

Franklin
Iristit ut e's

industrial

ing

as¬

several

The Plymouth division will furlough

schedules.

2,350 employees at its Detroit plant, reducing its labor force there
to about 9,000.
Also affected by the Chrysler action are part of
the workers in its automotive body: division,- formerly Briggs
Manufacturing Co., which makes Plymouth bodies. About 5,300
of

total of 30,000

a

Detroit workers in this operation will be re¬

leased.

Although the boom has eased, steel business continues to set a
sturdy pace, "The Iron Age," national metalworking weekly, re¬
ports the current week.
This bellwether industry gives no sign
that the economy is headed
decline.

A lot of

this doesn't

into anything worse than a moderate
somewhat belatedly pointing out that
unnatural after a record breaking year for

people
too

seem

are

most industries.

Steelmaking operations this week are scheduled at 75% of
newly revised capacity, unchanged from last week. The industry
seems likely to continue at about that pace for the next several
weeks.

tions

After

that, there might be mild improvement, as opera¬
a probable high for the first half
in March,

toward

move

it observes.

months ago, Dr. Levitt asked the

A number of

ble influence of wage

incentive to reverse

Hamilton Watch
Company, a respected pioneer in
the American watch industry, to
turn his theory into a working

the White House's

model.

In the fiscal area,

'

inter-plane¬

the

particularly .satisfying to Mr. Truwas this underlying theme expounded
President:

Industry

Hamilton

.

Key noting the various specifications (and

,

and

,

Production

space

,

doubt

1 man)
by the

Commodity' Price Index
Auto

\

first

scientific

climate.

.

future

today by its
inventor, Dr.
I.
M.
Levitt,

no

State of Trade

demon¬

to

explorers.

vote-hunger—are not gerthis essay, which is concerned with
assessing the present and prospective economic
•

Retail Trade

introduces

timepiece, the Hamilton
Space-Clock, was introduced to

to

mane

.

Carloadings

tary

are

therefor—notably

.

.

Electric Output

inter-planetary time differ¬

The

continuing to move away
recaptured free economy. The reasons

a

strate

For in his messages-of-the-

Republican leader demonstrates un¬
mistakably how far he, and those of his party
our

willing to follow,

Steel. Production

The

Food Price Index

Planetarium

well

e

Hamilton Watch Co.

By A. WILFRED MAY

Truman

Space
by

Clock Introduced

5

the President's plea to cancel the automatic
tax reductions scheduled for April first next, particularly the per¬
sonal income levies, is disheartening to those relying on the Campaigning-Ike's earnest diatribes for the promotion of individual

of the

us from the brink of socialism.
Coming after
"good fight" for deferment of the termination

generally condemned

profits tax, this further "stall¬

excess

ing" on tax reform, including rates, surely warrants doubts about
the

Administration's

intentions

to

whole-hog for free enter¬

go

prise, tax-wise.

:

i

,

Incidentally, the President's tax policy places him "to the left"
even of the Committee for Economic Development, which has been
regarded as the Administration's "liberal" influence.

62-year-old

The
clock, which holds four
dials, divides the Mars year into
the conventional twelve months,
and those months into days which

Mars—are 24 hours, 37 min¬

•—on

23

utes,

In the field of

declaration

foreign aid: the President counter-balanced his

that economic aid-—with the exception of Korea

other sensitive

some

be reduced,

areas—can

tion to maintain Mr. Truman's Point Four
In his messages on

recommendations
the

also

with

of

extreme

more

In

all

direction

the

recommenda¬

a

subsidy.

farm and labor legislation, the President's
manifest

unmistakably his commitment to

market—the

free

"needling"

in

lieu

assumed

of

this, whether by design

or

electorate's tranche

New and Fair Dealers

Whether this

by

the

cir¬

One

dial

set

records Earth time,

other two

works

enclosed in egg-shaped

are

not, his appeal lies in the

successfully consummated is

plexiglass casing which is
mounted
on
a
square
pedestal
with two rectangular brass feet.
The

was

because

clear understanding

problems involved in

should

travel

consideration
who

question of

a

a

theory

Dr. Levitt

by

the time

space

Clock

Space

conceived

of

comprising the conservative

new

of

contemplate

be

those

wage

be

may

a

Added to usual
ness

we

can say

discouragement

prices, with
rise

in

a

as

to its impact

and

decline

for

the

near-term

of

future

dip in steel business

equity prices, not real values,

the

over

very

long term—

with, the extent of that later rise correlated inversely with the ef¬
fectiveness

of the

prospective anti-recession nostrums.

are

pleased to

announce

(Special to The

tone

product run-down of the market reflects the comfortable
of demand.
Among the tonnage products, about the only

tight items is seamless tubing, this trade magazine states.
Hope for a spring upturn seems based at least in part on
simultaneous resurgence of automakers and suppliers, farm equip-,
ment makers and manufacturers of air conditioning and refrigera¬
tion

equipment.
Air conditioning gives promise of being the
brightest star in the appliance field this year, it points out.
«
Steel producers are really surprised at the apparent heavy
tonnages consumers held in inventory when they decided to re¬
duce their stocks.
Even though they now feel sure the inventory

Continued

CARL

Clinch

,
•

in

our

as

is

Marshall

The

now

"'a'-

r

'

'

•

>

Financial

affiliated

Company,

with

765

New

&

Terminal

CINCINNATI
———;
i

#£)IIIO
.,

...

'

<

»*

'

the

BENJAMIN

The

.i

NeW

'I

>1

K:-:T

Feb.

direction

J.

companies.

trusts.

Co.,

36. Wall

Street,

investment

sound

15

Broad Street
'

'

York City, members of the

FAYE

PEYSER

F.

•

i

•

4-6300

•'

service
:

& Co.
sincei.ih99

NEW YORK

n

SCN. Y.

'

teletype

York, Stock Exchange, on
i will admit RycierfHepfy,I|

tQi limited partnership,

etc

of

,«.*

.i,




AN

North

whitehall

-

OF

AND

-

.Xtixje

insurance

investmen1

JAMES

Chronicle)

Bache Co. to Admit

"

Walter, Woody & Heimerdinger

38

DEPARTMENT

Street.

Bache

,.$03

FORMATION

IVowIiiirj?cr. Loeb

'

■

funds.

under

partners

firm.

banks.

service

pension

Co.

Water

.

to

was

to

THE

INSTITUTIONAL

formerly Grass Valley
representative for Conrad, Bruce

Wulff

MUETHING

have been admitted

ANNOUNCE

With Marshall Co.

•

page

Financial Chronicle)

MILWAUKEE, Wis.—Eugene C.

HEIMERDINGER
A.

WE

with Francis I. du Pont & Co. Mr.

that

JOHN N. FUERBACHER

on

inter-planetary

VALLEY, Calif. — C.
Raymond Clinch is now associated

(Special

JOHN M.

be deeper this year than it has been

A

scientists

GRASS

&

We

may

since 1949.

With Francis I. du Pont

stock

subsequent socializing inflation-propelled secular

agreement.

expeditions.

the investor:—it indicates mild

on

without

spring buying upturn, this could make steel busi¬
pretty good during the first half.
If the wage question is settled amicably, the seasonal summer
look

political strategy which this columnist is not qualified to appraise.
But

entirely

fair amount of strike-hedge buying of steel if the bar¬

gainers get close to contract termination

major

a

an

contract before June 30, at least two large producers

have been assuring their customers that a strike is highly im¬
probable, this trade authority notes.
A strike of course would tighten the market overnight.
Since
a
lot of consumers know this from personal experience, there

month-

are

and-year calendars for both Earth
and Mars.
The face and exposed

he felt that

plus the "liberal" Republicans.

be

can

the

while

the

Right and Left wings' notwithstanding.

of the

The

amber

exigencies of political middle-of-the-roadisrn

motivation

and

time.

Martian
the face

into

Abroad

long.

Despite the fact that most steel firms must negotiate

cumference at the face itself indi¬
cates

Middle-of-the-Road

seconds

important steel consumers are alert to the possi¬
negotiations on their steel supply this year.

\

n y

1\-2q33

C

The Commercial and Financial Chronicle

(158)

1954

Thursday, January 14,

...

•
■

i

-

.

the

Do Our Wage-Fixing Arrangements
Promote Inflation?
I
J

opportunity to hold down labor costs by bolstering employer
resistance to union demands.
Declares large employers yield
its

readily to labor's claims, forsaking fight for the consumer.
tend to raise wages suffi¬

too

of

in

1861, 1867, 1870, 1885,1888, 1891,
1904, 1908, and 1949 produced no

of helping

of

success

quite

was

I have referred to the loose

foreign policy.

our

earnings

small.

ciently to require slow advance in price level; and this has
incidental advantage

hourly

age

Concludes wage-fixing arrangements

re¬

lationship between the movements
of

I

It

is

now

or

than

more

eince there has been

20

annual average of hourly earnings
for American industry as a whole.

This

is

supply

curve

attention.

little

drop in the

a

the

o

f

influences on the

supply of labor.

on

Influences

Before

the

beginning

dex

in-

of-the

hourly
ings on

side of the labor mar¬
ket. The history of wages makes
it plain, I think, that the individ¬
ual, unorganized worker in the

non-

agricultural
workers

1840.

in

In

1860

favorable bargain for

1872

and from

to

1908

1920

Suinner

H.

Slichter

books

averages of hourly earn¬
ings have increased steadily for
12 years.1
There has also been a
25-year period, from 1895 to 1920,
when hourly earnings did not fall,
but in four years during that time

they did not rise.

The end of the
in hourly earn¬

advance

ings is not in sight, at least if the
influence of penalty overtime on

on

deal of non¬
the weak bargaining
good

a

about

sense

and trade union¬

wages

contain

ism

the

annual

present

long

the capacity to drive a
himself. The

possessed

from

to

has

market

labor

American

two

periods,

closely at

more

the supply

earn¬

position of

workers.

unorganized

The fact of the matter is that even

before trade unionism became im¬

portant, the gains of technological
went in the main to peo¬

progress

their

in

ple
their

capacity

rather

earners

than

capacity

The

changes in output

wage

as

to

people in

consumers.

as

per man-

hour and changes in

hourly earn¬
industries during

34

among

period 1923 to 1940.

and

Side.

Supply

on

look

we

happened
to money
wages and prices during the last
century, let us examine briefly
some of the specific influences on

the Bureau of
Statistics'

tween

coefficient

has

what

f

o

.

cient of rank correlation of 0.6 be¬

the

II

rec¬

since

productivity and hourly earn¬
ings.
Garbarino found a coeffi¬

ings

the

unbroken

ord

have

also

So

other important

Congest stretch
rises

leftward shifts
has received

may even cause

in

years

in

relates

there

to

far

was

But this

ranks

only,

variation

more

manhour than- in
The six industries with

output

per

earnings.

the largest increases in output per
manhour
(an average

of'226%u)

had

an

increase in hour¬

average

ly earnings of 39%, and the six in¬
with

dustries

the

In

18

change in
ings, and

in

i

increase.2

78

The

has

course,

there

years

was

hourly

average

there

rise

been

of

was

an

prices,

much

no

earn¬

of

smaller

soon

as

supply

a

that

means

as

is set, the labor
changes. A gap ap¬

wage

curve

in

pears

wages

the

to

curve

the

left

of

than the rise in money
wages, and
also less continuous. The index of

the existing wage.
Consequently
in the labor market when demand

the

curves

wholesale price

creased

while

ings

little

a

the

has

level has
than

more

index

of

130%,

hourly

increased

in¬

earn¬

than

more

16

times that amount.

of

the

influences

determining

that

the

have

been

movement

of

sup¬

undoubtedly

curves.

there

demand

for

changes

ten¬

a

in

changes in the

labor

rather

than

by

in

supply and demand.
particular, the prolem of in¬

flation

has

matter

mand

of

curves.

such shifts
ward

been

viewed

a$

a

rightward shifts in de¬
The

possibility that
discourage right-

may

shifts

in

the

is

do

supply

curve

that

cline

wages

when

ences

long

and

make

S'

No.

Bu,eau

of

pp.

Slichter
the

presented

paper

before

American

.Washington,

D.

the

by

annual

Economic

C.,

Dec.

29,




Professor

meeting
of
Association:
1953.

willing
of

Wages

in

Times

521

and

2 Even the inclusion

ings

in the averages

age

hourly

below
hours
and

of

In

work

highs

41.1

in

Labor
the

risk

to

Statistics,

United

not

earn¬
aver¬

to

drop
weekly

manufacturing,
dropped from

have

of

41.7

March

in

their

December

1953

to

39.9

1952

in

No¬

vember

1953, but hourly earnings, includ¬
ing
earnings
from
premium
overtime
lates, have risen from $1.73 in
December,
1952

to

$1.75

in

March

and

$1.78

in

was

no

eighteen

early

data.
to

Although

provide

in

years

change reflect

the

the

accurate

which

there

crudity of
data

are

the
too

measurements

of'the

change between any two years,
they undoubtedly give an essentially ac¬

curate

measure

magnitude

of

of

the

the

direction

trends.

and

the

na¬

During the second
period, largely because of the rise
in prices, the money supply in¬
less

creased

1%

than

increase
It

come.

is

for every

than

in hourly earnings of 11%.2

crease

Among

18 industries for which

the Bureau of Labor Statistics has-

estimated

increases in

manhour

there

output per

1939 and 1950,
significant relation¬

no

increase

rank correlation

coefficient

in

the

cur¬

only 0.2.

was

in

the

supply of money
large rise in prices in
second period?.-The greatest

crease

produce
the

a

single influence
has- been

war

The

war.

the price level

on

the

or

,

absence

the

during

wars

absence

of

of/important

last

of

quarter

19th century made it possible
for the money supply to grow far
the

faster than output

being., bid

in output per manhour

crease

57.4% ) had

average of

(an

increase

an

in hourly earnings; the
six industries with the lowest in¬

the

was

great

the

57

sale

been mainly a
rising prices. In 38 out of
the index of whole¬

in

years,

prices

the

the

preceding
of

It

has

year,

been

as

high

the turn of the

Second

World

War,

the

War, and the fear of
which
then

Korean

third world

a

created

strong

every

now

preferences

of

by

are

Important

in prices, moving up more
promptly and completely in re¬
sponse.to advances in the price
level/ This is indicated by com¬
rises

the movements of prices
hourly earnings in periods of
prices. (Table II)

paring
and

believe

I

and

of

all

Statistics
rG45.

the

of

circulation.

the

United

262. 263 and

no.

demand

period,

them

use

States,

rather

1789-

274.

If figures

for

available

for

might

it

Historical

were

deposits alone

entire

to

in

money

be

than

preferable

total

deposits,

but

the exclusion of time deposits (which
include
savings deposits) would be de¬
batable.
For

national

1850

income

Income

casional

Paper

of

No. 6,
Research,

Economic

1900

Dewhurst's,

in

of

estimate
1896

the

national

made

was

by

and

1890

1896

on

79th

duction,"
Committee

An

for

made

that

the

income between

same

the

as

rate

Congress, first session,
Table E 1, p. 11.

Print No. 4,

national product figures, which
are
expressed in 1944 dollars, were con¬
verted
into current
dollars
by the use
The

of

gross

wholesale

of

index

period

1930

national

to

income

Commerce

were

the

difference

and

that

The
in

the

of

national

the

For

1950, estimates of the
by the Department of
used after adjustment for
these

between

Kuznets

changes

prices.

for

the

in

the

money

income

were

Money Supply

estimates
year

1930.

supply and
follows:

as

Such

1896

$306

1950.

12.3

190,926

periods

(1865

the

of

The two

wrong.

1871

to

and

1896) when hourly earn¬
ings rose most in the face of fall¬
ing prices were partly periods of
cyclical expansion and partly pe¬
riods

of

contraction.2

Further¬

in the first of these periods,

more,

the

rise of wages in the face of
falling prices was undoubtedly in
part a result of the great lag in
wages behind prices
during the

period
the

of

the

Civil

recent

more

All

War.

of

periods of falling

prices, except, the last,
riods

of

all

in

were

pe¬

contraction

business

and

of

them

rise

of

wages

ably with the great period of
traction in the 70s.

As

con¬

matter of

a

fact, the rise of wages relative to
prices

brought
7 The

for

for

the

fect
the

of

both

goods

half
the

of

had

than

of

first

to

the

in

money

the

there

century.

34

were

expansion and 50 months of
in the second, 90 months

expansion and 90 of contraction. A. F.

Burns

and

Business

C.

W.

Cycles,

p.

Mitchell,

Measuring

78.

TABLE I

prices is
in 1896.

Rise

Rise

customary to attri¬

during the second half of the 19th

index

of

sale

Period

in

the

whole¬

prices

ings

agricultural

the

in
as

hourly
a

earn¬

percent
in

rise
sale

employers

of

whole¬

prices

3.0%

60.0%

8.3

5.0%

1843-1847.

Rise

in hourly

earnings of non-

56.8

move¬

1849-1856.

14.6

20th.century mainly to
monetary influences. Such expla¬

1860-1865.

116.7

48.7

41.7

1879-1882.

12.4

6.8

54.8

1896-1907

40.2

29.0

72.1

and

the

upward

ment in the

nations

are

Money is

not

satisfactory.
medium through which

a

other

influences

level,

but

of

money

an

the

price

affect

are

in

not

of

level.

1915-1920

122.2

127.2

1932-1937

33.3

37.8

113.5

supply

1939-1948

108.4

113.2

104.4

1949-1951

15.7

13.2

themselves

movements

As

a

the

current

national

dollar

income

matter

value

of

the

current

by

4 An

conceal

value

of

four

unchanged

TABLE II

the

Change in hourly
Fall

in

wholesale

prices

Period

Periods

7.4

1847-1849
-

non-

in

index

the

.

14.3
13.1

0

average

1865-1871

37.3

+ 17.2

86.9

1872-1879—

national

and

30.4

—14.5

23.0

29.7

*+

one-

55.7

9.5

Periods subsequent to

may

drop and a rise within the
year,
but the drop would not be a long
one
and almost certainly not a large one.

prices

15.1%

5.9%

1896

a

1920-1922

37.4%

—11.2%

41.8%

1929-1932

32.0

—20.2

11.7

Garbarino, J. W., "A Theory of In¬
terindustry Wage Structure Variation."
Quarterly
Journal
of
Economics,
May

1937-1939

10.7

+

2.1

14.3

1948-1949

5.0

+

4.2

9.7

1950,

1951-Julyl953___

3.4

+ 11.3

15.2

5

pp.

296-297 and 298.

of

rela'

index of

'

0

11.6

to

wholesale

employers

prior to 1896

-f

Rise

hourly earnings
tive

agricultural

13.1%

1840-1843_-_

1856-1860

earnings of

1882-1896

the

annual

84.1

1

of

than

about

'

of

during the
first half of the 20th century, Be¬
tween 1850 and 1896, for example,
the money supply .of the United
States increased by over 15 times;
income

-

104.1

price

the

changes in the

explanation

of

rest

nineteenth

period

ef¬

greater

during

the

so

supply

money

far

a

creation

strong pref¬

a

relative

period

prices

on

last

the

created

War

increase

brief

a

(even the great de-

about

Civil

erence

that

in the later periods

per year

of contraction

contraction;

219.8

the

relative to prices compares favor¬

8 In

$2.2

6,992

_

be

to

months

Income
(billions)

1850

more

interpretation

an

would

early
1882

National

(June 30)

(millions)

great

resistant
to falling prices, but this cannot
be demonstrated statistically. In¬
deed,
a
superficial
glance
at
Table II showing the movements
of hourly earnings in periods of
falling prices might lead to the
conclusion that wages have be¬
come
less resistant to a drop in
prices. (Table II)
wages

the

income

assuming
the

pub¬
Needs

696.

p.

change in the gross
between those dates in
Employment and Pro¬

product
Facts

"Basic

4,

the

for

estimated

national

was

na¬

from

estimates

of change in national

rate

and

38;

America's

Appendix

Resources,

of

in

and

p.

Kuznet's

1930

to

lished
and

for

"Uses of
War", Oc¬
National Bureau

Peace

in

used

estimates

published

as

National

have

I

Kuznet's

1900

to

tional

income,

recent

the

that

gains in trade union membership

for

supply I include total de¬
banks (demand and time)

money

posits

market.

the

have

changes

table
6 In

as

bute the downward drift of prices

century

near

century, the First World War, the

and today

wholesale

nearly 3.7 times

not
the demand

however,

explained

solely

the

between

differences

periods,

higher than

averaged

index

during the last

War, the Boer War, the Russo-

can

Japanese War

present, 1 has

time of

The
two

without prices

It

up.

The second period, from 1896 to
the

great innovation, but wars have
undoubtedly been the strongest
influence pushing up prices dur¬

have

The

of 116.8%

fiscal
policy
after
a price rise was a

create

to

been occurring on
the supply side of the labor mar¬
ket. As a result, wages have be¬
come
increasingly - sensitive
to

of

six industries with the highest in¬

use

side

war)

The

deliberate

The

ing the last half century. 7

drop in prices in the
first period, and why did the in¬

and

earnings.

of the
of

the demand side

not prevent a

ship
ly

on

market.

rent value of the national income,

per

between changes in output
manhour and changes in hour¬

ences

1933

1896 to 1953.

between

was

no

government

raising prices
1850 to 1896 than in

the

were

in¬

the

money was

'Why did the enormous increase
in the supply of money, far great¬
er

I do not assert that there
other important
influ¬

goods.

that

far less effective in

the period

as

in¬

supply of

in the period

compared to money. The
preference for
goods
of money and attempts to shift
from holding money to holding
goods

strong

national

evident

in the

crease

1.6%

the

in

wars

November.
3 The

the

tional income.6

19th century the supply of
money
increased far faster in relation to

cause

1954

increase

of

fact, during the latter half of the

overtime

in

value

(the Spanish-Ameri-

States

574.

of

1%

every

50-odd years

Bulletin

1928"

to

may

earnings

1953.

yecent

experi¬

Only a fairly
depression will

severe

Colonial

604,

readily de¬

economy

employers

'History
from

the

not

depression.

a

crude

♦A

established

The practical result

,

been

the

been cleared.

rea¬

movements

by

wages

demand

has

explain

to

money

In

in

Perhaps that is the

why

son

dency

shifts

than

Hence, there is equilibrium
though the market has not

even

ply
side
of
the
labor
market.
The shifts in
supply curves in the
labor
market
are
the

less

some

wages
in the
American
labor market does not
pretend to
be comprehensive. Attention
will
be directed in the main to the

than

will accept, but by the
unwilling¬
ness of the successful sellers to ac¬

wage.

money

less

left, the price
is set, not by what the non-sellers

cept

My present examination of

shift to the

for

current

more

frequency of

strong

money

3%

the

the

increased

smallest »in¬

workers to accept cuts in custom¬
ary

than

Consequently,

supply

productivity (an aver¬
age of 25%) had an average in¬

in

creases

bargaining position crease in output per manhour
(an
of unorganized workers is attri¬
earnings is excluded.2
average of minus 4.1%)
had an
Money wages in the United butable primarily to two condi¬ increase
of
111.8%
in
average
States have always had a strong tions—the ability of workers to
hourly earnings.
tendency to rise. Today the aver¬ withhold
efficiency
when
the
Ill
age non-agricultural worker earns
wage or working conditions are
as many dollars in an hour as his
unsatisfactory, and the unwilling¬
Wages and Prices Since 1840'
predecessor earned in two 11-hour ness of employed workers to ac¬
Let us now look briefly^ at the
in customary money
-days back in 1840. As a result of, cept cuts
broad .movements of wages and
the rise in prices, the hourly earn¬ wages.
Workers who feel that
prices since 1840. The time may
ings of a worker today will buy their wages are unfair or who fail
be conveniently divided into two
only about nine times as much as to receive increases which they
the earnings of a worker in 1840. regard as fair become less cooper¬ principal periods of approximate¬
Were trends of the last 113 years ative and more difficult to man¬ ly equal length—the first, 56 years
in length, from 1840 to 1896, and
to continue for another 113 years, age. Employers know that a dis¬
the second
57
years long,
from
the hourly earnings of non-agri¬ satisfied labor force is inefficient
1896 to 1953. The first period was
cultural workers in 2066' would and expensive. That is why there
in
the
main
a
time
of
falling
average $35 an hour, but would is such a loose relationship be¬
prices. In 33 out of the 56 years
have a purchasing power of about tween
changes
in
wages
and
the index of wholesale prices was
changes in output per manhour
$14, or $84 for a six-hour day.
lower than in the preceding year,
The rise in hourly earnings has and why firms in industries where
and, in the year 1896 the whole¬
technological
progress
is
slow
not
been
continuous, but there
sale price level reached the low¬
have been only 17 years in the last raise wages almost as much as
est point in the last 113 years. In
firms in which technological prog¬
113 when the annual
average of
that year, the index of wholesale
ress is rapid.
non-agricultural hourly earnings
prices was one-fourth below the
The unwillingness of
was lower than in the
employed level of 1840.
preceding
year.

times.

money

1927, and 1938 were accompanied
by increases in the annual aver¬
ages of hourly earnings.4 Even in
the
relatively severe deoression
of the nineties, the drop in aver¬

supplies key to labor-inflation trend, through

Professor Slichter

half

unorganized
workers. Thus, the mild recessions

in the annual average of
hourly earnings, and the mild re¬
cessions in 1854, 1900, 1911, 1924,

Harvard University

Lamont University Professor,

cuts might

wage

among

even

drop

SLIGHTER*

By SUMNER II.

that

strikes

provoke

Number 5290

Volume 179

pression of the 30s)

..

.The Commercial and Financial Chronicle

the

greater

was

,'.i

IV

The Principal Supply Influences
1

Five

influences

principal

of

the

work

growing
among

popu¬

women.

1 Among
young
men,
especially
those in the age brackets 20 to 34,
the proportion in the civilian

'

I

of

result

larity

than in the 70s.9

labor

on

has

force

substantially,

the supply side of the market

been

dropping

least since

at

the

responsiveness

of

(1) The Decline in the Ratio of
the Adult Population in the Labor

1840 there

Force.

Part of this decline, name¬
ly, the withdrawal of many older
persons,
has
been
involuntary.
Nevertheless, the proportion of
population 10 years of age or over
in the labor force, after climbing
considerably from 1870 to 1910,
dropped substantially in the next
30 years. Had it not dropped, the

labor
been

in

force

1940

would

5.2

million, or
than-it actually was.
there has been

proportion

of

14 years

of

worker

of age

civilian labor force.

to

will

1915

for

Since

that

have

cultural.

covery

1915

as

brief

a

in

to

periods

of

neither

stability.

in

1908

Between

that

a

year

the

mechanical

arts.

(3)

The

in

Drop

Immigration.

have been

workers.

bership

24

re¬

and

1929.

spurt in mem¬
turn of the cen¬

the

at

tury caused this proportion to rise
to over 5% by 1900. By 1910, the
proportion was nearly 10% and
by 1920 more than 19%. By 1933,

agriculture had
by 1950 to 7.6. The

in

where

areas

relatively low.

importance

in

is

1950

of

years

was

25

the

of

explaining

34

labor

force

20

ernment

wages has been

on

unintentional,
stances

it

but

has

in

in¬

intentional.

been

Except for the period of the Sec¬

signed, in the main, to help

of proprietors, managers, and pro¬
fessional workers. It was in 1933,

sellers of labor get a better price
rather than to help the buyers

of

keep

of

the

average

size

of

the

labor force during the decade.

In

other decades, such as the

or

70s, net immigration
one-sixth

or

more

labor force.11

was

60s

around

of the average

The first decade of

this

century, when net immigra¬

tion

was

18.7% of the average la¬

down to less than 7%

that

course,

of the non-

unions

into their

come

own

was

began

to

with power¬

ful aid from the government. By
1940 union membership was about

law.

It

that

means

the economy in periods of expan¬
sion can no longer readily attract

large

quantities

abroad.

(4)

•

and

by

1950,

labor

from

products compare with the labor
in

the

rangements

gain

(5)

The

Wage

extent

for

favorable

of

the

helping
terms

ar¬

sellers

from

of Trade Unions.

Development

Policy of the

their

of

the

Government.
years can

the

policy, but in recent

wage

had

consid¬

of

de¬

the

the price down.
This has
spite of the fact that

the

itself is

government

large

a

purchaser of labor.

Unions' Influence
A

number

of

doubts

expressed

Wages

on

economists

that

have

trade

unions, despite their rapid growth,
have

had

man,

much

influence

Professor

wages.

money

on

Fried¬

in his stimulating discussion
Significance of Labor

"The

on

Unions

for

Economic

Policy" has
"laymen

expressed the view that

Only within the last 30

have

to

seem

been

40%.

about

the government be said to have

The Rise

Unions

of

..

has

25% of the non-agricultural labor

force,

two-thirds of the work¬
force, was the last period of
large immigration. During the 20s ers in manufacturing, and fourfifths in construction, transporta¬
net immigration was
only 7.1%,
of the average labor force, in the tion, and mining are organized.
30s there was no net immigration, Only the markets for agricultural
1940s immigration was

government

been true in

Around

bor

World War, the influence

ond

the

government

has

a

years

become

an

and

economists alike tend

exaggerate
which

labor

structure
rates."12
far

so

as

.

.

.

to

greatly the extent to
unions

and

affect

level

the

of

wage
Professor Friedman goes
to assert that the United

Automobile

Workers

and

Union

Workers

"were

the

according to the census,
and the male labor force

years

of

age

was

erable influence for brief periods
in some parts of non-agricultural

important influence in

industry in the 19th century, but
the su,stained influence of unions

government purchasing has broad¬
ened
the
opportunities 'for, the

wages of their members from ris¬

government to influence wages. It

ing

10,664,000.

1897,,.

market.

with the 20th century. In
union
membership
was

about 3%

of non-agricultural

ployment,

other-

than

em¬

exerts
Fair

self-em¬

The

participation
rate
of
1930
would
have produced a labor force of 4,906,000
among males 20 to 24 years of age, and
11,344,000 among males 25 to 34 years
of age in 1950.

11 The

decade

of

the

nineties

was

an

exception. In this period net immigration
was
only 8.7% of the average size of
the labor

the

labor

The immense increase in

its

influence

Labor

through

Standards

Bacon-Davis

Act,

the

the

Act, the
Walsh -

Healey Act, through the direct
purchase of labor, and through
large construction projects which
the government is financing, some

force.

an
offer to sell nor a solicitation of offers to
The offering is made only by the Prospectus.

buy

any

Steel

sponsible '•

as

for

much

absence

of

as

the

preventing

union."^

Professor Friedman's views

Continued

,

12

Wright,

David

on

McCord

Impact of the Labor Union,
13 Ibid., pp. 210, 217-228.

of these securities.

January

12, 1954

International Bank for Reconstruction

Fifteen Year Bonds of
i

1954, due January 1,1969

Interest Rate 3

Price 100%
Plus accrued interest from

1

January 1, 1954,

Copies of the Prospectus may be obtained from the several underwriters, includ¬
ing the undersigned, only in States in which such underwriters are qualified to
act as

dealers in securities and in which the

Prospectus

may

legally be distributed.

The First Boston Corporation
The Chase National Bank

Bankers Trust

Morgan Stanley & Co.

Company

The National City Bank

J. P. Morgan & Co.

of New York

incorporated

The First National Bank

*

Manufacturers Trust Company
First National Bank

Chemical Bank & Trust Company
Bank of America

.

New York

Harris Trust &

of

Drexel & Co.

Glore, Forgan & Co.

The Northern Trust

Savings Bank

Goldman, Sachs & Co.
*

Lehman Brothers

Stone & Webster Securities

Corporation

Merrill

Harriman Ripley & Co.

Company

Kidder, Peabody & Co.

Incorporated

Lynch, Pierce, Fenner & Beane
Union Securities

Chicago

Guaranty Trust Company of New York

N.T. & S.A.

Salomon Bros, & Ilutzler

Corporation

re¬

the

they would in the

$100,000,000




quite

most

20%

as

ISSUE

Lazard Freres & Co.

some

agricultural labor force exclusive

to

age,

4,490,000,
to

male

,

Blyth & Co., Inc;,

wages

In

instances the influence of the gov¬

however, union membership

decades, such

some

point of view.

the

them

the 40s,
50s, and 80s of the last century,
net immigration totaled more than

In

This advertisement is neither

NEW

.The

began

the

to

of

agricultural labor force

10 In

price level moved up and down
by small amounts with virtually no net
change. The same is true of the period
1922

skill in

mentary

of

al

immigration

were

of

There

and

cheap labor, much of
it possessing more than mere rudi¬

ployed, managers, and profession¬

market

sharp drop of the relative size of

best

large

a

4.6% :of."the: average labor force.
The reason for this drop in immi¬
gration is, of course, mainly our

By 1930, the number of

risen to 3.9 and

1907

are

size

because

was

worker in

every

in the

period

These

1929.

recession

1909.

that

the

the

wages

reservoir of

workers outside of agriculture for

the

includes

time

of

has provided

and in-the

agricultural labor force has rapid¬
ly dropped relative to non-agri-

This has been

observed

1922

or

regarded
was

be

tables

two

there

behavior

agriculture

em¬

agriculture
every--worker in agriculture.

population
over

every

non-agricultural"
By 1880 the ratio

to one, and by 1900
1.6 workers outside of

great
9 It

the

in

one

larger
Since 1940,

or

to

about 2.2 persons

were

ployment.

10%

civilian

Employment

employed in agricultural for

small rise in the

a

Agricultural

Non-Agricultural Employment. In

7

(159)

the.

1930.

have
The age group 20 to 34 is especial¬
of
ly important to industry because
wages to increases in prices and
its members are at the peak of
their resistance to drops in prices.
their strength and vigor. Had the
They are: (1) the decline in the
labor
force
participation among
proportion of the adult population
males 20 to 34 years of age been
in the labor force; (2) the great
as
high in 1950 as in 1930, the
drop in the ratio of agricultural
labor force in these important age
employment to non-agricultural
brackets would have been more
employment;. (3) the drop in im¬
than a million or about 6% great¬
migration; (4) the growth of trade
er than it actually was.10
t
unionism; and (5) the develop¬
(2) The Great Drop in the Ratio
ment of government wage policy.
increased

-

Smith, Barney & Co.

White, Weld & Co.

p.

are

page

29

(ed),

Thm

204.

8

(160)

,

The Commercial and Financial Chronicle..

pretty sure that
to have broken

am

People Will Have
Money To Bay in 1954

time records

in

1953.

ible

lion in

of

in

Babson, in condemning "loose talk" about rise in the cost
living and ability of people to buy, furnishes figures which

There
talk

been

lot

a

the rise in

of

the

loose

cost

sons

of

be

living and the ability of people
tq buy. Many readers have asked
for

official

fig¬

ures.

To

degree,

a

whether
P

1

peo-

have

e

equaled

Gov¬

ernment

money to buy

depends
what

on

they

spend

for

market

who

left

the

number

of

people

wives

who

retire.

have

been

have

not

These

people

ranks

of

been

do

daily

for

and

more

services

more

without

pro¬

peo¬

ple

holding

have

with

194j6,

a

4.5%

push

6'%

rise

a

jump in
in

of

18%

1950,

in

and

will have

to

the

in

spend

business high.

1954

If, for

-

more

There's

meaningful is the fact that,
while living costs have risen less

of our families
$97 billion continue to

to spend.

problem:

than

ple

since

have

another

angle to
How much money

ment
ers

on

hidden

in

away

billion in liquid savings.

the

part of manufactur¬
and merchants.
Fewer

If people

buy,

they

thpjqgh

Now
are

increases

.

our

have

jobs.

about

700,000

own

worth

of

of

Al-

labor force normally

by

families

families

all

automobiles.

greater than
Wheri the

per¬

$38

peo¬

New
New

a

have

a

net

are

City, members of the

York

limited

Stock

Exchange, will

partnership

to part¬

on

to The Financial

ward

J. Hallal has been

the staff

in,

Chronicle)

BEVERLY HILLS, Calif.

50%

of

—

announcement

is

not an

The

offer to sell or a solicitation of an offer
offering is made only by the Prospectus.

to

$25,000,000

of

Dollar

Company

Indiana, Inc.

of Thatcher Glass Manufacturing

and

Rational

market

Quotation

Research

Big

January 1, 1984

Horn

Cannon

,

DICK &, MERLE-SMITH
L. F. ROTHSCHILD & CO.

■

& CO.

COURTS &. CO.

GREGORY & SON

FREEMAN &, COMPANY




COOLEY &. COMPANY

AUCHINCLOSS, PARKER

—1

& REDPATH

ROBINSON-HUMPHREY COMPANY, INC.

BURNHAM AND COMPANY

FIRST OF MICHIGAN CORPORATION

January 14. 1954

HELLER, BRUCE

»

and

♦

Development

Corporation

—

Card

Powder

River

Corporation

—

Bulletin

—

Grayson-

Mills

Company—Analysis—Ferris & Co., Washington
Building, Washington 5, D. C.
National

Bank

of

the

City

of

New

York—Bulletin—

Laird, Bissell & Meeds, 120 Broadway, New York 5, N. Y.
Coca-Cola—Memorandum—McDonnell & Co., 120 Broadway,
New York 5, N. Y.
Consolidated Engineering
Corporation—Analysis—-Joseph Faroil & Co.,! 29
Broadway, New York 6, N. Y.
Food Machinery &
Chemical Corporatoin
Analysis — Van
Alstyne, Noel & Co., 52 Wall Street, New York 5, N. Y.
Company—Annual

report—The Glidden Company,
14, Ohio.
Steel Corp.—Memorandum—Milwaukee
Company, 207
East Michigan Street, Milwaukee
2, Wis.
Manning, Maxwell & Moore, Inc.—Analysis—H. Hentz & Co.,
Kaiser

Street, New York 4, N. Y. Also available is a list
depressed good-grade stocks.
York, New Haven & Hartford Railroad vs. St. LouisFrancisco

Railway—Railroad

R. L. DAY &, CO.

FOSTER & MARSHALL
&, CO.

SCHWABACHER &, CO.

bulletin

No.

150—Smith,

Barney & Co., 14 Wall Street, New York 5, N. Y. Also avail¬
able is a memoranudm on
Congoleum-Nairn, Inc., and a
bulletin on Chicago,
Milwaukee, St. Paul & Pacific Railroad
Company (No. 151).
Pantepec Oil Company C. A.—Circular—Benjamin, Hill &
Co.,
1 Wall
Street, New York 5, N. Y.
Phillips Packing Company—Analysis—Richard E. Kohn &
Clinton

Co.,

Street, Newark 2, N. J.
&

Light—Review—Ira Haupe & Co.,
York 6, N. Y.

Company—Analysis—ask

Lerner &
St.

Regis
Wall

120

HALSEY, STUART & CO. INC.

INCORPORATED

ALSTYNE, NOEL

Inc.,

Eigles Co., 82 Beaver Street, New York 5, N. Y.

Co., 10 Post Office Square, Boston 9. Mass.
— Analysis — A.
M. Kidder
Street, New York 5, N. Y.
.

Edison-r—Memorandum—Josephthal

Broadway, New York 5, N. Y.

Ill

for report T-31—

Paper Company

Southern California

VAN

Bureau,

Averages, both as to
a
13-year period—
46 Front Street, New

over

memorandum—May & Gannon, Incorporated, 161 Devonshire
Street, Boston 10, Mass.

1

THE

performance

♦

American

San

Prospectus may be obtained in any state in which this announcement is circulated
from only such
of the undersigned and other dealers as may lawfully
offer these securities in such state.

BALL, BURGE &. KRAUS

Co.

Stocks for 1954—Brochure—Bache &
Co., 36 Wall
Street, New York 5, N. Y.
Twenty Stocks for 1954—Circular—Ammott, BakerCo.,
Inc.,
150 Broadway, New York
38, N. Y.

Broadway, New

THE MILWAUKEE COMPANY

120

Stocks—Compilation of offerings in 1953—Union
Securities Corporation, 65
Broadway, New York 6, N. Y.
Review and Forecast—Bulletin—H. Hentz &
Co., 60 Beaver
Street, New York 4, N. Y.

Riverside Cement

'

Co.,

York 4, New York.

20

CO., INC.

&

Averages and the 35 over-the-counter industrial stocks

Puget Sound Power

WM. E. POLLOCK &

Bros.

Preferred

New

Price 102.625% and accrued interest

BEAR, STEARNS &, CO.

table—Sutro

60 Beaver

Due

EQUITABLE SECURITIES CORPORATION

discussion of the bond

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

of

January 1, 1954

.

a

Cleveland

1

The

earnings, and

Bonds—Yield

—

First Mortgage Bonds, Series K, 3%%
Dated

New

Broadway,

120

tabulation of preliminary

4

Glidden

Public Service

a

Ltd., Ill Broadway, New York 7, N. Y.
Companies—Comparative tabulation of leading companies
—Edward D. Jones & Co., 300 North Fourth
Street, St.
Louis, 2, Mo.
Oil Stocks—Analysis of
outlook—Kidder, Peabody & Co., 17
WalLStreet, New York 5, N. Y. Also available is an analysis

added to

Shearson, Hammill &

buy these securities.

Corporation,

Also available is

rities Co..

Ed¬

Co., 9608 Santa Monica Boulevard.

I

Hanseatic

Selected

Feb. 1.

With Shearson, Hammill
(Special

York

21,

Oil

Chase
1 his

pleased

Broadway, New York 5, N. Y.
Investment Opportunities in Japan—Circular—Yamaichl Secu¬

yield

peo¬

worth

all

be

will

used in the National Quotation Bureau

nership, and Sara B. Halladay to

year's income.

figures

York

admit Louise C. Gorman

billions'
And

mentioned

the- following literature:

market.

Halladay & Co. 14 Wall Street,

their

Our

'

Power

New York bank

German

our

ple have built up a $200-billidn
equity in their homes, with but a
$50-billion mortgage debt. 60% of

to have money to

must

our

Employed

1953

Halladay Admits

January,
1952, socks. It may surprise you to learn
hpurly earnings in all manufac¬
that the top 50% of our families
turing industries have risen about
have readily convertible savings
8%. during that time.
To
have
amounting to a staggering $97 bil¬
held prices
down while
wages
have gone up is a great achieve¬ lion. The bottom 50% share $1

New York

Light and

—New

Jones

even

V

N. Y.
Companies — Tabulation of 36 se¬
lected utilities—Francis I. du Pont & Co., 1 Wall Street,
New York 5, N. Y.
Foreign External & Internal Securities—1953 year-end prices

to

exam¬

top 50%

with their

Savings Beat All Records

What makes these
figures

2%

money

i

Stocks for Appreciation—Tabulation—Eastman, Dil¬
Co., 15 Broad Street, New York 4, N. Y.

Street,

Electric

enough Americans who

the

less

'■

Cycles—Monthly reports giving results of latest cyclic research
in stocks, prices,
business—$10—also included are reprints
of six chapters and postscripts issued plus a Chart Projection
to 1990 of various stock market
cycles made in 1954 (Chart
C-14)—Foundation for the Study of Cycles, 9 East 77th

a

1951.

the firms

send interested parties

York 5, N. Y.

are

money

hold

ple,

lon &

owe.

There

necessities.

cppipares

understood that

to

Common

hold
their purchases
high, - the
unemployed; they lower $0% will be
kept busy pro¬
simply deplete the ranks of the ducing. All
groups will then have
Living costs,
employed to whatever extent they the
funds
necessary
to
satisfy
without ques- are not
Roger W. Babson
replaced.
Obviously, in their needs.
We
have
a
t i o n,
huge
have retirement one has less income.
been flattening out. From Jan.
backlog of buying power. It's up
1, Obvious, also, is the fact that
to
the
sales
and
1952, to date, consumer prices
advertising
when a wife ceases to supplement
brains of the country to get us to
have risen
less than
2%.
This her husband's
income, that couple
spend it.

their

It is

this trend, up to a

portionately increasing what

Some

replaced.
swell the

not

and

goods

down full-time jobs have decided
to quit working out and to make
a
real home for their husbands.

Many

see

wants

more

to

■<''<

Recommendations & Literature

Key to Prosperity

like to

However, too much
lying idle is bad for our
America, you see, is a
country that actually develops its
way to prosperity.
And the way
to keep prosperity is to keep rais¬
ing our living standards higher
and higher by creating more and

it.

employed

«I

Dealer-Broker Investment

healthy

a

money

What is really happening? Some
workers have left the ranks of
the

is

economy.

entering the la¬
1953
just about

in

bil¬

certain point.

figures show
change from those of

(young people)
bor

the

are

A
I

1952. This is because new workers

facts.

Here

This

f'.i I

sign.

year—for whom jobs must

little

over.

i

»

could

Perhaps the mad rush to

is

have

provided—1953

very

depend-

able

a

1953

1949 and about $12 billion

1951.

buy

prices have risen less than 2%,

hourly earnings in manufacturing industries
risen 8%.

has

about

in

compared with about $3

Mr.

whereas

readily convert¬

or

saved

have soared to better than $16 bil¬
lion

consumer

for

Cash

assets

t-

peace¬

savings.
People
spent much less than they made

By ROGER VV. BABSON

show that in 1953

will

1953
all

prove

Thursday, January 14, 1954

.

&

Co.,

& Co.,

VoIumel79itfumber 5290

i.TheCommercial andFinancialChromcle

.

(161)

9

*

Another quite unusual- element

Clues to CLU

■;

By IRA U. COBLEIGH

7'—;—

Author of
\

few financial

A

alert: and. progressive
management, above $35 million in
year ouL profitability.
Only in working capital, with- no long1932 did the company-iaU -to rack term debt whatever; and a new
division
launched" under'
up a net profit? and the best post¬ boys'
war
year
was a fat $7.33 per most: favorable * conditions,
and

-::

-

— -

-

"Winning in Wall Street"

share which carried the common

directing attention to the sustained

arrows

Compared with: the rather su/b-

hundred
and two years wear and swim trunks, to sport
there was started, in a small knits and checks, dress shirts and
a collateral line of ties and hand¬
one room workshop in Troy, N. Y.,
kerchiefs.
At
first
a distinguished textile enterprise
blush, this
that has bur¬ might not seem a dramatic for¬
ward
move
but
on
geoned into a
reflection,
national insti¬ you'll see it is. For this new pro¬
tution with 17 gram is beamed toward two major
factories objectives.
First, the war baby
spread over boom has increased by 60% the
the
U.
S., a 1 to 6 year old boy population
top - flight (by mid 1957, we'll have 25 mil¬
textile labo¬ lion boys). This represents a vast
ratory,
and and, for Arrow, a brand (Arrow
gross earnings brand, that is!) new and untapped
in the neigh¬ market which might well be able
borhood
of to boost CLU 1954
gross by from
$80 million a $2 to $4 million. That will be fine,
year. The fa¬ and open up new areas of profit¬
One

of

ability. More important, however,
Ira U. Coblelgh
Cluett, Pea- is the long range result, namely
body aims to that a whole generation of boys
keep a shirt on your back at ail at an early and impressionable
times, and has hit its mark and age will
be
getting "hep" to
its

market, for decades, with out¬

standing effectiveness.
The forerunner of
pany

was

name

a

today's com¬
probably

you

in

and

the

Glan-

very

same

and will,

the

up

heard—Maullin

never

chard—which

Arrow

Arrow

make

and

tomers

out

of

today's

into the extensive manufacture of

row, Mr. Barry

the

business
1868

1863

George

brothers

two

and

Peabody joined

Mr.

Arrow

sold to

was

his

and

Cluett
in

the

Later in

collars.

up,

introduced

was

name

& Co. was
merrily started on its way to
leadership in setting the fashions
and

Cluett, Peabody

and modes of collar and shirt for

America.

masculine

For years

thing,

the collar

was every¬

peasant
didn't dress up in a buster
brown collar if you were so high,
and

you

or

begird

stockade

were

a

your neck with a minor
of starch if you were a

moustached

dignified
thousands
grown

with

the
it

I

War

World

Came

of

grown up.
and tens of

returning

soldiers

used to the soft army shirt
collar attached, demanded

equivalent
that

was

in

of

ment
and

to

"civvies."

in

1920's

the

So

Arrow

juniors.

its

judg¬

president

marksman

at

Ar¬

extensive

rather

of Cluett,

Peabody & Co.,

history, and its products, has

been

set

down

as

outline

an

for

investors,

who have apparently
not
been, to any great extent,
apprised of the qualities inherent
in CPU equities. It's really a very
durable
enterprise with an un¬
dividend

had

become

Another

torso textiles was

shrihkage.
hit

In

1919

upon

a

Sanford L.
pre-shrunk

that
bears his
name,
which was, by general agreement,
the most important contribution
to the textile trade since mer¬
process

Trading in German dollar bonds
resumed

was

first

strolling

shorts,

leisure

sets, swim trunks and a
slack.
Further, opening

with a

panoramic preview show¬

cabana

at a

Hotel

time

in

more

than

bonds

dozen

a

and

During the late 1930's, the Ger¬
Government purchased mil¬

lions of dollars worth of German

dollar bonds, taking advantage oft
the low market prices then for

NYSE
7%

gold

it

Admitted to trading for the first
time were:

Keith

by

Funs-

the

$2,180,000
of

Ex¬

of

Dawes

ing Issue

in

or

due Oct.

validated
bonds

which

changed

G.

Keith

ticular

the

amount)

Loan

of

German

owner

bond

of

It

does

not

to

investment

for

illogical

seem

common

be

certificate

(validated

on

Besides

amount)

bonds

outside

held

was

Jan. 1, 1945.

the

German

admitted

now

other

issues, it is

or

admitted

to trading later on.

1953, 3%

dollar

Dawes

(validated

(Special

(validated

amount)

SAN

1930, Federal Republic of
Germany, Extension Issue 1953,
5% dollar bonds due June 1, 1980.

and. Young

amount)

of

Joins Harris,

bonds

15, 1972.

(validated

$329,000

amount)

German Government International

the

This announcement is not

an

The

C.

offer to sell

or a

solicitation of

an

to The

has

associated

become

Upham

Harris,

&

Montgomery Street.

Co.,

merly with Walston & Co. and E.
F.

Hutton

&

Co.

offer to buy these securities.

The City of Montreal
(Canada)

espe¬

'

*

7.30%.

Nor

this

does

1954 UNITED STATES CURRENCY ISSUE DEBENTURES
FOR LOCAL IMPROVEMENTS AND FOR PUBLIC WORKS

dividend

in

seem

Dated

For

AMOUNTS,

(Accrued interest to be added)

of

more

a

provement
Debentures

Debentures

Due

1954

3% 3.00%

forize

Yield

Works

Debentures

Due

Rate

Yield

$393,000

$779,000

1963

3%%

3.75%

213,000

3.80

1,029,000

1955

3 ya

3.05

392,000

1964

3%

979,000

1956

3%

3.375

393,000

1965

3%

3.80

3%

3.425

392,000

3%

3.85

1,099,000

1957

1966

1,568,000

3.875

857,000

1,200,000

1958

3%

3.55

857,000

496,000

1959

3%

3.60

857,000

405,000

1960

3

3A

3.65

858,000

267,000

1961

3%

3.70

702,000

privilege — into
the common at $40 anytime to
Oct. 1, 1957.
It's callable at 103.
There is also a $7 straight pre¬

413,000

1962

3%

3.75

The Prospectus may be
from

\

obtained in

1967

3%

1968

4

3.95

392,000

1969

4

3.95

393,000

1970

4

4.00

387,000

1971

4

4.00

251,000

any

393,000
393,00#

1972

4

4.00

State in which this announcement is circulated
as may lawfully

only such of the undersigned and other dealers
offer these securities in such State.

Shields & Company

Savard&Hart

Halsey, Stuart & Co. Inc.

Bell,Gouinlock&Company Hornblower&Weeks

Division

vided, in the past,

Rate

1,788,000

conversion

Sanforizing

provement
Debentures

Works

conserva¬

preferred offers a yield of about
4.5% at 88 and has the advantage
a

Public

Local Im¬

Public

$1,120,000

those

below

MATURITIES, RATES AND YIELDS

Local Im¬

tive turn of mind, CLU $4 second

of

Due October 1, as shown

January 2, 1954

Mills, Spence&Go. Inc.

Limited

a

trademark which has been

Burns Bros. & Denton, Inc.

Coffin & Burr

Siiearson, Hammill & Go.

Incorporated

Stroud & Company
-

'

II.Hentz&Co,

Gregory & Son
Incorporated

Incorporated

New York Hanseatic Corporation

Swiss American Corporation

splendidly and widely advertised
should

stantial

continue

to

revenues.

bring in sub¬
Further,

F. S. Smithers & Co.

Courts & Co.

McDonald & Company

the
,

January 14, 1954.

Singer, Deane & Scribner

232

He was for¬

$19,266,000

for

>.

Chronicle)

Calif.—Roy

FRANCISCO,

Speer

with

Upham

Financial

offering is made only by the Prospectus.

cbnsidered

purposes,

dollar

trading

to

announced, will

probably be restored

Loan

Restored to trading are $2,000,-

cially when it presently pays a
$2.50 dividend to yield at its cur¬
rent
NYSE
quotation
of
34^,

a par¬

wishing to

stockholders.

CLU

cap¬

1924,

Germany

German Government International

obligations.

000

External

$2,600,000

Fun at on

ex¬

for

1965

was

German External Loan 1924, Fed¬
eral Republic of Germany, Fund¬

Young

loans

un¬

have it validated must prove that

Republic

$253,000

some

Berlin

After

Accordingly the

loan

1,

Extension Issue 1953, 5V2% dollar
bonds due Oct. 15, 1969.

bonds

the

and

June

(validated

German

Federal

change, will
be permitted
only in vali¬
dated

vaults.

Germany

ton, President
of

due

(Young loan).

an¬

nounced

International 5y2%

For

reason,

tured by the Russians on May 2,
1945 these bonds disappeared. .

amount) of the 1930 German Gov¬

Trading,
however,
was

obligations.

the
purchased
(bonds were not cancelled, but
were
merely stacked in
bank

Oct.

bonds

along with:

other issues of German dollar

man

gold
15, 1949 (Dawes
$3,600,000 (validated

due

loan)

on

External

$105;*

bonds, were suspended from deal¬
ings by the Stock Exchange on
Dec. 11, 1941.

ernment

in




York

year-end report showed only 8,945

luncheon at the Plaza trend toward the leisure look in
New York last week, shirtings for man and boy,
augurs
Arrow is launching a sleek and
well for probable expansion in
functional
line of boys'
wear.
sales.
Running the gamut from under¬
ing

New

German

common stock has
comparatively few
offering lists. The 1952

have pro¬
rather steady
cushion. While the patent rights
be
the largest manufacturer of
branded shirts and underwear in for the Sanforize process expired
in 1949, licensing agreements pro¬
the world.
viding certain services by CLU
For 1954, Arrow goes forward
and allowing the use of the San¬
with
an
expanded merchandise

including

Both of these issues
51

years.

ferred of high quality that sells
This process which has
around $132.
,
for years been bringing in steady
Whereas
textiles
in
general
royalty income to CLU (1952 —
have not been especially popular
$1,850,000) started as Sanforizing
in recent months and have, as a
for cottons, and has been adapted
to Sanforset for rayon, and San- class displayed a virtual minimum
of market buoyancy, CLU offers
forlan for wool.
Today Cluett, Peabody & Co. is elements of both diversity and
stability,
and
a
prospect
for
an integrated textile organization,
beginning with the raw cotton growth in earnings far superior
to
the
general run
of textile
and running through to the man¬
The earnings from the
ufacture of a complete line of equities.

line,

the

on

Stock Exchange on Jan. 12 for the

cerizing.

shirts, handkerchiefs, sport shirts,
and underwear. It is believed to

1924

to

000,000.

Argentina,
Peron
makes
political hay by appealing

Trading Resumed

be vali¬

may

increase

could

known

German Dollar Bond

which

bonds

these

to standing.

contribution to
the conquest of

CLU

Loan

on

investment

collars!

attached

Cluett

attached

•

amount of Dawes Loan and Young

dated

re¬

1

1954, to the "descamisados" or shirtless
quite ones. Here in the U. S., thanks
bright and certainly today's buyer to a bountiful economy, and pro¬
could hardly be said to be paying gressive merchandising by com¬
inflated prices for CLU at $34'%-. panies like Cluett, Peabody, the
Here's a company with a record "shirtless ones" are non-existent
for earning and reinvestment in —we've got buyers and investors
the business for decades, with an instead!

since

jeopardy since $3.96 per
presented its trump soft collar share was earned in 1952; and the
attached shirt and in less than a
projection for 1953 (the official
century we had, style-wise, swung figures have not yet been pub¬
full circle—from ornate collar-on
lished)
of
somewhere
around
shirts, to detachable collars, and $4.35 a share provide splendid
back to the attached jobs again.
coverage.
Today's
book
value
At last the collar had got the should be above $45 for each of
starch knocked out of it, and the the
723,358 common shares out¬
public

In

great

Loan 1930, Federal Republic of
Germany, Funding Issue 1953, 3%
dollar bonds due* Dec. 1, 1972.
Eventually, it is .estimated,.the;

its

yet

1923,

appeared

record

market

many economic pundits for
the prospects for CLU seem

have been

T. Leithead.

above

resume

and

energetic

executive

The

vision

the

the

broken

if you

cus¬

you look at it, it's smart
merchandising, and a considerable

tribute

detachable

lifetime

Anyway

which Isaac Singer in¬
vented the sewing machine, began
to parlay power and machinery
in

year

in theory, build
good will of

and

name

extensive

an

search.

dued profit prophecies offered by

ago,

mous arrow

after

past $60 a share.

up

Inc., whose N. Y. S. E.
symbol is CLU.

of Cluett, Peabody & Co.,

success

obviously

here is the-sustained yeamn and

I

j

l10

The Commercial and Financial Chronicle ...Thursday,

/

(162)

January 14, 1954

Connecticut Brevities
"

The

Fenn

has

Jpany

in

its

Com-

Manufacturing

operations

commenced

85,000

new

foot

square

plant in Newington.

The new $1,-

1979,

provide proceeds for.
and
expansion as a^

will

conversion
result
to

the

of

250,000 .plant will house all of
the company's operations except
the manufacture of Sikorsky heli-

heat

copter transmissions and the plating operations which will con¬

Hartford

conversion

recent

mixed gas

a

content.

with

i

800 BTU

an

'
%

«

*

The New York, New Ilaven and

"

*

tinue
-

at

plants.

The

be

closed

ployees

plant and
plant will

Hartford

will

down

the 800

and

formerly

these

at

transferred

be

Britain

New

other New Britain

•the

•

of the

one

to

em¬

plants

the

.

new

location.

sold
A

Railroad
issue

an

to

and

maturities

with

15

Davis

&

❖

Geek,

of

a

size

same

in

located

Inc.,

manufactures

company

surgical sutures.

passenger

Avenue
new

Manufacturing

Com¬

Hartford.
The
building will cost $45,000 and
in

plant

Its Henry &

is making

at

The

for

$125,000.

tion

is

the process

in

dating its operations.
&

Division

Erwin

will

be

trans¬

be sold.

Manning,
Inc.

is

Maxwell

division

ucts

Moore,

&

aircraft

moving its

prod¬

Stratford

from

to

Danbury.
A tract of land and
buildings have been purchased on
Shelter Rock Lane and a plant
has
been
leased
from Danbury
Centerless

Company.

Grinding
$

leased

:\i

constructing two

800,000
square
foot
Adrian, Michigan from

the Air Force Material Command.

The

plant, which is equipped with
presses
of various

extrusion

16

sizes up to 5,500 tons,
to

will be used

aluminum extrusions,
tubes, and forgings for airplanes
as
well as extrusion rods, wires
produce

and

tubes

The

company

also

will

consist

sandwiched

sheets

of

stainless

Electric

General

of

a

copper

between

two

steel.

*

24.

struction.

A

secohd

for

The
1953

nuclear
con-,

estimated

are

which is

of sorhe 40%

over

an

at

in¬

the 1952

The largest public

diana, Inc. first mortgage bonds,
K, 3%%, due Jan. 1, 1984,
at
102.625%
to
yield
approxi¬

ceived

Of
the

the

,;

#

Hartford

Gas

*

*

Company

on

Dec.

placed

privately through two
brokerage firms acting as
agents an issue of first mortgage
local

bonds, series C in the amount of
$1,200,000. The bonds, due Feb. I]

the

Indiana

which sold the bonds on
check, representing a final

Co-Trustee

payment

17,

Auditor,

1953.
of

proceeds received

from

bonds

sale of the bonds,

$15,000,000
applied to the repayment
outstanding bank loan - notes

Commission;

Vice-President

of

The

Indiana

National

Proceeds

Indianapolis, Trustee of' the bonds, by C.
Cheever Hardwick, (seated, right), partner in

program.

redeeming bonds at prices begin¬
fund

redeemed
at

on

or

after May 1,

Service

Co.

of

the State of Indiana.

ritory
and

served

Among
are

the

Noble

business from offices at 119 Don¬

in

He was formerly

Irle

&

Dull,

New

York City.

N.

J.—Alfred

Giugliano is engaging in the
curities

L.

stock

business

2306

Palisade

firm

name

from

Avenue

rear,

se¬

offices
under

at

the

by W. E. Hutton & Co. consummated

by
the

Jan.

8,

it

was

announced

Keith- Funston,; President
New

York

Stock

CH AS. W. SCRANTON

The

sue.

at

bonds

will

be

toll road which
The road will

the

across

point

a

the

on

Chicago, 111. and
the Indiana-

under

now

terminus

of

the

construction.

is expected to be

The

opened to

&

reasonable

An

was

first

firm

sold

as a

of

during

inclusive,

principal, the

W.

the

E.

were

Hutton

period

prevailing

mem¬

&

Jan.

approximately

Co.

6-8

W. E.

15,000

80

shares of National Gypsum stock.

Weekly share volume

change

ordinarily

on

around

the

BRAINARD,, JUDD & CO.

orders

-

REctor 2-9377

HAnover

totaled
shares,

"crossed"

*

2-7922

the

New

rules

an

York

"Ex-

change Distribution" must be ap¬

change,

<

The

plan

in- advance
and

"Exchange
Distribution"
designed to bring more

was

transactions

stock

the

blocks,

such

by*.the
approval

form

thus

breadth and

Ex-

is

•

BELL

given only when

-

TELETYPE HF-197
-

a

to

the

Ex¬

of

medium-sized

increasing
liquidity of the

the
auc¬

tion market—in the public inter¬
est.

*.

■

Although in this first applica¬
tion

of

the

as

plan

W.

E.

principal,

a

Hutton

the

change

Distribution"

permits

such distributions

the firm, or a group

"Ex¬

plan

also

when

floor Governor

of firms, acts

agent for both the seller and

the

buyer.
for the

Orders

stock

sent to the

with

an

amount,

purchase of the
together

grouped

are

floor,

trading

order

"

a

of

offerings (made during the mar¬
ket hours) are at one pre-determined, fixed price.

as

to

,

on

Exchange floor with the firm's

proved
NEW YORK PHONE

were

Exchange

methods

distributions (made after the close
of the stock market) and special

acted

purchasers
largest for 2,854

According

HARTFORD, CONN.

_

offices, de¬

sell orders.

75 Pearl Street

7-6291

11

cities in six states.

and all

HARTFORD PHONE

Co., which has

in its

Individual

CO.

.

&

Distribution"

other

offerings in that the
execution price is made by "cross¬
ing" the stock in the regular auc¬
tion market; whereas secondary

in
Hutton

salesmen

from

change's trading floor, especially

*

•

veloped purchase orders for Na¬
tional Gypsum during the course
of the "Exchange Distribution" in
Boston, Cincinnati, Philadelphia,
Baltimore, Portland and Lewiston
(Maine) and New York City —

the Ex¬

totals

Prices

"net"—no commission being

charged buyers.

mar¬

secondary

offered

prices.

market

of the auction

"Exchange

differs

at

stock

period of time in the

course

ket.

•

Stock

Hartford 7-2669

a

miles-

western

normal

time when National Gypsum

a

71—the

Exchange

Teletype NH 194

156

between

the

Toll Road

that the
first distribution
was quoted on the
of
a
Exchange floor
large block of listed stock occurred, at 20% bid; 20% asked and last.
under the new "Exchange Distri¬
The stock was sold in less than
bution" plan..
three full trading sessions—all'at

New Haven

—

the

traffic late in 1956.

7,500 shares of this particular is¬

of

Exchange,

SECURITIES

New York

Indiana

left.to right)

Biddinger, Executive Vice-President,

of Fred Juliano & Co.

Members New York Stock

Turnpike,

prevailing market prices, free of commission charges, in less than three
trading days.

Acting

WEEHAWKJEN,

of

connection at

a

Sales, of approximately 15,000 shares of-National; Gypsum,,

On

J. —Floyd

N. Dull is engaging in a securities

partner

Line

a

and

Floyd N. Dull Opens

a

line

with

Ohio

"Exchange Distribution" Plan in Operation

cities

Albany

N.

place at The Hanover Bank, New

nancing operation are' (above,

Terre Haute, Kokomo,:

RUTHERFORD,

Road

The ter¬

larger

New

Indiana-Illinois

Hammond, Ind. to

Observing the conclusion of the successful fi¬

Indiana,

is residential, agricultural
widely
diversified ' indus¬

trially.

Toll

York.

Inc. furnishes electricity in areas
located in 70 of the 92 counties
in

sale

part of the state from

Ohio

1955

prices beginning at 102.72%.
Public

took

the

approximately

northern

nationwide group of 475 investment bankers
which offered the bonds. The concluding cere¬
monies

extend

a

ning at 105.63%, and for sinking
purposes only they may be

from

will traverse the State of Indiana.

banking firm of Smith, Barney
Co., New York. The firm was co-manager of

&

Indiana

used to finance construction of

the investment

has the option of

the

Russell

sel for the Indiana Toll Road Commission.

Bank

of

and the balance to its construction

Company,

the, bonds;
Charles
Gauding,
National. Bank; Bruce Short,

Petersen, Vice-President,
Indiana National Bank; and Harry
Ice, of Ross,
McCord, Ice & Miller, Indianapolis, Bond Coun¬

due 1994, was handed, for the account
Commission, to C. A. Berry (seated, left)

of the

be

of

Indiana

Secretary-Treasurer, of

a

price of $273,999,444.44 for $280,000,000 principal amount of 3%% Commission

seven




the Merchants National Bank & Trust

Toll

banking

Dec.

CONNECTICUT

Primary Markets in

re¬

total purchase

Forms Fred Juliano Co.

•

of

The

These bonds were
Tuesday

The company

representatives

City Securities Corporation, Indianapolis, one of
the eight co-managers of the investment bank¬
ing group; Fred P. Backer, Vice-President of

Jan.

on
was

group

bid of 102.09%.

a

by

offering of toll road bonds

formally completed
for - $268,399,444.44

was

check

a

Road Commission from the investment

awarded to the group on
on

1953

when

12

series

mately 3.24%.

in

made

Co. of In¬

ber

level.

28

Service

Public

parent company's, aldson Avenue.

about $190,000,000
crease

of

Corporation

powered submarine is under
sales

Stuart & Co. Inc. is
today (Jan. 14) offering $25,000,Halsey,

of

will launch the Nautilus, the first
atomic
powered
submarine,
on
Jan.

underwriters headed

A group of

by

Bloomington.
Division

Dynamics

be

will

center.

Halsey, Stuart Group
Offer Utility Bonds

Lafayette,

#

Boat

other

The

facilities.

employee recreation

an

steel

sheet

The

recently
produce

will

it

use.

utensils
from
a
new
copper-clad metal,

stainless
which

has

that

announced

cooking

commercial

for

buildings

new

Waterbury. One will house the
employee
relations
department,
the employment office and hospi¬

of

an

at

#

Scovill Manufacturing Company
is

will

Bridgeport Brass Company has

plant

4,000 to

of floor space.

in

000

*t

*.•

ware¬

of consoli¬
The Russell

ferred
from
the
Myrtle Street
( plant to the main plant on Park
Street,
both
in
New
Britain.
After
the
move
is " completed,
which should be by April 1, the
vacated buildings are expected to
#

1952 from

feet

square
sis

tal

Corpora¬

Hardward

American

re¬

of raw paper.
enlarges the ware¬

built in

9,600

has

new

a

is

plant

storage

addition

house

Paper Goods

Kensington,

completed

house

Wright Division

alterations to its plant,
a
new
truck loading
an
estimated cost of

including
dock,
at

for

cars

main

whose

Company,

be of steel and concrete construc¬
tion.

fi¬

to

«

sis

American

The

located

is adding to its Bartholmew

pany

used

Connecticut.

and

cently
Emhart

be

to

are

commuter use between New York

is
building a
6,000
foot addition to its No/2

plant. The

one

75% of the cost of 100 air-

nance

Danbury,
square

from

The proceeds of this
subsequent issue of the

years.

conditioned
«

*

recently''

has

$6,600,000 series

equipment trust certifi¬

3%%

cates

of

and

sell

to

"crossed"

rules that the block of shares in¬

accordance

with ..Stock

volved cannot be absorbed within

rules.

-

:

•

-

and

together

an
•

equal

in

strict

Exchange
....

Number 5290

Volume 179

\

The Commercial and Financial Chronicle

*

*

.

(163)

Honor Edward Hifliard

From

=

late

of the News

By CARLISLE BARGERON

Senator

Wherry

until the time he died of
had

committed

the

George Norris.

To

Nebraska,

of

victim

the

was

up

Leftist smearing campaign because he

a

defeating their darling,
it several times
during Norris' life time, he was one of the
biggest hypocrites we ever had in the Senate.
sin

unmitigated

mind, and

my

But

position

the

dom
as

a

time

second

and

continuous cloud.

a

the

to

arose

whip in

Senate,

the

The Leftists,

synonomous—sel¬
mentioned him without referring to him

the

and

expressed

Republican

of

under

lived

of

I

Wherry, notwithstanding that he was

reelected

Liberals—they

are

LOUISVILLE,

former undertaker, which he was. -

Similarly it

was

crime, fortunately not

a

statutory, for Senator Butler of Maryland, to
have defeated Millard

watch

will

beneath

scandalous

or

them

you-wondered

just

time

to

matters over. In the comhearing he claimed he had been forcibly taken from his
beer parlor to talk

a

home and taken for a midnight

ride of terror.

evidence was sifted it was apparent that the

When all the

that had been committed was the defeat of Tydings.
"Tydings, a few months before had become a hero of the Leftists
for undertaking the political crucifixion of McCarthy.
This was
what mainly brought about his defeat.

Maryland I sup¬

happens that as a resident of nearby

so

ported him.
But I also told him before the campaign got under¬
way that he was headed for defeat.
He was a very able man and
I should like to see him in the Senate now.
But by no means can
I

see

criminality or wrongdoing on the part of the man who
him or on the part of those who aided in his defeat.

any

defeated

getting to, by way of showing how these Liberals
and/or Leftists operate, is that they are still pursuing those who
took part in the Butler campaign.
Sneers and innuendoes fre¬
What I

am

quently appear against them in the gossip columns and the socalled Liberal press.

they have turned their guns on a man whose wife
participated in the campaign to the extent of distributing some
Butler literature.
He is Robert E. Lee recently appointed to the
Federal Communications Commission after having served several

aide to Chairman John Taber of the House Appropria¬
A former FBI agent, well educated, thoroughly

EVENTS

ner

Investment

In

(New York

1954

City)

Dealers
Association 28th annual dinner al

It is

of

Philadelphia
the

at

Association

Philadelphia annual midwinter

May 7, 1954 (New York City)

New

York

dinner

annual

James Murphy Forms Co.
N.

Y.—James

rities business.

Stamrowe

at

the

National

1954

(Chicago, 111.)

National Security Traders

at the Hotel

(Chicago, 111.)
of

Societies

Asso¬

June 9-12,

to

Canada

engage

in

Annual

Convention

Whitney In v. Co. Opens

at

SALT. LAKE

Club of

CITY, Utah —
engaging in

Frank M. Whitney is

(Chicago, 111.)

Traders

firm.

the

1954 (Canada)

Jasper Park Lodge.
Jan..25, 1954

in the securities busia principal

John R. Maher is

nes.

Investment Dealers' Association
of

Sherman.

Trading

Company,
with offices
Wall Street, New York City

96

at

Finan¬

Conven¬

tion at the Palmer House.

meeting of officers, mem¬
bers of council and National Com¬

Stamrowe

Inc. hasj)een formed

Federation

Analysts

Trading

Company Opens

.

Sept. 22-26, 1954 (Atlantic City)

Chicago

Furni¬

ciation Annual

Hotel

Club.

Convention at the

The

offer

at

securities
200

business from offices

South

the firm
ment

Claridge.

name

Main

Street

of Whitney

Company.

solicitation of an offer to buy any of these

This announcement is neither an offer to sell nor a

;

a

National Security Traders Asso¬

Bonds.

is made only by the Prospectus.

among

'

-

i

■

„

this basis that the Liberals and/or Leftists are now

on

trying to block his confirmation, this and the fact that his wife

$35,000,000

seryed in Butler's campaign.
I submit that neither indictment—
•association with McCarthy or his wife's service with Butler in the
defeat of Tydings—constitutes sin with anybody except this army
of

It

smearers

makes

who

utter

are

always decrying McCarthy's Communist hunt.

professed

of their

mockery

concern

Mc¬

about

Consolidated Edison Company

Carthy's "tactics." I think the story is important because it points
up so well the tactics they themselves use, the tactics they have
always used.
I always feel a fluttering in the stomach when I
hear them mention decency in any sense, whenever they bemoan
the lack of it on the part of anybody else or attribute it to them¬
important is what the Senate will do about their
attack on Lee.
In that body it is being led by Senator Monroney
•of Oklahoma.
The Liberal-Leftist crew embraced him when he
came

looking"
tered

Refunding Mortgage Bonds, 33/s% Series J, due January 1,1984

is

What

first

of New York, Inc.
First and

selves.

of

out

young

and

he

Oklahoma, labelled

newspaperman.

has

tried

to

be

He

as

was

Dated

January 1,1954

"forthright, forwardimpressionable and flat¬

Interest

With du Pont

-

Coast

on

Claussen is manager of Francis I.
du Pont & Co.'s new branch of¬

(Special

Irwin

Volz and Kenneth C. Watson. All

York

ton, Bruce & Co.

I

Copies of the Prospectus may be obtained from only such of the
undersigned as may legally offer these Bonds in compliance
with the securities laws of the respective States.

to

The

Financial

Chronicle)

&

Boulevard, members

of

the New

BAKERS FIELD,
E.

(Special

Calif.

—

Kenealey has become

affiliated with Francis I. du Pont
&

Co.

He

was

IIARRIMAN RIPLEY & CO.

GOLDMAN, SACHS & CO.

BLYTH & CO., INC.

Los Angeles Stock Ex¬

and

changes.

MORGAN STANLEY & CO.

Co., 9680 Santa Monica

He

was

previously with

With Fulton, Reid & Co.

(Special to The Financial Chronicle)

Charles

$

Price 102.77% and Accrued Interest

i

i

Incorporated

LAZARD FRERES &

KIDDER, PEABODY & CO.
LEHMAN BROTHERS

.

i

CO.

Daniel Reeves & Co.

With F. I. du Pont
:

■

payable January 1 and July 1 in New York, N. Y,

HILLS, Calif. —
Spivey is now with A. W.

Morris

previously with J. R. Willis-

,

BEVERLY

fice in the Financial Building. As¬
sociated with him are Louis P.

were

,

young

A. W. Morris Adds

SACRAMENTO, Calif.—Jack I.

Due January 1, 1984

,

f

.

a

intellectual among the
Liberal-Leftist element ever since.
The Senate being as evenly
divided as it is, it may be that he will be able to make quite a
fuss and attract some attention in his campaign against Lee, but
his drawback will be that not enough of his fellow Democrats are
as "forthright, forward looking" or as intellectual as he.
Most of
them are, in fact, well imbued with the decencies, political as
well as those that apply in other walks of life.
a

formerly

with

Davies & Co. and James Ebert Co.




to

The

Financial

CLEVELAND, Ohio
& Co.,

—

Ross C.

members

of

the
-

>•

SMITH, BARNEY & CO.

SALOMON BROS. & IIUTZLER

Midwest

Stock
-

WHITE, WELD & CO.

UNION SECURITIES CORPORATION
'

Reid

Union Commerce Building,

Exchange.

MERRILL LYNCH, PIERCE, FENNER & BEANE

.

Chronicle)

Loudon is now with Fulton,

E.

Murphy has formed Murphy &
Company with offices at 67 Han¬
son
Place to engage in a secu¬

■

and election of
Securities Associa¬ May 16-20, 1954

ciation

ture

Beach.

dinner at the Ben Franklin Hotel.

cial

Bond

Hollywood

BROOKLYN,
(Philadelphia, Pa. )

Investment Traders
of

tion.

mittee

■

an¬

Warwick

Waldorf-Astoria.

23-25,

at

Security Traders Association oh

(Philadelphia, Pa.)

Philadelphia

4

course,

Club

meeting

Annual meeting

Jan.

.

(Philadelphia, Pa.)

1954

Feb. 26, 1954

the Biltmore Hotel.
Jan. 22, 1954

,

Security

York

New

,

.Investment Bankers Association

Hotel.

(New York City)

Advertising in Action Confer¬
ence at the Waldorf-Astoria Hotel
Jan. 22,

(Hollywood,

3, 1954

'

-

Hotel.

29,

Bond

Jan. 14, 1954

28-Dec.

Fla.)

r

,

Convention

at the Lord Baltimore Hotel.

Jan.

Field

nual

Republicans has, of
brought him into association with Joe McCarthy.
at the Capitol

Nov.

•

CO MING

tions Committee.

competent,- his work

(Baltimore, Md.)

Baltimore Security Traders Asr
sociation Annual Mid-Winter Din¬

mid-winter meeting ats.the

Now

years as an

Edward Hilliard with a.
Hilliard & Son. Mr. Hilliard

presented

Louisville

of

-

.great sin

It

houses

his retirement from J. J. B.

on

personal business and writing about economics.

episode which was given wide play with

went with them to
jnittee

his

investment

Ky.—The

given in his honor

newsworthy about the committee's findings.

even

one

was

dinner

devote

what was

all the
wraps of mystery.
In involved a printer who was supposed to
print some anti-Tydings literature and distribute it.
When a
couple of youngsters in Butler's campaign learned he hadn't made
the distribution they sought to get their money back.' The printer

There

a

Jan. 29, 1954

ler, himself, was subjected to a lopg committee
investigation which produced a lot of horren¬
dous headlines but when you read the stories

Bargeron

at

And

Tydings in 1950.

furthermore, it was a crime even to have been
associated with Butler in this campaign.
But¬

Carlisle

Retirement

on

Washington

Ahead
The

11

January 8, 1954.

r

■

"-*<<•

under

Invest¬

12

The Commercial and Financial Chronicle

(164)

Thursday, January 14, 1954

...

»

»

downside, all but two turning
from

THE MARKET... AND YOU
By WALLACE

gains to losses

nual basis.

was

merely

an

that

STREETE

of the

year

Haven

New

i

Canadi¬

Pacific, the loss last

an

Col. Oliver A. Trosfer Receives

on an an¬

For one,

•

i

,

First

i

Army Certificate

year

extension of
before, and

is

a

dubious

Unlike the

year's first week foi; above-average stability, member of the group, what
started
lustily
but oils were somewhat mixed with management dissension
out toward the end, and tobaccos continued to lag
complicating the picture and

which

fizzled
this

week's
a

on

with

market

decided

performance

reverse

with

a

technical rebound here

there to relieve

and

the

mo¬

its

investment

less

what

status

than

that

some¬

of

the

dismal

beginning but notony. It is chiefly in these proven members of the group.
then the tone improved in the groups
that
the
majority Nevertheless, it is against this
later trading.
On an overall opinion expects uncertainty background of a united front
basis, however, the market for some time until there are on the downside that the
a

continues

more

with

will fare in the first quarter.

in a
trading range
indication yet of what
it intends to do if, indeed, it
no

intends to do
the business
,*

"

More

list

backed
time

❖

from

standpoint
far

so

this

off—for

since

lows

*

is

September

287 overhead resistance level.

This, while it does build

up

the

as¬

base

for

future

any

*

/

.

New Look

Among the issues that
to be facing the new
better

a

mien

has gomery Ward.

third

set—from the 285-

were

*

they timid shows of strength in the

Montgomery Ward's

that with

year

the

the

a

f.

*

anything before
picture clarifies.

important

technical

the

"

❖

indications of how

been
poses
ones

all

to

is

seem

weeks

two

stand

out

now

better than 20 years

was

only

year

Mont¬

This issue has

intents

last

hopefully.
Missouri Pacific
preferred's vigorous response
to new proposals that would
step up the reorganization,

and

omens.
'

old,

of the better

one

:.

''1

*

sjt

ajs

pur¬

of

consistent frustration.

Mont¬

this

week, Chicago & North

gomery has never since 1946 Western is a special situation
approached the magic level of hardly typical of the standard

sault, nevertheless is discour- 1 above par, largely because of issues and the appearance of
aging because it indicates that the management views that New York Central on the
the

usual

ment

January

demand

reinvest¬
either

a

of

time

inflation

was

no

could

list

same

have

been

time for

expansion, the con¬ somewhat incidental, particu¬
lighter than had been antici¬ trary view to that advocated larly since a new low was
pated or ran into more of a and followed by its mail order within such close range. Nei¬
was

supply of stock than had been companion, Sears, Roebuck.
foreseen.

And

it

cate that it will take

for

the

list

indi¬

does
a

*

while

A

❖

*

ther

mar¬

of

their

made

lows,

new

with the conviction

moreover,

of Ward's

measure

Northwest

Airlines

gather its ket inaction
was
its
loss was the week's dividend casu¬
strength for the next try to
through all of last year of alty, slumping badly after di¬
negotiate the critical level.
less than 10%, while the year rectors announced they were
*
*
*
before, a not too good one for unable to muster the pre¬
A Slightly Higher Push
stores stocks generally, it held ferred payment.
The optimistic side is glean¬ to an 8% loss.
Both, consid¬
what
occurred,
are
ing what comfort they can ering
from the fact that last week's rather minor figures.

resistance

more

band

than

*

into the

#

A

comfort

meagre

*

Other of the standard tech¬

rails

have

any

performance last
the One-third of the issues

that

year.

what

badly.

con¬

been

showing a tinued to advance despite the
superior performance to that story purportedly told by the
of the
industrials
although averages of a sick year. Four
they have been dawdling at a others continued a slide that

two

weeks

havior

own

last

several

tured

heartening.
t-

On the

*

ed net
#

favored

basis of individual

stocks, the market shows

no

Corn

three

year,

well

Products

and

Kodak.
❖

far in the 1954

*

*

Individual

issues

their moments of

that

good

had
popu¬

of them that

New

highs and new lows
Eastman have been alternating at the
top of the pile and the list has

^

the usual year-

below the 1,222 issues that ap¬

peared

end tax-loss

selling this sea¬
replaced by switching windup.

in

the

hectic

1953

In fact, in midweek
larity
included
Lily-Tulip son was
Cup, American Brake Shoe, without regard for the calen¬ the total dipped below 1,100
Bayuk Cigars, Book of the dar. Thd fact that they have for one of the lower readings
Month
and
Pennsylvania done little since, although ad¬ since the doldrums of the
Glass Sand Cotp.—a rather mittedly a couple of weeks of summer.
*
*
*
diverse group not easily fitted trading is
hardly convincing,
into any single pattern. Split merely bolsters the case. And
In fact, if the market isn't
prospects, possible favorable it might be a clue to the disap¬ actually stalling for tiihe, it
dividend action and earnings pointing
reinvestment
de¬ is at least going through a
all made their weight felt on mand.
reasonable semblance of it.
*

the various issues.
*

*

*

Rails'

Of the standard

trading fa¬
vorites, motors did little de¬
cisive, steels were prominent




Sjt

sjs

United

Downward Trend

a

The rails last year showed
far more united front on the

30

West

for

44th

[The
article
time

views
do not

coincide

Chronicle.

Street,

the

award

presented to Colonel Troster

was

"exceptionally meritorious and

Medal.
citation

accompanying the
Certificate
of
Achievement reads in part:
First

Army

"Serving
ment

307th

Depot

mander

Commanding Offi¬

as

the

of

cer

AGC

Replace¬
Com¬

Deputy

and

Chief of

and

Staff, 301st
service in the Transpor¬
Logistical
Command,
positions
Corps Reserve, during the which are
usually occupied by
period Aug. 19, 1948 to September
Brigadier Generals, Colonel Tros1953," by Colonel H. A. Cooney, ter's outstanding leadership, tact,
Chief of the New York Military
initiative, foresight and profes¬

faithful
tation

District.

sional

Colonel Troster is

a

now

mem¬

ber of the Retired Reserve and has

completed

30

honorable

of

years

service in the Army and the
Reserve.

Army

World

War

commissioned

II,

he

Second

a

first

was

Lieuten¬

Army in June, 1916.
the

he

medals

many

holds

the

are

and

Silver

Star,
Mexican
Border
Service
Medal,
World
War
I
Victory
Medal, Army of Occupation Medal
(Germany),
Legion
of
Merit,
Bronze

Star

Medal, Army Com¬
Medal, American De¬

mendation

fense

Service

Medal, American
Medal, Asiatic-Pacific

Campaign

knowledge

mental

in

instru¬

were

a highly
trained Reserve unit which when
called

to

developing

active

its mission
able

A veteran of both World War I

and

in

duty carried out

highly commend¬

a

manner.

"Colonel

Troster's

experience
gained over his
many years of service played an
important part in the successful
and

knowledge

reorganization of the 301st Logis¬
tical

Command

from

active

its

upon

duty

By

his

and

outstanding

loyalty,

return

in

status

tireless
devotion

1952.

efforts
to the

Reserve

Program, he has set an
example that is in the best tradi¬
tions

of

the

military service and
himself

reflects great credit upon
nnd the Army Reserve."

$19,266,000 Montreal Debentures Offered

expressed

in

necessarily at
with

They

are

those

this
any

of

the
as

offering

debentures
treal

of

syndicate
Shields

$19,266,000
City of Mon¬
is
being made
Jan.

14) by a
jointly by
Company, ■ H a 1 s e y,

managed

&

Stuart

&

Hart.

The

Co.

at

of

The

(Canada)
(Thursday

today

Inc.

Savard

and

debentures

prices

scaled

to

&

of¬

are

yield

other things toward
or

maturity.

slum

offering of $19,266,000
is
comprised o f

debentures

$11,266,000 1954
Currency Issue

United

States

Debentures, for
Local Improvement, due Oct.
1,
1956 to
1972, inclusive and $8,000,000 1954 United States Cur¬
Issue Debentures for Pub¬

rency

lic

Works,

due

1964, inclusive.
has

treal

Local

the

on

set

Oct.

1, 1954 to
The City of Mon¬

coupon

rates

Improvement

ranging

from

3%%

Public

the

on

Debentures
to

Works

4%,

and

Debentures

ranging from 3% to 37/s%.
Debentures

be

direct

of

and

each

issue

will

unconditional

ob¬

ligations of the City of Montreal.
Proceeds

Local

public

the payment

of

the

works,

cost

of

including

clearance, road and highway
public
garages,

construction,

parking grounds, trunk sewers,
parks, playgrounds, and construc¬
tion of

a

civic centre and concert

hall.
^

The debentures will be redeem¬
able

The total

of

reimbursement

various

from 3.00% to 4.00%,
according to

from

the

sale

the

of

Improvement

as a whole or in part, at the
option of the City of Montreal, at
prices ranging from
100%
to

1002%, plus
opinion

the

taxes

accrued
of

presently imposed by Can¬

ada will not be

of

interest. In
income

counsel,

the

payable in respect

Debentures

thereon

by

owners

or

who

interest
are

norn-

residents of Canada.
Also

ing

participating in the offer¬

Bell, Gouinlock & Co.,
Ltd.; Hornblower & Weeks; Mills,
Spence & Co.; Burns Bros. & Den¬
ton, Inc.; Coffin & Burr, Inc.;
are:

Shearson, Hammill & Co.; Stround
Co., Inc.; Gregory & Son, Inc.;
H. Hentz & Co.; New York Hanseatic
Corp.;
Swiss
American
Corp.;
F.
S.
Smithers
&
Co:;
&

Debentures, Courts & Co.; McDonald &
Co.;
will be applied by the City among
Singer, Deane & Scribner; Field,
other things toward the payment Richards &
Co.; A. E. Masten &
or

reimbursement

sewers,

and

presented

those of the author only.]

Public

fered

been somewhat narrow, hov¬
signs of wandering from the
There is
pattern of last year, that be¬
something of a ering around the 1,100-issues
ing one of high selectivity. suspicion for at least a couple per day mark, considerably
*

cere¬

Liberation

Philippine

Medal,

Medal and the Armed Forces Re¬
serve

The

informal

and

World War II Vic¬
Army of Occupation

Medal,

tory

fea¬

year

these

being Loew's,

City.

brief

a

Place,

mony held at the New York City
Army Reserve Training Center at

two-million-

days and an average of
past a million and 3 half,

*

gains last

In

share

so

trad¬

York

New

Trinity

74

Theatre Medal,

Where the first
of

trading vol¬
began the year before or ear¬
ume
has only been able to
ing range than the industrials. lier. Thirteen reversed their
The fact that they have been
patterns to the downside and struggle across the latter min¬
imum line on a couple of the
backward for so long makes three that had lost
ground in
sessions.
any improvement in their be¬ 1952 turned around and
post¬
lower level in their

Co.,

&

awards

Stalled Market

been

Troster,

Among

Technically

has

Reserve Colonel Oliver
Partner in Troster,

Army

A.

Singer

ant in the

To get back to the selectiv¬
of
nical indicators were either
the previous rallies although
ity on a statistical basis, the
it was measured in
pennies 30 industrials of the Dow neutral, confused or inconse¬
over the December and Nov¬
quential.
Volume,
for
in¬
average turned in a highly
ember best levels.
stance, has been lagging some¬
It is also varied
of

to

Certificate of
presented

Army

Achievement

which

to

strength pushed

First

The

Of the couple of rails that
the do-nothing
since War II, in rather featured the new low list of
one

of

of

the

cost

of

pavements, and sidewalks,

the

extension

certain streets.

and

widening

Proceeds

from

the sale of the Public Works De¬

bentures

will

be

applied

among

Co.;

Piper,

Jaffray & Hop wood ^
&
Co.; Ferris & Co.;
King & Co.; Mackall &
Coe; Wm. J. Mericka & Co. Inc.;

Thomas
Charles

Merrill; Turben & Co.; Townsend,
Dabney and Tyson.

Volume 179

Number 5290... The Commercial and Financial Chronicle

LETTER

TO

THE EDITOR:

both

out of

Autlier "The Battle

justified, for stock
in the strict sense of
are not a substitute for

dividends,
the word,

dividends

cash

and

Mr. Loeb, in presenting a market forecast for this year, says
for increased competition, also generally lower

profits, which will more than wipe out for many companies
their savings from expiration of the Excess Profits Tax. Expects

never

were

It has been my

the statement that

good fortune to
placed many shares of our
fire and casualty com¬

sober and realistic markets in early 1954 "with
tion of many situations likely/'

more

nation's

shares held by a large number of
people in many sections of our

the hands of my
The popular economic forecast
industry which for 1954 is for a possible 10% dediscussion on stock splits and stock country will at all times better has pursued a conservative cash
cline in gross business and a somereflect the true market value of dividend
dividends.
pay-out, year-in-and- what larger decline in net
Necessarily, my dis¬
profits,
these shares than shares in a com¬ year-out, together with a quite
course must not be
it has aiways
academic, as I
pany hedd by a few in a narrow, consistent pay-out of stock divi¬
operate in the
been
I would like to enter the
present

localized

need

our na-

tioB's corpo¬
rations com¬

practice and

stocks

theory

is

often
s

too

utter

ing,
be

my

well

may

the

it

way

Paul

should be done
and

Conrads

E.

practice is

the way it is done. The teachers
of economics or of finance in our

colleges and universities teach the
economic

laws

the

and

finance but the student

laws

of

enter¬

on

ing public life finds that by rule
edict

and

scend

has tried

man

to

tran¬

contradict

even

or

these

laws in the interest of group or
individual aggrandizement and

expediency.
In the days

before public own¬
ership of our American corpora¬
tions, shares were in the hands of
but

individuals.

few

a

directors

and

families

owned

Often

their
ail

the

immediate

of

the

out¬

standing shares of the corporation.
No

there to

need

,in apricots,

send

out

quar¬

not pay

here
to

to

split the shares in order

make

broader

a

market

nor

capitalize earnings which had been
plowed back in the form of ma¬

mortar, and brick and
stock dividend for there was

chinery,
pay a
no

market for the shares and this

they

losing their market and
meet their competition

were

not

only under-selling
them but were putting out a su¬
ery

not

were

perior product.
ery

was good enough for
enabled the corporation

it

them $30

and better
in dividends each year.
On his
threat of resignation they voted

many

just gave you
happened and

caused

break-through

a

in

corporations and its stock

subsequently

found its

the hands of the

way

into

our

to

significance of shares in
American corporations finding

ownership by the public made it
necessary that many changes take
place.
The one change in order
that the public would buy these
shares was the split-up.
A split

no

by increasing the num¬
ber of shares outstanding and by
reducing the par value of the
shares, the object being to bring
the price per share down to a
figure where more people would
become

owners

broadened.

the

and

new

meeting

in

market

The public often will

enough

money

of

for him

is

the

shares of

difference

$40 stock or

a

story which has
now happening
localities, called

a

is

cash dividends today,

as

last year, regardless,

said the stockholders and the

cor¬

poration gave another gasp for it
could

gasp

as

it

was

few gasps
What

are

suffering in

of

corporations

today going to do when they find
their markets upset and their ma¬

you

Well

say?

research

them?

have

stolen

march

a

down

to

their

conserve

cash

pay the balance
dividends in the hope that

they

can

their

United
in

a

Certainly,

these

as we

radical change in these

States, and

wealth is

our

power

their

position

in

so

sued, chances

there would be

are

capitalistic system through wider neither cash nor stock dividends
distribution of share ownership of spvailab'e in the near future as
this corporation would have lost
our corporations.
This wider dis¬
not only its market but its earning
more

means

fnore

sharesjin

power.

people's hands and,so better

^markets.

^.

,

r,-.>i




■

:

-

'

»

More of

our

'

i.k

^

•

.

for the main body of shares and
premium prices for the choice

mo-

tion that gen-

erally tend to
advance

eUx penc

individual
such

HHBbIH
G*

Loeb

by

more

psychological

actions,

decreases

or

in

of

many

pay

In the

the

rate

of

spending and saving, balances high

On

top

of

all

this,

policies and world
are

developments the

best

pay

above

all,

it

leaders

and

Very few ap¬

parently "bargain counter" shares

ing factors.
outlook

The

It will

premiums for

the

among

wholly unpredictable, yet rul- special situations.

competition

is

and

increased

for

generally

lower

will prove

to

be really cheap or

actually able to recover.

an offer to sell nor a solicitation of offers to
The offering is made only by the Prospectus.

This advertisement is neither

buy

any

of these securities.

January 8, 1954

Street,

679,436 Shares

"Financial Chronicle"

Company

Common Stock

o

reported that Arthu"

was

(Without Par Value)

Krersky, President of the Re¬
public Investment Co., Inc., Chi¬

111., had acquired

cago,

a

member¬

ship in the New York Stock Ex¬
Mr. Krensky resigned ar

change.

President

Co.

Republic Investmen

of

31,

Dec.

on

membership
broker

individua'

an

as

the

and

thf

holds

and

item

instant

wa?

incorrect to the extent it may have

been

implied

Republic

therefrom

Investment

that

Co.,

the

Inc.

if

member corporation. Whik

now a

Mr.

Krensky is at present
of

change

the
as

New' York
an

individual

the

formation

of

a

CHICAGO,
been

to

the

will expire at
may,

for

3:30 P.M., Eastern Standard Time, on January 22,1954. Employees
under certain conditions, subscribe for such shares as are not subscribed

through the exercise of Rights.
agreed, subject

The several Underwriters have

the

new

cor-„

The First Boston

Ripley & Co.

Blair, Rollins & Co.

1

Lester, Ryons & Co.

The

Ireland

has

Chronicle)

to

'Sutro & Co.

the

staff of Clair S. Hall & Company,
Union Trust

C. H. Reiter Adds to Staff
(Speei&l

to The Financial

Chronicle)

Ohio —W.

Ross

Dunn has bebn added to the staff
of C. H. Reiter & Co.,

Lee W. Carroll & Co.

McCormick & Co.

The Milwaukee Company
Singer, Deane & Scribngr

Van Alstyne, Noel & Co.

Richard W. Clarke Corporation

Union Trust

Building, members Of the Cincin¬

Crowell, Weedon & Co.

DeHaven & Townsend, Crouter & Bodine

Hanrahan & Co.

Kirkpatrick-Pettis Company
Peningfon, Co ket & Co.

Thayer, Baker & Co.

I

„

Kaiser & Co.

McJunkin, Patton & Co.
Stetson Securities Corporation

Stern, Frank, Meyer & Fox

Suplee, Yeatman & Company,, Inc.

Westheimer and Company

Woodard-Elwood & Company

Ellis, Hoiyoke & Co.

Henry Herrir.an & Co.

Carl McGlone & Co., Inc.

J. S. Strauss & Co.

Rodman & Linn

Irving Lundborg & Co.

Chaplin and Company

C. F. Cassell & Co., Inc.

The Illinois Comparfy

Arthurs, Lestrange & Co.

Kay, Richards & Co.

Stokes & Co.

Goodbody & Co.

Laird & Company

New York Hanseatic Corporation

& Company

Janney & Co.

Elkins, Morris & Co.

Fauset, Steele & Co.

Building.

CINCINNATI,

Stern Brothers & Co.

J. J. B. Hilliard & Son

H. Hentz & Co.

Boenning & Co.

Eosworth, Sullivan & Company, Inc.

Burgess & Leith

Cooley & Company

Company

Moore, Leonard & Lynch

Ohio—Ellsworth

been added

Merrill, Turben & Co.

of

Hayden, Miller & Co.

Financial

Baker, Weeks & Co.

Blunt Ellis & Simmons

Brown, Lisle & Marshall

Brooke & Co.

Bache & Co.

A. M. Kidder & Co.

Shearson, Hammill & Co.

Swiss American Corporation

John C. Legg

to

Wood, Struthers & Co.

Lee Higginson Corporation

1ncorporated

Emanuel, Deetjen & Co.

Joins Clair Hall Staff

Corporation

Incorporated

Schwabachfer & Co.

Weeks

staff

Harriman

Allyn & Co., Merchants Na¬

(Special

pur¬

Copies of the Prospectus may be obtained from any of the several underwriters
only in Slates in which such underwriters are qualified to act as dealers
in securities and in which such Prospectus may legally be distributed.

Estabrook & Co.

tional Bank Building.

CINCINNATI,

certain conditions, to

Prospectus.

Julien Collins &
A. C.

to

chase any shares not subscribed for pursuant to the abnve offers and, both during,
and following the subscription period, may offer shares of Stock as set forth in

Ex¬

indi¬

as

111.—Earl T.

added

Holders of the Company's outstanding Common Stock are being offered the
right to subscribe at $36.75 per share for the above shares at the rate of one new
share for each ten shares held of record on J anuary 7,1954. Subscription Warrants

a mem¬

Stock

cated, he has plans for the future

F.

and,

Washington will be wise to

M.

has

situations likely.

to keep positions small, cash

11, 1954.

Jan. 7 it

for

sober and realistic mar¬

of forecasting kets in early 1954 with liquidation

way

increases

as

I think the September-Decem-

ber enthusiasm W*R be replaced

ted

possible

no

equities.
'

There

trend.

is

or

in special situations,

NFAV, ISSUE

CONRADS

have^adopted td"'policy oft paying nati Stock Ekchatige.

-

irf

or

This is. reflected in discount prices

yours,

,

corporations of late

the leaders

a

Consumers Power

through

and their earning
that these stock divi¬

despite possible contrary trends in

Correction

extraordinary expenditures
keep

forces

.

,

.

als0-rans> etc-> is for lower levels,

Company,

State

W.

Jan.

and

dends prove of worth in the fu¬
ture.
If that method is not pur¬

hands, it becomes even
more
important that our public
has an even bigger stake in our
more

tribution

majority of the smallcompanies, marginal producers,

er

Rockford, 111.

in stock

industry

a

321

&

eacl

nuture

E.

PAUL

Conrads

of

o n

market of stocks. The out-

look for the

harvest?

a

Respectfully

on

The oply

for their money.
have had

your

chinery made obsolete by new
poration.
or
radically changed products
brought out by new corporations
A. C. Allyn Adds
entering their markets or one of
(Special to The Financial Chronicle)
their old competitors who through

possibly

is

reap

ber

left."
our

then

hill—and

a

hill—and

death and had

the throes of slow
a

big difference
—if it is too high in price, they
don't buy—they like more shares

the difference

to

annual

repeat of the last
manager resigned. I

thing they should
do is to revamp their whole pro¬
100 shares of a $20 stock where
they would not consider buying cedure, junk their present ma¬
10 shares of a $200 stock.
What chines, cut their cash dividends
buy 50

in

a

your

us

same

next

The

ones.

was

many

the

,

is effected

a year

rebuild three old machines, but

—"Give

public.

The

statement

a

t i

continues

market

stock

more a

edu¬

he

response

certainly

to pay

and the new

closed

The

hadn't

death

when

made

cators

distinguished

our

got was that the present machin¬

for

or

automatic machin¬

new

to set aside

money

of

and" used for
machinery. He explained that

new

would, therefore, mean nothing to
the shareholders.
However, this
all
changed
when corporations
were
forced to go to the public
new

One

so

the regular $30 per share
should be kept

who, with

by
the corporation or in close touch
with each development.
No need

,

this year as money
in the corporation

could

all employed

'

other examples.

—

these

were

juice

too. interested

were

paying cash dividends

terly reports or annual reports for
men

or orange

furnish many

can

that- editor and your readers, as fol-*
the powers-that-be could continue lows, ridiculing stock-splits
and
living in their usual style. Times, stock dividends. I quote—"If an
apple is divided into eight parts,
were changing, new products were
entering these markets which were and a man owns one part, that is
making their good-old-standby- that. But if it is, instead, divided
product as well as their good-old into 16 parts and the man gets
machinery and equipment just a two of the smaller parts, it is non¬
sense to say that he has more than
little more obsolete each year.
he had before." I agree absolutely
As an example of what I'm try¬
with this deduction. But there is
ing to illustrate: I attended the
one part
of the apple he over¬
annual meeting of a comparatively
looked in talking about his apple
small corporation right after the
and it is a most important part of
second world war.
The stock of
his apple—the core with its seeds.
this corporation was held "in the
The core of the apple with the
family." They had a new manager
seeds
that's the growth part—
this year outside the family. "The
that makes the difference.
family" was now too old to con¬
Did you ever take a potato, cut
tinue in the management. At the
it in pcuis—just so there's an eye
first
annual
meeting,
the new
in each part—and plant each slic
manager
said that tney should
in

think¬

way of

■■The

con-

to

dividend.' Many of our former-

a

corporations

t rangers.

Theory, to

said

-

and see where

are

my

section.

be

liquida¬

profits. Even those preferred companies currently paying Excess
Profits Taxes may find their narrower
margins will more than
wipe out their savings,

.

stocks

mon

an

Perhaps more dends. Of course, as a stock divi- ;
t n a t
justify split-upsy dend is disbursed the shares right¬ business forebut others may have that privi¬
fully fall in value. However, as casting .canlege.
\
time goes on the new shares often
\
not
possibly
I in ow let's talk about stock divi- recapture the former price and come near the1
denas. Anything paid to a stock- the cash pay-out per share has mark.
The
Holder whether it be in cash, in - remained the same. You, of course,
very expecta-

securities

markets and
deal in

pany stocks in
clients. Here is

for Investment Survival"

outlook is

be.

meant to

policies of insurance companies.

i

Partner, E. F. Hutton & Co., New Y-ork City

search it is not

have

Chronicle:

By G. M. LOEB

cash which is needed to

expand the business, or to revamp
the business, or to increase re¬

Conrads, owner of Conrads & Co., Rockford. III., holds
increasing number of shares in a company aids in spreading
ownership and in establishing true market value. Cites success

I here make

Stock Market Forecast for 1954

entering a com¬
Unless jthe. pay¬

stock dividend is done to

a

conserve

Paul E.

Editor, Commercial and Financial

stock dividend,

a

are

we

petitive economy.

Split-Up and Stock Dividends
of stock dividend

cash and

a

that

now

Mid-Western Dealer Defends Stock

13

(165)

J. R. Williston & Co.

Woodcock, Hess & Co., Inc.

^

14

The Commercial and Financial Chronicle

(166).

unions and to bargain collectively

Text of Eisenhower's

Message
Recommending Labor Law Changes
Congress he proposes specific amend¬
which are (1) fact-finding boards, if re¬
disputes involving

a

national

in

law

our

and

permanent policy

a

clarification of jurisdiction between Federal and

in strikes endangering public health and
safety. Also recommends both unions and employers be made

authorities

Challenging Year for Banking"

Henry C. Alexander, President of J. P. Morgan & Co., Inc.,
in annual letter to
stockholders, also expresses belief that
1954 will be year of general
stability though at perhaps some¬

a

govern¬

our

Labor-Management

Rela¬

what lower level than

Act,

1953.

Reveals J. P. Morgan & Co.

earnings of $29.58
In

his

annual

letter

to

stock¬

share.

per

share, in the preceding year.
holders of J. P. Morgan &
Co., The company incurred net security
Incorporated, dated Jan. 13, Henry losses of $661,633 during the
year
C.
The Injunction Process
Alexander, the President of in the process of
readjusting its
this prominent investment
In
the area
of
portfolio in line with
employer-em¬
New
-York
changing market conditions. Hold¬
ployee
relations
the
injunction
v b a
n k i n g ings of longer-term U.
Govern¬
has always been a controversial
hous e;-'.r e- ment
and
municipal
securities
process.
It is apparent, however,
p 6 r t e"d that were reduced, and the
that
proceeds
where
irreparable damage
"Business ac¬ from these sales were
reinvested
threatens, the restraining effect of
tivity ran at a in shorter-term U. S. Government
an
injunction is required in the
high level for obligations. The average maturity
interest of simple justice. Never¬
the year 1953. of the
company's investment port¬
theless, where a collective bar¬
It reached an folio
at
the
close
of
the
year
gaining
relationship exists,
the
all-time
peak was considerably shorter than
issuance of an injunction often has
in
the early a
year ago.
The net loss on in¬
the effect of making settlement
months,
but vestment security transactions was
of the
dicates that changes can

emergency;

a
ballot system, supervised under government auspices;

(3)

State

of

remain

ment.

to reinforce its

and

should

1947, is sound legisla¬
tion.
Experience gained in the
operation of the Act, however, in¬

(2} all strike votes by union membership be required under
secret

1953: "A

employer. The protec¬
right is firmly fixed

of this

tions

quired by President, should be directed to make recommenda¬
tions for settlement of

tion

The

In special message to

ments, chief among

with their

Thursday, January 14, 1954

...

be made

per

basic objectives.

*

responsible for their agents' actions, and that a study be made
as to how to protect welfare and pension funds set up under
collective bargaining agreements.

,

j

As promised in his "State of the
Union Message," President Dwight
D.

Eisenhower,

on

Jan.

11,

sub¬

Federal labor-management

islation

at

tne framework

mitted to Congress a special mes¬

lective

recommending certain
changes in the Taft-Hartley Law

ducted.

sage

relating to labor-management

re¬

lations.
The text of

this

message

follows:

best

can

in which free col¬

bargaining
It

leg¬

provide only

should

may be
con¬
impose neither

arbitrary restrictions nor heavyhandedness upon a relationship in
which good will and sympathetic
understanding should be the pre¬
dominant characteristics.

dispute which led
injunction more difficult.

Therefore,
whenever
under

I

the

National

the

later

that

Labor

mod¬

erately

is issued

Henry C. Alexander

de¬

on

clined

recommend

injunction

an

to

and

somewhat

Rela¬

more

as

the

ireduced

to

$231,633 after tax ad¬

justments

related

thereto..

Net

earnings transferred to undivided
profits amounted to $4,912,941, or
$19.65

per share, compared with
$4,478,638, or $17.91 per share in
relationship exists
be¬ ward 'trends in certain segments
1952. The reserve for possible fu¬
Act—known as the Wagner Act tween
the
ber
of
parties, the Federal of the economy and in certain in-1 ture
legislative recommenda¬
losses on loans has reached
tions affecting labor-management and adopted in 1935 by bipartisan Mediation and Conciliation Serv¬ dustries did not, however, cause
the maximum amount permitted
ice shall empanel a special local serious or
relations.
These recommenda¬ majorities—came into being be¬
widespread difficulties for
purposes of tax deduction un¬
board to meet with the parties in They were
tions are in the interests both of cause American working men and
generally moderate or der
Treasury regulations, and no
women
needed the protection of an effort to seek a settlement of restricted in
working men and women, and
scope. This has given
further additions to this reserve
law in order to guarantee them
their dispute.
our business
and industrial com¬
I further recom¬ encouragement to the belief that
were
made in 1953.
the free exercise of their right to
mend that in secondary boycott in the
munity. In a broader sense they
coming year general stabil¬
The company paid dividends of
organize into unions and to bar¬ cases, the application for an in¬ ity will be attained at a
are in the interests of all our
peo¬
good $10 per share in
1953, the same as
level, though perhaps somewhat in
ple, whose prosperity is in so gain collectively through • repre¬ junction be discretionary.
1952.
Combined capital, sur¬
sentatives of their own choosing.
lower than in 1953.
great a degree dependent on the
plus, and
undivided profits in¬
As unions became
Redefine Secondary Boycotts
strong, a need
existence of genuine mutual re¬
"These changing trends in busi¬
creased by $2,412,941,
arose
to
bringing the
protect the legitimate
The
prohibitions
in
the
Act ness activity naturally had their
spect and good feeling between
total at the close of the
year to
rights of employees and employers against secondary boycotts are de¬ repercussions on the
employers and employees.
money mar¬
$68,633,263, or $274.53 per share
and to protect the general public
signed to protect innocent third ket and on banking activities. In
This field of legislation has had
on the
250,000 shares outstanding.
from the consequences of unre¬
parties from being injured in la¬ the early part of the year, the
a
long, contentious history.
It solved labor
This compares with $264.88 per
disputes that created bor disputes that are not their demand for bank loans to finance
has taken time for objective prin¬
share at the close of 1952.
emergencies
endangering
the concern. The true secondary boy¬ business was
strong. The Federal
ciples to emerge which can comhealth or safety of the nation. To cott is
indefensible and must mot Reserve Sj'stem restricted the sup¬
2nand
mutual acceptance of the
meet this need
the Labor-Man¬
be permitted.
The Act must not, ply of money and credit, making
fundamentals which
govern
the
agement Relations Act, 1947, com¬ however,
scarcer
and
prohibit legitimate con¬ them
dearer.
Its
complex labor-management rela¬ monly known as the
certed activities against other than measures proved
Tart-Hartley
so
effective as
tionship. Although the process is Act, was adopted by bipartisan innocent parties.
to
cause
some
concern
I
recommend
lest, in
not
and
that the Act be clarified by mak¬ their zeal to control
perhaps never will be majorities.
inflation, the
PHILADELPHIA. Pa.—The an¬
In enacting
central banking authorities
labor-management ing it explicit that concerted ac¬
complete, we have now achieved
might
nual meeting of The Bond Club
legislation, the Congress has al¬ tion against (1) an employer who bring on a deflation that once
a measure of
practical experience
of Philadelphia will be held Fri¬
ways
built upon the legislation is performing "farmed-out" work started might be hard to stop. In
and
emotional maturity in
day. Jan. 29, 1954, at the Warwick
this which
for thp account of another em¬ the late spring,
however, they re¬
preceded it. We have never
Hotel, at 7
field which, I do not doubt, is
ployer whose employees are on versed their course.
During the
turned
backward.
The
Laborf strike or
p.m.
(2) an employer on a remainder of the year, they sup¬
responsible
for
the
relatively
The Nomi¬
Management Relations Act, 1947, construction
project who, together plied funds to the market while
peaceful character of recent in¬ was no exception. It built
Com¬
upon
with other employers, is engaged at the same time business demand nating
dustrial relations. No drastic
mittee,
of
leg¬ the National Labor Relations
Act, in work on the site of the project, for loans failed to show the nor¬
which Norbert
islative innovations in this field and not
Thus money
only reaffirmed, but re¬ will not be treated as a secondary mal seasonal rise.
W

I

submit

herewith

for

the

tions Act where

con¬

sideration of the Congress a num¬

The

National

Labor

Relations

collective

a

bar¬

drew

year

to

close.

a

The

down¬

gaining

Phila. Bond Club to
Hold Annual

are

at

therefore desirable

this

time,

or

required

i

inforced the right of
working men
and

women

to

organize

„

and

boycott.

into

Union Representation

,

As the

ployees
'This is

not

an

offering oj these Shares for sale, or an offer to buy, or a solicitation of an offer
The offering is made
only by the Prospectus.

to

buv,

any

of such Shares.

Act is

who

economic
from

Company

70,000 Shares 4.20% Cumulative Preferred Stock
(Par Value $100 Per Share)

Price $101 per

\

for

Board

to

be

petition

a

that

months

(Without Par Value)

of

the

tion

long

A. C.

Allyn and Company

The First Boston Corporation

Kidder, Peabody & Co.

Bear, Stearns & Co.

Coffin & Burr
Incorporated

Hallgarten & Co.
G. H. Walker & Co.

E.F.Hutton& Company
Burke & MacDonald

Stern Brothers & Co.

Spencer Trask & Co.

Dean Witter & Co.

Goodbcdy & Co.
Barret, Fitch, North & Co.

Kirkpatrick-Pettis Company

part

which

H. O. Peet & Co.
I

four

be

considering

the

of

claims

a

any

to

pro¬

peti¬
other

represent

the strike continues,

as

vided, however, that
limit of
one

a

pro¬

reasonable

time, which I suggest be
be stipulated.

year,

that

tive

though

a

collec¬

bargaining contract is in force,

either

party

may

insist

that

contract be reopened for the

that

of bargaining
were

tiations
made.

the
pur¬

about matters

not the subject of nego¬

when
Thus

the

contract

stabilization

was

of

the

January 14,1954.




relationship

between

Continued,

the
on

parties

page

41

fluctuated

widely in
changing money

these

market conditions.
In the early
part of the year they rose rather
markedly; in the latter part, they

underwent
At

the

rates

U.

gations
than

substantial

end

on

of

S.

were

1953,

long-term

declines.

short-term

Government

obli¬

considerably

they had been

earlier;
slightly

a year

rates,

lower

only

lower.

of

Smith, Barney
and
Co., is
Chairman, has
presented

the

following slate
for

1954:

President,
Lawrence M.

Stevens,
Hemphill,
Noyes

&

L. Ran¬
kin, Goldman, Sachs & Co.
Treasurer:

"These wide fluctuations
during
course of the
year in the de¬
for

mand

market,
the

loans,

money

and

prices of bonds held

portfolios
and

in
the
interest rates,

in

made

the

challenging

one

A

condensed

financial

in

lively
for banking."
year

a

statement

condition

in

bank

of

the

of

the

com¬

pany as of Dec. 31, 1953, as stated

by Mr. Alexander, shows deposits
at

the end

of

1953

570,699

compared

398,

the

at

year,

an

close

stood

with
of

increase

Butcher

previous

about

the
year,
however,
deposits averaged about 4% lower

lower

1952,

the

entirely
United

deposits.
volume

Government
over-all

of

earning assets, com¬
bined with higher operating costs,
resulted in a slight decline in net
operating earnings, although final
net
earnings transferred to un¬
divided

1°%.
Net
Federal

profits

Morris,
three

ley,

increased

income

term:

Stroud

&

&

Z.

&

R.

Co.,

Weeks;

Victor

Mos-

Incorporated;

Suplee, Suplee, Yeat-

Co., Inc.; and Morris Lloyd,

(Special

to

after

related

thereto, amounted to $5,144,574, or
$20.58 per share for 1953, com¬
pared with $5,178,788, or $20.72

The

Financial

Chronicle)

CLEVELAND, Ohio—Charles F.
Steinman

Jackson
merce

is
&

with

Paine, Webber;

Curtis,

Union

Com¬

Building.

Joins Robert Baird Staff
(Special

to

GREEN

taxes

Mor¬

With Paine, Webber Staff

about

earnings,

W.

Drexel & Co.

•

operating

Hornblower

year

William
man

being
attributable
to

smaller

Frederick

For Governors, one year term:
Alfred Rauch, Kidder, Peabody &
Co.; two year term: George L.

decrease

States

The

Secretary:

2%.

Throughout
in

Frederick T. Seving,

Sherrerd.

&

ris, III, Smith, Barney & Co.

$671,241,-

the

of

at $687,-

Lawrence M. Stevens

Co.

Vice-President: Harley

the

almost

Reopenings

even

of

than

The Act has been interpreted to
mean

pose

Newhard, Cook & Co.

from

Contract

White, Weld & Co.

Incorporated

of

commencement

the

legally be distributed.

Smith, Barney & Co.

period

recom¬

employees.
The prohibition
against considering a petition by
employer should continue as

Copies of the

Merrill Lynch, Pierce, Fenner & Beane

a

the

further

the

Prospectus may be obtained from any of the several under¬
writers only in stales in which such underwriters'
are
qualified to act as
dealers in securities and in which the

Marcus

became easier.

term

view

the part

on

strike, the Board

on

union

I

for

after

hibited

Price $32.50 per share

Glore, Forgan & Co.

from

employer which challenges
representation rights of the

mend

225,460 Shares Common Stock

Blyth & Co., Inc.

prohibited

of the

the

may

representation

an

striking union.

Prospectus

an

employer to use
destroy a union
of
his
employees, I recommend
that, in the event of an economic
strike, the National Labor Rela¬
considering

Plus accrued dividends from date of issuance

f

in

In order to make it im¬

this provision

tions

share

em¬

prohibited

are

in

long

written,

engaged

are

voting

possible

now

strike

elections.

Kansas City Power & Light

credit

"Interest rates at both short and

Meeting

A.

The

Financial

Chronicle)

BAY, Wis.—Arthur H.

Dy Chateau is with Robert W.

Baird

&

Co.,

Inc.

He

was

for¬

merly with Thomas Hundley and
the Milwaukee

Company.

Volume 179

(167)

Numtjer 5290 ... The Commercial and Financial Chronicle
opportunity for international pre¬

Eisenhower Outlines Program in
State of the Union Message

which

would

prevent

serious

any

place

where

hower,

Dwight
Jan.

on

Eisen¬

D.

delivered

7,

his

and

justice.

in

in

Korea,

continues' to

Indo-China

the

vigorous

can

resistance

sociated States, assisted by timely
aid from our country.
In West

the

Germany,

by

Administra¬
tion-

■

its

outlined

fu t

the

for

and

u r e,

made
ber

f

o

posals

be

re¬

national

legislature.

*»«.«

"

Portions of the

President's

mes¬

follow:

sage

It is

high honor again to

a

pre¬

,

sent to the

Congress

views on

my

the State of the Union and to
ommend measures to

rec¬

advance the

security, prosperity and well-be¬
ing of the American people.
r

branches

All

>

this

of

ment—and I venture to
our

Govern¬

both of

say

objective of the recom¬
mendations I make today, for that
the building of a
stronger.; America. A
nation

is

for

bold

where effort
is
rewarded
and
prosperity
is
shared; where freedom expands
and peace is secure—that is what
I

by

mean

hope;

stronger America.

a

this

Toward

momentum

objective

has

j.

We

real

a

developed
during this Administration's first
in office.

year

tinue

We

it.

crease

We

to con¬

mean

that momentum

and

build

to

mean

in¬

to

a

better future for this nation.
Year's

Much
thankful
the
.

which

has

happened

during

past year.

First

of

that

grateful
die

the

on

Korea.
called

tary

all

the

nation

history.

homes

to

has

The

inflation

are

In

of

still
mili¬

in

year

wages,

savings of

its

effect of
pensions,
all has

damaging
the

on

the

vital

Far

East,

interest

retain

we

We

Korea.

in

with

negotiated

mission

The

fact

that

can

I

shall promptly submit to the Sen¬
ratification.

ate for its consent to

We

prepared to meet any re¬

are

newal

of

Korea.

We shall maintain indefi¬

nitely

armed

aggression
in

bases

our

trade

in

Okinawa.

material

continued

I

assistance

of

the

in

Indo-China.
This
assistance
will
also
bring
closer the day when the Associ¬
ated States may enjoy the inde¬
pendence already a s's u r e d by
struggle

shall

We

France.

also

continue

military and economic aid to the
Nationalist government of China.

committee*

a

readiness

organization of

and

forces.

reserve

these

Measures

weaknesses

will

to

be

now

our

allies

can

and

our

own

tinue
can

to

their

earn

economy

own

shall

have

strength

and

course,

this

more

States
the

were

United

sembly.
viet
a

need

now

economic

an

ures

now

to

thfe second great

being

are

urge

meas¬

strengthened.

the current fiscal year we are

these

in

the

next

shall spend nearly
for them than in

of

tion,
the

purposes

of

our

fiscal

an

effort,

year,

we

$1 billion more

of

wonders

the

undergirds

the

Western Europe's

us

In

This advertisement is neither

Strength

Europe our policy
rests firmly on the North Atlantic

Treaty.
as

will remain

It

far ahead

so

as we can see.

an

The

Western

to

termined

keep

At

this

transition
dent

that

in

ruption
But

we

paredness
the

a

economy.
we

can

without
our

we

of

Government

our

has

been

re¬

duced and its work proceeds with

183,000 fewer employees;
discouraging trend of

some

the

thus

modern governments toward their

limitless

own
our

case

expansion

been

has

in

oppressive

defense

as

we

near

yet

goals;

we

are

our

mili¬

tarily stronger every day. During
the
yeai?, creation
of the new
Cabinet

Department

Education and Welfare

Health,
symbolized

.

citizens.

Segregation in the armed forces

and

other Federal activities is

the way out.
progress

on

to

free

a

self-reliant

and

which

offers

assurance

of

chance.

is

serious

nation

as

as

security. With the coming
unity to Western Europe, the
this

nation

can

Subsequent
and
28

the

will

special

economic
set forth

report

Foreign

shall

tions

for

and

debt

management

Continued

1953.

offer to sell nor a solicitation of an offer to buy
offering is made only by the Prospectus.

any

Hemisphere,

we

develop har¬
mutually beneficial
cooperation with our neighbors.
Indeed, solid friendship with all
our American neighbors is a cor¬
nerstone of our entire policy.

We have also made

toward

its

Confidence in

elimination

in the District of Columbia. These

In

the

world

United Nations

Some developments beyond our
shores have been equally encour¬

a
whole, the
admittedly still
evolution, means
much to the United States,, It has
given uniquely valuable services
in many places where violence
threatened.
It is the only real

aging.

world

are

steps in the continuing effort

to eliminate inter-racial

Cracks in

Iron

Communist

difficulty.

Curtain

aggression,




United
in

a

Price $34 per

to

Share

Copies of the Prospectus may be obtained in any stale from such of the several Underwriters,
including the undersigned, as may lawfully offer the securities in such stale.

as

Nations,

state

A. G. Becker & Co.

of

forum

where

we

have

the

Incorporated

January 12, 1954

Jan.

action.

policies;

on page

of these securities,

$10 Par Value

and

on

plans of the ad¬

Congressional

Assistance

continue

monious

messages

These will include: flexible credit

effectiveness.

In the Western

pre¬

ministration and its recommenda¬

100,000 Common Shares

render

for the security of Europe and the
free world will be multiplied in

important

military

paredness.

pean

assistance

inter¬

Economic pre¬

fully

Company

Euro¬

a

economic growth.

Marquette Cement Manufacturing

the European

to

I am confi¬
complete this

NEW ISSUE

This will be promoted by
Defense Community

Europe.

of

the Government's permanent con¬
cern with the human problems of
our

vital

of

reversed.

The cost of armaments becomes
less

European community, in¬
cluding France and Germany, is

in

are

wartime

shall not leave this vital
to

matter

moment,
from

its organization, the building of a
united

The cost

to go down.

economy

our

strong and to keep it growing.

based

have begun

It

our military security
and
standard of living of every

Within-

been brought under control. Taxes

world.

international posi¬

our

citizen. This administration is de¬

for continental defense must

and

and

possible
era

turn

to

portion

toward

I

tion.

to

start

well

participation in its construc¬

our

allocating

make

as

Military and non-military

A truly constructive So¬

Law¬

St.

the Congress promptly to approve

increasing

will

the

reasons.

As¬

General

United

his

purpose

Both peacetime

interdependence.

recently presented to

reaction

new

for

as

In

Nations

forfeited

Strong Domestic Economy
I

transition

United

the

Some

Seaway for security

rence

be

of

our

the unbreakable ties of

military

spirit the atomic

proposals

energy

and

citizenship.

addition, the Attorney Gen¬
before your
present his recom¬
mendations for needed additional

we

this foundation

system.

strategic

constructive

of

prospect

advocate the

to

eral will soon appear

of

transport

whenever there is a rea¬

In

conspiring

In

plant-

continental
of our
vital heavy materials
come
in¬
creasingly from Canada.
Indeed
our relations with
Canada, hap¬
pily always close, involve more
of

is,

Allies, we shall be in ah im¬
proved position to discuss out¬
standing issues with the Soviet
Union.
Indeed we shall be glad

sonable

Thus

realistic

more

Another part of

during the coming year
closer the bonds with

results.

after

overthrow of this government by
force or violence be treated as

the gaps in

us

base.

program.

our

so

who

States

of
our
government:
Along
with
the
protection
of
the maintenance of a
This nation is at last to have an freedom,
up-to-date mobilization base—the strong and growing economy.
The American economy is one
foundation
of
a
sound
defense

draw

to do

what the

and stockpiling goals.
We shall speed their attainment.

nations

and

the United

of

is convicted in the courts of here¬

for

expansion

con¬

our

time,

know

are

mobilization

our

Program

maintain

we

first

tential, will show

Policy has made its report.

As

Congress en¬
legislation to provide that a

mobilization
require¬
1,000 major item^ legal weapons with which to com¬
needed for military uses.
These bat subversion in our country
data, now being related to civilian and to deal with the question of
requirements and our supply po¬ claimed immunity.
ments

after our Joint
Foreign Economic

Peace

the

officials

problem I shall sub¬

Atomic

I recommend that

committees to

Congress detailed rec¬
on

States.

United

For

arbitrary restraints on trade that
have
continued
ever
since the
On this

no

States

The free world

flourish.

knowingly participates
conspiracy he
longer holds allegiance to the
Communist

the

ability to convert swiftly
partial to all-out mobiliza¬
tion is imperative to our security.

longer afford the kinds of

no

the

of

party

citizen

in

States

The

from

way

can

citizenship.

having, by such act, renounced
his
allegiance
to
the
United

re¬

payments within the
system in which

and

matter re¬

a

character

tions akin to treason— that when,

citizen

of

to

now

in the United
States has been clearly demon¬
strated in many ways, including
court
proceedings.
We
should
recognize by law a fact that is
plain to all thoughtful citizens—
that we are dealing here with ac¬

act

Evi¬

employment

American

subversive

Communist

ap¬

dent weaknesses exist in the state

world-:-a

free

to

The

pointed by the Director of the Of¬

in the next fis¬

we

turn

lating

fice of Defense Mobilization.

bur

duce

Commission

which

and

manpower

Mobilization Base Formed

the

Pacific

the

for

military

Conspiracy

special

standards of the Federal Govern¬
ment I

*

To Reduce Foreign Aid

our

have

*

of

and

correct

ommendations,

Republic of
Korea
a
mutual
security
pact
which develops our security sys¬

just completed

prosperous

salaries and

assist¬

However,

our

mit to the

Far East

our

later submitted to the Congress.

war.

Military Aid to

year,

the

they are no longer
field of battle.

to the

most

longer

no

mountains

they

our

service,

The

sons

Although
from

called

our

distant

deeply

are

we

on

new

have just been completed by the
National Security Training Com¬

economic programs

to hasten the successful-conclusion

be

may

we

of freedom

cause

shall ask the Congress to author¬

Accomplishments

for

the

foreign fronts.

ize

Past

shall, therefore, continue to

advance

a

capability to strike back.

Studies

;

.

In the task of maintaining
this
unity and strengthening all its
parts, the greatest responsibility
falls naturally on those who, like
ourselves, retain the most free¬
dom and strength.

tem

been

:

world

a

con¬

-

whose every citizen has good rea¬
son

massive

foreign5 economic as¬
sistance in many areas is gratify¬
surface is hard.:
i
i
*
ing evidence that its objectives
"
\
•
J American freedom is threat¬ are being achieved. By continuing
ened so long as the world Com¬ to surpass her prewar levels of
Eu¬
munist conspiracy exists in its economic ; activity, Western
present scope, power and hostili¬ rope gains self-reliance. Thus our
ty. More closely than ever before, relationship enters a new phase
American freedom is / interlocked which can bring results beneficial
with the freedom of other people. to our taxpayers and our allies
In the unity of the free world
alike, if still another step is taken.
This step is the creation of a
lies our best chance to reduce the
healthier
and
freer
system
of
Communist
threat
without
war.
"

the

we

not be aggressors, but we and our
Allies have and will maintain a

in Korea
and in a few other critical places
of the world are especially im¬
portant, and I shall ask Congress
our

to continue them

great parties—can support the

general

objective

other

in

Economic

reduced.

be

can

peace,

continues to grow.

power

Communist
From

This power is for our own defense
and to deter aggressiion. We shall

of

Technical assistance must

maintained.

ance

and

*

Military assistance must be
be

is

enter this

we

military

our

.

acted upon by

the

As

peace.

cal year.

»

pro¬

to

the

nec¬

•

num¬

a

and

while, from .behind the Iron Cur- *
t^in, there are signs that tyrartny.
i§ in trouble andj reminders that
itys structure » is as brittle as its

'

aims

Iran

As¬

Slowly but surely, the free
world
gathers strength. Mean¬

President
.1

in

and the

ourselves

owe

•

dom.

the past year,
*

France

hope

our

the fatal

-

war.

a

keep

by the. forces ofstability and free¬

during

the

of

areas
of
the world,, heartening
political victories have'been won

fis.

to

•

tinued.

aWay 'from

"and

Since

foreign policy, we enter the
of (foreign
assistance and

our

Message
joint session of the Congress.
After reeiting

made

the

continued firm support.
•In the practical application

interruption in

a

candid explanation of the mili¬
place where tary measures we are taking to
he squarely assigned make that peace secure.

It is

,

steps

essary

to

progress

of

The United Nations deserves

second State of the Union
a

nations

is

field

halted
meet

the

It

-

world can, if they have the will,
take collective action for peace

trade.

President

rebuttal.

to those who fail to take all

prosperity.

our

road toward atomic

the guilt

President, in document read before joint session of Congress,
tells of progress of last year and ouilines aim and proposals
for enactment by Congress. Calls for delay in tax cuts; for
atomic-age defenses, with reduced military personnel, and a
program

peace,

sentation '"and

15

35

16

The Commercial and Financial Chronicle..

(168)

Plan

NYSE

Monthly Investment Plan—
An Idea (or Democratic Capitalism!

cash

any stock
from among

payment basis of

his

choice

own

1,200

Stock

bought
under the Plan are those traded
in less than 100 share lots.
The

Exchange

be

cannot

which

Plans

Points out how Plan

encouraging.

$40 to $999—monthly or
He

vest so

broadening market for share ownership.

Monthly Investment Plan—
is

product

a

of

among the Member
Lot Houses and the
a

new

teamwork

Firms, Odd
Exchange—

proving
in

and

the

fighting all persons or
that want to tear the sys¬

groups

down."

tem

way

As

buy stocks.

have

is

Stock

"Understanding
quote from

f

"This

thousands

o

f

financier,

investors.

Capitalism

also be

cans

the
for

every¬

where

Should
the

Ruddick C. Lawrence

does

the

share

of

of

is

po¬

impact
know

and

its

the

answers

viuosly they
to

people

public

of

the

you,
we

but
And

us.

supply

ury

ket

for

and

the

how

Plan,

you

how

can

it

to

is most

reaction

press

couraging.

You

the

editorial

the

New

have

may

which

"We

with

hope

this

every

spread

that
of

like

fellow

chances

to

ductive

and

.

to

see

citizens

low income groups.

than

more

with

the

one-half

incomes

be*
own

Nearly one-third
$25 to $50

families

with

is

stocks

own

equity

no

current

are

To

all

of

these

sharegroups,

they have high incomes
the pay-as-you-go tech¬

low,

nique should
This vast,

missing

a

invest

in sound, pro¬
profitable American

target

have great appeal.
undeveloped market is

worth shooting

Features

of

the

at.

Just

the

see

of

is

greatest

Americans
in

terested
*A

ta'k

by

Associa ion

York

C'ty,

we'd

that

like

possible

become

vitally
and

Mr.

before

of

Customers'

Jan. 5,

All

Brokers,

which you

in¬

the

im-

is

Plan

it

public?

but

for

.

—

Some

Monthly

been

having
as

is

publicly

a

a

In¬

this

of

brief

who

fuels

coal,
as

heat

source.

this

matter of record only.

not,
The

plants

built

by the dollar's worth—just as the

worth

dollars

let's

Now

pump

privately

of gas.

look

at

of the

some

Plan's sales points:

The Plan is limited to
on
the New York

listed

stocks

You pay

that

Credit:

or

You

Cost:

extra

no

pay

charge,

mission.

the

after

extra com¬

no

purchase
price
will be the first odd lot price of
stock

1

McGRATH

'

1

securities corporation

in

payment
the

of each
account. Where
under $100 the
straight 6% of

your

is

purchase

commission

is

invested.

amount

a

purchase is $100
mission
with

is

Where

the

or more,

70 Wall

Street, N. Y. 5, N. Y.




•

WH. 4-0175

my

that

legal diffi¬
barrier

a

development for the bene¬
mankind

of

this

form

new

energy

the

used

to

sion

of

the

take far

legal

situation

will

time than the

more

pro¬

will allow.

gram

The best that I

can

do is to sketch rather

the

unique problems with which
shall

we

be confronted, and

briefly

more

1

the

of

briefly *

to

solutions.

even:

the

suggest
I

na¬

shall

do,

address

under five subheads.

so

Continued

1953.

1,

on

46

page

LETTER

of six

Non-contractual:

Ml

Tax Reduction Views

1%,

dollars.

You

can

in

Former Chairman of Council of Economic Advisers

stop

and mailed to you

name

without

fractional
will be sold
and a check for the proceeds sent
to you.
Or you can purchase a
fraction to round out your hold¬
ings to the next full share.

shares

charge.

held

When
you

for

published in the "Chronicle" on Dec. 31, he placed
emphasis on tax reductions "to provide incentives and stimuli"
Chronicle:
I

appreciate

sell

all

printing

my
the "Chronicle" of Dec. 31.

tently convey
the impression
that, as of the

the

shares you have accumulated,
merely by instructing the member
so.

the

for

a

time

proceeds, less the
New York Stock Ex¬

customary

commission

and

talk, I

was

situation

[1954],

Convenience:
can

Flexible:

You

invest

can

n

scheduled

each

s

for

year

expendi¬
by

increased

billions of dollars, I would
desirability of trying to

doubt the

increase

the

burden

tax

in

the

aggregate, because this would do
harm

more

than

economic

to

it would

do

be

or

an

progress

good by balanc¬

ing the budget. .
hand, if defense
level off

...

On the other

outlays should
reduced, in accord

plans, there will be
expansion

enormous

consumption

re-; of
o

likely

many

for

i

be

to

current

a u c t

by mail.

the
next

defense

unless

need

corporate

The entire trans¬

be handled

of

were

with

and

view

tures

against the in¬

transfer

-

action

this

of

In

dividual

change
taxes.

You will receive

How¬

the caption "Leave Taxes as
They Are"
may
inadver¬

ever,

of

part

any

or

much your
tax talk of Oct. 16 in
very

loopholes.
economic

Editor, Commercial and Financial

you

Plan is terminated,

your

can

Any

in

says,

address

full shares will be registered

your

Keyserling Explains His

com¬

whenever you please. At that time
your

TO THE EDITOR:

the

dollars plus

three

minimum

a

maintain

to

growth in a healthy economy. Un¬
these

der

circumstances,

the

tax

reduction scheduled for

early next
.every
.three
against the re¬ year should be allowed to remain
months.
If you skip one or two
moval
of
the in force, and
the next priority
periods,
the
firm
will
merely
excess
profits should be a lightening of the tax
suspend your Plan for you and
burden on low income families,
Leon Keyserling
tax. Quite the
continue to reinvest or remit your
contrary is the either through a raising of the
dividends, as you direct.
How¬ case, as my emphasis was upon exemptions or in some other way.
month

•

or

if

to

firms

reserve;

you

you

1 9 5 4,.

the

or

than

four

tax

reductions

brief,

substantially

would

seem

into

main

dends, rights and special distribu¬

scheduled

a

shares

your

or

share after you have

made your first investment.

Ownership:

You

are

an

in the company whose shares you

Continued

on

in

[1954].
the

page

40

increased,
desirable

me

it
•*

to

line

with

what

.

force

.

for
.

the

tax

early

it

signs of

an

become

further

economic recession
more

relief

tax

pronouneed,
should

be

granted to reactivate the economy,
but I do not think that this should

be

done

seems

precipitately

to

me

economic

because

it

that the longer range

trends

are

still

very

re¬

reductions

next

If

should

strong."
Very truly

year

However, I think that

LEON

H.

yours,

KEYSERLING

excess

profits tax should be
allowed to die, because it tends to
restrict

owner

to

is, instead of allowing to

titled to your portion of
any divi¬

on

incen¬

adopt legislation bringing the tax
structure

received

provide

What I said, in

was

now

for yoii, as you direct on
purchase order. You are en¬

......

d

the following: - - • ^
"If defense expenditures should

be

They can be mailed
automatically
rein¬

to

tives and stimuli.

vested

tions

a n

once

member

ever,

fraction of
Member Nutional Association
of Securities Dealers, Inc.

Therefore,
profes¬

upon

it

to

see

receipt

skip more
successive purchases.

a

of

generators.

the
*

of

because

by Mr. Stason at the An¬
nual Meeting of the American Society of
Mechanical
Engineers, New York City,
Dec.

handled.

are

Your

Dividends:

Offering Price SI.00 Per Share

of

ture

only the
customary commission rates.There
is

power

as you go.
♦An

Low

to all

common

electric

unique

source

turn the

re¬

difficulties.

Anything like complete discus¬
are

owned

are

scientist

of energy. "

Blythe Stasoa

plants, for example, problems of
incorporation or financing. I shall
confine my discussion to problems

novel

Payment

Down

No

so

MICRO-MOISTURE CONTROLS, INC.

E.

the

with the legal

problems that

gasoline

to

fit

I

makes it

modern

The

technical

incumbent

to

deal

not

techno¬

gradually

are

culties do not constitute

Corn-

also

are

executive, working
engineer, will, in due
to it that the economic

see

is

sion

by the Atomic
mission.

the

problems
it

lawyer's

and

problems.

the

time,

I

the

business

with

power

shall

right to terminate the account at
any time and would expect to do

299,000 Shares Common Stock

The

deal

not

is

economic

engineer

solving

tne^r

shall

of

logical

gas, or

oil

That

We find that there

and

instead

of

solved.

plenty

nuclear

prob¬

Concludes

There are plenty of such
unique
legal problems. In fact, the scene
literally bristles with them. But
like all legal problems
they can
task.

plants

g

Monthly Investment Plan is sim¬
ply a method of purchasing shares

study

have

description.

sold,

have

you

chance to

a

those

here

shares

the

New

advertisement appears

i

right of

a

certain other Federal legal

be

elec¬

using

He is an
The

power

generat-

100 or

company.-

is,

y

tric
n

give

problems arising from State laws.
all these legal
problems can be solved.

privately-

Energy

check

package
will be discussing with

probably had

the

1954.

these

what

vestment

number

maintaining
Lawrence

to

the

of

b

to

private patents in

on

as

industry—that

produced

with

buys

1,000 shares at a time.
owner

firm to do

Plan

industries and businesses.
"Ano her

who

the

incomes

owners.

lot

a

This market is

us.

shares at all.

or

hope

know

we

$10 and $25 thousand

whether

this

to

figures,

chase

among

1
for

don't

we

meet

widely than

more

reason

our

a

will

ownership

far

it is spread now.
"One

will
and

success,

stock

Americans

plan

right,

merchants, manufacturers' repre¬
sentatives, and supervisors, hold
no
shares
in
publicly owned
companies. Stewart Dougall esti¬
mates that only about one out of
eight of some 40,000,000 adults
who are "financially able" to pur¬

in

appeared

"Daily News"
week ago Sunday. To quote:

is

According to the Brookings
Survey,
80%
to
90%
of
such
groups
as
professional
men,

seen

$180 stock,

a

the

pay

investor

the

of

Stock Exchange.

securities.

en¬

York

Plan

thousand

de¬

frac¬

investor has

the

Quality:

Potential

tremendous potential mar¬

no

velop business.
The

Tremendous

a

of

mar¬

When

T

;

the families

of

works

it

use

1

the

tween

and

questions about the

answer

'Big

According to United States Treas¬

these

discuss

to

business.

a

share

a

also

and

only win

not limited to

the

failure of the Plan—are

invitation

your

the

but should produce

us

ket is open

ob-

That's why
producers.
especially glad to receive

were

the

on

Market

answers—who will determine the
success or

stocks

that the Plan should not

If

yet,

will

indicates that

by

people

friends for

Opening

going to be im¬

are

all

who

Times"

of

well

possible to buy one, two or three

other

that

0.2621

or

commissions.
purchased
one full share, his rights of own¬
ership are no different from those

to think

relations

stock,

$18

an

na¬

seem

We don't

industry?

regular payment of, say,
will buy you 2.6206 shares

can

terms

the
Exchange?
significance to our

on our

portant

in

mean

Each

$50

private

owned

a

Exchange is one
forward
steps

undertaken

So

credited to his ac¬

are

man

"Sun

common

greatest

four

to

figured

count.

of

Energy Act, along with

as

I have been asked to
discuss the

places) bought with each

payment,

lems,

legal problems connected with the
development of nuclear power by

share

a

Atomic

Discusses ban

The
of shares (and frac¬

tions

be part of

response

of

materials, and (4) failure

commis¬

and

Monthly Investment Plan

the

ever

of

prospect

for

its

economy

it

can

volume

What

little

mogul,

tions

decimal

source

continuity in business.

sub¬

for

money

sions—are invested promptly.

of

buying

and

purchases—less

sequent

a

Board.'"

tential of many new shareowners
—mean
in terms of business for

What

is

capitalist."

a

new

of

broadening the market—this

you?

the

common

New York Stock

op¬

portunity to own their
American business.
What

here

of

Chicago

"Public

Ameri¬

have

York

writes:

—

the conviction

that

And

the

not

proud to
tion where the
The

booklet

New

age

we're

ocratic

e m

the

is

course

D

we

4,000

the Boston "Herald":

is

of

idea

the

trie

Exchange."

o

than

more

requesting

hundreds

That

of this editorial

received

letters

the

on

remittance

exact number

result

a

It is also part
of an idea that

big enough
to help create

system,

—

on

as

sibility to

a

dollars—monthly or
in a certain stock
Exchange. His first

many

quarterly

Capitalist

many

signs

simply

School, University of Michigan

legal problems in application of Atomic Energy
important deficiencies in this law: (1) lack of a
foundation for
ownership of facilities; (2) lack of Ifoundation
for ownership of fissionable
fuels; (3) no provision for acces¬

he wishes.

investor

listed

The

which

have as

can

Specialist

Act lists

purchase order—not a contract—
which states his intention to in¬

a

of Plan in

he

But
as

The

examples. Reveals publica¬
"Merchandising kit," containing sales advice for help¬
ing in selling the Plan. Expresses optimism regarding potential

only one

buy

can

Plan.

be used to

can

sell in special markets and cities

tion of

new

Dean of Law

buyer may invest any amount

it has been

is

By E. BLYTHE STASON*

from
quarterly.
stock per

NYSE executive sees in new Monthly Investment Plan an idea
big enough to help create hundreds of thousands of new inves¬
tors. Explains features of the Plan and says Press reaction to

to

The Legal Situation

the New
The only

listed on
Exchange.

stocks

York
stocks

By RUDDICK C. LAWRENCE*

Vice-President, The New York Stock

permits the investor to be¬
an
owner
on
a
budgeted

come

of

Thursday, January 14/1954

obtain

productive
more

advance.

revenues

if

To

defense

Consulting Economist and
Attorney at Law
1001 Connecticut

Ave.,

Northwest

expenditures should be increased,
renewed
and more vigorous ef¬

Washington 6, D. C.

forts should be made to close tax

Jan.

7,1954.
i

.

.

Number 5290... The Commercial and Financial Chronicle

Volume 179

cotton

corn,

Text oi Eisenhowei's

Message
Urging New Farm Price Policy

and

and

oils

most

excessive

total

vegetable
their

encourage

The huge and grow¬
ing surpluses held by the govern¬

production.
act

ment

normal

special message to Congress, he outlines program which is
designed to achieve stability and growth in farm income over
the years. Lists ten fundamental considerations in his program.

as

markets

results which in
to

threat

constant

a

for

those

whom

tended to

these

the

help.

are

laws

to

because

full text of the President's
message follows:
submit herewith for the con¬

I

sideration of the Congress a num¬
ber of recommendations affecting

modities

more

for the treatment of 16 commodi¬

creasing

by

ties

As

result

a

I

PART

is

serious and complex as any

as

the

Congress

will
t h i

in

deal

session.

s

Immediate

ac¬

tion is needed

to

the

arrest

growing
threat

to

our

agri¬

present
cultural

pro¬

and

gram

farming
given assurance to the
American farmer that support of
our

I have

areas.

and

government

States

and

friends

our

For

products

farm

reasons

are

other commodities.
individual farmer
less

price supports on basic commodi¬
ties at 90% of parity, was a moral

many

subject to wider
fluctuations than are most

price

control

Moreover, the
rancher

or

the

has

do

prices

he

producers

over

than

other

most

greater

This

existing agricultural laws, includ¬
receives
ing continuance through 1954 of

produced by a stable,

effort
farm
adjusted to existing con¬

program

This

country.

requires for

success

new

a

ditions in the nation's agriculture.
This

message

that

Congress

the

to

presents

new

program.

It

is designed to

achieve the stabil¬
ity and growth in income over the

years to which our
entitled
and
which
must

farmers

are
nation

the

in the interest of

assure

all

160,000,000 of our people.
Studies of the Problem
In

constructing its program, this
Administration resolved to get the
benefit of the best thinking of the
nation's
of its
ferent

than

farmers,

farm

well as that

as

experts. Over 60 dif¬

and

groups,

survey

of

500

the

more

eminent

most

farm leaders in the country, have

in these studies.
Agricultural colleges and research

participated

contributed

institutions
work and

thought.

their

Scores of

pro¬

trade
groups, as well as national farm
organizations, gave their findings

ducer,

in

industries.

Govern¬

and

processor

the

It

some

diverted
total

sup¬

corn

also

is

acreage

re¬

expected that

3,000,000 diverted acres

may

is

can

more

treat

the

fundamental

causes

carry - over
about 9,600,000

to

again the
of

the

carry-over

entire

nation

will
bales.
is ap¬
for

of

unbalanced

farm

pended

income.

It

likewise

must

for

a

part

large

of

its

Major Features of Farm

and

marketing

scheduled by

moving from the old to modern¬

parity

and

relation

the

Program
The

new

farm

program

here

dent and careful

sharp

manner

adjustments

threaten

the

tion

to foresee and

difficulties

in

forestall

our

Adjustment to

(6) In keeping with the policy
gradual transition, the Secre¬
tary of Agriculture will use his
of

authority

under

the

Agricultural

Act of 1949 to insure that year-to-

variations

year

in price

be continued.

Under

the

Supports

of the
Agricultural Acts of 1948 and 1949
the

provisions

government will:

and

marketing quotas when such
effect;
(2) Announce the price support

are

in

level

for

those

crops

various
are

crops

before

planted,

insofar

practicable;
Support price levels at up
of parity. For some prod¬
ucts a schedule of price floors will
as

(3)

to 90%

also be provided as authorized

National

Agricultural

Advisory Commission has steadily

relationship of total to normal
supply; and
,
(4) Vary the price support level
one

percentage

two percentage

point for every
points of variation

Continued

on

Fiber Glass Plastics Corporation
200,000 Shares
Class A Stock

farm

worked

and

consulted

problem for the past
Numerous
tions

commodity

have

of

this

organiza¬

consulted.

Many

Congress

have

the

their

own

members

shared

been

the

on

12 months.

effort.

rich experience

Accordingly,

basic functions of the Department
of Agriculture since its beginning,
are

still indispensable if our farm¬

are to improve their produc¬
tivity and enlarge their markets.
ers

Offering Price: $1.50 Per Share

forest
States
of

resources
are

have

recommendations
been

reaped

in commercial production.

our

of

the

Offering Circular

United

national

as

economy.

from




which

all

this

111

Aetna Securities
Please send

me

a

copy

laws

discourage

consumption

of

in¬

wheat,

Corporation

Broadway, New York 6, N. Y.

York 6, N. Y.

of the Offering Circular relating to Fiber Glass

f

please print plainly

creased

request from

Corporation, 111 Broadway, New

Name

Situation
Present

on

Aetna Securities

From

ago,

Recommendations by Commodity
The

ment sufficient to engage

the natural foundation

them come our food, most of our
the most
clothing, much of our shelter. How
comprehensive
well we protect and improve these
study ever made of the
farm
resources will have a direct beard¬
problem and of governmental
ing on the future standard of liv¬
farm
programs
has be£n com¬
ing of the whole nation.
pleted.
The Present Agricultural

promised a year
thorough and

thermoplastics as well as press die molding of fiber
products will be tote boxes for bakery goods, soft
drink carrying cases, food boxes, candy and restaurant trays, auto and aircraft parts, and window
panes, storm awnings and jalousie shutters. It will also manufacture numerous other civilian items
from styron and other thermoplastic sheet. The Company has purchased plant facilities for manufacture
of plastic products. Such facilities are located on leased premises at 52 Davenport Street, Stamford,
Connecticut, and include a number of presses, heaters, compressors and items of production equip¬
Company is engaging in vacuum molding of
glass plastic products. Its principal fiber glass

The

(10) The soil, water, range and

Address.

by

the 1949 Act, ranging from 75% to
90% of parity, according to the

new

new

support

levels will be limited.

(1)

agriculture,

a

the

major features:

quotas

rather than to attempt their legis¬
lative cure after they have arisen.

(8)

would
of

dislocation

program.

(7) A workable farm program
must give the Administration suf¬
ficient
leeway to make timely

This will enable the Administra¬

to avoid

which

(1) Support the prices of basic
crops of those farmers who co¬
operate with acreage allotments

handling,
a
diversion The principles on which they were
be adaptable to these and other within a single year of 25 million based are particularly applicable
differences, and yet not penalize acres of productive crop land — to the agricultural industry today.
based generally upon
one group of farmers in order to about 8% of the total—from their Although
accustomed use could have the those
principles,
the
benefit another.
proposed

changes in policies and methods,
including
price support
levels,
limits established by law.

basic

proposed is consistent with all the
foregoing conditions and funda¬
mental considerations. It has five

comprehensive farm program must careful

within

of

supply levels require a
transition period to assure a stable
farm
economy.
This
transition
should be accomplished in a pru¬
to

crops

Parity and Price

full year.

allotments

as

prosperity.

a

The new program should
aim at stability in farm income. have had to be applied to wheat first be given an opportunity to
There should therefore be no wide and cotton. An appeal by the gov¬ start operating without the handi¬
year-to-year fluctuation
in the ernment for sharp acreage re¬ cap of such large accumulated
This is to be done by
level of price support.
ductions
for
corn
appears
un¬ surpluses.
(6) No single program can ap¬ avoidable. These allotments are setting aside certain quantities of
ply uniformly to the whole farm expected to reduce the acreage our surplus commodities, elimi¬
industry. Some farm products are planted to these crops in 1954 by nating them from price support
perishable, some are not; some the
following
amounts:
wheat, computations.
farms consume the products of 16.5 million acres; corn, between
(2) The 1948 and 1949 Agricul¬
other farms; some foods and fibers 5 and 6 million acres; cotton, 3.5 tural Acts were soundly conceived
we
export, some we import. A million acres. Without the most and received bipartisan support.
tional

1, 1956,

Provision should be made for

law.

(7) The authority of the Secre¬
ports. The problem is complicated tary of Agriculture to apply price
by the continuing loss of some of supports at more than 90% of par¬
those foreign markets on which
ity when the national welfare or
American
agriculture
has
de¬ national security requires should

proximately equal to the domestic
needs

one

production, resulting in specific
surpluses which are unavoidable
under the present rigid price sup¬

the entire

cotton

The
amount

rather

the

domestic

the

Jan.

on

planted to soybeans, thus ag¬

to

expect to acquire.

than

wheat requirements of
nation for a full year.

Here

which

effective for all commodities

come

gravating

I shall request the
take early action to

of

legislation of 1954
new features, im¬
provements and modifications.
(3) The amendment to the 1949
Agricultural Act providing for
mandatory rigid supports, attuned
to war needs and demonstrably
unworkable in peacetime, will be
permitted to expire.
After the
1954 crops the level of price sup¬
ports for the basic commodities
will be gradually related to sup¬
ply, promising farmers
greater
stability of income.
(4) Modernized parity is to be¬

ized parity in steps of five per¬
the tremendous over- centage points of the old parity
supply
of vegetable oils.
The per year until the change from
old to modernized parity has been
likely production from other di¬
verted acres threatens producers accomplished.
(5) The key element of the new
of potatoes, sugar beets, rice, al¬
program is a gradual adjustment
falfa,
flaxseed,
vegetables and
to new circumstances and condi¬
many other crops.
Therefore, we
tions.
Application of modernized
must move without further delay
be

financial

share

agricultural

proposals.

sentative

in

of

ment

program
must be accomplished
Mail from thou¬ gradually in the interest of the
sands of individual farmers, and nation's farming population and in
the interest of the economy of
opinion polls among farmers,
have been analyzed and weighed. the nation as a whole.
(9) Research
and
education,
The bipartisan, b r o a d 1 y-repre-

and

enough

sorghums to hold

duction.

The carry-over vegetable oils
price supports must, there¬
may be about 1,500,000,000 pounds,
legal commitment that must fore, be provided in order to bring
needed stability to farm income roughly
double
the
carry-over
be upheld.
Along with the ful¬
that should
normally be main¬
and farm production.
fillment of this commitment, an
tained.
(5) A farm program first of all
unending effort has proceeded in
should assist agriculture to earn
Because such tremendous sup¬
the past 12 months to provide the
its proportionate share of the na¬ plies are already in hand, acreage
American farmer his full share of

prosperous

to

of rigid

As for corn, it is

that

purpose

than

and

the income

continue

plies of feed grains at present
levels, thus largely offsetting the

loan,

the

(4)
Eisenhower

Pres.

could follow
in

to

will

consequence

a

the

restore

abroad.

dis-

that

tress

Congress

following fundamentals:

as

land will be used for oats, barley,

1953 and 1954 crops will

on

covered,

United

subsequent
economic

be

in¬

yields that will be sought

estimated

In" order to assure that
price
support
commit¬

channels for constructive purposes
that will benefit the people of the

to

the

prevent

ments

problem,

the Administration has held to the

the

cotton
of

corporation's capital of our present excess supplies of
(1) A stable, prosperous and losses as of June 30, 1953, and to
farm commodities.
free agriculture is essential to the increase its
borrowing authority
The nation's agricultural prob¬
welfare of the United States.
to $8,500,000,000, effective July 1,
lem is not one of general over¬
(2) A farm program must fairly 1954.
production:
Consumer
demand
The
represent the interests of both
government's
commodity
continues at or near record high
holdings are enormous.
It has
producers and consumers.
investments in more than $2,000,- levels; the average prices of farm
(3)
However large
surpluses
products that lack direct price
000,000 worth of wheat alone. This
may be, food once produced must
supports have been as high in re¬
includes
440,000,000
bushels
not be destroyed. Excessive stocks
cent years as those of price-sup¬
owned outright. About 400,000,000
can be removed from commercial
ported products. The problem is
additional bushels are under

which

with

thority.
present

In its approach to this

agricultural problem today

The

concerned.

Some Fundamental Considerations

agriculture.

the nation's

lower
and

likelihood

price supports.

about

the

wheat

the

markets

cause

shrink

doubled, in¬
$2,500,000,000.
commodity groups. I here
obliga¬
confine myself to those aspects of tions of the corporation are press¬
the farm program in which all ing hard against the $6,750,000,000
farmers and all citizens are equally limitation on its borrowing
au¬
or

of

from the reduced acreage, and be¬

in¬

Partly because of

excessive

message presents detailed proposals

The

the

on

contains certain

appreciably
of

creased

stocks, farm in¬
On Jan.
11, President Eisen¬ inquiry are in the best traditions come has fallen steadily over the
hower
sent
to
the
Congress a of bipartisan approach to the Na¬ past three years.
The urgency in this
special message in which he out¬ tion's agricultural legislation. They
situation
lined his plan of flexible farm- recognize that each farm crop has may be illustrated by a few basic
price supports, and listed in it a its own problems and that these facts. During the past year, the
number
of
recommendations
to problems require specific treat¬ investment
of
the
Commodity
ease the
present agricultural sit¬ ment. Accordingly Part II of this Credit Corporation in farm com¬
uation.

not

surpluses

hurtful
are

impact

Even these reductions probably

these

turn

unfortunate
economy.

will

prod¬
Thus, present law produces

ucts.

In

17

(169)

Plastics Corporation.

page

18

-18

The Commercial and Financial Chronicle

(170)

imm

rnntinnorl

17

r>nnp

jiuin puye

restrictions.

Text oi Eisenhowers Message
__

ViyillU 11CW
^

production,

it

is

,

come

essential

In

the basic

of this production
surplus.
..
*

support

*

-

•VlIVY;-

the

of

program

•

iand.
ments

placed under all basic crop prices,

of

of

tion

will

food and fiber is an essential first
step in launching this new pro-

thus

excess, reserves

our

gram.

former.
;

_

_

i

-

_

Abroad

most

for

calculations

Parity

.

.

Expansion of Farm Markets

Parity

Modernized

One of our largest potential
outlets for present surpluses is
tionships and buying habits of 40 in friendly countries. Much imyears
ago.
Because methods of petus can be given to the use of
under

commodities

mula

farm

production

old

the

for-

price rela-

based upon

are

changed

have

markedly, the Congress has wisely

brought the parity concept up to
date. Modernized parity takes account

price relationships dur-

of

ing the most recent 10 years. It
permits changes in farm technology and in consumer demand
to express themselves in the level
of

support
and
restores
relationships among com-

price

proper

modities.

the

basic commodities,

For the

substantial volume of these
commodities by substituting to
the maximum extent food and
fiber surpluses in foreign economic assistance and disaster relief. I shall request a continuation
Of the authority to use agncultural surpluses for this purpose.
a

is

It

enough,

not

which

difficult, situation

especially

are

has

the designed

cost

corn,

modernized

cotton and peanuts,
parity is already in

Conclusion

-

our

stocks of wheat.

excess

tural output. The individual production of the remaining farms,
numbering about 3,500,000, is so
small that the farmer derives littie benefit from price supports.
During 1954 the Secretary., of
Agriculture, in cooperation with
tbe National Agricultural Advisory Commission, will give furtber special attention to the probjems peculiar to small farmers.
•
■

alternatives:
'
(i) Curtail production to the
amount needed for domestic use
and\very limited exports, This
would * require ' a reduction in*
wheat acreage of about 40%—
fr0m the 79 million acres planted
in 1953 to between 45 and 50 mil-

V

lion acres.
by

wheat

of

increasingly severe

wheat

excessive

ever

market

outlets

both at home and

needs.

will

It

agricui-

promote

1949

year-to-year

that

insure

to

tural interests, along with the variations in price support levels
public interest generally. It will will be limited.
commodities
cannot
be
counteavoid any sharp year to year
/gN
Beginning Jan
1 1956 a
nanced under any circumstances, purpose.
change in prices and incomes. ,
change be made at the rate of 5%
They can be insulated from the
Meanwhile, a series of trade
The program will again stimu- a year from old to modernized
commercial markets and used in
missions, working in cooperation late and encourage good farm parity;
'
constructive ways. Such uses will
our
representation overseas, management. It will prevent arm\
Acreage
allotments
and
abroad.
In my Budget Message
I shall recommend that sufficient
funds be
appropriated for this

,

disaster

reUef

a

^

ftLEniiiri states,

cna
n

°

I

recommend

one to Europe, one to Asia, afford the greatest
one to South America to explore individual farmer.

i !

the immediate possibilities of ex-

international

panding

that authority be

provided to set aside reserves up
$2,500,000,000 from
the stocks presently held by the

to the value of

food

fiber.

and

trade

in

the

Moreover,

Secretary of Agriculture, in cooperation with the Secretary of
State, is organizing discussions for

our agricultural resources,
promises the nation's agricuiture a more stable and reliable financial return than any alterna-

jncrease

the

of

the

"frozen"

This

reserves.

some

and

for other purposes.

tive plan.

safeguards

the return of these
mestic
to

to

r,

In

markets so as
disturbance in normal

cause

trade.

Perishable stocks should of

course

vegetable oils and possibly
some dairy products should be set
aside after this program takes ef-

lating to the

crop

removal

of

expansion

of

the

the

soecial

re-

and the date of

i
i
\

'

As

a

must

be

reduced

The proposed program

milium

Speculation,

we

offer

/

iiibiiiiiiiiiiiidiiii

on

TdAH TciEWICIOKI

Cr%DD

1
Drim

lOVo

Telephone

or

write

us

i

win

i^irfTJi

'

__

,

*

.

■

,

.

(2) Except as provided in (3)
and (4) the provisions of the Agricultural Act of 1949 become effective for the corn crop of 1955
and subsequent crops;
(3) The Act of 1949 be amended

to provide a change, within the
range of 75 to 90% of parity
of
one percentage point in the s'upport price for corn for each one
point

percentage

of

change

in

supply, thereby giving greater
flexibility to corn support prices
and tending to prevent the building up of excessive holdings by
government;
■
"

-

i

O

Ck

o

m

I
g

i

I

1 Exchange Place, Jersey City 2, N. J.

I

Free teleohone from New York-Citv-Dlahv J-A SOP

Telephone DEIaware 3-3801
3

/•

|

9 y

•

9

nBiiiiitiiuiioiiiiiiiiiiiiDiiiiiiiiiiiiDiiiiiiiiiiiiQiiiiiiiiiiiiDiiiiiiiiiiiiDiiiiiiiiiiiiDiiiiiiiiiiiiaiiiiiiiiiiiiaiiiiiiiiiiiioiiiiiiiiiiiiai;




,

.

of Dec-

more

n

£

is

needed

was

1

recommended

therefore

mandatory price supports at

th

90% 0f parity for rice be allowed
to

eXphraftL tL

than $2,000,000,-

l954

crop

plus exports,

assure

more

and

stable

reduce

the

feed

sup-

impact

of

000 of Commodity Credit Corpo-

erations are carried out

.

.

Act of 1949
authorizes price support for such
n0AJ"basis cropa as oats> barley,
and
sor/hwnfi. at not to
90% of the parity price,
^he amounts, terms and conditions of price support operations
and the extent to which these op-

Corn

are

de-

funds were invested in feef.^ain.ji^tock economy, retay^f^gficMtoeX'on "conl
The exnort

market

economy is based on an

hi^toripallv

in- sideration of various

factors speci-

^eat farmers
terdependent process involving fied in the law.
'
wneat tarmers, was
production of feed, its conTr,ocmii
.
ltself partly responsible for the version into iivestock products, J^uccb.as this Program has

vital

X

A

to

our

was

.V

farmers continued their high level

i

...

,

balance, prices are a critical fac-

V.=
r*»

Wheat

.

when it

needs of devastated countries, our

1

use

Production controls and support

tion as meat, dairy products and

=

15% of domestic

to become effective for11955 and
subsequent crops This would help

have had no recent ap-

Wheatyears. To msGt a"d post:
duringJhe waf tliG food
war

1
g

for Free Offering Circular c

TEI I ICD

IELLICK
t

*

current carryover stocks on future

and its

=
i

b

I

,

z°r, ^orn too
mnH.rni7?V rl'
,
f lzh^ ParAty'

{or rlce at 90%

i

CUmka

route

i
■i

d

plies

=

.

12/2 Cents per Shore

g

B

f

j

to

expanded production of American

I

COMMON STOCK

s

+

wheat

-

Wheat is a prime example of

|

i

vUKr.

I cLEYDIUN

I KAU

.

'
Rice

^prevented SSentfol
Wheat

'

b|

NEW ISSUE

,

a

I

1

h

J

t

an
adjustment if one should be Feed Grains Other Than Corn
commodity an adjustment, it one snouid be
eea urains utner man torn

the results that ensue from a supac- port program which fails to adthe
levet of demand. As

utilization of commodities, there-

M

1
|

m

v,

rnmmnrM+v

mini-

to

complishes this by increasing

a

and

®roups"

un-

i

n

j

i

lj'eai.eInaDDheddetVoel0sotcific'price^^uppor^for"rke^an^nMMt abollshed'

pnmmnditip^

To avoid these dif-

i

|aiiiiiiiiiiiiaiiiiiil!iniaiiii

p®e,

the number of diverted

ficuities,
acres

land

present wheat

Price supports

must

measures

diverted from crops

aCreages

der allotment.

mum.

circumstances

to

^takeri Tdial wit^thf usTol

(

special

and

markets

feet.
The

addition

surpluses

be rotated. Stocks of wheat,

cotton

"

Use of Diverted Acres,

prevent

stocks to do-

foreign

or

, •
TT

fnrmi

Market prices have levels;
PART TT
been at or above support levels, . (5) Upon adoption of the forerAIVA 11
restraints on production have not going recommendations, the sysIn this part of the Special Mes- been needed; stocks have not ac- tern of marketing quotas be

cultural surpluses and stockpiles.

authority should be coupled with

incentive to employ

of all

B°r™7dLcrefenary''Authority dgn'mMsfe'rs oraTrtcunure ou „1 urge its earIy approval by the of parity
b^ provided to manage sub^ecTs Effecting the use of agri- Congress.
-plication.
lecislative

nnritv

"rt

(4) Legislation be enacted to
freedom to the with the anticipation, however, raise the normal carryover alIt will provide that adjusted support levels will lowance for corn from 10% to

added incentive to make wise use

should
these

'

Tb
th

d°t» the°Deonle S"! be se.nt„from the ,U"it?d bitrary government control and marketing quotas be continued,

national emergency.

or

and competing feeds to pro-

' A' Modernized parity for corn
become effective on Jan. 1, 1956,
wl+
modification limiting the
the 1954 crop, the
e .
e transition to 5% in
SUt)Port for wheat be any sinSle year;

commercial markets for this ex- and growth of farm income.
market.
panded production is part of the
It will help the farmer attain/
(2) After
larger problem of organizing a full parity in the market. It will level of price
for all farm products as now profreer system of trade and pay- avoid creating burdensome sur- reiated to supply. Because of the
vided by law, beginning Jan. 1, ments throughout the free world, pluses.
It will curtail the regi- substantial set-aside, computations
1956.
Because our farmers depend to a mentation of production planning, 0f the support level under
the
considerable
degree
on
foreign lessen the problem of diverted Agricultural Act of 1949 would inInsulation of Surpluses from
markets
their
interest will
be acreage, and yield farmers greater sure that changes in support levels
Markets
particularly served by strength- freedom of choice and action.
would be gradual. The Secretary
Removal of the threat of huge ening of the work of the DepartIt will bring farm production 0f Agriculture will use his authorsurpluses
of farm
commodities ment of Agriculture in developing into closer balance with consumer jty under the Agricultural Act of
part of the program here
presented. Destruction of surplus

on

livestock products,
fo guide the corn price support
Program,, the adjustable price and
0- lu
Agncuiturai Act of, 19$9on the
™noie are well suited. The level
sp?cJfied is..-designed
Jl
f°rn lnto us?> Livestock
p
c s.ar® assured of,a steady
*uPp'y of feed.. at. .reasonable

carry-

set aside as ^tn emergency
and
removed from the

reserve

Equitable treatment of the vacommodities requires that
we should use modernized parity

tial

squeeze

other farmers who normally buy

rigid support level for wheat.
ance
these
vital
nrW
r^intinn"
it is, therefore, recommended shipS
auonthat:
*
£ '.
therefor_
a substantial part of the that.
'
•' ltxummenaea

rious

from current markets is an essen-

high support price for farmers

Subsidize the consumption

.

Developing the best prospects for the stability

world.

the

of

ers,r therefore, are the principal
users of corn. It follows that a

levels for wheat would corn
confront us with two undesirable du,£e

production and marketing. Year present
food in and year out, it will provide 0Ver be

nation to supply an
proportion of the

through commercial channels, and
the bulk of this is eventually used
as feed by other farmers. Farm-

support

rely solely on these measures to posed in this section, and in Part burdens upon the taxpayer.
surpluses into consumption. II which follows, will open new
The foregoing alternatives make
No farm program should overlook market outlets both at home and it increasingly clear that the nacontinued economic growth and abroad, not only for current sup- tion must depart from the high

needs

Corn is used in the same manner as pasture and hay on farms
where grown. Seldom does more
than 25% of our corn crop move

vates the cost-price

?

present price

of

Continuance

The agricultural program pro-

to

however,

greater

those

w"0 produce corn for sale aggra-

otherwise help absorb

could

move

our

encourage

trends.

provides that until Jan. 1, expansion. By revolutionary in- lies but for future production. It
1956, the old or modernized par- creases in farm productivity dur- will provide a firm floor on which
ity, whichever is higher, shall be ing and
since World War II, our farmers can rely while makused. For all commodities except American farmers have prepared ing long-term plans for efficient

use.

to

American farmer a substantial
part of his world wheat market.
During the past two years our
^exports of wheat outside the International Wheat Agreement
have fallen from 220 million
bushels to 64 million, while CanSmall Farms
_ada's free market sales have
The chief beneficiaries of our risen from 105 to 161 million
price support policies have been bushels.
Thus our price policy
the 2,000,000 larger, highly mech- shrinks the very
market ■ that ■

law

wheat,

of those gains on to consum-

anized farming units which produce abQut g5% of QUr agricui-

whole. The insula-

program as a

but variations in price and

supply
tend to offset each other, and
stabilize the income of the

production and in passing

corn

some

an ers in the form of reasonably
has priced livestock products. Our
Wherever acreage adjust- created an artificial competitive corn support program should be

initiating the proposed new pro- Agricultural Conservation Prois short, higher support levels will
gram should govern the time for gram funds will be used to help
encourage production. If the supestablishing each such commodity farmers make these adjustments
ply is overabundant, a lowered reserve.
This reserve program in a manner that will advance soil
price will stimulate consumption, will be effective only if it is conservation and long-term effiThus, not only will a floor be carefully integrated with the new ciency.
If the supply

In the total supply.

-We have made
great
strides in improving the efficiency
sumers.

the high of

markets,

foreign

rigid

has be-

objectives of soil conservation— United States < has become
to Protect and to improve that umbrella for competitors. This

r

■

from

more

■

•

diverted

be

that its use be related to

1 ■

PviTA
ClIIll m HVv

*

~

*

..

.

must

land

When

,

.

.

Thursday, January 14, 1954

levels and, annually, more and quantity of their products to con-

by reduced the/need for. acreage

'

'

...

£ggs#

tor,

movement into consump-

To

hold

this

encouraging

economy

and

in

discourag-

worked satisfactorily, it

,

is

rec-

Paimnended .that these Provisions
continued.

Moot

Animolc

Animals
The fact that mandatory price

^ ing liYestofk Production by turns,
rendered a great service to rationing feed when it is scarce supports;

humanity and to. .the cause of and moving it into
freedom

thro|ighout

the

use

are ill adapted to meat
when it is animals has been recognized by

world, plentiful. For the efficient

use

of

Those expanded outlets have since corn, some price freedom is indisgreatly diminished. Yet the sup- pensable.
. .
P°rt price has remained at the ; A progi'am of high rigid price
level associated with wartime supports for feed grains involves
needs. The result is that produc- the danger of curtailing our livetion has
continued at wartime.; stock industries and limiting the
:

Secretaries

of

Agriculture

for

The present law provides
tools well adapted to deal .with
the problems peculiar to the livestock industry;
-

years.

; It
is > recommended
therefore,
that the existing conditions • with

Volume 179

Number 5290

The Commercial and Financial Chronicle

...

(171)

respect

meat animals

to

be

The Congress repeal
provisions whereby

(4)

con¬

tinued.

Dairy Products
The

-

Agricultural
price

requires

"products
75 and

at

of

of

parity

1949
dairy

reduction

between
are

as

that

these

Tobacco
strated

in

Poultry and Eggs
have

not

been

desired by the poultry
Temporarily,
and
in
special circumstances, price sup¬
ports can, however, be helpful. It
is
recommended, therefore,
generally

that:

have

price

demon¬

have

without

which

made

r

of

is

90%

any

of

in

year

quotas
It is

Provisions of the 1949 Act

is

it

the

authority

discretionary

Agriculture to
at not to exceed

of

Secretary

continued

support prices
90% of parity;

the

Discretionary authority be
to
purchase
poultry

-continued

for

products
lunch

that the

in the school
in non-profit in¬

other

certain

for

and

purposes.

above the world
level.
Carryover stocks in the United
States
have
been
accumulating

ported

rapidly in the past two years.
These-stocks,-probably close to

9,600,000 bales by next August,
will
approximate a full year's
domestic requirements.
Our high
rigid price support

730s

During the '20s and early
net

our

exports

of

cotton

which will help growers
adjust gradually to changing cir¬
cumstances, including foreign and
domestic competition of rising in¬
program

Agricultural

Act

of

1949

provides price supports for cotton
at

level between

a

of parity,

75%

dependent

and

90%

the

sup¬

on

ply. Thus changes in supply and
price would tend to offset one an¬
other, giving a relatively stable
income. This plan will allow lim¬
ited price variation, thus afford¬
ing- growers reasonable market
stability

and

inducement
cotton in

offering

yet

heavier

for

added
of

use

of abundant

years

sup¬

plies.
•
•
I Separate legislation has made
the adjustable pricing provisions
of

the

Act

1949

ineffective

for

The Secretary of Agricul¬

cotton.

•

ture is

now

required by law to set
such marketing quotas and allot¬
ments that the required price sup¬

port level
below

seldom if

can

90%

of

parity.

relying in part
price floors
of

fall

ever

Instead

of

the schedule of

on

intended

in

the

(1)

1949, the law requires reliance
entirely
on
production

controls.

is

recommended,

therefore,

that:

(1)

A

in

prospect

be

set

aside

an

emergency
reserve
moved from the market.

„

(2)
level

After
of

1954

and

as
re¬

crop,

price support for

be related to
the

the

the

cotton

supply. / Because of

substantial

which

has

ex¬

not

to

to

Act

of

parity

be

iset-aside,

to

with

and

and

and

consumers;

compatibly

with

Direct

domestic

90%

90%

flax

the

of

(3)

mar¬

the

to

made

sufficient,

average

mar¬

parity;

Each

producer

depending
he

receive

from the

tion

and

the

This
of

tion

exportation and

these

limited

funds

each

rewards

the

further

the

need

loans,

or

other

pur¬

regula¬

interference with the

or

Further, it imposes

mar¬

need

no

may

within the amount of unob¬

enues

purchases of

ligated tariff receipts from wool.
(5) Similar methods of support

market surpluses of such perish¬
able- commodities as fruits and

be

adopted for pulled wool and for
with proper regard for
relationships of their prices

vegetables. No purchases may be
undertaken
unless
outlets
are

mohair,

available.

to

the

those

of

similar

commodities. 1

It is recommended that:

(1)
use

DWIGHT

Present provisions for the

D. EISENHOWER

The White House,

of funds from tariff revenues

Jan.

be continued.

Authorization for the

(2)

marketing

agreements

tinued

compu¬

tations of the

support levels, un¬
Act of 1949,
would insure that
changes in sup¬

der the Agricultural

use

11, 1954

(a)

provide

marketing
adapted;

be

inclusion

for

commodities

to

Nat'l Analysts Group
To Meet in Chicago

of

which

agreements

are

CHICAGO, 111.
Federation

(b)

enlarge and clarify the au¬
thorization
for
agencies
estab¬
lished under marketing orders to
engage

in

sonable

Societies

funds

finance, within

collected

pursuant

provide for

operation

Financial

will

hold

Analysts

its

seventh

convention, May 16 to 20,
Palmer

the

will

be

House.

forums

on

the

chemical

the

tional

the continuous

investing.

Members of the Program
mittee
are
Albert Y.

of

Com¬

Secretary of Agriculture will use
his authority under the
Agricul¬

marketing
agree¬
ments, despite short - term price
variations,
where
necessary
to

Bingham,
Arthur J. O'Harr, Corliss Ander¬
son,
Glenn Miller,
and Wayne

orderly distribution
throughout the marketing season;

Bennett.

tural

lows:

Act

of

year-to-year

1949

to

insure

variations

in

The

that

price

support levels will be limited.
(3) Modernized parity becomes
"effective for cotton as scheduled
on

Jan.

1, 1956.




assure

(d)

thorization for the

The Caja Autonoma de Amortizacion de la Deuda
Publica, in accordance with the provisions of Article 3 of
Law No. 8962, also announces that holders of bonds of
the external debt who assented to the plan of service of old
Law No. 5580 and who do not accept the new plan under
Law No. 8962, will be entitled to receive for the year 1953
interest at the rate of $7.95 per $1,000 bond, calculated
on the basis
provided in Law No. 5580 with respect to the
following revenues:

Participation in the profits of the Corporation de
Ventas

Salitre

de

Share in the taxes
of

nitrate

use

of market¬

efficiency,
of

including

containers

the

and

regula¬

types

of

j

Reg
New
of

income of the 4th category

506,712.

importation of petroleum for the

on

and

industries (Article
January 6, 1938)

copper

Law No. 6155 of

Halladay,
Stock

partner

in

the

Halladay & Co.,, New
City, passed away, Dec. 30.

York

98,453.

US$3,266,769.

Up to the close of the year corresponding to this decla¬
93.7% of the dollar bonds, 98.4% sterling bonds and

ration

95.9% of the Swiss franc bonds had been assented to Law
No. 8962.

Pursuant to the extension granted by the
Supreme Government under the terms of Fi¬
nance
Decree No. 11,174 of December 14, 1953,
the period for acceptance of the exchange au¬
thorized by Law No. 8962 will remain open until
December 31, 1954.

entitled

to

$1,000 bond
entation

bonds assented

receive
on

the

5580 will be

to Law No.

aforesaid payment

of $7.95 per
and after February 1, 1954, against pres¬

and surrender for cancellation of

the two

cou¬

corresponding to said payment, (in the case of the
City of Santiago, Chile Twenty-Ohe Year 7% Ext. S.F.
pons

Bonds dated
made

January 2^ 1928, the said payment will be
by presentation of the bond for endorsement of the

interest

payment)

together with

an

appropriate letter

of

transmittal, at the office of the correspondent of the
undersigned in New York City, Schroder Trust
Company, Trust Department, 61 Broadway,
New York 15, N. Y. Letters of transmittal may be
obtained at the office of said

correspondent.

DE AMORTIZACION

General

Exchange firm

7th of

"

CAJA AUTONOMA

York

US$2,661,604.

Yodo of Chile.....

y

on

companies

copper

Share in tax

Reg Halladay

au¬

ing orders to promote marketing
tion

£17,440,974, US$106,595,500 and Swiss Francs 85,-

EDUARDO SOLMINIHAC K.

enlarge and clarify the

acquired be¬

832,400.

and

port levels would be gradual:

were

period 1948 and 1953.

After making these amortizations the balance of prin¬
cipal amounts of bonds of the external debt was as fol¬

Featured

industry, atomic energy, automa¬
tion, public utilities, and institu¬

marketing order;
(c)

The National

at

rea¬

to

of

—

annual

limits, research work from

or

tween the

Holders of

con¬

amortized and retired from circulation

were

£249,960 nominal value of bonds which

of

liberalized to

and

$1,000. bond.

addition there
•

action to control im¬

(4) Funds to meet wool pay¬
ments be taken from general rev¬

Caja Autonoma de Amortizacion de la Deuda

following principal amounts of bonds were amor¬
during the year 1953 with the sum of US$2,531,000
assigned under the aforesaid. Law No. 8962 for amor¬
tization:
£1,421,530, US$3,263,000, and Swiss Francs
663,800. These bonds were retired from circulation. In

ports in order to protect the do¬
mestic price support program.

domestic consumption of agricul¬
ture commodities. In the event of

distress

has

avoiding

storage,

for periodic

use

revenues

market
If

his

governmental

ket.

the

market, efficient produc¬
marketing will be en¬

couraged.

Fruits and Vegetables

to encourage the

allowed

advantage
for

chases,

of general tariff

upon

obtained.

has

is

grower

at

these

Existing law authorizes the

Chile

tized

poli¬

support payment per pound
wool, rather- thkn a variable

price

parity

for

of

The

~

be

payments

producers

added

of

rate

and

per

align

over-all

ket price for the season, to raise
the average return per pound to

Seeds

continued

for

of

processors,
minimum of cost to tax¬

a

when

commodities.

used

interference

producers

(2)

provisions of the Agricultural Act

be

It

minimum

same

exceed

market

marketing.
a

only one price for wool—the
price;

It is recommended that the

of 30%

and

to

efficient

ket

support is authorized for

1949

returns

level in the market, com¬
peting with other fibers and with
imported wool, thus resulting in

of

of

own

their

to

discontinued.

to

United

our

Prices of domestically pro¬
duced wool be permitted to seek

fore, that the mandatory price
supports for these commodities be

cottonseed

Co., San Francisco.

Publica, in accordance with the readjustment plan for the
service of the external debt approved by Law No. 8962
of July 20, 1948, and published in New York on Decem¬
ber 7, 1948, announces that holders of bonds in dollars,
pounds sterling and Swiss Francs of the direct and indirect
external debt of the Republic and the Municipalities cov¬
ered by Law No. 5580 and which have assented to the new
plan under the aforesaid Law No. 8962, have been paid
interest for the year 1953 at the rate of
percent or $25.

(1)

permissive rather than re¬
It is recommended, there¬

not

the

It is recommended that:

quired.

price.

The

out

cies.

Tung nuts and honey should be
the same category with other
products for which price supports

soybeans,

in

encourage

require

itself

in

Price

in

in storage.

up

and

payers

peanuts

Tung Nuts and Honey

Oil

&

Service of Bonds of the External Debt

—

Santiago
r

December 31,

1953.

Fo¬

Hooker

Fay in San Francisco, and Wal-

dron

Republic

Two-thirds

imported; yet

governmental

both

-modernized

modernized

Mr.

in

wool

wool

equitable

should

than 5% per year.

more

are

is

used

production

A transitional provision be

old

domestic

piles

growers

provided to limit the change from
the

resulted

farm and international trade

shift

&

has been their pol¬

as

icy heretofore.

previously with

was

the substitution of im¬

wool

States

parity for peanuts begins as now
provided by law on Jan. 1, 1956.
(3)

Co., 22 Second Avenue.
ley

Day), and Nov. 11 (Armi¬

above

wool

has

consumption.

the

entail

Agricultural

The

(2)

for

level

for

wool

Jan. 1, 1955.

on

additional

substantial part of the
present large carryover of cotton
now

The

managing the trad¬

be

program

Act

almost

It

peanuts

1949 become effective for

tensity.
The

for

It is recommended that:

foreign producers and reduces ex¬

.generally exceeded domestic con¬
sumption. Current exports amount
to hardly a third of our larger do¬
mestic requirements.
Our problem is to develop
a

market

of

competition of

-program stimulates

ports.

manda¬

justing supplies to demand at the

Cotton, like wheat, is an export

12

present form.

home

difficulties in ad¬

some

Feb.

on

now

ing department of Rex Merrick &

(Lincoln's Birthday), Oct. 12 (Co¬

A program is needed which will

program,

to

generally
It is
rec¬

this

its

support

assure

This

perienced

Exchange

vote

to

nearly 100 million pounds —
by the Commodity Credit Corpo¬

the end of 1955.

;

whose price is currently sup¬

in

ported

that

supports

the

not

now

supported price, can operate suc¬
cessfully with certain changes.

Cotton

crop

90%

close

intention

a

heavy accumulations of

to¬

through 1954 and that
old parity remain in effect until

use

program,

stitutions,

requires

for

its

MATEO, Calif.—Thomas F.

Foley is

meeting today that it

Wool
Price

continue

*

(2)

tory

law

was

stice Day)

manner.

that

ration and

The

mined at its

SAN

cooper-

Peanuts
-

For Rex Merrick & Co,

The Board of Governors of the
American Stock Exchange deter¬

the

available

is operating in

satisfactory

present form.

for

is

as

Foley Trading Mgr.

lumbus

ommended

the. parity price
which marketing

recommended

in

growers

fruits.

1951,

be continued for poultry and eggs,
with

legis¬

Sugar

bacco program be contihued in its

(1)

that

The sugar program, extended in

in effect.

are

manner

loss

production

The level of support to

ators

potato

to

Remain Open 3 Holidays

recommended

to

American Stock Exch.

at

control easier than for other crops.

in

vege¬

producers of other vegetables and

pro¬

demand

The relatively

to

areas

is

same

of tobacco and the

acreage

adapted

; industry.

~

It

ance

with

to the government.

limited

supports

support

ability to hold

line

supported

and

lation be enacted to allow assist¬

farmers

their

duction

small

provisions of law be continued.

Price

price

fruits

Potatoes

be any

can

Tobacco

the

satisfactory

program.
recommended

the

fresh

re¬

nec¬

to assure an adequate sup¬
ply. Sufficient discretionary au¬
thority is provided to operate a
is

tables.

level is required.

essary

It

of

pack

the

production

strictions before there

for

levels

such

90%

Act

support

of

use

for

the

present

maximum

19

Manager

.

DE LA DEUDA PUBLICA
SANTIAGO WILSON H.
President

20

The Commercial and Financial Chronicle

(172)

Thursday, January 14, 1954

...

f •! mi

Recession Not Likely in

Nash

Britain

Our

By PAUL EINZIG

Dr.

conditions in Britain,
conclusively that cheap money is
not indispensable to prosperity.
Notes increase in Bank of
England rate in 1953, and warns against danger of too great
optimism, "which is likely to be anything but helpful."
Einzig, commenting
experience there

says

5

prosperous

on

proves

the

situation

and

pessimism

an

American

is

In

theless, the
proportion of pri¬
vately-built houses to the total
number completed in 1953 showed

far

as

business

Britain

itself,

however,
is

there
'V

*

sign

*

*

of

no

any

business

# Si

re¬

always

cession.

Ear¬

by

the

The

in

past

a

year

marked de¬
cline

of

ports

a n

ex¬

d

of

employment
forecast

was

for

Dr. Paul

the

au-

the

t

These

gloomy forecasts did not material¬
ize.^ The index of industrial
duction showed
of the output,

previous

pro¬

steady increase

a

distinctly above the

high

level

in

reached

1951 before the setback of 1952. Al¬

quate

they

to

to

appear

be ade¬
require¬

import

cover

1953

lies

It is of

course

building indus¬

But the fact that

try are special.

im¬

most other industries showed

provements during the past year
shows that relatively high inter¬

1953

Britain in
proves
that

cheap

is not

money

an

indispen¬

sable condition of prosperity.
terest

remained

rates

high

throughout

Bank

rate

the

and

is still

level

at

which it

On

the

and

U/2%

of

pre-Keynesian

ployment and
stead,

high

above the
maintained

was

should have meant

as

The

year.

of "cheap money."
both Keynesian

years

basis

relatively

only lowered by

was

lk%

during 20

In¬

beliefs
reduced

a

this
em¬

In¬

employment is once more
as during the cheap money

period, and the industrial output
has

its

resumed

increase

tempo¬

rarily interrupted) during 1952.
It

that, while

appears

the

of

crease

Bank

'

followed

was

by

unemployment

4%

increase
decline

an

and

to

a

of
of

production, its maintenance at a
high level did not prevent a re¬
covery. Indeed it seems doubtful
whether

higher
money

the

the

the

to

was

a

temporary

large

setback

degree

due

to

interest
rates.
Tighter
conditions resulting from

officially-inspired

efforts

banks to reduce their

of

credits

the private sector of the com¬
munity must have been a more
important factor in causing a de¬
cline
of
production
than
the

to

higher

the

of

cost

bank

loans.

Moreover, import cuts by British
Dominions

other

and

countries

during 1952 played their part in
causing a reduction of employ¬
ment, especially in the textile in¬
dustry.

terest rates have

fjailed to reverse

the

to

imported food and

materials
has largely neutralized the effect
of the rise in

of

This

private

sector

of

the

of produc¬

the cost

tion in Britain

ing.

raw

the cost of liv¬

on

means

that the increase
purchasing

consumers'

the

has not been offset by a
corresponding increase in prices.
There has been, consequently, an

power

increase in domestic consumption.

Beyond doubt this is the aspect of
the British economic situation that
is

causing the most concern. For
to affect adversely Brit¬
of payments.
In its
annual report the Organization of
tends

ain's balance

Cooperation

Economic

European

lays particular stress

on this point.
Unfortunately the absence of a

indications

the

and

of

decline

unemployment

has

strengthened the bargaining posi¬
tion of employees whose Trades
Unions
are
now
pressing
for

higher wages.
The government
has already yielded the pressure
as far as the employees of the na¬
tionalized
British
Railways are
concerned.
The granting of sim¬
ilar

increases

would

imports

more

World

other

market
to

as

maintain

less

and

conditions

make

exports

it

in

exports.
not

are

possible

to

spite of the

higher cost of production.
Paradoxically enough, the

ab¬

securities.

Long 2%s in Demand

advances,

more

money

was

icy resisted the trend toward

volume, of "production and em¬
ployment. As it is, the higher in¬
terest
charges did not seem to
prevented

maintaining

and

its activities.

in

face

from

increasing

of

of

afford to be
is

business

recession

in

an

export surplus and

building activ¬
higher interest




as

prosperous as

she

at present.

few

a

tutions

With

coming into the market for the long-term 2V2S without
develop later on in the maturity range of
the presently outstanding bonds. These banks must put funds to
work in order to protect earnings which have been adversely
affected by the current trend of loans.
In addition, many of these institutions were in the market in
are

the not too distant past for the longer eligible bonds and because
of

cautious

too

a

attitude

missed

these

securities

at

prices

that

would look very good

the

in their holdings today. Therefore, despite
opinions that future refundings will include bonds that will

fall

in

the

maturity range

banks that have money
this time of missing the
at

of

the outstanding

ones,

the deposit

to put to work are not taking any chances
longer 2V2S because they are buying them

currently prevailing prices.
Small Life Companies Active
Although the out-of-town commercial banks

have been

the

leading buyers of government securities, all along the line from
the shortest to the longest maturities, there has been and most
likely will be considerable competition from other institutional
investors. It has been reported that some of the smaller life insur¬
ance companies have come
into the market recently in a much

was

city.

previously with

York & Co., Inc.

Warren

W.

a

nounced

York Stock

the

n-

appointment
of

Arthur

Nash

L.

as

Manager.

a

Mr.

Nash, former¬
ly an Assist¬
ant

is

Manager,
credit

a

executive of
the

bank.

He

is National

Chairman

f

o

Commit-

t

on

e e

C

Arthur

o-

L.

Nash

operationwith
Public Accountants of the Robert
Morris Associates, and is Treas¬
urer

of the

that

organization.

man

& Co.

New York

Chapter of

Mr. Nash has
been with Brown Brothers Harri¬
The

since

firm

George

1928.

also

announced

Llewellyn

has

that

been

ap¬

pointed

an
Assistant Manager in
Philadelphia
office.
Mr.
Llewellyn has been with Brown

the

Brothers

Harriman

&

Co.

since

June, 1920 and has been head of
the
foreign
department of the
Philadelphia
office
since
May,
f

Consumers Pwr. Stock
Offer Underwritten
Consumers Power Co.

ing to holders of its

is offer¬
stock

common

rights to subscribe to 679,436 ad¬
ditional

share

per

shares at $36.75
the basis of one

common

on

share for each ten shares held of
record Jan. 7, 1954.
Subscription

rights expire at 3:30

p.m. (EST)
22, 1954. Harriman Ripley
& Co., Inc., and The First Boston
Corp. head a nationwide group of

Jan.

on

investment

firms

awarded the

which

was

underwriting of the

offering at competitive bidding. Employees of the company and
its subsidiary, Michigan Gas Stor¬
age Co., may subscribe, subject to

allotment, to shares not taken
through the exercise of rights.
,

The
will

the

net

be

proceeds
in

used

of

the

sale
with

construction

company's

connection

pro¬

Budgeted capital expendi¬

gram.

tures from Jan.

largely in the discount long-term 2Y2S, although there has been
important purchases of the 3J/4S done by these same insti¬

Sept. 30.

way

followers.

than had been expected by certain money
buying, according to reports, has been

This

some

The
the

main

1954

amounted

Major projects included

the addition to the Justin R. Whit¬

Pension Funds Seek 3x/4s
pension funds, both private and public, continue to be
buyers of the more distant maturities with the 3Y4%

bond still the most sought after issue with certain of these funds.
On the other hand, it is more evident that the longer-term dis¬
count

obligations are getting greater attention from these funds
though the yield is not as good in the longer 2%s that are
selling under 100 when compared with the 3Y4S due -6/15/78-83.

ing steam-electric generating plant
Lake

on

Erie

of

third

a

unit of

106,000 kilowatts, placed in
ice in
tion

serv¬

November, 1953, and addi¬

of

unit

seventh

a

of

135,000

kilowatts to the John C. Weadock

even

Also

there

are

indications that quite

a

few

owners of

steam-electric

generating plant
City, Mich., scheduled

Bay

near

for service in 1955:

The

operates entirely

company

within Michigan, supplying elec¬
tric service to 1,476 communities
and

townships, and distributing
gas
in 273 communities.
larger cities served include

natural

writers, representing 90%

inv. Cos. Assn.

Association, have become partici¬
pants in and have indicated their

Appoints Information

support of the program.
The following were appointed
as

The

National

Association

Companies

meeting
a

of

has

of
an¬

regular quar¬
the Executive

Public

of the

total assets of all members of the

Committee

Committee

Mr. Misciagna

the New

have

tutions.

market

terly

Hemphill, Noyes

that

Street, New

1, 1953 to Dec. 31,
to approximately
$122,500,000 of which about $40,300,000 was spent in 1953 through

substantial

more

Information

Committee was appointed for

the

the members of the Public In¬

formation Committee:
Harold

K.

Bradford, President,
Mutual, Inc.; Robert E.
Clark, Vice - President, Dividend
Shares, Inc.; A. R. Hughes, Lord,
Abbett & Co:; Dorsey Richardson,
Investors

of

expanding the activi¬ Vice-President, The Lehman Cor¬
poration; S. L. Sholley, President,
firm of Hemphill, Noyes & Co. in lic
information
and
education
The Keystone Company of Boston;
field.
The Committee will elect
charge of their newly opened of¬
Henry T. Vance, Vance, Sanders
in

Wall

1951.

much fear of what might

Investment

ALTOONA, Pa.—Anthony Misciagna has become associated with
the New York Stock Exchange

of

Co.,
York City,

opinions expressed

coming refunding will be a
it will be securities that are
characterized as longer than the intermediate term issues (which
would bring the maturity in the neighborhood of the outstanding
long 2%s) there has been no noticeable let-up in demand for the
eligible bonds. It seems as though the out-of-town deposit insti¬

nounced that at the

fice

■

The increase

ity

industry
even

been not

by money market specialists that the
rather "full basket" operation, and in

an

expansion
of
bafnk
money,
it
would probably have affected the

have

though there have

buying has been sizable enough to take this selling right in stride.

a

strengthening the none too large
gold reserve.
It may well be
ing and rearmament. This means asked, therefore, whether in ex¬
that, in spite of the reduction of isting conditions Britain can really
available for the requirements of
trade. Had official monetary pol¬

Even

payments in 1954. A moderate re¬

of

largely as a result of increased
government expenditure on hous¬

bank

•

the balance of

sence

Britain may therefore lead to an

maintaining

a
decline, how¬
deposits actually increased,

might be prudent to wait and see what kind
obligation will be a part of the impending

the longest
Treasury issue have been sellers of this bond, with the proceeds
going mainly into the discount long-term 2Y2S. Profit taking has
been reported in many sections of the list, but the investment

ever,

While

from the

refunding package before making further commitments in these

claimants

inevitably
increase
do¬
consumption, leading to

mestic

such

to

advances showed

continued in 1953.

away

areas

buying in these middle term obliga¬
tions, it is reported that th^^yolume has receded somewhat because

of

prosperity gave rise to an atmos¬
phere of optimism which is likely
to be anything but helpful.
The

cession, though its effect on wages
claims and domestic consumption,
would
assist materially toward

economy

few of the

Although there is good

Al¬

check it.

even

or

adverse change in

The efforts to reduce bank cred¬
its

a

Treasury securities had been mainly in the intermediate maturi¬
ties, especially in the issues which were still selling at a discount.

of the opinion that it

recession

in¬

the

rate

not

of an intermediate term

are, in themselves, no
prosperity.
The explanation is that high in¬

inflation,

59

the

Not only have ther
the looked-for increase in borrowings has failed to materialize and, as a result of this condition,
many of the smaller out-of-town institutions have come into the
market in the quest of government securities.
It had been indi¬
cated that the purchases of the smaller commercial banks of

to

it

lower output.

a

by Loan Down Trend

changes in the loan trend.

rates

fairly steady in 1953, this was be¬
cause of the fall in
the prices of

of

:h:':

(

been repayments of loans but

est

registered month after month.
experience
conclusively

mildly cautious atti¬

centers, according to advices, have experienced what

money

is termed important

though the cost of living has been

The

banks in

Commercial

large

bar

ments,

judging by the small but
almost continuous influx of gold

f

Market Aided

in

arguable that cir¬

a

considered likely candidates in the basket offer¬

these ranges are

ing that is expected.

for

involved.

cumstances of the

though exports leave much to be

desired,

in

demand

strong

transactions

and

u m n

winter.

rule

this

to

housing
accommodation,
as
a
result of
which
it is possible to dispose
of houses profitably in spite of
the higher cost of the financial

Liiuig

impending refunding is creating

The

reason

form

the bullish side of the situation.

on

tude among the middle maturities with very little effect noticeabie in the longer maturities, even though securities in both of

increase of interest rates.
why it failed to con¬

an

government securities

definitely

are

dustry is the first to be affected

lier

in

belief is

growing that interest
as the year gets older.
These two
important ones in the government

regarded as almost
that the building in¬

axiomatic

will be available for in¬
as time goes along. Likewise,
rates will continue to decline
factors seem to be the really
market at this time and they

of the opinion that more money

are

vestment

been

firm

Exchange,

the

Yet it has

remarkable increase.

a

banking

private

members of

ists

the authorities themselves. Never¬

concerned.

in

erate

currents that have been appearing in
time to time because of the various
by the President of the United States and the reconven¬
many cross

ing of the Congress, the underlying attitude is very definitely on
the favorable side. It is evident that many money market special¬

rates is

outlook

ended

The

Brown Brothers Harriman &

messages

as

1953
atmosphere of mod¬
year

Governments

on

By JOHN T. CHIPPENDALE, JR.

Despite the

Appointed Mgr.
By Brown Bros.

the government market from

particularly striking. It is
true, most of the 310,000 houses
completed in 1953 were built by

LONDON, Eng.—The

Reporter

*'ti v.'-f

attitf

f

purpose

ties of the Assocation in the pub¬

its

own

It

Chairman.

Was

announced

also

that

&

Battle

Creek,

Joseph

Executive

end

ington Fund, Inc.

Vice

-

E.

Welch,

President, Well¬

Bay

Grand

Rapids,

mazoo,

Lansing,

City, Flint,
Jackson,
Kala¬
Muskegon and

Pontiac.

'

,

Operating revenues of the com¬
pany have
increased from $85,297,000 in 1948 to $154,014,000 for
the

months

12

1953.

In

available

the

ended

same

for

Sept. 30,
period income

common

stock

rose

from

$11,144,427 to $20,155,427.
The company has paid dividends

on

its

since

stock in each year

common

1913.

A

quarterly dividend

of 55 cents per share has been de¬

clared

payable

stockholders-

Company;

closed-end

companies, and opencompanies and their under¬

The

of

Feb.

20,

record

1954 which will be

1954
Jan.

to

29,

paid to record

holders of the additional common
stock.

Volume 179

Number 5290... The Commercial and Financial
Chronicle

(173)

21

Mayer Sales Mgr. of
'/

CrutfeRden & Go.

''

'

vv
:

•-'

•

xc

Wwis^

L-*_J

AFTER 36 YEARS'

STEADY GROWTH

f

Glidden Looks Forward

'

<

-

*i

gX?iYiViiViilit:»

MPi^
Ernest A. Mayer

CHICAGO,

-

Mayer

of

ager

South
of

Cruttenden

La

the

Stock

He

111. —Ernest

Salle

New

served

&

Co.,

Street,

York

Exchanges,

has

Continued Expansion

to

A.

appointed Sales Man¬

was

:::.-

Midwest

Assistant

Sales

Manager since joining Cruttenden
in June. Formerly he was a
part¬
of

ner

has

Dayton
25

over

Gernon .and

and

years'

| J

Jan. 1, 1954.

on

as

209

members

and

THIRTY-!

PP5
.YJS&si*

X

:

'

experience in

securities.

TWI&TY-II6HY

Morgan Stanley Group

MIltlON

Offers Consolidated
,tm -FIFTEEN Ml Lit ON

Edison Co. Bonds

mm MILLION

Morgan
an

Stanley & Co. headed
underwriting group comprising

54

investment

for

public

issue

of

firms

sale

that

Jan.

on

$35,000,000

offered

8

a

The 36th annual report of

new

latest

Consolidated

Edison Co. of New York, Inc. first

refunding
mortgage
3%%
bonds, series J, due Jan. 1, 1984.
The bonds were priced at 102.77%
interest

accrued

awarded
on

at

chapter in

a

The Glidden Company is the

record of continuous

of the

some

competitive

bidding

Jan. 6.

ABOUT PROFIT AND

SALES

achievements in the

—

Substantial

During the

growth of this di¬

facturing plant

operations.

all

connection

with

the

in¬

financing of its construction
and

program

the

the

use

additional

balance

costs

of

to

that

The company estimates

program.

projected construction will in¬
expenditures of approxi¬

charges

profit after

$7,109,272 compared

was

$6,948,805 in 1952. This
$3.10

per

share

outstanding. It
1952

was

equal

2,290,794

on

compares

to

share

per

spending for electric operations is

$21 l,758,522,anincreaseof$6,645,218.

$308,000,000,
$27,000,000 and

operations

equipment

and

ABOUT NET WORTH—As

gen¬

$15,000,000.
able at the option of the company
at 105.77%

12

tions

beginning Jan. 1, 1954
thereafter at prices decreas¬
annually
to
the
principal

ing

after Dec. 31,

amount

1982.

The

supplies

company

in

the

Manhattan

during

added

were

above
was

1953

above,

$3,000,-

$74,324,321,

the previous

were

the

up

laboratory

plant addi¬

expenditures $2,311,790.

at

a

Toronto for

new

our

plant will

serve

Quebec

and the Maritime Provinces and
permit us

with this rapidly developing area.

At the Cleveland

year.

$4,149,573;

five

and

CONDENSED

plant,

we are

adding

paint manufacturing facilities

to

essen¬

tial

equipment to increase greatly our
production of synthetic resins and poly¬
esters.

CONSOLIDATED

BALANCE

boroughs

Assets

RESEARCH

AND

DEVELOPMENT-

continuing research and develop¬
in our 28 laboratories, and our
big

ment

Central

to

Laboratory in Chicago is work¬
the benefit of all the smaller labo¬

cially

to

devoting its attention

creating

espe¬

utilization of

greater

and expanding edible

oil

Division.

Management is constantly alert for

products,

processes

or

new

methods which

might be purchased and developed to
advantage. Of utmost importance,

our

many younger men

since 1946

are

brought into Glidden

stepping into areas of great

responsibility where they will have
portunities

to

op¬

apply their aggressiveness.

We look forward

to

the future with

con¬

fidence and believe the coming year will
be one of further growth.

SHEET

Liabilities

CONSOLIDATED

INCOME

STATEMENT

of
Current Assets

......

Other Assets.

a

a

and

are

CONDENSED

electric

large part of
County; gas service
in the boroughs of Manhattan and
The Bronx and

We

increased

research for the Durkee Famous Foods

The Montreal

our

ABOUT

markedly

handling devices installed.

the soybean

manufacturing plant in Montreal.

to grow

been

ratories. It is
in

Canadian Paint Division and will build
new

has

to our

Division

Chicago.

a

at

capac¬

ing

Paint

to

Spe¬

Westchester

and in the

was

in

the principal amount.

to

service

rose to

over

maintenance

cial redemption prices range from

102.77%

illustrated

ABOUT NEW FACILITIES—Gross

if redeemed during the

months

and

1953 it

$2,680,428

redeem¬

are

per cent

in 1917 Glidden net worth
000. In

The series J bonds

4

was

high. Dollar volume

gas

structures

stores

own

We have started the addition of

Physical volume
new

our

Industrial

research

a

dealers, industrial

many

Southeast.

Nubian

2,284,739 shares.

1952,

our

and

on

mately $350,000,000 for the years
1954
through
1958.
Proposed
at

serve

108,000 square feet

shares

volve

estimated

great

to

favorably with

earnings of $3.04

to

customers

and

taxes

Kentucky;

plants

Long

efficient

established in At¬

was

Foods

Elmhurst,

manu¬

us

made

eral

efficient paint

lanta, Georgia. This will better enable

characterize its

to

Famous

Island; and Chicago. Tank storage

continue

In fiscal 1953, net

its

year an

Durkee

Louisville,

ity

$21,000,000 to
payment of short-term bank loans

meet

Following

highlights from the President's letter:

company will apply

terim

the

versified and decentralized organization

Of the proceeds of the sale the

in

Additional facilities have been added

even more

marked growth will come in the years ahead.
are

and

progress

to

yield
The issue was

3.23% to maturity.

'

expansion. It reveals why Glidden believes

and

and

1

'V/

.

......

$

67,429,973

2,085,381

Equipment.

populous parts of
Westchester County.
Electric re¬
more

...•••

Total Assets

•

$
......

Capital Stock and Surplus.

Property, Plant and

portion of Queens

Current Liabilities

Long-Term Debt.

•

•

•

.

33,234,243

$102,749,597

Earned

Surplus

.

.

Total Liabilities

.

.

...

.

.

21,425,276

Net Sales

7,000,000

.

Income Before Taxes

on

Income

32,603,967

Taxes

41,720,354

Consolidated Net Income

on

Income—Estimated.

$211,758,522

.

.

.

14,834,272

.

.

7,725,000

7,109,272

$102,749,597

quirements are supplied from gen¬
erating stations owned and leased
with

a generating capacity of
ap¬
proximately 3,380,000 kilowatts.
Energy is interchanged with
Niagara
Mohawk Power Corp.,

Central

Hudson

Gas

&

A

THE

Electric

Corp., Long Island Lighting Co.,
New York Naval Shipyard and
the New York City Transit Au¬
thority.
For, the

31,

1953

12

the

months

ended

GLIDDEN

COMPANY

•

on

Request

Cleveland

14, Ohio

Oct.

reported

company

consolidated
of

Copy of the Company's Annual Report will he Sent

operating
$452,688,813
which

revenues

compare

with consolidated operating reve¬
nues

of

$435,032,437 for the calen¬

dar year 1952.

Gross income be¬

fore income deductions for the 12

months
to

ended

$67,659,157

1952

Oct.

31

and

for.

$32,111,575. "




amounted

the

='

year

"" *4'

i

W

.y?

22

The Commercial and Financial Chronicle

(174)

Flexible Credit Policies Needed!

Richards & Go. to Be

Bank and Insurance Stocks

Formed in Pittsburgh

By

II.

This Week
There

January issue of "Monthly Bank Letter" of the National City
Bank reviews Administration's credit
policies of past year, and
points out, though credit policy eight months ago was on side
of restraint, it is now
working as a stimulant to spending,

JOHNSON

E.

Insurance Stocks

—

thus

little doubt that business activity this year
than in 1953.
Opinions as to the extent of

seems

indicating that such policies will have to work on both
alternately in years ahead, if economy is to be kept on

sides

will

lower
the
decline vary widely from economist to economist and from indus¬

average

try to industry.
In

view

in

their

in

this

of

investors

have

become

much

selective

more

each

investments

preferring the stronger situated

companies

nection it is of interest to note that
stability of dividends has long
been one of the attractive features of insurance stocks.
In

part, this stability is based upon the nature of insurance
operations and the financial policies pursued by most of the major

Richards

PITTSBURGH, Pa. —C. Snow-

institutions.

in

the

Stock

York

New

Exchange, and will form Richards
■& Co. in partnership with Ralph
S. Richards, Jr., as of Feb. 1. Both
are partners
in Kay, Richards &
Co.

Offices

be

of

located

the

firm will

new

the

in

Union

Trust

Building.

is

Forms Inst'l
Newburger,

Loeb

members of the

New

York

other

and

Exchange

&
Co.,
15
York
City,

New

Street,

Dept.
Stock

Exchanges,

historical basis

an

regulated

a

underwriting operations of most insur¬

companies have shown wide fluctuations.

rising

losses

Inasmuch

as

and

unfavorable

This in turn has brought about

earnings

which

justify rate adjustments that set the basis
ing operations.

for

a

in

turn

helps

to

period of improv¬

extent

the

extreme fluctuations
in
underwriting
companies have been moderated through
diversification among the different insurance lines. In other
words,
the experience in all lines at a particular time has not been uni¬
formly bad or contrariwise, good. Nevertheless, the cyclical nature
of the underwriting business is evident.
some

of

the

various

Dividend

hand

reflect

policies

the

of

insurance

companies

the

on

other

stability of financial1 operations not present in the
other phase of the business. For example
many of the major fire
and casualty companies have paid dividends
continuously for over
a

100 years.

In fact the Insurance Company of North America
made annual distributions since 1792 or for
162.years.

has

stability is in large part due to the policy of making divi¬
dend payments from investment
earnings. Historically, approxi¬
mately 75% of investment income has been distributed to stock¬
holders, the balance together with underwriting profits, if any

being used to augment the capital funds to provide for the future
growth of the business. At the same time investment income has
fairly stable reflecting conservative policies.

income

has

expanded

dividends have
nomic

ments.

As

investors
James

J.

haye

the formation of

announce

stitutional

Department.

function of this

mary

will

ment

be

pri¬

the

banks,
pension

trusts

In¬

an

depart¬

new

of

companies,

investment

Peyser

The

service

to

needs

vestment
ance

F.

Benjamin

in¬

insur¬

funds,

similar

and

fi¬

This

will

be

both

of

whom

have

been

seen

prominent in these activities

for

many

Mr.

years.

previously

associated

Faye
with

was

Hall-

some

under

gradually increasing their
to do

a

the

coming

tabulation

distributions

current

annual

investment
lected

below

field

&

taken

Company,

much

as

as

10%

over

to

be viewed

can

less

than

as

70%

business
The

of

H.

branch

A.

will

Humber,
be

Ltd.

under

Peter

Bell

and

W.

Stan-

located

at

Aetna

Fire

Agricultural

STOCKS

New

York

Stock

Exchange

Members

American

Stock

Exchange

120

BROADWAY, NEW YORK 5, N. Y.
Telephone: BArclay 7-3500
Bell

Teletype—NY 1-1248-49

(L. A. Glbbs,

Manager Trading Dept.)
Specialists in Bank Stocks




year

last year, in the early part
Referring to the

the

a

se¬

that

should

Indie.
Dividend

$2.40
1.60

stocks

with

business

listed

several
decline

Pctge.

Current

Indie.

Payout

Price

Yield

53%

4.25%

59.0

I

his Message to Congress on
the State of the Union last Febru-

President Eisenhower set out,
immediate tasks, checking the

ary,
as

of

itiative.'

The

chosen

5.25

Government

to

serve

dear

make

the

as

discarding

of credit and debt management stirred vehement objections,
areas

reviewed
of

this

serve

the

in

September issue

'Letter.'

was

The

adequate access to credit. In
Congress the Treasury, for paying
314%
on
its initial ^offering of

banks

insurance companies
injury of debtors. Trade
union publications, neglectful oi
the interest of the laboring mar
in the real value of-his savings
and pension rights, spoke darkly
about Wall Street conspiracies to
saddle the Federal budget and the
taxpayer with radically increased
debt service costs.
Critics

Taken

who

ers

raised

_

central

whole

voices

feature

the

rates and bond

money

Money rates
held

down

trary

—

policy
been

Insurance
of

America

Paul

_

_

_

:

Marine,

&

Fire

&

States Fire

Westchester

Fire

1.00

32.9

27%

3.62'

2.00

54.6

63

3.17

69.2

39

5.13

62.0

84%

2.95

5.89

2.00

67.3

44%

4.47

3.00

48.5

67

4.48

3.40

57.7

100

1953

modest

dollar.

of

more

a

new

2.48

expense

tion

Marine

3.64

2.00

54.9

50

4.00

on

is

to

be

prepared

never

Inflationary Policy Adopted?
'"pbpvp

jj?

fp

be

sure

view

a

beard that the lesson of 1953
for

n0^

the

market

Administration
Reserve

for

the

and

System.

was

but

Federal

The

the

fall in

the

bond

market, the storm of criticjsmj an(j the subsequent slippage
in business are supposed to have
taught them that cheap money is
to the easy and orderly
of the public debt

necessary

management

and that the inflation it generates
is a tonic that provides the sure
to

means

ties

prosperity.
said

are

there is

The authori-

have

to

discovered

great need for lenders

no

REPORT

OF

CONDITION

OF

tiie;
corporation trust'
W

<; v.\s\v.^v

mmm
of

120

Broadway,
in

York

New

the close of business

published

by

the

Superintendent

the

provisions

the

State

of

of

5,

N.

with

Banks

of

the

call

a

at

Y.,

December 31,

on

accordance

to

1953,'
made

pursuant

Banking

of

Law

York.

New

ASSETS

Cash,

balances

with

other

institutions,

in¬

balances,

reserve

cash

items

in

process

collection

United

$1,129,311.42

States

Government

obligations,
guaranteed

Other

direct

...

and
481,175.34

,,—

60,000.00

fixtures;

384,906.44

assets

409,887.54

TOT^L ASSETS

$2,465,280.74

LIABILITIES

Demand

deposits

viduals,

of

indi¬

partnerships,

and

corporations

$131,365.96

TOTAL
DEPOSITS

Other

$131,365.96

liabilities

1,350,025.17

TOTAL LIABILITIES

including

(not

subordinated

obligations shown below)
CAPITAL

$1,481,391.13

ACCOUNTS

Capital t.

surplus

$500,000.00

fund

325,000.00

158,889.61

undivided profits
TOTAL

postwar

CAPITAL

AC¬

COUNTS

$983,889.61

TOTAL LIABILITIES AND

than

commu¬

pinch
an

was

oppor¬

The most lasting

Banks

found

their

only

CAPITAL

tThis

ACCOUNTS—

institution's
stock

common

$2,465,280.74

capital

with

total

consists

of

value

of

par

$500,000.00.
MEMORANDA
Securities
are

as

after

serves

shown

deduction

above

of

re¬

of

$762.17

Insurance companies

improved

yields

though

at

I,

on

the

of market price deprecia¬

bonds

available
3.92

money

investments

4.76

25%

other

financial

lesson

from

36%

58.5

the

3%% bonds.

35%

1.00

is

the biggest buyers of the Treasury

52.6

1.71

of

This

financial benefits may go to pen¬
sion funds which evidently were

62.5

3.53

task

eventualities

debt

600ths

2.41%.

of

tunity for profit.

1.70

42%

the

mistakes in let-

clearly
foreseeable, and to adjust to developments as they occur,

in¬

price to pay for a stable

"Within

0.90

54.3

to

nity, the spring

1.71

1.50

market's
for

How¬

public

only

was

number

a

2.72

2.76

are

hold,

many

years.

j

_

being

they

ting money get too tight in the
spring and too easy in the fall,
they may repeat mistakes.
The

so

It is less than the increases

gained
3.40

the

on

3.04

6.18

Security Insurance
Springfield

cost

2.37,

2.97

_

Insurance
Fire

war.

average

•371/2

2.50

for

the

46.2

2.00

a

working
normal

the

terest

in

more

since

ever

1.60

4.03

condi-

0f

of

arbi¬

the rise in

1%—from 2.35

2.89

North

Hampshire

Phoenix

levels

a

of

matter

to

up

during

1.71

as

authorities made

yields but

Government

3.71

1751/2

as

after having been
a

as

3.83

38.3

year

increase

the widened range of fluctuations.

791/2

3.00

of

the

of

not

was

77

7.83

__

an(j

stocks

3.66

__

If,

and

56.2

4.53

adverse.

Furniture

60.2

4.62

of

supply

market

wait when

Corporate

2.95

39%

to

protest,

2.95

321/2

when

have been taken aback by the re¬
versal of policy in June-July. The

5.25

58.3

credit

favorabie

are

prepared

and

during the spring, including bank¬

4.90

47.8

snaring

It taught the useful-

qUirements
tions

of

3.46

Fire

Aback

"Critics of the policies pursued

ever,

1.80

value

ness of anticipating borrowing re-

banking

2.59

1.50

to

lend-

as

the

was

of

d demand

had

well

as

timing

fundamentals

cluding

4.21

3.09

perspective

and

961/2

_

of-*

dates

experience

matur^

and to the

33%

__

did

investors

est rates for the special benefit of

63.1

3.14

of

the

ancj

ers

long-term bonds, was accused of
adopting policies of raising inter¬

67.0

_

Re-

of

1.40

•

also

so

paid to attract savings

tarding the growth of the money that sound money, however desupply and depriving, the Treas- sirable in theory, is not a practical
ury, home builders, and business
goal.
Thus, the implication is,

2.50

___

Federal

attacked for unduly re-

3.96

Insurance

the

burden.

2.09

—

wage

easing

1
"This program has been carried
forward. The moves taken in the

years—have

__

or

situation

controls, and

way

(Newark)

"What

im-

cheap

economic

dictate,

and Price
tax

credit

their

_

for

means

proving the structure of the publie debt, freeing the Federal Re-

many

_

main-

expenditures,

5.02

_

and

accomplishing these wholesome
objectives were curtailing planned

4.19

__

while

taining economic stability and encouraging 'the free play of our
people's genius for individual in-

59%

Co.

United

inflation

261/4

Pacific Indemnity

St.

30%

^

"In

52.9

Insurance

monev"
money

tes'

49.1

Hartford

Ins.

"tight
"got

1.10

Casualtv

subsequent

Monthly Bank Letter

3.00

__

_

American

Home

this
tnis

of
oi.

policy, the

the

the figures

The point to be

55.6%

and

6.11

Continental

New

Laird, Bissell & Meeds

squeeze

of

2.08

Hanover Fire

INSURANCE

!,ng V?
credit

Insurance

Boston

Great

and

policies of the Administra-

Surety

American

Glens Falls

BANK

on

likely to be well maintained.

2.71

Insurance

American Insurance

Firemen's

Members

so

earnings

$4.50

----

Fireman's Fund

Street.

credit

discussion of the

tion and the Federal Reserve dur-

1953 will show

payments for

even

are

1952

Continental

branch,

total

conservative.

Thus

Earns.

Fidelity-Phenix

Broad

income

rose,

teach borrowers

Investmt.

the
1220

1952

investment

less than 50%.

bury, formerly of H. A. Humber,
Limited, will be with Pitfield in
Victoria

'

Some allowance should

the

management of John M. McAvity,
their Resident Manager in Van¬
couver.

the
very

current

of

Pit-

has

expected
,

the 1953 figures not being available,
dividend rate, the percentage of

substantially, indicated payments

Limited,

■-

investment

be made for the fact that investment
earnings for

gains of

are

indicated

of fire and casualty stocks.

issues paying

the investment dealer

over

show the

we

H. A. Humber, Ltd.
C.

others

earnings distributed and the present yield for

group

amount

C.—W.

and

•

emphasized, however, is that

B.

of

year.

share basis for 1952,

per

the

in the

so

&

VICTORIA,

,

conditions

shown below

Pitfield Takes Over

necessary

payment.

current

garten & Co., and E'astman Dil¬
lon; Mr. Peyser with B. W. Pizzini

Co., and Adams & Peck.

been

declining business where
searching for stability of income, the defensive char¬

are

active

and

it

While yields for the group
may be lower than that obtainable
in other securities, some allowance should be made for the fact
that most
tympanies are even now distributing a relatively low
percentage of investment earnings. Some institutions have been

In

department

new

has

acter of insurance stocks deserve consideration in the formulation
of investment policies.

nancial institutions.

under the joint direction of James
J. Faye and Benjamin F. Peyser,

growth of the business,
Only jin periods of extreme eco¬

to reduce pay¬
from the
record, the major companies even then

have maintained
Thus

disaster

or

As investment

result of the

a

increased.

been

distress

as

rates

l'ered

5 informative
and

might

This

been

piiblicaCity Bank of
Monthly Bank

deposits.

menace

To

keel.

York, "The
Letter," the issue which marks its

this

business, periods of favorable underwriting have

been followed by rate reductions.

results

Newburger, Loeb
Broad

On
ance

monthly

New

reversal
reversai

don Richards wilLacquire a mem¬

bership

current

tion of the National

evident will continue.

now

group and defensive issues such as utilities where the
likelihood of continued dividends is
fairly certain. In this * con¬

S.

even
i

The

However, most observers believe that the slight

downward trend

Charles

Thursday, January 14, 1954

...

CHARLES

that

the

best of

above

my

loan

deposits

funds

and

shrinking;

holdings
salable
While bank loan

of

Treasurer

statement

is

true

to

the

CHARLES

JT

SKINNER

Correct—Attest:
GEORGE
RALPH

security
at a loss.

SKINNER,

institution, hereby certify

knowledge and belief.

previously acquired.
their

J.

the above-named

F.

LePAGE

CREWS

OAKLEIGH

L.

1

} Directors

THORNEJ

Volume 179

Number 5290

borrowers

or

selves

with

money

to

The Commercial and Financial Chronicle

them-r Managers, ,of

concern

repetition

a

...

"This

view

gains

the

U.

International

the

prices.
I

of

member

sharply declining bond

or

Medical Center

for

Cancer and Allied Diseases and

of tight

S.

Council

Chamber

of

of

booming prosperity.

with

the

$73

maturities

billion

the

Certainly,

of

"On

close

S.

be

undue

allowed

because

par

to

it

difficulties

finance.

Similarly

there

were

same

reason

1943

to

he

until

joint

Colo.,

Norman has retired
date

as

a

general

as

of the

bert
As

&

Co., New

former

&

Tennessee

be¬

of

make

tives

President
ary,

ago

Gas

Transmission

of

Tennessee's

Northeastern

Gas

was

Division

of

Vice-President

member

Co.

for

also

Greene,

subsidi¬

ident

Transmis¬

sion Co. in which capacity he was

Rarbis,

clerk

Jacobi

&

recently elected Pres¬

was

of the

American

change Floor Clerks

Stock

Ex¬

Burke, Gilligan, Will & Co.; Da¬
niel Hannafin, Joseph McManus
&
Co.; Michael Petruzzi, Rey¬
nolds
&
Co.;
Marty
Solomon,
Bernhardt & Bocklett; and Nelson
Goetz of Reich & Co., according
to

the

announcement.

Co.

elected

was

Wm.
Co.

&

A.

E.

Recording Secre¬
tary; Harry Schneiderman, R. F.
Lafferty
&
Co.,
Corresponding
Secretary; George Heaney, Mabon &

Co., Sergeant at Arms; Wm.
Carter, Walston & Co., Assistant
Sergeant at Arms.

Association.

Elected

as

Governors

Company in Newark

Financial

Dobbins,

Wil¬

were

NEWARK, N. J.
Koellner
mation
with
to

of

A.

—

steps
trie

would

be

H.

debt,

and

nomic

interests

stability.

again

Mr.

Koellner, who has been

the investment business for 40

years,

was

Koellner &

formerly President of

Gunther, Inc.

policy
of eco¬

The

argument

objectives

impractical.

But

be

notice

on

to

fluctuations

COMPLETE BANKING AND TRUST SERVICE

expect

in

two-way
prices and

bond

DETROIT

OF

NATIONAL BANK

practical

difficulties did not deter effective
action.
By now everyone should

money rates.

"The broad record of the Ad¬
ministration is performance upon
the

promise—including the

ise

to

defend

the dollar.

Administration

building
ket

versy over

And

RESOURCES

re¬

reopening the contro¬
cheap and depreciating

Cash

money,

on

as

113,173,202.91

Loans:

357,726,061.50

Loans and Discounts

public support.

Real Estate Mortgages
Place of Flexible Credit Policies

Branch

Economic sta¬

achieved

at

all,

and

supported

by

by

stability

the

$1,808,694,129.08

and

i

against
Government

LIABILITIES

cheap

credit

Deposits:
United States Government

—

Accrued

of taxes the American

Dividend Payable

been called

to carry.
"The present direction of public

policy

is

to

upon

curtail

Government

spending and to improve the debt

structure, bringing tax relief into
play as a stimulating force on
private

spending

.

109,308,364.30

.

48,686,842.97

Other Public Funds

insured that inflation would pre¬
vail in spite of the heaviest load

people have

$1,542,411,726.76

Commercial, Bank and Savings

gave

protection against deflation
or,
rather, as proved to be the case,

ever

1,210,617.22

.......

guard

Heavy

spending

Letters of Credit

of

spending
appropriate
and

favored

inflation.

5,100,809.44

and

business

flexible fiscal and credit policies,
Previous
to
1953
tax
increases
were

7,040,302.98

Buildings and Leasehold Improvements

Customers' Liability on Acceptances

bility has to be achieved, if it is
consumer

439,095,505.93

81,369,444.43

...

.

Accrued Income and Other Resources

free society people cannot

be led by the nose.

442,421,085.26
800,652,605.34

.

Other Securities

then became apparent, has a broad

a

$

Hand and Due from Other Banks

United States Government Securities

the unpegging of the bond market
in March, 1951. Sound

"In

31, 1953

no

relish

that reached its climax in

money

CONDITION DECEMBER

OF

prom¬

artificial money mar¬

an

and

should

STATEMENT

13,100,214.04
1,125,000.00

February 1, 1954

Acceptances and Letters of Credit

1,210,617.22

.

Capital Funds:
Common Stock

($10.00

par

22,500,000.00

value)

Surplus

57,500,000.00

Undivided Profits

12,851,363.79

92,851,363.79

$1,808,694,129.08

initiative.

and

$1,700,406,934.03

Expenses and Other Liabilities

Credit

policy—eight months ago
the side of restraint—is work¬

on

ing today as a stimulant to spend¬
ing. It is safe to say that it will
have to work

nately, in
are

to

the

keep

ahead

years

on

United States Government Securities carried at
ment

are

both sides, alter¬

on

anything

if

pledged to

secure

$154,190,172.69 in the foregoing state¬

public deposits, including deposits of $15,486,386.44 of the
and for other purposes required by law.

Treasurer—State of Michigan,

we

like

an

keel."

even

While, Weld & Co.
BOARD OF DIRECTORS

To Admit

Ogden While

»

PERRY

SHORTS

HOWARD CJ BALDWIN

CHARLES T. FISHER, JR.

R.

Street, New York City, members

HENRY T. BODMAN

JOHN B. FORD

GEORGE A. STAPLES

of the New York Stock

ROBERT

^

White, Weld &

announces

is

a

in the
son

White,
old

near

as a,

of the late

founder

1945

associated

HARLOW

,

H. CURTICE

Mr. White

Alexander M.

B.

BOWMAN

CHARLES T. FISHER

DONALD F. VALLEY

E. HUTCHINSON

BEN

R. MARSH

JAMES B. WEBBER, JR.
R.

JOHN N. McLUCAS
W.

DEAN

R.

BEN

ROBINSON

WILLIAMS
E. YOUNG

NATE S. SHAPERO

the
58-yearbanking and

*

Mr. White has been
with

Rockefeller.
was

general part¬

j!

PRENTISS M. BROWN

of

brokerage film.

II he

Wall

Exchange,

future.

investment

Since

40

the proposed admission

of Ogden White
ner

Co.,

Laurence

During

World

S.

War

44 OFFICES IN

METROPOLITAN DETROIT

connected with the War

Production

Board,

serving

as

Garden City

•

Harper Woods

•

Inkster

•

Livonia

•

Plymouth

•

Wayne

United

States executive office of
the Combined Production and Re¬
sources
was

a

Board.

Prior

that

CADILLAC SQUARE—DETROIT 32, MICHIGAN

he

Stone

&

to

Vice-President of

MAIN OFFICE—WOODWARD AT

Webster, Inc.
Mr.

Howe
and

a

White
Sound

is

a

director

of

the

Member Federal

Deposit Insurance Corporation

Co., Vice-President

member

of

the




Board

of
\

Co.,

Street,
engage in the securities busi¬

defend i

these

that

was

were

&

Clinton

the pub¬

credit

use

fle?4b/y in the

to

out

the for¬

Koellner

accept at

taken

dolhtf, lengthen

Arthur H.

announced

offices at 31

ness.

in

has

face value official statements that

lic.,

&

A. A. Koellner Forms Own

floor.

Secretary;

specialist's

Farrell,

Mann,

Vanderhoef

Robinson; Jack Negri, William I.
Rosenfeld,
Jr.
&
Co.;
Joseph

George Layng, Shearson, Ham-

Elect New Officers
Peter

the

on

Mullenbach,

23

American Stock Exchange trading

Purcell

of

and

of

A. S. E. Floor Clerks

the

firms

liam

who

telephone order clerk representa¬

Co.

mill &

of Lam¬

Vice-President

Houston, Mr. Norman

Gas

and

Weil,

Treasurer respectively of the as¬
sociation which is composed of

associated

been

Sulphur and Oil Corp.

Oil

City.

York

had

elected

were

resigned in

same

partner of

capital investment firm

he

Wallace

terms.

George Hoffman, Carl M. Loeb,
Rhoades & Co. and Vincent Mann,
Andrews, Posner & Rothschild,

Chicago Corp.

Denver,

Earlier,

succeeds

served two

incep¬

Lambert

The

year

to

in

1952

the

skeptics who, for the
refused

He

in¬

gas

its

from

and

Treasury

a

tion

Co.

with Union

trade

for

an

Transmission

effective
Jan. 1, it has been announced. Mr.
Corp.,

theory

would

of

for many years. He was
officer
of
Tennessee
Gas

President of Colorado Oil and Gas

an

accepted for years that
Government bonds simoly

couldn't

low

the

to

natural

and

pres¬
as

uncomfortably

resemblance

widely
U.

an

oil

W. C. Norman has been elected

the other hand, this inter¬

has

the

in

Treasury faces

1954, the temptation will be
ent to keep money
cheap
Treasury finance.

extension

Mr. Norman has been associated

with

Of Golo. Gil & Gas

debt

aid to

pretation

the

England States.

W. G. Norman Pres.

time

public

service into the New

dustries

eral Reserve has gone to increase
a

for

natural gas

ffom the extent to which the Fed¬
the supply of loan funds in

(175)

responsible

a

Commerce.

plausibility

-

I

24

(176)

The Commercial and Financial Chronicle..

Favoritism Is Not Good
All

of

weak

Securities Salesman's Corner

have

us

points.

who

does

fellow.

criticize

his

depends

friendliness

Morale in Sales Organizations

Is Dependent Upon

Salesmen

Recognition of Ability
One of the

such

why there is

reasons

large turnover of salesmen
in the investment business, I bea

meeting

firm

the

and

good

minds

of

salesman.

rightly

men

pensation,

or

the

i

and
who
constantly
overtrade
oversell just to make a sale should
not be in the investment business,

with

their

com-

personal

some

or

emotional element enters into the

relationship
and

their

either

employers,

change firms,
in

start

themselves

between

business

sometimes

or

for

they

and

themselves,

The

If

in

Fair Basis

a

The

Some

35%,

Value

of

firms pay

some

for

Judging

Salesman

a

^esfa^y

of gross.

bonuses,

year-end
Some pay

this
are

treated the

man

and

and

same

are

their

emDlovers

to

seem

expenses

pajd

firm, other times not.
various

methods of

by

which it is paid is a very
consideration

tant

First

Boston

the

impor¬

in

year
A

issue of

new

$100,000,000 1 53l/z% dollar bonds of the In-

year

ternational
tion

and

known

Bank

for

the

as

ent term

World

generally

Bank

was

Members

'

the market (Jan. 11) by

on

nationwide

a

plans have their good and
points, but it seems to me

that

tne

J.

ley & Co.

compensation is based

upon

commission basis with
extra

production,

set

a

bonus for

a

rather

than

a

plan which pays year-end bonuses
salesmen

to

the
to

that

based

are

upon

judgment of the employer as
the

amount

each

The

receive.

latter

plan

leads to discussion and
icism

of unfairness

should

man

often
crit-

some

favoritism,
whereas the straight bonus plan
or

based upon production, eliminates

such dissension.

tiated

Profitable?

firms have

no

real

basis

judging the productive value

of their salesmen

because

keep adequate

they do

records.

Find

~

1^? a

se

men are doing then
basis that is

up

ia.r
be

issues

commission

all.

to

the

This

first

1

to

seems

in

step

organization

me

building

that

will

to
an

stick

through the years and be loyal
through good times and bad.

of 23-year 3%%

lien

Are

Opportunists

and

What Men Are Builders

succe'ssfulIy

A firm that has loyal sales¬

alone.

should have

men

Some

that

salesmen

shows

whether
the

to

Total
of

of

is

not

The
to

near

clients

sell

anything
long profit,

a

it

suitable

is

investment business

profession

a

should

be

sold

in

that

securities

who

is

constantly

pushing

anything he

can sell just to make
commission. Sometimes it is better
to
build
customers
than to

U.

sales

V*

1

Uti

TT

that

4- h

-C i

Vfw*

will
'

«

only hurt the firm's

vi

a

eventually
1

^ 1

^

!i.i.

w'tv,

its clients.

Only a study of clients'
holdings will show which sales¬

men

are

which

bonds,

dollar

are

my

sound

men

sterling

■

j

.

bonds

and

A

as

bonds

thereafter

year

to

.

nnn

*n *967 and
thus

a

Si

Co.,
&

Si

*

Inc. J

*

the

providing for retirement

of

.

,

,

'

.,

bonds are redeemable, at the

.

option of the Bank, at 103V2% to
and including Jan. 1, 1957, and at

change

on

and

members

Other officers
ert,

President;

as

of

a

become

of

Ex-

Jan.

21.

James

Eckert,

Mo-

hawk Valley Investing Company
»

£

vv

^

f i1:

-

-

_

offices

„

i

at

OOO

238

/"I

~

^

Genesee

Street.

after Jan. 2, 1966; and in part for

af+Pr

if

P
-j

July 1, 1957
year

there-

nnr

*
Black's

Eugene
n

on

July 1 in each

x

*

XT.

t,

,

term

as

t-

President of the Bank has

been

extenued for five years, commenc-

Piper, Jaffray to Admit
MINNEAPOLIS, Minn. — Piper,
Jaffray & Hopwood, 115 South
Seventh Street, members of ithe
New York Stock Exchange and
other Exchanges, will admit Ruth
E. Cranston to

partnership, Feb. 1.

less
be

to

than

severe

it

first

at

glance.
Popular discussions of the harm¬
ful effects of taxes

and to

incentives,

on

extent

some

economic

cal

to

also

analyses

and

full

the

personal

and

theoreti¬

based

assumption
of

ranges

also

are

impact

on

the

of

income

corporate

taxes.

profits

excess

this

is valid

While
in wide

circumstances,

there
opportunities,

numerous

of them of strategic impor¬

some

for avoiding the full im¬
of the ordinary • income tax

tance,
pact

The

rates.

these

most

important
but by

opportunities,

-

of
no

the

only one, is that of
accumulating new investable
means

funds

As

the

less

basic
are

of

activity—the
that

taxes

effect.

In

restricted

more

question

of

how

compensated, tax
been niguiy

have

cite

another
little

example,

evidence

of

enterprise

and

the

be

dominated

by

tax

considerations.2
As

final example,

a

the condi¬

tions under which taxes

are

likely

to be the main motivation for the

sale

class, to accumulate large amounts
of

investable

new

funds' is

at¬

the

fact

that

dividuals

of

many

able

are

accumulations

in

to

these in-^
their*

make

that

ways

are

not

subject to the full impact of
the
top-bracket
individual
in-'
tax

come

rate.

portunities
incentive

for

of

amounts

ing

in

such

capital
promis¬

as

many

socially desirable in

are

economic

the

tax

that

but

sense,

time they

into

ven¬

substantial

enterprises. The fact
cases these incen¬

young

tives

be

to
into

funds

situations

gains
that

by personal dis¬

channel

to

op¬

positive
top-bracket

inclined

are

turesome

same

a

those

who

individuals

position

These

introduce

an

the

at

introduce-serious
and

inequalities

structure,

poses

a

High Tax Rates Imposed Under
Conditions

of

Rising

Incomes.

A

final

explanation for the moderate
impact of the severe tax burdens
the

of

the

last

10

to

increased

15

years

is that

burdens

tax

have

been

imposed on an expansionary
economy.
For many groups in
the economy,

and during most of
for the economy as

period

whole, both real and monetary
and
profits levels have

been

rising.

for large
the

As

a

consequence,

portions of the

heavy tax

economy

burdens of recent

have not cut into

years

existing

levels of income and profits; their
effect

has

rather

absorb part

been

merely

to

of the rise in income

levels which

occurring along

was

with

the

most

part, also, the tax increases

increase.4

tax

the

For

have been enacted at times when

or

mergerj of one company
another are highly special¬

with

ized

and

do

not

apply

to

business expectations were buoy-

the

large majority of merger trans¬
actions; once the basic decision to
sell or merge is made, however,
taxes typically play an important

3 This
more

son,

by

a

discussion
the

of

the

effects

and
Individuals, (Boston, Harvard Busi¬
School, Division of Research, 1953>,

ness

4

of

62-68.

Tax

and

Journal,

VII.

for

See,

discussion

legal form and
financial
structure
of
closely-held companies see
Dan Throop
Smith, Effects of Taxation
on
Corporate Financial Policy, (Boston,
Harvard Business School, Division of Re¬
search,
1952),
especially
Chapters
VI
on

has
been
developed ix»
than is possible in this paper
Butters, Lawrence E. Thomp¬
Lynn L. Bollinger, Investments
point

detail

J. Keith

in

pp.
2 For

taxes

con¬

income

is made to start such

the

to

the

tributable in considerable part to

a

nature of its capital structure are

likely

in greater de¬

paper,

capacity of individuals in
upper income brackets, as a

the

we

enterprise, however, the legal

form

in this

tinued

in¬

to

(in the aggregate)
organize new enterprises, once

an

is developed

later

tail

execu¬

intensity

little

very
on

the decision

York

New

Eckert, Assistant Treasurer.
iraintains

the

and

individuals

to

are A. James EckA.

be

dicate that taxes have greatly af¬
fected the desire or willingness

jr^ Vice-President, and Yates P.

^

prices decreasing to 100%

will

frequently

same

indicates

have found

'^change, will become
firm

and

hand,

taxes to

are

of

—

effort

had

To

I

Struthers Si Co.

the

is

appears

this

Co.

u

and

at

is

influential.

UTICA, N. Y.—Robert W. Mor-

•

fect on financial capacity than is
usually believed, is that the im¬
pact of the existing tax structure

activity. On the crit¬ major dilemma of tax policy.3

considerations

Co.

Co.

member of

be

to

specific

decision

question of how hard

executives

To Be NYSE Member

including

*

50% of the issue prior to maturity.

ahead of them in




nnn

like amount in 1968,

on

men

and

& Curtis

in¬

on

much smaller ef¬

a

illustration of the above discriminations

executive

and

/ Vice-President of the Mohawk
1966» and $5,000,000 of the bonds Valley Investing Company, Inc.,
10CC

sinking fund

tri fact, I believe that

Pollock

likely

action

an

more

the

contrast,

Mohawk Valley Inv.

gan,

The

more
likely
controlling.

have

/.

Co.

Pressprich
Si

Inc.
,

Co.

Co.

Rothschild

Wood,

$50,843,513

July 1, 1957 and in each

on

the

,

F.

Si

Jackson

&

signifi¬

functioning

incentive ef¬

as

whether

or

evidence

pound

d
fund the Bank
retire $4,000,000 of the new

and

,.

Fenn

E.

W.

L.

a

If I

giving consideration to this prob-

Wm.

&

Webber,

Phelps,
R.

& Co.,
Corporation

Marks

Moseley

Paine,

Swiss franc bonds.

and

opportunists in my organization I think I would
gladly place

S.

Co.

Lanston

M.

more

decis-

concerned, taxes are more
likely to determine how a thing
is done than they are to determine

ical

Langley & Co.

F.

Canadian

$14,000,000

customers

had

C.

a

are

tives work

W.

the

its

greater

So far

excutive

Higginson

as

economy, the more
nontax
considerations

Si

Hutton

G.

the

Weeks

E.

Laurence

stated

for the effective

A good

Co.

W.

Lee

per-i.
man¬

the

on

Hemphill, Noyes Si Co.

Aubrey

their

propositions is the effect of taxes

Securities Corporation

Si

be

can

the

Incorporated

Dominick

Hbrnblower

in

business enterprises.

it

technical

&

&

considerations

capacities and of the

taken.

Co.

Company,
Co.

&

tax

individuals

and

fects

Merle-Smtih

Hallgarten

Of this total,

$13,636,364

bonds,

&

Corporation

Co.

and

of

what

Equitable

bonds, will
$753,479,877 expressed

currency.

&

Corporation

Dominick

new

opportunists.

building

ones

t>.

Securities

Thalmann

Dodge

Dick

Beane

Corporation

Stearns Si

Clark,

&

Company

Childs

F.

than

believe

are

Co.

Securities

Wertheim

lar

a

create

of

Webster

Bear,

both

of

Co.

C.

Consid¬

of much greater sig¬

are

dominant.

&

Si

Nontax

determining the basic decisions

cance

Incorporated

Fenner

ef¬

high marginal tax rates,

very

I

Hutzler

American

of

centives, and

has had

impact

and accretions to personal
By far the most impor¬ wealth in the form of capital
tant explanation for the relatively
gains rather than of ordinary in¬
limited effect of taxes, even on come.

sion

Pierce,

Si

destructive

moderate

a

years

erations.

agements of

Co.

Securities

Shields

$675,000,000 constitutes U. S. dol¬

for

that meet their investment needs.
Often it is better to have a salesman who
recognizes this fact than
one

consist

A.

Co.

&

Weld

highly

ef¬

compared
generalizations

general proposition that the

Si

only

why the tax

reason

structure of recent

as

basic and fundamental

Bros.

Ladenburg,

distributed by syndiby the same firms

the

8.

Brothers

&

Union

White,

outstanding funded debt
Bank, giving effect to is¬

the

Si

Barney

Stone

managing the current offering.

Eventually this will
large turnover of ac-

a

(.its.

will

them

or

client.

lead

loyal customers.

popular

the

sonal

Company

Sachs Si Co.
Ripley Si Co.,

Lynch,

Smith,

headed

cates

York

Inc.

Co.

Freres &

Salomon

were

York

Peabody Si Co.

Merrill

bonds offered in

New

Co.

Forgan

Lazard

tober, 1952. The three issues

in

When you are building a clien¬
tele
you
don't work for today

the

in

Inc.

Lehman

May, 1952 and $60,000,000 of 19year 3J/2% bonds marketed in Oc-

T.

N.

Another main

ject
be

can

concerning the

taxation

nificance

Savings Bank

Si

Kidder,

three-year 3% loan sold in
September, 1953; $50,000,000 issue

suance

What

factors

of

quently

Chicago

New

Moderate

is that nontax considerations fre¬

Company

of

Trust

Read

Goldman,

$75,000,-

a

Si

Si

Harriman

Earlier nego¬

included

America,

Trust

Glore,

negotiated

a

of

Northern

Blyth & Co.,

brought 0ut in
on

of

Opportunities for Avoiding Full

simplified models, often take for
granted that all income is sub¬

comparatively optimis¬

conclusion

to

Company

Trust

Bank

Drexel

000

Some

not

be

National

Dillon,

Switzerbe offered in

underwriting basis.

Which Man Is the Most

for

to

Bank

Trust

Company of

The

0fferjng
represents
the
fourth and largest issue of World
bonds

National

*

allow

negotiations

Impact of High Income Tax Rates.

individuals and businesses subject

Incorporated

Trust

Harris

Tbe

the United States

Co.,

Si

Bank

the United States market,

Bank

pres-

*f;

Bank

First

Zurich,

land, and will not

First

Si

to

I

existing tax structure.
The explanations, in themselves,
can properly be regarded as
gen¬
eralized findings of our studies.

*

Guaranty

The remaining $2,000,000
underwritten by the

Suisse,

Morgan

the

fects of the

City Bank of New York

Manufacturers

being

are

P.

Bant

Cofnpahy

Chemical

100% and accrued interest to yield
3M>% to the maturity date of Jan.

1, 1969.

NationaI

Trust'

National

T^e

Of the total, $98,000,000
of the bonds are being offered in
the United States at a price of

Credit

chase

The

underwriting group

bad

The

Ba'nkefs

banks,
jointly headed by The First Boston Corporation and Morgan Stan-

of

for

with

group include:

of 167 investment firms and

form

and

about

June 30, 1954.
of the underwriting

on

to

former.

failure

main

Importance

ing at the expiration of his

Reconstruc-

Development,

tive, organization of salesmen.

desirable

the

the

explanations of this mod¬

as

erate

tic

Morgan Stanley & Co. head
of 167 investment firms and banks. Fifteen31/2% bonds are priced at 100%.

placed

most

cited

zation.

group

building a
congenial, harmoniously coopera¬
All

Several

be

Corporation and

underwriting

All of these

thoughtful consideration
by the management. The basis of
compensation and the manner in

of

Over-All Impact of Taxes

$100,000,600 World Bank Bonds Marketed

compensation

deserve

that

fects

a

are

type of effects

exclusion

Explanations

able to give to their sales organi-

do

emphasize

inquiry.

many Dusy emPloyers seem 10 ne

your country, or your reAnyone who does this is
making a mistake.

to

adequately for cash and liquidity
considerations has greatly limited

nsh this sort of environment than
b

been

the relevance of much theoretical

a lot
planning and doing to estab-

more

has

latter

believe

to the welfare of all. It takes

ligion.

salary, others a
salary and commission. Sometimes
traveling expenses and other busi¬
ness

the
near

re¬

respective contribution

profit expectancies, has im¬
implications for wide

of economic theory. With
the exception of aggregative anal¬
ysis
the
traditional
theoretical

equally for their loyalty

spected

passing

financial

on

ranges

ousy and

Capacity

the

tion is to be consummated.

emphasis

in

as

approach

in

on the
legal form in which the transac¬

noted

portant

..

Some

some

and

part

impact of taxes.

contrasted with in¬
effects based on income

centive

ls
*° acnieve
feeling even among men that
*

this

capacity,

to stress

be

should

that

f J13™™"!

?a*1<?1r| ls dlsP aF.^d

have been known to
make derogatory remarks about
some officer of their company to
a customer, or to others.
Such a
even

rather than

over-all

It

and energetic sales organi-

ou3

Some men unfortunately look upon
their employer as a necessary evil.

their salesmen

more,

pay
not.

the

aharmoni-

friends,

Have

to minimize

jo the organization the^others will

should not be surprised or
be
disappointed, if some day his firm
they believe they are being com- heard of this sort of thing and
pensated fairly, and secondly that resented it deeply. You can't gain
they are being recognized, and are friends by throwing mud at your
own
part of a team.
firm,
your
family,
your
only way that salesmen can
happy in their jobs is when

And Financial

of

that

there 1S any showing of favoritism
toward any .ma?> or several men,

resent, it is good enough to uphold
and to praise whenever possible.

They

cooperation

^

firm is good enough to rep-

a

spirit

a

upon

and

otheis (more so than ma y o
people in other walks of! life). If

A Good Man Is LoyaI to ,Iis Firm

Many

wrongly be-

or

dissatisfied

come

between

Taxation, Incentives,

particular are tem¬
peramental and they are sensitive
to the feelings and reactions of

is that too often there is not

lieve
a

other

only be engendered at the top.

can

jrom 'page 3

man

the

wise employer who
men the same.
Team¬
a

work

DUTTON

Continued

*

strong and

our

It is the wise

not

It is

treats

By JOHN

<

.Thursday, January 14, 1954

and
on

Tax

of

Haskell
Tax

Burden
C.

Burden

the

stimulating

point by Gerhard

Wald,

"Some

March

1952,

"The

pp.

National
1-14,

1952,

and

Dynairnics

Comparisons," National

December

Coins

Comments

Comparisons,"

Neisser,

Journal,

Albert

example,
this
P.

pp.

of

Tax

351-364.

Number 5290... The Commercial and Financial Chronicle

Volume 179

ant

and

attitudes

investor

opti¬

Full

weight must be given to
these highly important environ¬
mental
conditions in appraising
the significance of our empirical
findings. It would be rash, for
example, to generalize from the
empirical evidence of the recent
past that no concern need be felt

about the effect
economic

incentives and

on

activity of

structure

current

regardless

underlying

indefinite

an

the

of

continuance

the

sponsible

position

tax

shifts

of

economic

in

condi¬

ation;

were

A.

systematic state¬
major findings or
generalizations. I turn now to a
detailed

more

of

ment

these

the

and

evidence

findings.

tailed"

specific state¬

Plans

and

underlying
this "de¬

Even

discussion, however,

such

a

that

it

the

of

range

is necessarily
level.

mary
It

broad

has

seemed

utives."

on

discussion

systematic
dence

so

to

to

as

statement

underlying

the

Retirement

the

direct

individual
of

taxation

concur

efforts

the

compensation
of

such

a

of

tending

of

use

pension

use

While

such

the

day-

our

the

to

Sanders

activities

and

on

with the

Professor

general not lessened

various

plans,

plans,

and

devices

other

findings

by

are

taxes

also

of

taxes

is

as

on

available

means

business expenses, es¬

as

technique than the substance
what

is

being

accomplished,

they

rather

than

"play-it-*-

venturesome^

a

conceivably be of considerable
importance to the long-run devel¬
opment of the economy, and they
constitute an area which deserves*
examination
revision

some

portance.
tend
in
to

on

or freeze employees
existing jobs, and hence
impair the improved allocation

that

resources

would

brought about by greater

be

execu¬

tive

mobility. It is also suggested,
though less definitely established,

Tax

that deferred

journal.

any

be

fundamental,

tax

structure.

It

noted,

from

not

structure

of

the

the

basic

income

rate

tax

but

to hold

their

of

in
our

however, that
of the problems in this area

arise

Nonvesting deferred
compensation plans, for example,

of

should

may
have unintended in¬
cidental effects of substantial im¬

incentives

of the National

1953 issue

(177) : 25

often tend to develop a

of

executives

work

>

safe"

the

been limited

on

t.;/

f

developments such as
these may be specialized in their
impact, and more concerned with

points in general to the same conclusion.
See, for example, the excellent discussion
of this topic by Professor Break in the

by taxa¬

no

of

information

effects

December

covers

researches have

effects

y*»%?

t

While

stock

as

*

erations.

es¬

in other groups of the American economy

tion."6

These

compensation,

»«w

•

pecially by the owner-managers and
enterprising
management *
of
closely-held companies, un¬ philosophy.
Both
these effects^
doubtedly is stimulated in sub¬ through their qualitative influ¬
stantial measure, by tax consid¬ ence on executive
activity, coukt

8 Dan
Throop Smith, "Taxation and
Executives," Proceedings of the National
Tax Association, 1951,
Sacramento, Cal¬
ifornia, 1952), p. 235.

effects

in his recent book that their

to-day

exerted

"

claimed

is

methods

on

«

quisites provided to executives and

options and stock purchase plans.
Similarly, the wide range of non¬
taxable fringe benefits and
per-

Professor Smith states:

conclusions

evidence

have

'

##

•

"Taxation and Exec¬

regards

high

>

i

rather from technical features o£
the

with

tax

law;

it could

considerable

be argued

merit, for

ex¬

ample, that the tax benefits

ac¬

corded

qualified

pension

Continued

compensation plans

on

plans*

page

2$

material

at

best

The

taxes

stimulate

pecially

by
Professor Dan
Smith in his summary

statement

that

deferred

and

Throop

in

to

findings

Hall in his study of Executive

executives, I fully
our

contrary.

executive

reported by Professor Challis

Compensation

II

of

or¬

clear

similar

•

behavior. Quite

pronounced effect

of

ment

the

an objective; and
organizational disciplines im¬
posed on anyone working in a
group activity.

"As

a

at all on executive

ganization and

Substantially

*

•'

imply that taxjes.;have:no effect

of

remuner¬

of loyalty to an

a sense

*»

the

tions.5

So much for

regardless

financial

tne level of its

mistic.

/r *■

*

a

'

sum¬

V

organize

present

of

the

a

evi¬

first

con¬

clusion to the effect that the

over¬

my

all

impact of taxes has not seri¬
ously impaired the performance
of

the

10

to

during the

economy
15

In

years.

decisions

now

the nation in the

expenditure
odds

the

THE DETROIT BANK

past

of

the

v

major

all

terms

above

material
main

of tax and

areas

policies

the

most

'/.

confronting
this

is

findings.

Statement

by

significant

Illustrative

supporting

the

December 31, 1953

other

findings, however, will

of Condition

of

be

DIRECTORS

•

•

introduced
at

as
seems
appropriate
points in the discussion.

varous

The

critical

considered in

effects

tax

to

Walker L. Cisler

be

appraising the

all

impact of taxes would

seem

to.

be

President

over¬

(1)

basic

those

affecting

motivations

of

the

individuals

workers and investors and

as

those
of

(2)

affecting the crucial phases
development, namely,

busines

RESOURCES

Cash

Due

and

from

Banks

State

and

and

Loans

Discounts

istence

as

Real Estate Loans

entities

of

shall

of

new

separate

competitive

existing companies. I
briefly the evidence

discuss

bearing

each

on

of

these

key

areas.

to

dence
tax

Incentives:
work

is

With

incentives

evi¬

our

principally to
executive activity.6

on

role in

$135,718,762

.

.

317,402,417

.

.

.

.

....

.

72,916,091

.

...

7,474,986

...

.

.

.

98,773,195

.

Federal Reserve Bank Stock
Bank Properties

.

.

.

.

.

.

.

.

and

-

-

.

f

Equipment

and

214,040,971

Prepaid Expense

765,000

4,294,227

3,387,613

......

Acceptances

on

and

Credits

64,708

.

.

Other Assets

Total

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

$756,163,458

tion

where

incentives

effects

tax

would

be

executives
a

and

likely to be

arrived

thibir associates
the

at

...

that the extent to
executives

have

Individuals, Corporations and Others

,

$346,555,343

U. S. Government

Presiden t

Harry L. Pierson

20,599,518

......

$382,330,243

Savings Deposits
Total Deposits

yvhich business

$717,139,224

Unearned Interest

Senior Partner

Accrued Expenses and Taxes

2,809,615

their

not—as

Surplus

serious

a

ices.

.

The

.

of

amount

such

serv¬

Capital—Common (750,000 Shares)

,

.

.

$

7,500,000

basic

is

of Professor

that

Sanders'

nonfinancial

.

General Reserves

.

in¬

decision

how

as

a

7,110,229.
.

,

.

.

.

.

1,685,037

.

Total

which Professor Sanders cites

sheer urge to

the

power,

do

a

prestige,

good
and

satisfactions associated with

are

$756,163,458

job;
a

Butters, Thompson, and Bollinger,
cif. pp. 52-75.
evidence

for

this

section

A.

of

$27,390,000

are

pledged to

Hall,

Jr., Effects of
Compensation

Taxation
and

7

Sanders,

op.

cit.,

p.

12.




a

par

value

public .and other deposits where required by

C. David Widman
Director

The Murray Corporation
of America

of

re¬

op.

MAIN

OFFICE

on

*

GRISWOLD

AT

STATE

•

DETROIT,

MICHIGAN

our

38

Offices

MEMBER

OF

FEDERAL

Throughout the
DEPOSIT

INSURANCE

City

„

CORPORATION

Ex¬

Retirement

Plans, (Boston, Harvard Business School,
1951).

secure

foregoing statement with

law, including deposits of the State of Michigan amounting to $9,827,596.

is

ecutive

Vice President and

Secretary-Treasurer
Whitney Realty Co., Ltd.

United States Government Securities in the

derived mainly from Thomas H.
Sanders, Effects cf Taxation on Execu¬
tives, (Boston, Harvard Business School,
Division of Research, 1951), and Challis
paper

Nathan T. Viger

other

5

6 The

34,295,266

man

his

working life. Among
the major nonfinancial incentives

the

President

W. M. Chace Co.

Undivided Profits.

typically outweighed
purely financial incentives in such
a

&" Stone

Herbert B. Trix

18,000,000

.

centives

spends

Miller, Canfield, Paddock

64,708

."7

gist

findings

consequence—lost

Cleveland Thurber
Acting Chairman of the Board

1,854,645

.

Chairman of the Board
Detroit Harvester Co.

334,808,981

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

Acceptances and Letters of Credit

tax

Vice President and

15,175,382

Other Public Funds

following

and

a

James McMillan

Chairman of the Board

in

tends to show

reduced

Corp.

>r,

effort, as a result of
taxes, has frequently been much
exaggerated.
The economy has

work

Nash-Kelvinator

Raymond T. Perring

conclusion:
"The evidence

Chairman of the Board and

Demand Deposits:

interviews with

wide range of areas and indus¬

tries,

George W. Mason

Federal-Mogul Corp.

investigation of the topic,
T. H. Sanders, on the

numerous

Corp.

work

on

Professor

basis of

Chairman of the Board
Allied Products

H. Gray Muzzy

LIABILITIES

f

maximized.
In his

Executive Vice-President

Treasurer

posi¬

a

Charles H. Hewitt

Boyer-Campbell Co.

because they are subject to
high marginal tax rates on their

in

Chemicals, Inc.

98,683

and

are

Dean

Presiden t

Customers Liability

play a key
free enterprise economy

incomes, and hence

Jr.

President-Treasurer

$115,267,776

executives

a

Charles A. Dean,

Ralph Hubbart

These
effects, however, are of
strategic importance both because

business

.

refer¬

limited

effects

.

Other Securities

Accrued Interest

Work
ence

and

.

.

•»

^

.

Municipal Securities

Corporate

formation

,

United States Government Obligations

companies,
the rate of expansion of
existing
companies, and the continued ex¬

the

.

The Detroit Edison Co.

OVER

ONE

HUNDRED

YEARS

OF

SERVICE

26

The Commercial and Financial Chronicle

(178)

tions to

accumulate undistributed

profits

Xtontinued jrom page 25

which

(though

should

be denied to plans with
severely restricted vesting rights.

rises

the

*

The

matters

however,
earded

centives

this

footnote

is

stated

true

decisions

of

the

cerned.

If

quate

level

of

major
con-

are

con-

high

continued

taxes

finance

to

xv,

now

country

required

are

re-

Certainly
the

as

nolicv

tax

be

onwork in-

above.

insofar

fronting

discussed,

Qualifications

matefinding^

the

to

just

properly

can

as

ade-

an

defense

expendi-

tures, I know of no evidence pertaining to the United States which
indicates that
of

taxes

currently

harmful

tax

to

as

require

reductions despite

per

Bracket

and

Invest.

question

Save

to

the

on

incentives

and

of

hat

a

class

save

large

as

for do)

can

and

amounts

claim

the

individuals

these

longer

validating

they

are

*

•

increases of recent years have cut

severely into the incomes of

up-

bracket individuals

un-

and

doubtedly

also into their capaclty to accumulate new investable

funds, provided and to the extent
that

their

brunt
tax.

the

The

data

still

amounts

the

individual
also

show,

accumulating
of

large

investable

new

of

inued

funds

first,

arge accumulations

by

the

to

individuals

ate

to

habit

be

most

ln

ot

large

the

in

saving

with

moder-

that

incomes

ap-

ingrained

in}Pact of the

has

it

severe

A*n the evidence
burdens of the past decade.

All

indicates

that

overwhelming majority of the

individuals

the

in

population

still

are

P°sfflve

top

ranked

income

r

savings,
oi

savings

at

least

1%

by size

of

ailcj these the
that
half
in-

viduals amount to

incomes

be-

large incomes, it is
possible that those whose

quite

for tax purposes, but there
no
doubt that they often

(though not always) represent an
increase in the real wealth of the

ways in which many tant
of upper bracket individ- pact

groups
ualg

can

able

funds

aCcUmulate

subjected

having them
full impact of

the

to

individual

the

invest-

new

without

income

tax.

In

of

tax

it

in which the full imindividual
income

way—

the

to

Once again,

extent

some

semantics
are

avoided.

rates is

is

whether

considered

capital

be

to

matter

a

of

gains

income, but

^ for
g^ps in Serein 'be no
thTthey
the economy the tax structure is often constitute a source of new
much less severe than at aPPeai"S investable funds and of additional
t0 be on suPer£icial examination, wealth in the hands of individYhemlfnr"exnlanatifns'fo? uals-.1" this connection the inmoderate impacfrf the existS^SrS^foS;
structure on incentives, taxable as ordinary income now
perhaps be useful to list qualify as capital gains is acaj; this point some of the more
centuating the importance of this
important ways by which the full consideration,
^

tax

wyi

impact of the high
of

rates

tax

avoided

income

sizable

by

of individuals

gr0Ups

bracket

individual

the
be

can

upper

with large

incomes.

^

very

There is

(6)

certain

a

amount

are

evasion

which

allows

taxable income to escape taxation,

The intensive auditing of tax

turns

filed

individuals

by

re-

(a)

interest
and

interest

on

bonds

issued

local

government;
savings invested

on

by individuals through insurance
companies; and (c) income offset

by depletion charges in
of

cost

depleted.
tax

the

amounts

of

of

properties

being
opportunities for

Such

avoidance

excess

for

account

large
incomes

tax-exempt

received by individuals with large

(2)

the

for

data

appraising

taken

of, the
opportunities
of
avoiding-the full impact of the
individual

income

tax

satisfactory, it

very

the

use

concluded
them

that

not

are

can

be safely
of

made

contributes

substantially to
the surprisingly large accumulations "of Savings still being made
bv individuals with large incomes,

the investindividuals,

curtailing
capacity
of

ment

to

seek

increase
such

the

short

computing

their

dition,

"adjusted
purposes.

substantial

in their funds in such investments,

gross

In ad-

components

of

as
rea] estate taxes and interest
payments
on
mortgages on owner-

The

evidence

cates
had

that,

point indi¬

on balance, taxes have
such,effects, byt, that

some

effects

these

this

on

pronounced

have
as

or

not

been

pervasive

as

as

is

believed,

usually

flow

of

capital

However

to

this

drying up the supply of
equity capital which such inves¬
tors haVe been
make

small

to

business

terprises in postwar
Business

Our

,

taxes

Incentives

centives

of

taxes

and

and

Capital

ta^es) haYe ris.en along with or
lrXL evidence appears
°£ ° Very
g

c?./h
fit*

tax is that of resisting the
stant

political

Thompson,

summarized from But-

and

Bollinger,

1° fp.ec,f,c est,l"ates of the
of
total accumulations

new

funds made
come

by individuals

percentiles

are

in

op.

dt.

percentage
investable

the

top inpresented in Butters,

"°".P".n%hnJeBS;Srtht.\?ea7opr
1%

of

of

all

spending units
$15,000 and over

about

mulaLns

with

incomes

accounted

for

ot°m3vetU!eth|u„d"n"ideCCbU;

jfeall spending units in 1948, and presumably also in other postwar years.
The

60%

for

to

the

top

5% of all spending units

65%.




of

capital loss

—

undue risk

an

the high upper

bracket income tax rates greatly

expenditures which

reduce

are

allowable

as deductible expenses.

with

(3) The income of family units

into

several

entities

each

of.wblcb is taxed separately.

By
this means the income of a family
unit can be concentrated to a
.

greaier degl ee in the lower ranges
of the personal income tax brack-

the

incentive

large

for

incomes

vestment risks.

To

to

persons

take

such

in-

individ-

uals, the net return after taxes
often appears too small to justify
the danger of capital loss present
in almost

The

ment.

often

yxn-n

any

equity-type invest-

balance,

reversed

for
xwx

to

and

work

in¬

willingness

invest.

It

on

and

of

the decisions

acting

as

of business

managers

enterprises.

How have the heavy
taxes imposed on business enter¬

prises since 1940 affected the will¬

ingness

the

and

capacity

of

the

business sector of the economy to
undertake the capital expansion

investments needed to main¬

and

tain full

employment and

rate

ous

of

have

a

vigor¬

the

growth in

How

omy?

econ¬

taxes

affected

the structure of the industrial

The

ascertain

them,

those

ways

Just

have

we

as

gone

questions,

been

parallel

sketched

able

in

to

many

above

for

workers and investors.

there isdittle evidence that

individuals
on

in the aggregate have

investment

an

strike

or

have

significantly reduced the in¬
tensity of their effort and ac¬
tivity because of taxes, so there

on

is

vunureoumv.

of taxes
of

New

insofar

operate

effect

available

FtT®

can
avoid

tax-

.

sometimes
the

indi-

0wners

through

the

There
reasons

ited

by

early 1946.

The

upward

price

pres¬

sures, particularly in the indus¬
trial sectors of the economy. Pri¬
vate capital expansion has pro¬

ceeded at
The

that

an

unprecedented pace.

evidence
the

rate of

low

maximum

as

income,

often

ingness

of

tax

rates

clearly

indicates

major bottleneck to the
capital formation has

new

funds to finance this expansion.
In

compared with

on ordinary

increase

essentially

the

will-

venture-

outlets offering the potentiality
of large capital gains.

it

these

the
war

aggregate terms, then,

hardly

can

severe

years,

tax

be

contended

structure

even

with

profits tax, has acted
brake

on

On the

:

new

this

of

the
as

a

the economy as a

that
post¬

excess

serious

whole.

contrary, the taxes which

their

capital
than

purpose

incentive

route.

perhaps

are

compa¬

of

two

main

which account for the lim-'

effect of taxes

the

desire

new

enter¬

on

of individuals to start

prises— especially those

terprises

which

new

en¬

believed

are

by

the

promoter or entrepreneur to
have
a
large growth potential.*
The first is that at the time
is

organized

tentialities

can

possibility

of

a

new

only

the

profit

po¬

be made.

The im¬

estimating

profits

prospects with any degree of pre¬
cision

this

at

tion's

stage of

development

preclude

the effect of taxes
nite

a

corpora¬

tends

to

evaluation

careful

a

of

on

these indefi¬

profits prospects—unless tax-

rates approach confiscatory levels
and are expected to remain there.

The

force of

this point,

becomes weaker

as

however,^

business de¬

a

velops to the stage at which
definite estimates
its

profits

impact of taxes
tialities

be

can

on

more

be made of

the-

arid

these

poten¬

with

computed

precision.

more
-

can

potentialities

A

second

tending

reason

to

diminish the importance of the in¬
centive
effects
of taxes
in
the

formative
is

ness

izing

stages

that

uals who

the

of

of

businesses

new

motivated to

busi¬

new

a

kind

individ¬

interested in organ-*

are

a

often

are

marked degree by

monpecuniary
considerations.
They tend to be aggressive, con¬
fident in their ability to succeed,
anxious to be their own boss, and
desirous

of

developing

"idea" in which they are

interested.

is

in

the

something

power

with

goes

a

new

intensely

If the organizer's pri¬

interest

mary

that

of. some persons to invest in risky

closely held corporations, in particular, can cause their corpora-

acterized

and

whole has been char¬

a

new

through

supply

for

the lack of adequate incentives or

(4) The c.orporate {orm of busi" £he much higher rates
of to

1945

effect

incentive

or

of

more

the

on

creating

investment objective. The rel-

organization

postwar conversion pe¬

as

the

as

undertake

to

the formation

nies

the

capital gains,

availed

of

continuously

a

ited restrictions which taxes place

in

on

be

riod

period

had only

enterprises is concerned: the lim¬

strong emcapital appreciation as
a

an

ness

employment

since the

can

fol¬

as

Enterprises.

the desire

on

individuals

of

ets tha," ,WOuid f p°fib*e i£ U

were 311 lumped together for tax atively

full

econ¬

effect on the formation of.
enterprises.11 This is partic¬

business

acting in their individual
as

t£ie

respects

crudest estimates of its

to these

answers

best

impact of

limited

sec¬

tor of the economy?

as

of

Formation

re¬

effects

individuals

by

owners

the

consider

the tax structure
made

compa-^

summarized

be

been limitations of manpower and
of technical capacity rather than

investors who place

phasis

however,

venturesome

purposes.

;ranP°p"a„'dfnrunTsearefO45%et,„°P503% v!dua,1

and

the

without incurring

enlargement of items of personal

ships,

of

for

Las
income of can 0ften be split, by the use ot
nrnfOcSJ0UnS execu- trusts, gifts, and family partnerpiofessional peisons)

nr

9 This section is

ters,

pressure

con-

,

1

ularly true

discussing

on

the

on

save

three

these

perhaps

on

mains

in

new

capacity of individual inves¬
to

the

on

the structure of

Taxes appear to have

Expansion

effects

findings

on

lows.

en¬

years.

Thus far I have been
the

medium-sized

and

1

in-

of

"centers

nies in the economy.

«

5SVeh! a^p,ears,t0ibe whose than
more
offset by individuals
J
.befor^ and after

the

of

willing and able to

available

occupied homes — represent conOnce again, a large part of the
is little evidence that taxes have
living standards were geared to
sumption expenditures which aref explanation is that, so far as in- curtailed
corporate and business
high
teye-j-s before the period of in effect, excluded from taxable vestment decisions by individuals investment to undesirably low
very
high
incomes
taxes,
and income. Deductible contributions
are
concerned, the existing tax levels in postwar years.
No intensive or specialized in¬
hi
rorh
^Ve might ^ven be so reSarded if structure is in many respects a
£? reduced by the lm- they are assumed to constitute a two-edged sword. For conserva- quiry is needed to justify this
position of such taxes, may have source of
personal satisfaction to tive investors—those whose pri- statement. With the
exception of
ceased
to
save
significantly or the contributors. One of the
prin- mary investment objective is to a slight breathing spell in late
1948 and early 1949 the
Sf'to many instances tv"*group, cipal Prpblems in maintaining the preserve.their capital intact or to
t^8
C3pl"
economy
tal in
This
integrity of the individual income obtain a moderate income yield has operated under conditions of

fr?uSS

brought,

(1)

existence

ued

omy

of

capacity

exclude them

be

should greatly re¬

new

individual investors has fallen far

and

to

strict:

of

of¬

be, it is clear that the com¬
bined impact of these effects on

persons

hence

to

if taxes

may

with

owners

taxes

could

about

investors

investments

out

situations.

large incomes, not- taxes could restrict the supply of
of family businesses, funds which individual investors
are able to charge off substantial
are able and
willing to invest in
amounts of personal consumption business
equities by reducing the
expenditures as business expenses incentives for individuals to risk
abiy

by

and

effects

fering unusually large capital initiative" represented by the in¬
gains potentialities as actually to dependently owned and managed

tors

advantage is

Besides

Certain categories of indi-

viduals

While

the extent tq which

'

incomes.

ture

and

limits such understatements of the
partly or completely tax exempt, income tax liabilities of upper
Among the more notable of these bracket individuals,

the

a

of un¬
depression.

bringing about conditions
employment
These

the rate of formation
enterprises, particularly of
new
enterprises
with
a
large,
the opposite reaction of apprecia¬
growth potential; (2) the rate of
tion-minded investors. The latter
expansion
of
such
enterprises,
group, however, may have been relative to their large, established.
so
stimulated by the tax struc¬
competitors; and (3) the contin¬

severely

large incomes, however,

whole

induced

as

were

re¬

long-

economy

shift to less risky investment posi¬
tions appear to have overbalanced

with

income received by individuals A*

state

who

and

the

on

growth and vitality of the.
without necessarily

run

wide margin. In other words,
equity-type investments con¬

sidered

influence

strictive

in¬

a

for

otherwise

variety

wide

a

of circumstances under which "the

are

by

bracket

It would be'

for the tax struc-*

ture to exert a deadening

has been to reduce somewhat the

no

the industrial sec-;

on

possible

quite

that

be felt over the ef¬

need

of the economy.

tor

years

the net effect of the tax structure

upper

been |

has

rapid

formation

capital
concern

findings indi¬

our

during the postwar

t

does

the fact that the

employment

fect of taxes

balance,

cate that

of

it

however,

again,

consistently high and the rate of '

be.

of deliberate or unintentional tax

...

There

°r more" the personal deductions—such

Within the group of persons re-

level

areas—risky though such invest¬
ments may
On

extraordinarily'

by

not follow from

is the incentive to invest in these

,

a fairly siz- income", for tax

?

w-+u-Xe!'uSay' 3

of the

accumulating

able fraction ol their

ceiving

definition of in-

appropriate

substantial amounts of new in- constitutes another major way—
vestable funds is that there are probably the single most impor-

the

deeply

so

individuals

survived the

the

garded as representing actual
(though not taxable) income in

owners more or less in the amount
0f the retained earnings,
the continued capacity of upper
(5) The preferential treatment
bracket individuals to accumulate given to capital gains in general

(b)

to explain

appear

upper income groups.

pears

re-

adequate to
degree of'

barely

reasonable

a

stability in an economy i

Once

dividuals in the aggregate to make
venturesome investments, but not

by

,

reasons

con

be

with

measures,

powerful inflationary pressures,

against

is

funds

_

e

should

assessed

are

willingness of

full

despite existing tax rates.io
lwo

corporations

which

rates

the

.

been

along

imposed,

characterized

other forms of income, the greater

come

income

how¬
a group individuals
income percentiles

ever, that as
in the upper
are

bear

incomes

of

held

profits in closely

obviously can do so only by ac-

ing

,

finding holds despite the
indisputable evidence that the tax

per

Whether such accumulations

0f undistributed

a

opting less luxurious living
standards than their predecessors
in equivalent positions were able
to maintain in the era of low tax
ratesA second major explanation of

no

This

have

petroleum

by
be

to save despite the high income the hands of their owners is
taxes which they must pay. In partly a question of semantics and
many instances, however, they of personal value judgments as to

SUbStant'al
*

and

receive in effect

A

date.

exist

otoer

to

Xrt

that

of Up-

evidence

the

TTt_

n

,

Individuals
The

of

incomes

that (by and large) they continue

free.

numerous
na

no

is

needs.

rnr(lnf-IO'
■,
Inc ntives and Capacity

tor

effect

incentives

great

so

immediate
these

the
work

on

to

taxes, and

incomes before

their

living

their dis-

to

rather than

income

posable

their

in

keyed

mineral

financial

later

some

realizations

Capacity

is

in

maintain

techniques

advance

those

anti-inflationary

par¬

at

standards

resources,

owners

been

variety of tial tax exemption in the form of
which such percentage depletion deductions
may
qualified as and the current deductibility of
capital gains or sometimes even intangible drilling costs. In a very
be
made
partly or wholly tax real sense, the higher the tax

Taxation, Incentives,
And Financial

the

of

have
other

addition, certain highly risky
of
investment, especially

forms

always)

not

discretion

the

at

In

frequently
be realized

can

Thursday, January 14, 1954

...

and
a

satisfac-

independence

successful

ness

development,

tax

considerations

and

new

as

it

tend

busi¬

often
to

is,
be

1

11 This

Butters
eral

section

and

Taxes

John

is

based

on

J.

Keith

Lintner, Effect of Fed¬

Growing Enterprises (Bos¬
ton, Harvard Business School, Division of
Research, 1945) and on our later obser¬
on

vations, particularly the data for Butters,
Thompson, and Bollinger, op. cit.

s

Volume 179

Number 5290

The Commercial and Financial Chronicle

...

27

(179)

viewed

of

stimulating the

only secondary im¬

man¬

which
exerts

mainly

In

ing effect

considering the effect of
taxes on the availability of funds
for the inauguration of new en¬

to

terprises, the appropriate starting

exert

point is

indentify the

to

tially available.

ship

supplied

of the individuals

sources

interested
their

the

in

immediate

atives.

point

has

advanced

to

convincing evi¬
dence of its potential profitability
be cited.

can

until

this

stage

is reached
sion

of

the

of development
preceding discus¬

the

the

effects

willingness

outside

turesome

of

and

investors

taxes

make

investments

is

enterprise.

potential
these

also be caused

may

regarding

the

for

In

...

the

second

place, sales or
closelyr-held businesses

mergers of

be prompted

may

minimize

the

by

desire to

a

impact of the

per¬

sonal-income tax and of the Sec¬
able

accumulations

surpluses.

In

of

corporate
most- general

the

there, sales

.

the

made

are

to

owners

to

withdraw

profits from the firm by the capi¬
its. tal gains route. This is obviously

however,
in¬

become

This

creasingly relevant.

Chicago & Eastern Illinois

discussion

taxes

of

the

sale

attractive

an

the

on

and

merger

in

areas

which

taxes

most

seem

alternative

be

hav¬

to

ing the profits distributed
idends which would

concerned,
the supply of capital available for
this

purpose

are

to

appears

be

sig¬

nificantly affected by taxes in
only one way.
This is .through
the impact of the personal income
tax

the

on

capacity of the

ing

the

vital

to

capacity which

the

are

function¬

merce

economy.

ers,

discusssion

div¬

as

subjected

the

of

implications of

issues
in

major

;

policy

confronting the nation

now

the

reiteration.,

the
of

areas

public

tures «nd taxation

expendi¬

concerned,
the evidence clearly supports the
conclusion

namely,

that

the

15

last

duced

calls

already stated
the high taxes
have

years

crisis

a

for

are

not

situation

drastic

Unless these in¬

dividuals and their immediate
sociates

accumulate

can

mum

amount

which

to

of

mini¬

a

capital

start the

as¬

with

enterprise, the
is that it will

fiscal

our

effects

tax

doubtedly provided
sale

the development.

company

102.

These

the

for

the

stability require
of

rates

the

for

current

another

motivation
of

have

pro¬

which

the

studies

have

increase

trial

the

number

tive"

in

would

the

be

produced

indicate

no

that

the

while

are

preferred

com¬

dividends

There appears to be little ques¬
but
that
stockholders will

tion

to

initia¬

But

stress

it
the

to

preserve

home,

almost

regardless

of

the

the necessary changes in
company's charter and crea¬

the

tion of the

the

class

bond issues.

new

"A"

and

would benefit.
of

the

probability

feasible
would

alternative

tax

structure

greatly alter the intensity

of this tax effect for all potential

enterprises

considered

as

whole.

prises.

is

merely
sions

Existing

Both

in

his

state

main

stock

unchanged

would

and

into

major

our

conclu¬

pertinent

findings

the

on

to

be

much

effects

tax

greater

and

considered

(2)

The

of-these

ef¬

growth of promising
companies is much greater

large,

interests.

matters

for

the

on

well

the

as

growth of their

established

competi¬

(3) Both incentive and cash (fi¬
nancial
capacity)
considerations

(he

to

these

latter

tax

effects,
usually the

are

powerful.

as

and investment

outlays than does
the personal income tax.12
and

Mergers

of

Business

Enterprises. A third major

way

in

is

economy

Professor

evidence
four

is

by

cit.

the

later

same

support

present

of

discussed

are

paper;

points

the
and

two

developed in Butters and Lintner,

op.

viduals,

in

Lintner's

three

The

subsequent evidence
study of Investments by

cited

above,

also

points

conclusion.




short-run,

or even

in the

very

are

James C. Vacha Joins

Republic Investm'l Go.

while

payment

dividend,

the

of

class

though it is

even

"A"

cumu¬

considerable

a

period

the

of

would

rash

a

public

months

through

October,

has

from

Indi¬

to

the

with

a

would

policy

which
danger of

considerations

when

even

—

the conditions needed to make tax

structure,

is

Considered

desire
and

to

maintain

management

be

may

resist

will

by

the

present

being

as

of

the

tax
same

the

his

of

intense that

so

ignore

or

an

strong

tax pressures to sell out or merge.
still
other
instances
action

as

sale

a

public

a

or

a

of

sale

ownership

be

part
the

interest

may

such
of the

merger,

in

taken

to

All

in

the

major

policy

decisions

basic

13 Address
ury

by Secretary of the Treas¬
George M. Humphrey, April 20, 1953.

14

Space

tended

does

not

development

cations

of

our

permit a more ex¬
of the policy impli¬

discussion

in

this

paper.

Some aspects of the matter are developed
more
detail in Butters. Thompson, and

i"

Bollinger,

have

mergers

or

mis¬

op.

cit.,

altered

the

likely to do

Planning
Corp. Formed in NY

ture.

revisions
As

in

with

the

most

tax

of

ration, chartered
surance

has

so,

York

other

gation of the f^cts doesi not reveal

needed

stability

expenditures

priority.
to sell

out

constitute

as

which

significant

revenues

cal

acute

so

reductions

or

of

a

operations,

101

Park

both in¬

with

Avenue,

Thomas

justify
sac¬

cently

a

H.

until

Bennett,

order

of

do, however,
instance in

a

an

though the
very long

even

a

maturity and interest thereon does
not

constitute

fixed

a

charge.

In

specifically that in the case of
Chicago & Eastern Illinois the
debt

has

already been increased
substantially since reorganization
through the sale of equipment
obligations.
question

capital

troversial

of

debt

has
for

one

versus

been

con¬

a

many

years.

Throughout

the

years

Commission

and

the Courts

formulating
the

and

were

the
plans under

Section

new

the

litigating

reorganization

then

when

77

the

of

Bankruptcy Act, the Commission
was

consistently being urged by

interested
for

parties

part

any

of

not
the

to

provide

claims

preferred stocks. It
gued that substitution of

new

or

with

was

a

ar¬

junior,

subordinated, income bond for

preferreds

would

result

in

an

City

shares

to provide

plans

financial programs in¬

dividually tailored to the needs of
its

representative^

licensed insurance

registered

with

sociation

of

Inc.

men

the

as

It states

will
well

be
as

National As¬

Securities

Dealers,

the

same

at

time would mitigate the

burden

of

taxes.

Despite

heavy Federal income

these pleas, the
consistently to
its formula of a balanced capitali¬
zation.
It will be interesting to
Commission

see

if

this

changed
recent

>

held

philosophy

by

years.

the

has

been

developments

of

Glass

Plastics
per

share.
Proceeds from the sale of these

shares

will

balance
a

be

the

of

used to pay the
purchase price of

plant, and for the purchase of
equipment, plant ex¬

additional

pansion, advertising and working
capital. The corporation has ac¬
quired the plant facilities, draw¬
ings, dies, molds and production
models
of
Eugene L. Vidal in
Stamford, Conn. These facilities
have
heretofore
been
operated
primarily for research and prod¬
uct development. It is the purpose
corporation to expand such

of the

facilities and to manufacture and
sell

a

number of items heretofore

developed by Mr. Vidal.
Fiber

Glass

Plastics

Corp.

tends to engage in vacuum

in¬

mold¬

ing of thermoplastics as well as
die

press

fiber glass

molding of

plastic products. The corporation's
principal fiber glass-plastic items
will be tote boxes

various

company

Fiber

of

be payable only if earned, and

The

Corp. of New
offering
200,000

is

Corp. class "A" stock at $1.50

is

that

pressures

on

York

used

investors and businesses.

finance public

kindly

Securities

Aetna

equally "depression proof" capi¬
talization, as the interest would

President.

He-

Glass A Stk. Offered

or

resentative of Distributors Group,

tax

more

re¬

New York wholesale rep¬

fis¬

high

of¬
New

City.

of

merge

one

at

maintain

Tax-created
or

to

would

amounts
to

to

to sell

and investment securities,

started

fices

specific problems discussed earlier
in this paper, a careful investi¬
situation

Planning Corpo¬

struc¬

the

whether

debt created has

new

many

appraising the need for imme¬

diate

equity security,

This

Financial

the

of

to

as

rail¬

many

approval will be forth¬
It is felt that the Com¬

coming.

62.-68.

pp.

tax-stimu¬

structure

are

on

mission

equity

com¬

stress

analysts

of

out

alleviate

seem

great

which

to

industrial

economy,

in

place

minds

this connection it is being pointed

summarized in this paper.14

The Financial

all, it would

to

extent

the

proposal to substitute debt for

the tax pressures.

leading

in

of

In

short of

tion

mission may not look

the

with

associated

Fiber Glass Plastics

foregone conclu¬
considerable ques¬

a

sion, there is

order
of
magniture as that of
aggression from abroad. In terms

considerations important are met.

Conversely, in other situations
owners'

caused

the

a

tax

control

evaluate

become

public Investment Company, Inc.,
141 West Jackson Boulevard, in
the
Trading
Department.
Mr.
Vacha was formerly an officer of
Webber-Simpson & Co.

While approval by stockholders

years,

however, I believe that it
be

12

1953.

Vacha

C.

James

CHICAGO, 111.—James C. Vacha

over

a

reasons

rifice
and

In the

intermediate-run, extending

now
confronting the nation this,
risky investment in
my judgment,
is by all odds
host of other simi¬ the most
important policy impli¬
may far
overshadow cation of the data and
analysis

position; and

tax

one

pro¬

sometimes

director

or

consolidate

to

a

12 Points

to

known
company;
to
competitive advantages;

achieve

structure

the

re¬

nationally

which taxes could affect the basic
of

to

succession;

associated

officer

an

lated

The corporate income tax,
and the excess profits tax
(if one
is in effect), have a much
greater
impact on corporate expansion
(4)

Sales

desire

enterprise;

pany,

tors.

contribute

motiva¬

Frequently

management

become

to

he

intensity

that

human

of

range

and

enterprise

the

on

whole
tions

in

this paper.

in

or

international

closely-held business

a

lar

significant than most of the

other

more

reorganization,

the income bonds would

on

road

the

the

appears

but

of

since conn.,

through the depression and have

not the Interstate Commerce Com¬

outlays and the rate
growth of existing enterprises

than

summation

their

reduced

mandatory to the extent earned

shall

I

paper,

(1) The impact of taxes

small

have

debt structures

earn¬

in,

investment

fects

that

roads
overall

However, as pointed out by
management, payment of in¬

economic deterioration from with¬

be summarized in the follow¬

more

might logically come forward with
similar proposals. The step would
be particularly feasible for those

ings.

independent

ing four statements:

of

Chicago &
plan, it is felt in many quarters
that a number of other carriers

re¬

vide

perspective of the
discussion.
For
present

present

-

over

the

payment

topic

this topic in order to fit

on

purposes
can

the years, as
approval of
Eastern Illinois

changed

would be indicated in

Income of holders

the class "A"

tire; to avoid the ever-increasing
red tape involved in managing an

Professor

as

to sell out

is very complex and embraces the

such

Enter¬

considering this

detail

them

of

Inasmuch

Uintner

in

a
.

Expansion

j

has

be

never

new

important precedent.

an

If the attitude of the Commission

common

consequences
of lative to the extent earned, is dis¬
importance of this fact too strong¬ these reductions, is not, I believe, cretionary with the directors. It
organized. Since, how¬ ly. For the conditions under which substantiated by the facts.
is payable only as declared.- So
ever, there is no reason to believe these fax effects exert their full
As a long-run proposition there far as the common is concerned it
that individuals with the desire force are highly specialized and
is substance to Secretary Hum¬ will benefit from an increase in
and talents required to
its potential earning power. It is
inaugu¬ apply to only a small proportion phrey's position that:
of
rate a new enterprise successfully
all
small
and
medium-sized
"... our way of life is threatened, indicated that the net tax saving
are
heavily concentrated in the companies. Moreover, even when not
would amount to
from
approximately
one,
but
from
two
upper income brackets, it would the tax incentives are important, sources at the same time.
It can $1.00 a share at current tax rates.
hardly seem appropriate to put they are not necessarily control¬ be lost just as
This compares with actual earn¬
completely by eco¬
too much stress on this point. It ling.
nomic deterioration from within ings, before sinking and other re¬
is not clear, for example, that any
The problem of whether or not as by aggression from without." 13 serve funds, of $4.79 a share for

high

railroad

approve

be

economy.

of

small

prospective establish¬

not.

are

terest

early date in order
economic strength at

ment

the

ally. The potentialities
interesting.

puted

taxes

reduced at

an

relatively

in

since cut back their debt materi¬

income

that expenditures must be greatly

reduce

elsewhere

this

success

recapitalization

Federal

to

and

and

of

lies

the

of

bond interest is deductible before

the

quarters

failure

those roads that remained solvent

sional

way

The broad interest in the
or

posed plan is to lighten the Fed¬
eral income tax burden.
Income

tended
of indus¬

en¬

long-

the

to

would still be contingent on

degree

incorrect

tax

years,

cumulative

earned, would receive in
exchange $40 par value of the new
bonds. The objective of the pro¬

run
damage thereby. The claim
frequently
voiced
in
Congres¬

merger

"centers of

of

of

share,

a

the

for

concentration

the

to

continua¬

level

several

en¬

extent

economy will suffer serious

independent

many

evidence

a

and

Each

which is

major part

a

terprises, and in this
to

un¬

of

the stock,

of

new

a

titled to preferential dividends of

immediate

and

"

of

funds

in

—

proposed, subject to
by the Interstate Com¬

(preferred) stock into
100-year 5% income bond.

$2.00

tion

or

needed

profits

It is

"A"

which

as

followed

Commission and stockhold¬

share

deserves

be

to exchange the present class

these findings for national policy.
There
is, - however,
one
point

Insofar

will

closely by students of railroad fi¬

successful

Time will not permit a systematic

forward

come

ingenious plan of recapi¬

an

talization which

approval

tion

indi¬

the

with

nances.

financial

and
having them possibly sub¬
ject to penalty taxes under Sec¬

immediately concerned to

viduals

accumulate

Eastern Illinois has

the

So far the actual formation and. to the upper bracket rates of the action on the tax front. If
the embryonic
development of individual income tax or to leav¬ demands of national defense
enterprises

management of Chicago &

likely to impair the incentives and

r

new

The

effects

independent enterprises com¬
pletes our examination of the key

tion 102 penalty tax on unreason¬

en-

structure.

ing and growth of the

tax

able

clearly

profitability,

considerations

estate

purposes.

largely

As the

more

the

of

ven¬

and.. is

progresses

in

valuation of the business

terms,

demonstrate

encountered

still

uncertainties

enable

to

is

death; they

by

irrelevant to the problem of form¬
terprise

problems

business

ing

a new

The sales in this

on

capacity

to

tax

be made to lessen the impact

meeting estate tax liabilities if

at

Generally speaking,

the

of

in

where

system
rigidify-

competi¬

111

of

the

new

tax
and

basic

sales

liquidity

by

rel¬

a

revision of

such

the

on

they constitute one among
considerations which de¬
attention in any long-run

mand

on

existing

stratifying

such

many

companies

such

or merge.
first place,

the
a

tive structure of the economy, and
as

the

pressures

many

other

system does

instance may be stimulated by the

Outside investors typically

interest in

with

merge

of the estate tax.

re¬

or

companies—

The tax

of

the

may

be

directly

and

or

powerful

In

owner¬

business,
friends

have very little
venture until it
a

type of

ordinarily must
from the personal

capital

out

to sell out

Our observations

this

that

sell

owners

sources

owners

closely-held

companies.

from which such capital is poten¬

indicate

and

agements of existing companies—

as

portance.

for

(carrying boxes

deliveries),

models

and

made

in

shapes

and

forms of construction, which

have

in

been

use

by thrpe major bak¬

ing companies for the past several
years,

food

soft

drink

carrying

cases,

boxes, candy and restaurant ~-\

trays, auto and aircraft parts, and
window panes, storm

jalousie shutters.

awnings and

23

(180)

The Commercial and Financial Chronicle.. .Thursday, January

ficer at the Irving's Empire State
Branch Office.
Mr.

News About Banks
CONSOLIDATIONS
NEW

BRANCHES

NEW

OFFICERS, ETC.

Bankers

and

The

Public

National

and

guest of honor at

have

retire¬
ment program that would be suit¬
able for all participating banks,
regardless of size.
The unique
feature
of this new program is

dinner given

a

at the New

Athletic

Club

Jan.

on

9, by the Sen¬

of

ary

vesting, and the benefit formula.
assist banks
in
formulating
their own retirement plans, Manu¬
facturers Trust Company is offer¬
ing its
own
services and will

dinner
the

was

Mr.

To

pre¬

to

Gersten

of

wood

a

Chester

E.

Gersten

make available those of

carving of the
Bank's main office

building at 37
Broad Street, New York, executed
by Vincent Glinsky, a famous conreplica of the Bank (itself

architectural

•an

constructed
foot

by

it

is

1/16

a

inch

0

within

on

masterpiece)
by

1

Concealed

eight-day

an

driven pendulum

vating

inch

scale.

is

spring

movement acti¬

reproduction of the West¬

a

minister Chimes.

The

cabinet

birch wood has a special finish
which, while sealing the surface,
retains the beauty of the naked
wood.
A

i

hand-carved

inscription

on

the back of the replica reads: "A
Token of the Twenty-Fifth Anni¬

of E. Chester Gersten

versary

President of The Public
Bank and Trust

York

with

bank decides to

a

National

Loyal

officers
cute

partici¬

Affection

for the benefit of its
employees, and exe¬

and

trust

agreement with the
Manufacturers Trust Company as
a

This agreement

Trustee.

the

thorize

of all other

will

au¬

the funds

with

Trust

Company

pioneer in the field of provid¬

a

ing employee benefits for its cor¬

banks

than 500

participate.

now

Bank

New

of

New

York.

York, John C. Traphagen, Chair¬

announced

man,

election

as

Jan.

on

the

12

Trustee of Alexander

a

and Esteem of the Senior Officers

he

dent

Leadership."
the

on

inside

An

reads:

and designed to fill
specifications: it should
symbolize the career of a man

who created
while

ject

.

outstanding Bank;
in
effect, it

monumental

should

•So

an

.

be

should

and
to

as

than

more

be

static ob¬

a

have

animation

compatible

with

dynamic personality of the

to whom it is presented; it should

be

unique in

design

and

execu¬

tion in order to reflect his

accom¬

plishments."
Mr. Gersten started his

in

National

as

Commerce

After

he

became

of Public National

Since

of

for

working his
to Vice-President of that

institution,
that

time

President

Jan. 9, 1929.

on

the

band's re¬
increased from

have

sources

$138,000,000 to $546,000,000.
if

^

Election

xacin

and

New

of

New

7

if

of

Mr.

F.

Grosch
Bronx

pany

on

bank

was

the

appointment

Fraser

Joseph

and

Kelley

as

Vice-

bank

started

August,

on

Jan.

12

by Percy J. Ebbott, President.
Mr. Albarracin, who is in the
Batin-American division, has been
Second

Vice-President
since
joined the Equitable
Company
33
years
ago,
He

Mr.
and

vision.

merged with Chase in
in

He

the

also

v

European

became

start

Vice-President in 1944.
The

bank

Resident
mann

P.

Volz,

branches in

the

Company

Company

Group

it

for officers

gold

Mr.

watches

0^

*

Irving

ice

to

our

York

and

H.

Company's Investment
for the past twenty

and
with

been

the

Transfer

and

A.

on

Jan.
has

New

an

assistant

executive

Mr.

gal
in
•

Bliss,

a

Bliss

H.

Assistant

Albert, Jr.

member of the Le¬
came

&

the

credit

a

bank

has

and

to

the

Irving

1943.

Brown

and

7

Bank,

New

its

at

time and date to

a

stock

The

clared

payable

of

shares-

25

Jan.

30,

in

the

of

issue
2552.

elected

W. Easterly, Jr., was
member of the Board of

a

the

at

Directors

one

was

of the split-up
the Dec. 24, 1953
"Chronicle," page

program

given

was

Harry

dividend

stock

the

The

further

board

1954

■I

CENTRAL

to

authorized

warrants for the right to subscribe

shares to be mailed to the

new

shareholders
Each

May

on

14,

will

shareholder

annual

meeting.

de¬

♦

1954.

be

given

if

if

BANK

NATIONAL

CLEVELAND,

all shareholders of record Jan. 15,
1954.

Dec. 31,'53

Total

right to subscribe for
each

for

which

shares

and

paid for

26

shares

Sept. 30/53

521,869,991 487,486,857

resources

489,148,070

458,120,403

125,961,849

118,775,394

196,553,705

Deposits

193,328,904
169,159,019
2,709,935

and due from

Cash

banks
Govt, security

U. S.

holdings

have

directors

FOR

no

Dec. 31 ,'53

dividend

stock

of

266,922,578

22,576,469

19,899,559

82,462.248

77,665,908
157,789,530

due from

and

banks
U. S.

271,414 ,870

.—

—

Govt,

security

holdings

3,000 shares

Jan. 30, 1954, $30,-

on

from

Loans

discounts

&

the

Undivided Profits Account to

$

293,742 ,866 290,735,432

resources

Deposits

pay¬

Sept. 30/53

$
Total

Cash

the

CITY

OHIO

CLEVELAND,

OF

THE

IN

SAVINGS

bank

issue at

with

Simultaneously

if

*

♦

underwritten

of the entire

the

1,737,995

&

held,

the

of

individually

of

187,552,798

profits—

Loans

before June 16,

on or

The

ment

discounts

Undivided

subscribed

be

must

1954.

the sale

one new

OF

OHIO

SOCIETY

the

157,896,151

the

will

transferred

be

Capital Account of the bank, in¬

creasing
000

the capital from $750,$780,000 and at the same

to

time

will

$90,000

from

be

transferred

Undivided

the

Profits

Ac¬

shares
ther

on

June

increase

*

Account, in¬

16, 1954 will fur¬
capital stock

the

of

the number

directors

new

at

Jan.

13.

annual meeting

their

The three

on

members of the

new

Bank's

Harris

and

twenty-one

to

three

from

directors

bank's

the

111.,

Chicago,

increasing

eighteen

Trust

Harris

Bank,

Savings

approved
of

if

*

Stockholders
and

elected

creasing the surplus from $1,200,000 to $1,290,000.
The sale of the 3,000 additional

board

David

are

Graham, Norman W. Harris, and
Kenneth V. Zwiener, Vice-Presi¬
of the bank.

dent

outstanding from 78,000 shares of
$10

Mr.

Harris,

Albert

of

son

W.

for

*

if

Board of

County
N.

the

of

Trustees, Mr. Charles D.
President of the Kings

promotions:
Charles F.

Brau, former Comp¬

troller, now
Comptroller;

Vice-President and
James
B.
Crane,

Assistant

former
to

Trustee

a

Fuhr

Mr.

has

for the past three

years.

John

J.

if

Ryan, Vice-President

Counsel

tion

if

for

Republic

Corporation,
elected

Suffolk

meeting

First

of

on

Suffolk

with

Bank,

Bank

Island, N.

Long

shareholders'
The

Farmingdale,

Director of the First

a

National

ington,

Avia¬

total

on

ferred

its

at

surplus from undivided

The

First

New

more,

Dec.

of
as

30,

Bank

of

$5,600,000,

out¬

increases the surplus to $6,250,000
and gives the Bank a capital and
surplus of $10,000,000.

Mr.

Peterson

stated

that

after

the completion of the transfer the
figure of undivided profits stood

approximately $3,400,000.
Mr.
Peterson, also announced

the promotion of John E. Livesey

Ambrose

and

sistant

Donnelly from As¬

Vice-Presidents

to

Vice-

Presidents.

FIDELITY-PHILADELPHIA

PHILADELPHIA,

and

TRUST

CO.,

Mar. 31/53

$

S

275,895,359 249,070,246

resources

Deposits
Cash

244,026,548
due

218,033,623

67,346,560

and

55,856,844

from

Govt, security

holdings
Loans

&

Undivided

64,999,833
discounts

*

were

consoli¬

berland, Maryland, announced the

business

promotion of six members of their
official staff, Walter C. Capper,
Senior
Vice-President; H. C.

close

of

Franklin

Square."

At the effective date of consol¬

idation the consolidated bank had

Landis, Vice-President and Cash¬
ier; T. V. Fier, Vice-President and
Trust Officer; Ray Blose,
Vice-

President; Miss Hazel H. Oder,
Cashier; A. A. Helmick,

capital stock of $5,735,000, divided
into
573,500 shares of common
stock of the par value of $10 each;

Assistant Cashier.

surplus

of

$5.735.000;

and

605,000.

...
if

*

*

"

At
ers

a

meeting of the sharehold¬

of The First National Bank of

if

,

Stockholders

*

of

elected

an

as

of

immediate three-forsplit of the 120,000 out¬
standing shares, by vote at their
proved

one

an

stock

came

to

Chi¬

the

of

bank

Assistant Cashier

Zwiener has served

Chairman of

a

Chairman

is

and

loaning division
of the bank's

portfolio investment committee.
The

tors

eighteen incumbent direc¬
re-elected,
including

were

Richard E. Pritchard, who retired
as a

Vice-President of the bank on
The

31.

Dec.

of

board

directors,

organization meeting imme¬
diately following the stockholders'
meeting, re-elected all other of¬
at its

ficers.
Directors
of

members

the

appointed

directors'

as

trust

committee for the year

Wayne A.
Chairman; Harold H.
Swift, Vice-Chairman; John G.
Searle, and James L. Palmer,

Johnston,

*

*

*

stock dividend the com¬
capital stock of the National

By

a

Bank

Commerce

of

Illinois
000 to

was

Chicago,

$1,000,000, effective Dec. 29.
*

*

^

ILLINOIS
CO.

TRUST

AND

of

increased from $900,-

CONTINENTAL

OF

NATL.'

CHICAGO,

Dec. 31,'53

resources.

$

and

S.

due

banks!—

from

699,384,694

559,158,953

faoldgs.

1,116,306,512

1.296,855,069

discts.

793,434,004

profits

3?,929.237

Govt.

&

Undivid.

;52
'

2,779,561.638 2,800,500,848
2,536,500,395 2,568,797,375

Deposits
Cash

BANK
ILL.

Dec. 31,

$
Total

Loans

Bank

Virginia, Richmond, Va„ have ap¬

bond

1939, becoming Assistant Vice-

ident in 1946.

curity

*

the

President in 1943 and Vice-Presi-

U.

The

He

departments

many
was

in

Se¬

'

undi¬

joined

in 1932 and after serving in

cago

Assistant

vided profits of not less than $1,-

Francisco.

San

mon

*

$100,000
the

Zwiener

Mr.

4,719,093

The First National Bank, Cum¬

&

Hall

department of The Harris Bank in

115,292,568

5,206,414

Harris,

of

Director

and

Company, successor to the corpo¬
bond business of the bank.

rate

49,704,478

118,912,583

profits
*

bank, from 1927 to 1934.
In 1935 he became Vice-President

The

Dec. 31/53

common

of

securities affili¬

ate of the

PA.

with

1953 under the title and

of

has

York,

charter of "The Franklin National
Bank

National

banks

*

Franklin Square, New York, with
of

that

standing 150,000 shares of $25.00
par value stock for a total capital
of $3,750,000.00
This latest transfer of $1,000,000

U. S.

stock

to

of

resources

National

announced

profits.

Total

if

Bank

meeting
Jan. 4th $1,000,000 was trans¬

Jan. 12.

is Suffolk County's
largest commercial bank.
if

J.,

N.

National

$27,165,000,

The Franklin

Peterson,

Hunt¬

Y.

Secretary of The N. W.

and

dent
*

Raymond

at the Board of Directors

at
*

was

Lakes,

Vice-President,

Vice-President.

been

*

Harris Company,
F.

of Paterson, Cilfton and Pompton

if

meeting

Savings* Bank, Brooklyn,
announced the following

Y.,

*

Mr.

Chairman of First National

I

a

joined the bond department of the
Harris Trust. He was Vice-Presi¬

of the bank from $1,-

290,000 to $1,410,000.

were

opened the first morning.

Following

Harris, retired President and
Chairman
of
the
Harris Trust,

a

business

accounts

new

total of $780,000
to 81,000 shares of $10 par value, a
total of $810,000 and will increase
value,

par

new

opened

office

Street

450

if

Savings

Jan.

on

Har¬

1928.

if

if

Side

West

Brothers

since

Co.

&

Mr.

Albert joined the Irving in
1951.
He is presently acting as a
loaning and customer contact of¬

him

the new $10 par value
will be placed on a 25-cent

the surplus

riman

dated

agency

Division,

is

manager,

of

with

been

stock

business in the
Corporate Trust Division.

Program
employees of its

Harriman

has announced the

stated that following

board of directors authorized

by the directors.

count to the Surplus

*

Brothers

Brown

Co. New York

that

Thomas J. Rohde have also
been elected Assistant Secretaries.
Mr. McCoach is administrative
of

if

if

and

if

since

Departments

1928.

been

8

Vice-President

Alpheus

Gundersdorf has
Corporate Trust

Mr.

years,

held

a

The First National Bank of Belle-

McCoach

Albert

April

since

Cherry has been identified

common
if

Assistant

Counsel.

Brunner,




honored

Company

announced

named

branches

corr^popdent banks,"

both

*

Trust

William

correspondent banks is announced
by Manufacturers Trust Company
(New York).
"In order
to'be^of further serv¬

to

1930,

Secretary

the

new

cost to the bank.

joined the
has been an

who

in

one

shares

26

on

meeting of the directors
following the snareholders meet¬

000

with

served, presented

guests at the dinner.

Retirement
and

$70,000,000.
Lynch,
the
fifth

County Trust
under whom the cele¬

have

brants

officer
A

than

almost

P.

Assistant

as

1949.

system of nine offices and
of

and

also announced at

was

Fraser,

Assistant

and

$2,000,Today, the bank

deposit.

Cherry

time.

same

Mr.

earlier

banking careers,
County Trust Company had

Thomas

Puerto Rico.
if

months

President of Bronx

branches in Ger¬

many; James P. Duddy,
in Japan, and Carl
B.

five

offices and less

resources

also

appointed
as
Vice-Presidents
Her¬

to

their

of

Bronx

di¬

Second

that

name

1903.

Kelley joined Chase in
is

1926

its

officials recall that at the

a

announced

was

changed

County Trust Company.
Reddington's career with the

Mr.

in
Albar-

until

not

was

C.

Fred W. Gundersdorf
Secretaries

A.

Vice-Presi¬

Assistant

as

Alfred

of

basis of

a

share at

a

set

share
The

career

the 23rd Ward

as

on

each

for

At

for

former Mortgage and Real Estate
Com-„ Officer, now Vice-President and
when the Mortgage Officer; ahd Lewis Fuhr,

1904

11,

Strong,

Trust

Bronx

Both
A.

his

began

known

bank

on

1930

William

were

County

Jan.

It

Bank.

has

1930.

as

Vice-President,
Reddington, Manager
the banking department at the

with

if

Louis

Leo

was

Jan.

Assistant

of

Benjamin

by

Hanover Bank.

and John J.

000

which

on

Marking their Golden Jubilee
Grosch,

Company

Ammidon, Trustee, was
formerly Vice President of The

Behrens,

iVew York

Trust

dinner

13.

two

1944.

Company,

shares

share

announced

was

Mr.

has completed 50 years of service

bankers

a

President.

associates, each of whom

Bronx

Trust

it

York,

Jan.

on

elected

was

Board of Trustees

States

United

of

further increase in the cap¬

share for each

*

Ammidon

member of the

Varick

Trust

with the bank, at a

active

to

Boushall, President

C.

Thomas

this stockholder action, the bank's

quarterly dividend basis.

ing,

*

*

York

>f

officials honored two

York,

Presidents in the Foreign Depart¬
ment of the Chase National Bank,

a

County

of their

banking

a, messenger

Bank

New York.

way up

Bronx

recalled

duty with the Navy.

Union

Main Office.

career'in 1909
the

if

if

the

person

the

Bag and Paper Corporation.

these

.

of

Director

and

there¬

Shortly

1951.

was

author¬

May
1, 1954 the right to subscribe for

be

after

also

the shareholders of record

$50

1948, first was ap¬
Assistant Secretary in

December,

for

of the Bank,

shareholders

a

January 8.

the

to say that

bank in July,
an

share

one

held in Richmond
At the same time
$20 par value of the present
shares was changed to $10 for the
new
360,000 shares.
annual meeting

on

$780,000 to $810,000 for the purpose of offering to

pointed

Calder, Jr., Executive Vice-Presi¬

inscription
"Conceived

the

joined

who

Faunce,

of

stock from

new

appointment of Arthur L. Nash as
a
manager.
Mr. Nash, formerly

ff

*

*

The

more

for his Devoted

,

Mr.

banks, having estab¬
lished in 1947 a Group Life Insur¬
Plan in which

Rockefeller

office.

respondent
ance

New York

Department

participants.

Manufacturers
is

Center

invest the

to

Trustee

funds of the trust

as

Company of New

the

When

pate, it will establish its own re¬

of

and is assigned to the

dent,

ent actuaries.

tirement plan

temporary sculptor.
The

independ¬

Assistant Secretary

of The Hanover Bank,

Hoyt

each

The

sentation

own

this group arrangement,
participating bank decides
upon the details of its own plan,
such as eligibility, retirement age,

fifth

highlight of
the

each

Under

Presi-

dent.

to

dividend

The

ital

an

capital

each 25 shares held.

*

ized

attempt at standardization."

no

his

-

ways

on

group

participating bank can
plan, tailor-made to
fit its particular needs.
There is

annivers¬

twenty

working
flexible

a

have its

-commemorate

year as

develop

that

ior Officers to
the

been

"we

was

Bank

Company of New York

York

President H. C. Flanigan said,

the

of the bank from $750,000,$780,000 by the payment of a

stock

•.

a

in

increase

the

stock
to

leased from

E. Chester Gersten, President of
Trust

^

es¬

George Faunce III, recently re¬
active duty with the

CAPITALIZATIONS

appointed

.

the

has had

trust and

River, N. J. held January
12, 1954, the shareholders author¬

ized

United States Navy, has been re¬

*

*

of

Division,

*•

H,

,

member

a

Trust

■

REVISED
'

Rhode,

Personal

wide experience in
tate administration.

/

Toms

14, 1954

i

*

*

.*

767,043,046

24,073,147
.

The First National Bank of Bis¬

marck, North Dakota increased its
nrirrcrVi ri'n

>anitnT

ctnrk

frnm

$9.nn

—

V

Number 5290

Volume 179

The Commercial and Financial Chronicle

...

(181)

000

to

$400,000 by

stock divi-

a

Continued from page

7

attempt, in his "Real Wages In the

dend, effective Dec. 30.

BANK

NATIONAL

United

*

*

*

OF

DETROIT,

Dec. 31,

'53

June 30, '53

$

Deposits
Cash

and

442,421,085

463,212,795

holdgs.

800,652,605

705,517,929

discts.

439,095,506

442,457,009

profits

curity
Loans

12,851,364

16,147,958

&

Undivid.

se¬

*

THE

DETROIT

*

DETROIT,

MICH.

Dec. 31,'52

$

Deposits
Cash

717,139,224 664,029,734

be

views

of Professor

correct.

were

Friedman

the

is

principal

the trade union

purpose of
to

It

influence

It
if

the

move¬

of

level

Unions have dem¬

money wages.

transfer

*

of

has

steel

*

directors
Bank

of

of

the

Mobile,

authorized

the

of

$500,000 to surplus
undivided profits and re¬

from

accumulated

serves

during

1953

in prior years' earnings.
board's action, taken Dec.

The

30,

increases the bank's surplus
$3,500,000, with the capital of
$1,000,000 remaining unchanged.
to

Increases of

like amount

a

were

earnings in December,
1949, and December, 1951.
H. A. Pharr, President, said that

it has been First National's policy
to keep the bank's capital funds

increasing
posits.

in

proportion

stated

was

that

to

the

de¬

latest

workers'

unions, which Mr.
regards as weak, have

Friedman

Alabama

of

outside

Birming¬

*

*

able

were

to

the

accept
union

force

closed

or

employers to
abominated

deeply

-

shop and yet not

force them to pay

somewhat high¬
er money
wages than they would
otherwise pay.
Such
to

glaring failure of unions

a

achieve

C. Beise,

Senior Vice-Presi¬

Francisco,

California

announced

that three officers of the Loan Su¬

pervision

department have been
promoted to Assistant Vice-Presi¬
dencies.
All three
San

have their offices

men

Franciscp

They

are

ther,

and

J.

J.

H.

headquarters.

Cannon, E. GunF. Osborn, all of

whom previously held the rank of
Assistant
Cashier.
Mr.
Gunther
and Mr. Osborn have duties in the

department's foreign section.
:

*

*

Effective

States

National

Diego,,

California

United

Bank

by

of

one

their principal

of

Promotions

of

its

sale

of

*

five

officers

at

meeting. In Wells Fargo's Depart¬
Banks, Albert W. Larsen
Vice-President

Wood

Wilkinson

W.

opment work
Hiltman
Office

G. W.

Dyson

Devel¬

in the bank.

of

the

was

Cashier.

market.

In the

absence of unions, pricing in the
labor market is on a take it or

the

names

"take-it-or-leave-it"
the take-it-or-leave-

names

it

price. It is to be expected that
negotiated prices would be more
responsibe to increases in demand
than the take-it-or-leave-it

The quickness of

the

price.

response

is

likely to have important long-run
consequences because it may de¬
termine whether savings in cost
are captured by the workers be¬
fore they are passed on to con¬
sumers.
Finally, it is the purpose
of trade unions to

supply

manipulate the
for labor and to see

curve

that the

supply

u-li *n

curve

shifts to the

to rightward
curve.
Have

resP°nse

bank's

Paul
Union

retirement

bank because of

from

illness, after

*

employers got
agreed

to

rates)

(in

were

but the market

compelled the negotiation of
rates.15
Today unions and

soon
new

euP^y®rs are weB aware of the

pittalls

in long-term contracts and
rarely freeze wages for more than

a

Many of the contracts

year.

ne¬

gotiated in recent years have pro¬
vided almost unlimited reopening
of wages on relatively short no¬

tice.15

There,

when

too

have

union

been

times

of their members.

leaders

have

of

some

the

This happened
building trades

10nsm,during the Second World
T?e laaders remembered the
^ii after adjustments when prices
fell
the First World War and
m

they wished to avoid repetition of
that experience.

And union lead¬

quite

ers

commonly
members against the
getting
union
rates
above the rates in
union

plant^.

their

warn

danger
too

of

much

competing

non¬

But evidence that

accelerate

that
the

unions
rise

may

of

not

is

plain

that

have

unions

effect

money

upon

the

structuie of money wages. Innu¬
merable comparisons can be pro¬

wage cuts, are less

called to the fact that union
in

tracts
run

for

have

a

the

past

con¬

have

usually
(or at least

year or more

usually not required

nego¬

tiations

more

wage increases when business

pands.

ex¬

Finally, it is pointed out

that union leaders sometimes seek
to

large
the

temporary and that
increases will price

wage

union

members

out

the

market.
All of these reasons,

*

of

it will be

observed, relate to the influence
unions during periods of ex¬
pansion rather than during pe¬

and

hourly earnings.18
Goldner

measure

though I believe that this part of
their

conclusion

is

their
proof is unsatisfactory—they have
perhaps demonstrated that unions
fastest

grew

in

correct,

the

industries

which happened to have the
high¬
est wages in
1933, but they have
not

shown that unions accelerate
the rise in wages.19
The
most
comprehensive and

thorough

investigation

of

the

movement
of
union
and
non¬
union wage rates is that of H. M.
Levinson.20 He divides the
period

he

studied

into

seven

principal

parts—1914-1920, 1920-1923, 19231929,

1929-1933, 1933-1938, 19381941, and 1941-1947. Two of these
seven

periods
(1920-1923
and
1929-1933) were mainly or entire¬
ly times of business contraction.

In both of these periods the hour¬

ly

earnings

in

the

more

highly

organized industries showed much
less

tendency to drop than hourly

dustries.21

hold

There

up

will

in

wages

be

little

periods

of

they widen

—

the gap in the labor
supply curve

immediately

to

the

left

of

the

matter of

fact,

For example, union rates in

pay

more

than

the

however,
frequent case is the one
higher wage scales in union

the most
of

Furthermore,

the history

unions

their

the

aoove

the

non-union

scale.

Ex-

aredIle coal miners' union
the

of

a

during the

business

contrac¬

printing industry and the

threat of .unioniza¬

become strong, some who

scale. Even today,

union

existing wage. As

struction

industry

con¬

continued

to

Douglas finds greater cyclical fluc¬
tuations in "payroll"
wages than in union
wages, with a tendency
for union wages
to
rise more slowly than
payroll wages
in periods of
expansion and to fall more
slowly in periods of recession—or for
union

of

recession.

But

is

in

kind

would

one

hourly

and

periods

the

that

between
rates

all

at

this

in movement

contrast

pect
to
find
based on day
based

fall

to

not

wages

hourly earnings

piece rates. I suspect that
differences in the wages of

on

cyclical
two

groups

fact

that

was

result

a

of
ex¬

earnings

partly

the

the

of

the

hosiery workers, the men's
clothing workers
(the Chicago
market), the potters, the tapestry

partly of the fact that
one
group was mainly time workers and
the other mainly piece workers.
But the

f?rpet weavers, the shoe workers,

not

the flint glass

workers, the cotton
textile workers, the women's gar¬
ment workers, the handbag work¬
ers, and others.

not indicate that unions affect the
movement of wages through time.
Iheir influence on the structure
of

wages

may

be

once-for-all

by

any

ten¬

dency of unions to accelerate the
rise

in

money wages. Several at¬
tempts have been made to meas¬
ure

the effects of unions

on

wages

group

be

the

fact

that

group

hourly

conditions

the

36

almost

rise

earnings

faster

from

years

of

the

influence
than

much

as

of

other

Teikoku

Bank

Limited,

as

tendency

a

the

earnings of time
workers because many small
changes in
materials, equipment, and method do not
|»ad

the

to

rates

the fact that the

workers

almost

being re-set.
Hence
hourly earnings of union

rose

over

the. entire

Tokyo, Japan, announced that, in
accordance

with

the

resolution

adopted at the General Meeting of
the Shareholders held on Nov. 28,

see

rise

to

Union

my

Management,

faster

than

Policies

rates,
Industrial

wage

and

255, 256 and 293.

pp.

the

name

of the Bank would re¬

vert to the old and prewar

The

Mitsui

-would
mame

The

title of

Limited

Bank,

and after Jan. 1, 1954.

foregoing change does not

in any way
the bank.

rather than affected individual industries

at times had limited influence
union

wages.

cutting

and workers

operate its business in that
on

1945.

the




case

bad has little
the

or

willingness

possibility
of

cuts

are

The

of
non-union

business

of

employers

reason

likely to

turns

influence

no

increase the wages of

affect the identity of workers.
,

in

The

wages

on

on

to

non-union

is that wage

cause

trouble

15 A

reducing

case

in

the

pioneer

weekly take-home

where the long-term
the

opposite

way

contract
was

the

five-year agreement in the New York
printing industry
effective in
January
1928.
It
provided for annual wage in¬
creases.
By that time the depression was
well advanced the employers were seek¬
ing relief. They obtained some relief from
the
pressmen
but not from the com¬
positors.
16 This was particularly true
in 1946
and

1947.

Unions

wished

liberal

re¬

ture "

differentially." Ibid., p. 280. I believe,
however, that at least since 1933 unions
should be regarded primarily as a general
market

influence.

20 Unionism, Wage Trends, and Income
Distribution, 1914-1947, Michigan Busi¬
Studies, Vol. X.
21 Levinson, Ibid.,
p. 47.
The peri

ness

,

1920-1923

In

all

the

generally

fn

the

contained

higher in

non-union,

opening clauses because they feared in¬
flation, employers because they feared
deflation.

than

wages

1923

wages
in

of

wa?es,^®'!e

than
were

1920.

recovery.

in

1920;

S^ally
1922

But

in

below 1920 but
Ibid., pp. 34-35.

were

non-union.

year

industries

union

lower in 1923 than
union

a

most

government

policy. The miners were the prin¬
cipal exception. There was a con-

siderable.

rise °f union member-1
during the war (from 10.5

ship

million

1941

in

to

crease

13

over

f!°W945) and
for higher
wages.

mil-

ma«y strikes

Both

the

in-

in

membership and the
strikes may have occurred in or-

fhlw hrrruy up the decisions o*
the War Labor Board. Hence it
is
possible

that

weakened
poicy

believe

union

the

pressures

stabilizationw

wage

moderately, but I do
that this effect, if it

isted, was significant.25

1923-1929,

was

not
ex¬

,

Allother period studied by

.

mson,

Lev-

time

a

less

of

piospenty but
not
of
general
boom-—-the speculative buying wa»
limited
real

to

the

estate.

unions

as

stock

It

was

whole

a

Total

pering.

market
time

a

pros¬

not

were

union

and

when

membership

remained

unchanged at 3.6 mil¬
lion between 1923 and 1929 mak-

mg no recovery from the 1.4 mil¬
lion drop from the

peak in 1920.2*
period of weakness unions
influenced the wages of their own
embers but had little influence

In this

Pb>ntTgW °UtSide their Uni0n
plants.
Hence

a comparison of
highly unionized indus¬

wages in

tries and poorly organized
tries clearly shows the

indus¬

influence

of unions. This is well

by Levinson

brought out

figures which, show

s

riSt.Tages +in a11 waga classes
outrunning non-union
between 1923 and 1929 25

wiip

i

wages

+

^remaining three periods
1914 fn 1920 LeviPson>
first,
914 to 1Q90
for the the
most part
was

strong sellers' market, and the

other

two

1941)

(1933-1938

were times of

and

1938-

rapidly rising

the.face of substantial

unemployment and of strong gov¬
ernment intervention in the
labor

to3rmn In the first period>
iyzu,
non-union
wages
io

rose

unS
wages 26 in the other two pertoS
and non-union
wages wS
considerably * faster

than

union

up at more

thl
the

ing

union
union

less the

or

rate.27

same

J

941

World

wages

at

unk

faster
than
that during tho
1938 and 1938 to

rose

and

1933

to

and

union

lose

fact that non¬
dur¬
War

First

wages

penods

non-union

about

that

the

wages
rate.
I

same

union

for

pressures

HageS- substantially accel¬
erated the rise of
these periods. This all wages in
assertion

that I explain

quires

limitations

in

the

re¬

of the

some

method

Continued
22 U.

S.

"History
From
No.
trol

Bureau

of

of

Thus,

of

de~

And
ers

of

rather

slowly.

decisions

disbursed

the

was

ings bonds.

States

Bulletin

had

the time when
to

tho

wage

workers.

possibility that work¬

be induced

pay

United

1928",

574.

decisions

were

there

would

back

the

30

Statistics,

techniques of wage con¬
by the War Labor Board!

postponing

increases

page

Labor
to

and

retroactive

even

effect of

on

the

make

to

in

Times

521

pp.

employed

was

of

Wages

Colonial

604,

23 One

18 "The

worked

14 Even

Douglas'

presumably

period

rapidly as the earnings
of
piece workers, indicates that
unions had a strong influence on wages.
On the tendency of the earnings of
piede

suggested
influences
has
been
important, but the other two have

I do not be¬

time.

was

as

by abolishing overtime may cause trouble
as
employers discovered in the fall of

riods of contraction.

through

lowest-paid workers in order

non-union

workers

less among

"eeded; Nearly this of the unions
all
in

The

Interindustry
Wage
Struc¬
Quarterly Journal of Economics,
May 1950. Vol. LXIV, pp. 254-281.
19 I agree with Ross and Goldner that
"the strongest influences on wages seem
to have operated throughout the economy

of

the

wage

to concentrate

whfrle-frelief from rising Prices
wheie it

group

unions.

earnings of piece workers have
to

can¬

hourly earnings of the

rose

the

to

in

the

1926

to

union

of these

(2)

more or

and

measured.

The
1890

organized

was

lieve that the first of these three

The

inflationary

and

increases,

wage increases

and

not

relative influence

time

a

effect unaccompanied

one

the other

attests

the ability of unions to
modify the structure of wages does

!wLP0W? °f the stronS unions*
producing

from

a
17

of

policy wa»
the main to two objec¬
tives. (1) to prevent the bargain—

t

contraction

severe

movement

in

But

changes in absolute rather than
relative terms—a procedure which
I think is incorrect.
Hence, al¬

the

Government

wage

tions.

employers who take

forcing a large part of
employers out of business
through
enforcing
differentials

unions

Ross

of

during

degree of union organi¬

and

devoted

them to conclude that
recently or¬
ganized unions tend to accelerate
the rise in

controls

complete

wages.

and

ot non-union

managers, realizing
will strongly oppose

that

said

union

parts

deliberately

tween the

zations

The inves¬
tigations of Ross and Goldner lead

early

of unionism is full of instances of

is

of

unions push wages
up

In the first place, it

that

movement

vided showing that unions enforce
substantially higher wage scales
than aie paid by non-union em¬
ployers. True, there are plenty

plants.

reasons.

the

so

this period that it is not
surpris¬
ing to find* no relationship be¬

non-union earnings.17

a

the long-run or that they
may even retard the rise of money
wages is supported by three prin¬
wages in

of

to

It

considerable

Government
were

move¬

day-work and piece-work
earnings through time as it is one

dispute, I think, that unions tend

otherwise rise.

that the

view

much one of relative

as

World War, from 1941 to

uf/P7

1947.

wages

ment of

Pushj up rates faster than they
would

tion has

The

is

earnings in the less organized in¬

now

failed pretty completely
executing this purpose?

unions

leaders do this hardly sup¬
ports the view that unions do not

union

in

thirty-three years of service.
*

rates

cat

heroic

to meet the union scale and

discourage stiff wage demands
made Assistant
because
they believe that the

Wickland, Vice-President,
his

that

see

the

wild

made

care

boom will be

announced
the

and

Assistant

Kent

in the Business

are

Trust

W.

at

union

m

change in the institu¬

on
general wage changes
frequently than
once
a
promoted to Vice-President
year). Hence, it is said that unions
Victor H. Winfrey to Assist¬
are unable to press
promptly for
Vice-President; the latter of-

Vice-President;

efforts to

labor

experienced

The

important

tions of the labor

willing to raise
Co.,
San
Francisco,
California
the wages of union workers than
were
announced on Jan. 7 by I.
the wages of non-union workers
W. Hellman, President, following
In the second place, attention is
the
bank's
annual
stockholders'

elected

rates

cipal

common

Wells Fargo Bank & Union Trust

ment of

the

con¬

sought to limit the wage demands

San

capital stock from $900,000 to $1,000,000.
*

above

unions
The

stock, increased its

*

far

rose

shifts in the demand

*

31

Dec.

soon

the mines which held to the

would also be surprising be¬
cause
trade unions introduce an

aims

buyer

*

dent of the Bank of America, San

W.

War.

spite of the fact that these

price and in the labor market the

ham.

ant

States

World

minimum

leave it basis, similar in a way to
brings the total capital
most retail markets except that
and surplus of the bank up to
in
the retail market the seller
$4,500,000, the largest of any bank

iicers

United

industries, formerly citadels of the
open shop. It would be strange if
the bargaining ability of unions
were
so
specialized that unions

addition

and

the
First

established the union shop in their

made from

was

the

strikes

4,450,289

National

was

shortly before

Miners

tract

97,766,369

7,110,229

board

First

new

tract. made by the United

entered

wage

Even the automobile workers' and

115,267,776

profits—

Alabama,

in

retarding

the three-year con¬

was

Wages

❖

S.

increases

rates specified in the contract and

discounts

&

The

in

contract's

union

unwelcome conditions, such as the
closed shop of the union shop.

many times their abil¬
force employers to accept

which

One of the periods covered
by
Mr. Levinson was the time of tho

comparison

317,402,417 311,050,514

holdings

It

against them.
surprising, I think,

in

weak) came mainly from
industries (textiles, hosiery, men's
even
when the workers are not
clothing, boots and shoes, meat
union.
In fact, such wage cuts
packing, iron and steel) in which
are likely to lead the men to or¬
piece rates or tonnage rates pre¬
ganize.14 A notable example of a dominate. Hence the

ity to

from

security

Undivided

and

would

and

industries

were

135,718,762 128,185,082

due

and

Govt,

Loans

for

from

onstrated

banks

U. S.

dence

ment

$

756,163,458 699,931,349

resources

shared by a number of economists,
and I wish to examine the evi¬

the

*

BANK,

Dec. 31,'53

Total

Promote Inflation?

1,672,060,497

due

banks—

Govt,

S.

$

1,700,406,934

from

U.

Do Our Wage-Fixing Arrangements

1,808,694,129 1,762,490,772

resources-

market

duced

DETROIT, MICH.

Total

1890-1926,"
pro¬
ambiguous results because
his union figures are in the main
time-rate figures and his socalled
"payroll"° figures
(which
came

stock"

climb for two years after the
crash of 1929.22

States

29

to

put

good part

a

disbursements into
Union

war

sav¬

for

quicker
produced results in individual
cases,
but probably did not affect tho
average time required to decide a case.
pressures

decisions

24 The

members

building

trades

because

construction

panding and
service.

The

so

did

unions

miners

and

unions

in

gained

was

the

the

ex-^

public

railroad

workers, however, lost ground and so did
most
unions in manufacturing.
25 Levinson, Ibid., p. 47.
26 Levinson, Ibid., p. 33.
27 Levinson, Ibid., pp. 60-61
and 6$.

The Commercial and Financial Chronicle

(182)

30

Carnegie-Illinois

29

Continued from page

unions on

by comparing the
wages in the well

wages

specific
evidence for believing that unions
accelerated the rise in the general
level
of money wages between
and

1933

between

and

1920

and

1941.

period

one

The

JruL

■ehi

10

iripl
tries

in
in

movements
movements

thp
the

u/ith
with

wages

of

movements

second

a

cents

repre-

increase

wage

hour.

an

the

the

that

time

same

the

argue

winning im-

were

victories
over
General
Motors and Chrysler, and in April

portant

unionism
in the num-

ber of strikes did not alarm non-

1937, the constitutionality
Wagner Act was upheld.

union

the influence of the Roosevelt vie-

employers and did not lead
employers
to
raise
to keep their

The

satisfied.

efforts

of the
Under

tory in November 1936, the steel

settlement,

of

the

the victories of
workers, hourly

and

automobile

non-union employers to

organized indus-

hiehlv

in

monev

on

tho

pnmnarin?

Vw

to

that the rapid spread of
and the great growth

people

deduce the in-

attempt to
nf nninni

fantastic

be

wages in an attempt

and Degree of Industry
Organization

Wages

less
iess

working hours was used to supthe demand, the claim for
higher wages was pressed regard-

port

jn which unions have exerted

of

as

members and

own

mobile workers

would

it

non-union
VI

or

increased

43.8%.

believe,

I

by

however,

earnings

that

less of what

1946 to the present is

was being done about
The first big test came in

hours.
the

powerful influence on the wages
0f non-union workers. Hence, efforts to test the effects of unions

oil

industry. By the end of
oil refineries in six

September,

a

states

closed

were

October

the

earnings in manufacturing which

unions

had

keep out
revealed in the spread

are

scarcely changed in the face

of employee representation plans. 0f rising industrial production beSuch plans had been quite rare tween January 1936 and October
Prior to 1914.28 They were adopt- 1936, continued to rise throughout
ed
many companies during the 1937.31
This increase in hourly
1no„

^

dustry

the

by

reenforced

was,

industries

it

in

true

m

well

or-

mucn

OI

during

"iak

«ujuovcu

the

in

than

nartieularlv

i:rnfx

the

in

greater

ic

?r .Ye2aiiVe^04^?!0 ??a-j£

?«,ct.ion„/ron} ,J16

trie

in
the

an

The next great test came in the

automobile industry. The General
Motors strike began on Nov. 21.36
it was followed by large strikes in

unions to the postwar wage
price spiral by looking at the record.

of

the electrical products

months prior to

V-J
Day,
factory
employment
had
been dropping. It was 1.4 million
jess jn August 1945 than in February 1945.
It continued to drop
For

some

Jan.

dustry

industry on
packing
Jan. 16, the steel in-

1946,

industry

on

r

,

.,

,

mucx

umusuwi

per

193a

^.a?uary \°

~

..

.

ui

in

WCIC

them

meat

large

on

number

strikes

of

in

the

—-

nugusi

involved,

in-

not until October 1946 did

WUIIV

immigration and partly to the the face of a monthly average of
raPid fPread of u™onism a,nd the 7.7 million unemployed, or about

man

the

Jan. 18, the cobper industry, and other industries. The

T

^

15,

1945, and particular-

large
•uratfpc

early

seized

Sinclair Oil Company settled for
18% wage increase. This settlement was followed in the next
month or so by the other oil cornpanics.

policy of the government
which with the end of the war
quickly
changed
from one of
holding down wages to one of encouraging wage increases. Let us
seek to appraise the contribution
wage

-art of

gardzed

and

President

riod. In more than half of the gteel Workers Organizing Com- by reference to non-union wages plants of -11 oil companies. The
stoppages between 1914 and 1920 mhtee was winning its important break down. The influence of key settlement in the oil industry
wages or hours were a major is- vjctory over u s. Steel, the auto- unions on wages throughout in- came on Dec. 1'6, 1945 when the

dustries and that I adduce

1914

60%

the

granted

in- sue.

and less organized

organized

with

of the employees organized,

recognized the union

About

movements of

turing 'industries
more

hourly

sentative of its

Promote Inflation ?
money

Corpora-

izing Committee entered into an
agreement by which the company

Arrangements

Do Oni Wage-Fixing
aucing the influence of

Steel

tion and the Steel Workers Organ-

Thursday, January 14, 1954

...

largest

launig

number

made

year

1945

workers

by

record

on

wufivjw

of

far

the

in terms

wuintio

vcu.

take-home
pay.
Average weekly earnings in manufacturing, which had been $47.12

But the year 1946 was destined far
to surpass 1945 in time lost. The
increase in the number of strikes

breaks down in those times when

in April 1945, decreased to $41.72
The periods 1933-1938 and 1938- earnings rise substantially after in August and $40.97 in October,
1941 were also a time when the remaining unchanged for
10 The consumers price index had

influence on
workers,
Furthermore the greater the influence of unions on the wages of
non-union
workers,
the
more
complete is thei breakdown of the
method.
In
periods
of strong
sellers' markets, when unions are
gaining
members
rapidly
and
winning large wage increases for

influence of unions on wages was months in 1936? Simply the lar- changed little for some months
great that it was a general gest gain in union membership in prior to V-J Day and continued
market influence greatly affect- any single year in the history of stable for some months after V-J
ing the wages of non-union work- the United States! The great Day. On Jan. 15, 1945, it stood
ers. The government also, espe- Roosevelt victory in November at 127.1; in August at 129.3, and
cially through the National Indus- 1936 had much to do with stimu- in February 1946 at 129.6. r
trial Recovery Act, the Bacon- lating the growth of unions. The
The end of the war saw prompt
Davis Act, and the Fair Labor growth in union membership be- moves by public officials to enStandards Act, exerted a powerful tween 1936 and 1937 was in excess courage workers to demand large
influence on wages, especially on 0f 3 million. At any rate, the gain wage increases. On Aug. 18, 1945,

was small and so was the rise in
the proportion of workers -in¬
volved (though one out of seven
of the socalled "employed work,ers'\ participated^ in stoppages),
but the longer duration of strikes
caused the time lost nearly to
treble. No other year comes close
to 1946 in the amount of time lost

rppp^ions

v

1923

as

such

when unions

1929

to

severe

periods

other

or

But the method

ing few members
exert

unions

are

gain-

having tough going and are

great

the wages on non-union

their members

and

thus

exerting

powerful influence on wages in
non-union plants, the method of
comparing wage changes in union
and non-union plants may show
a

apparent influence of unions
at all.
Many unions may be held
back a few months in raising the
wages of their own members by
no

1

unexpired agreements, and yet the
unions which are negotiating may
be winning large wage increases
which

immediate

have

repercus-

sions among employers who fear
that unionism will spread to their
workers. Hence, unions may cause
the

workers

of

wages

money

to

rise

non-union

faster

than

the

of all union work-

average wages

The method of attempting to
of unions by

ers.

detect the influence

comparing

the

and

umon

breaks

down

times

movements

non-union

wages

precisely

when

the

'

of

at

those

"

"

fear that xt. would sPread even one-seventh of the labor force.
faster than it did.
What happened to make hourly

weekly

so

the wages of the lowest paid employees and on wages in the South
—wages which unions were least
able to influence but which were
effected by the NRA codes. Membership in unions almost quadrupled between 1933 and 1941, and
work stoppages increased enorm°usly. In 1933, strikes were
more tnairi twice as numerous as
in 1932 and they were particularly
numerous-in 1934 and 1937. Union
recognition was a much more fre3,uent lssue tban wf^fs+an? u0urs'
Employers attempted to halt the
sPread of unionism by organizing
employee representation plans as
well
aL^y making wage concesS10ns- The employees covered by
representation p lans increased,
from about 1.3 million in 1932 to

between

was

more

mem-

President
controls
Labor

torn of the depression in 1933. The

to

spurt in trade union membership
was accompanied by a great eruption of strikes.
The number of
strikes doubled between 1936 and

employers

without

proval

used

membership and

the doubling of

government's

objective

the number of strikes had nothing
to do with wages rising in the lat-

raising

real

and

rising

unem-

ployment?
VII

.

.

Dt Particular interest is the pe-

to

porations

within the next five years.33 Asked
whether increases would not

ter half of 1937 in the face of fall- automatically
jng production

was

economy

40%

wages

ures

industry, but that wages were not
a major part of costs.
In late October,
President
Truman
in
a

proved to be the approximate

points of settlement of nearly all
of the negotiations and disputes
involving large and prominent enterprises.

higher prices,
Mr.
Davis replied that the importance of wages in the total cost
picture varied from industry to
mean

The settlements

'

eral cents

only

were

sev-

than the emploV-

more

had offered before the strikes

ers

"

"

1

-

The big strikes in the industries

bile workers for 18 cents and 18!/2
cents respectively, and these fig-

1937, making 1937 the largest year
to then in the number of work tember 1945, William H. Davis,
stoppages and
the next-to-the- Director of the Office of Economic
largest in number of workers in- Stabilization, announced that the
volved.32 Can anyone contend that

was wages.
.

struck, settled with the automo-

for

raising prices or resisting proper
price reductions.
Early in Sep-

the enormous jump in trade union stabilize the nation's

the

50%

basis

the

In

to

ap-

increases

such
as

lockouts.

or

by

increase

to

strikes

-freat majority of strikes in both
1945 and 1946, the principal.issue
dominated by large and rich cor(automobile,, electrical
products, steel, agricultural implements) were settled for about
.18 to ISV2 cents an hour. In the
steel
dispute, after the United
States Steel Corporation had offered 15 cents, President Truman
had proposed 13V2 cents. Late'in
January, while the steel strike
was
still
unsettled,
Ford
and
.Chrysler, which had not been

War

agencies

government

provided
not

were

other

and

wage

the

permitting

by

Board

allow

wages

relaxed

Truman

up

The Postwar peri0(j

Many employers who endeavored to halt the spread of unions
J'

1937

bership of the country at the bot-

ab^lt 2-5 million in, 1935.
'

1936 and

than the entire trade union

;by

unions is strongest

1933-1938,
times

tuating
ward

1938-1941,

unions

the

effect

were

of

movements

curves

of

and

when

were
accen-

the

of

right-

demand

by raising the supply price

labor

unions

but

on

—

when

the

effects

of

obscured

union.

The

United

Corporation is
On

Nov.

6,

offered the

were

1936

when

the

a consider
gen?Ial

us

lirst the period 1914 to 1920 when
non-union
wages
outran
union

E?
labor

This

was

8

'

—T

4.u

were

when there had been little

1920

and

strikes

increased

and

from

1,204 in 1914 to 4,450 in 1917 and
remained well above 3,000 a
year
for the entire period. Durins 1919
more than
one-fifth of so-called

"employed

wage earners" were at

time

some

year

in

the

engaged

in

largest proportion
is
lv

the
the

record.28

Douglas,
fnr

It

By
,

Bureau
wage

the

were

estimates

the

oKivr

.1
J
'employed
of

Labor

earners

largest
4i_

occur.

- wage

m

which

Pe"

...
earners"
the

Statistics

except those

professions

ever,

to

,

and

any year ln the

Zl '
28

1ft1„

1919

according

(9rKf\°7„\

if

on

v,^4..

of

or

—

j.

1920,
■

of

strike

significant that the rise in hour-

n^riorP

*

course

a

all

means

in

occupations
strikes rarely,'




,

crease

of

earnings

of

workers

non

during

ranirJ

agricultural

-

this

period

ahmit

hee?nnfnffY7^S4fi
b^nr|in2 ot 194o

frr^m

has
ihp

to tl,P

nf

to the middle of

-^7,
as

a

move-

result

1937, the

.

?

Of

the employee

the

represen-

adope,?„„VaVprian,,!n

the influence

fe,ler interests after

an

of^he

Rocke-'

investigation by

WboLTh"aIu^L'r<iKoitCompany

of

New

Jersey, the Standard Oil Company of
Indiana, the International Harvester Com-

th\,Go°dye®r Jire a"d Rubber

£any'

Company, the Westinghouse Electric and
Manufacturing Company, the Bethlehem
Steel Corporation, Yale and Towne were
amo"S

the prominent companies adopting

employee representation plans during this
PeriodN°t to be confused with the

Pians of
adopted by companies for the
pose
keeping

forced

cies

on

such

unions

are

as

the

National

many

pur-

the plans

companies by government

Board and which
resented.

out

and raise

But

with

the

powerful

avoid

in-

power

income,"

prices

on

held

to

f ;

.

Enterprises which

do

the

not

and

employers^

of

aggressive

indicate

what

employers

of such unions. The socalled "pattern" settlements in the oil, autosome cases to 44) saw the neces- mobile, steel and other industries
sity of passing on at least part of were well above the settlements
back

hours

'

to

40

6

r

week

in

(or

*

Late

in

th

Aueust

.

}fme navmentT
l™,e

cutting

were

a

and had the

t

being made in industry

w

c„L®!!-fi" ^ ^ l

effect

aeeeTeratiS

of

^

iiT

Au§-

40-

made by the U. S. Bureau of

lere

industries increased

the

'.n

well

War

agen-

Labor

employers bitterly

as

rapidly

as

organized

ones.
manufacturing inless than 40% or-

jersey put into

y in
p

crease

pay

h

eSect
effect

a

15%

a lb 7c tn-

k35

together with

a

hourly

earnings

increased

The CIO unions

by .oase

rates.

were

quite

gen-

Although the cut

Hourly
55.3

were

cents

they

earnings of factory workers
cents in January 1936 and 55.5

in

October

were

59.5

1937, 64.3 cents.

1936.
cents

U. S.

In

and

March
in

Bureau

9-52,

p.

9.

York

President

can

afford

without

said

December

of Labor

prices"

"industry

wage

the

result

of

half, downward

reclassification of jobs in many industries* increased productivity, the present
and prospective favorable profits prospects, and changes in the excess profits
tax provisions. New York "Times," Oct.
31, 1945.

32 In the

than

proportion of "employed wage '
35 Some of the 10% increases accominvolved, however, 1937 was be- panied a -cut in hours from 44 to 40,
both 1919 and 1922 and no greater whereas the 15% increases applied where
1934.

*

*

cuts

were

w a

survey

_

g e

changes in 6,000 plants between

18> 1945

May

1,

1946
La¬

from 48

to

c

"Urban

creased

wage", rates

-

1.7

had

in¬

cents per hour in the

three months

1945,

August 1945 to Oc¬

and

4.3

cents

in

the

increases

as

a

earners"

low

a

special

tober

that

substantial

raising

m

"Times," Sept. 5, 1945

1937", elimination of time and

Statistics,
Production-Worker
Employment, Payrolls, Hours, and Earnings in
Manufacturing Industries, 1914-1938, L.
S. 55-0902,

33 New
34 The

31

y

bor Statistics.

'

Sanitation in 1946, straight-time .erally demanding a 30% rise in

49A%1953, and among 18 manufacbetween january 1947 and
July

to

unions

have done in the absence

-would

.

offers

ized. have lagged a bit behind the 'est '"teases (in Hercules Powbetter organized industries, but in
but
on
W
? thl
the field of manufacturing hourly o/l
."ul„ "". °®pl- a

the c°lo»-ado Fuel and iron Company in Among eight
tk45 aJtel a bl"eL an,d bloody strike, dustries with

aboVthTough

national

line

earnings in the poorly organized

failed to weaken the interthe employees in unions,

tJS.7I

qUate purchasing

|he

; flation.34
flation.34

1853. It has also been a time when
ment in the hourly earnings of hourly earnings in poorly organ-

Hence, early in March

stoppages

U™ted Automobile Workers

hppn

«\e

unemployed,

est

and

a

million

one-slxth

N

force)

bership virtually doubled between
1914

done at

than

immigration, but unions were an
important influence. Union mem-

labor

JJjat Professor Friedman asserts
tjjat the United Steel^Workers and

corporation

more

.

market influence. WTel?
Let

Steel

company unions a 10%

wage increase.

time

States

typical example.

a

A—

wages

""

failed to halt the growth of the

40.

,

four months October 1945 to February
tern"

1946.

Following the "pat-

settlementHip

ban wage rates
36 Other
sues

rico

ir,

nr

beiuemeniS, Uie rise in Ur-

jumped to 5.3 Cents

important strikes on wage is¬
the General Motors strike

preceded

—such

as

strike

a

longshoremen

of

against

30,000

New

York

a
settlement
by
large strike in the lumber
industry of the Pacific northwest, and a
general strike in the flat glass industry.

their union,

a

_

7

Number 5290... The Commercial and Financial Chronicle

Volume 179

in

i

two

months

1946.37

The

the

April

February

to

industry

of the

survey

,that in manufacturing most
.increases

far

were

the

keep

pattern.
Between V-J Day and
,May 1946, 21.3% of factory work-

the

peace

definitely

was

the fact that out of 129 wage settlements in March and April and
ments made just before and after in May UP to the 20th> only 23
ceived no general wage increase ...April and during Aoril Less than were for 13 cents an hour or more
at all, 15.2% received general in28% of these (86 out of 310) were ar¥ 54 were for less than 10 cents
-creases
of less than 10 cents an
jor 15 cents or more
83 were for' ai^hour.42
The effect of the set: hour,
16.6% increases of 10 to 15, less
than 10 cent
and 61 for ten
tlement was to quicken the rise
-cents, lo.4% increases of 15 to 18 to
eleven cents.4® Among 180 set- in hourly earnings in manufaccents, and -23.7% increases of
19,~tlements made in the first three turing. Between January and May
: cents and over 38 The special sur-.
months of 1947
45 or one-fourth hourly
earnings had increased
-vey of the Bureau of Labor Sta-„
were for 15 cents an hour or more,
from $1,302 to $1,324 or 2.2 cents;
tistics showed that in the selected..
difficult tn in -in the same len^th of time> May
above the market

covered

ers

by

the

survey

This is shown

by

.

of

compilation

a

310

settle-

re-

;

-

*

.

,

non-manufacturing mdustnes (re-.
tailing, wholesaling, finance, serv-

y
rerpret,

ices, heat, light and power) where,

;
i

union influence
most industries

union organization in general was

5

9^*907

iQdfi

'

the

1««

n

ceived

<

hour

.

It

unions

,

the

10

seems

™

cents

an

clear that

strong wages

were

quite
differently -from
in which they behaved
1 where unions were weak.
/
way

.

The

.

evidence

of

the

lags

increases in 1946 is of

,

wage

!

in

siderable interest.

con-

During the entire postwar period, hourly earnings in retailing and wholesaling,

i

large industries with little
union membership, rose almost as
two

.

*

fast

in

as

manufacturing

where

two out of three production workers

;

union members.

are

Between

Februai-y 1946 and January 1953,
straight-time hourly earnings increased

;

by 66.5%

in manufactur-

ing, and hourly earnings increased
55.9%

in wholesaling and 60%

*

and 63.6%

in retailing among the
covered by the survey of

plants

the Bureau of Labor Statistics received no increases. The union industries
were
evidently setting

*

'

-

industries

1945-1953. In

settlements

posed

-

of wealthy

corporations

,

15 cents

.

and

were

in
than in

year

last

In 1949, a year of mild contrac-

announced

company

not take

that

strike of the United Steel workers

did

*Pr.

In April, 1948, the United
States Steel Corp. refused the desteel
wage

workers

for

increase.

led to deadlocks or breaking
off of negotiations in the agricultural implement industry, the rub-

Thp

tbp

lininn

bound

Was

strike

bv

It

whPtbpr

the

^ppI

remained

?nrinctrial

irnionq

Th

y

Derhanq

1

tb

that

1Q4S

Tjnupd

the

h™.

Autornnhilp

attemnted

...

strikp

reluctant to

in

L

to

seen

lnrcrp

would

honine

ilVwoul^
®

be

nthpr

obviouslv

dn

inHn«strv

to

thp

nf

anv

aluminum

contractTo

its

hreaH

tn

.

strike

the

nf

r,

its

^urorise

the

to

,h

Pri

,

the

that

^av

,L. It

were some

had

,

fore-

been

t

betwee" the U- A- W- and Chrys"

the contents

^ which set the pattern.

The

year

gaged

of

saw

in

-smaSn

••

'.

was

ahont

oeoole

more

strikes

sTme

the

en

thanPusual,

While

the Chrysler strike was still

pensions,

un-

confined to
But in 1952

try and was equivalent to
lhan

21-cent

a

more

timp
time

tn
to

time

community

may

properly insist
a better job of

.

ers

doing

in

a

better ]ob of bar-

fining' Jhe ,lar|er e™Ployer9

^ulUn^
approval for their principal pohcessful
Ses Neverh,a?® yiejdfd to° re^'r
^^XTar ^ unions ^e l!y t0 thlclal^S of aborKfS
theless the fa^Prevalent tends to
they did not wish to be
wLm in S
fut down while their rivals did
more

re-

general more re business, but partly also because
largest wage in- they have felt that a fight on
^

r™ai
0l f linioniqm
P^an^4ea^de spread o u
m
.® pr2'iv PYnpp/thp
^reasfs.^^
y
*"^e?se ctrnnS nn««ihil
|Jenc®'
J? a
+Z

^half of the consumer would win
thenJJ lefs public approval than
would

the

liberal

of

granting

wage concessions. But if the pub-

o^er

and

only 5

were

in-

ments in non-manufacturing
the

period,

same

wlmt sbould b6 done about ^bem.

f/om
HqW oHpp
Jhe ^.orld» a slowly rising p
evfi in the United States s greatly„t<?,b® desired, and c^temly it
w°u.'d

77

c®®8 °

nv„.

'

th^Lflationa^rb L

''Correct

s^

were for 20 cents an hour or more
and 281 for 15 cents an hour or

y
y
L trlde ,S

SL,

SriTeln^forfs'ce^TbTtto

ma"ds

'°nr

™?

dl1_?rig ^^pflppfq

Sany

f"led, General Moror:I'jtnionl

thp fart that tbprp

bv

,.^°hrect the inflatio:

bgbt.

"Make

V

emolover

the

do

I

Imposing taxes which
on

higher

of

Prevent his passing
wages in the form

Hence, in the last analysis the
to the question "Do the
Wage-Fixing Arrrangements in
the American Labor Market Have
an Inflationary
Bias?" will be
answer

supplied by the public itself. If
the public strongly insists that
employers hold labor costs stable,

J^. 7
What emPlo^ers

'.

.

.

,

stable price level.

?

for 20

cents or over- AmonS 520 settle"
in

m" JhUe fn "inriationary bfas,, r[sk/?g the c0®ts of 3 P°sslble
u d
shutdown.

The mcnts have an miiduoiiaiy

wage increase.

corporation had offered 15 cents
an hour before the strike. How far
the settlement w»s out of line with
th« market is indicated by the
fact that out of 745 settlements
manufacturing industries in
the three months, April, May and
Jtine, only 98 were for 15 cents

dustries

"

tim*

the steel workers won a great vie,
lie decides that it must have
tory over the steel industry and
stable labor costs because it dethe government which had far
sires a s.table price level, it will
reaching effects on wages in other *;y tnat tne atte pts o u
reserve its approval for the emindustries and virtually destroyed
nrodure a
ployers who valiantly oppose exthe wage stabilization policy of ®w ®
w
11 nrnce.sslve w?Se claims and will
the government43 The victory of alse in
costs wmc wi p
withhold its approval from the
tbe union came after the longest duce either unemployment o
a empi0yer who readily accepts
strike in recent years in the indus- higher price level.
higher labor costs rather than

or

l5'^0 SoTewhat

was

particular industries.

a

The

line

and

limited and

was

attempt of employers to hold the

ber industry,
industry.

of, the

better

get

.

non-contributory

In both 1950 and 1951 the influence of unions on money wages

weeks.

"substantial"

cannot wait

we

progress

to

an

increase, but there are many pos-. bargaining. And the community
siMe.reasons - Union> ar®
has the means to interest employ-

This victory lead in the following
m0?tbs 0 a raPld spread of non- make wages .in
contributory pension plans.
sP^e to the

bility fob the inflationary effects
of a wage increase. As a result,
negotiations were deadlocked for

mand of the

But

slow

the

effort

feel

prosperity of the

nothing, unions We for the larger-than-average- that employers do

the

it

an

results
economy.
Something
^
&
quicker is needed.
and from industry to industry. In
My belief is that the community
frnm
from

vnrv
vary

workers" engaged in work stop-

15-cent"package6 bufttesum'of
■

or

from

?agne9in9r^d from 5.5% in 1948 the large mcreases t;o their mem- desire and, indeed, need public

the

take the responsi-

care to

community.

than

and the proportion of "employed enced by these larger-than-usual

As

Workers,

the

for

faster

and

would have yielded unorganized ly responsible or largely responsi-

At

in

dustries

workers little

line.-

Electrical

interest

go up in some occupations or insooner

satisfaction

to make each individual

now

determined

a

the

real

civilization is essentially

X

vears

gets

observing that the community is
prospering. The civilized man is
one who feels a deep and broad
concern for the welfare of larger
groups and the struggle to achieve

with

two

was

ual

were

1946

prominent

hour. There

on

com-

the

fixing arrangements in the American economy have a small inflationary bias—that they tend to
put up wages fast enough to re<*uire a slow advance in our price
level.
The inflationary bias in the
wage-fixing arrangements may be
summarized as follows.
Wages

crpacpc
creases

.

spiral that had been continued to make gains. It took
by'the large wage in- some striking to win these gains

of

United

the basis of

on

of

about 6 2 cents.

opening negotiations between the to ?.0% in 1949. The most notable
General Electric
Co. , and
the u™?n fa*n was the successful

w

1947 the

the industries

in

in this

concerned

result, there
effort to hold

I shall not take time for extended comment on the other
years of

! -the period
-

following.

were

tnat the

was less

from rising or falling over the balance is admirable.45 He is sureperiod of the business cycle and, ly correct that such an economy

elsewhere. The reasons for the civilization
to September, the increase was much-larger-than-a v e r a g e in- from the

J A0 L~

d

conclude

a

the pace and the less well
organized

l

l

hie strikes

creases

in

retailing. And yet between Aug.
18, 1945 and May 1, 1946 48 4%
of the employees in
wholesaling

-

out

fostered
■

behaved

i

civth

rmp

increase of

an

or more.

where

.

than

j

wage-prfce

among this group of
only 15.6% of the work-

1p«c

or

.

t primarily^

than

othe?\vords
: industries

.

31

and to reduce the danger of therefore, provided a solid foun- requires a broad identification of
strikes elsewhere. That the settle- dation for a stable price level. It collective interests with individmen* was generous is indicated by looks very friuch as if the wage- ual interets, so that each individ-

The price which the large employers *were willing to pay' to

wage

than

less

designed to - force a quick
settlement of the Chrysler strike
been

revised to meet the

was

pattern.

^Bureau of Labor Statistics showed

(183)

wi„ probably be able

and willing to do s0' But if the
is indifferent, employers
will find it easier to accept small

pub]ic

increases in labor costs rather than
to risk shutdowns, and the com-

have a slow'y risin®

pnee level.

higher

-

admirable

his

45See

Alternative

to

Sts"suchTs a?mUteS'the la5t cha'»sCMteTthe ^strikes PreocfupatiofoKered an incTeasI ^nted'th^TSS&d un" ^e -d J M Clark say: "Build Dempsey-Tegeler
the large employers and
£ " ^ cha'n^s Z colttf dbr ^ gove^nent?s wage
£>££
Opens New Branches
but

non-union plants out-

on

1946

.

in

'•

aveoidTr0oubiaeUAthrer|teanedXte

"ving and an automatic increase

paniesTr^ in S?Ven °j\con?"

productivity3 Thfoffer was"ac-

Bve western states m btd and beCame the basis for
creasef LuTvMen^n lniy th^n; settlements in re opeLd negotiaS
wum0re t?3n tinns Tn the steel aluminum rub,
tori! Ihe
S T f ber agricultural implements and
E

»

'

'. downand

theun"onissueda
mnnnn-L
tlement '!

RtrifcP

noil

tat^e

se

+A

■

wase^ advance

setflement

of

u

♦

r

Thic

electrical
Thpqp

products

settlements did

cost-of!uv£g

the

industries.

features

the

of

however'settlement

but

^str^1it

l3

contain

not
pr

duS

y

GenLal M^rs

generally for

were

^ents

41

P0"^

after consid-

The steel settlement stimulated

rises in wages in many industries,

The coal industry was the most

notable. The union insisted on a

ment in the industry. But straight-

thought that wage increases would

1

r

<r

i

mu *

for 15 cents.

This

lowed by the
the steel

•

was

same

,

-i

quickly fol-

settlement in

industry, electrical prod-

ucts, agricultural implements, and
the

automobile
duiumooiie

ly.

industrv
industry

general
general-

The agreement in the rubber

-

M
...
37 Monthly

i

1946,
be

.

;changes

in

wage

scales

and

in

basic

general
from indi-

Genpral

a

M^otors

f"a?ed tratChrvXwouMno

employment

changes in

bewteen

industries.
payments

occupations, reThey also exclude
for overtime work,

hoSa^8
38 Monthly yaca«oni»•
Labor Review,
.

1946,
4

p.

,

September

344.

39 Journal

Commerce,

Feb. 20,1947.

(New
.

York)

The problem of

the

policy

credit

correct

in

an

with

?|iw°of monevfs reared to
f iTpmnTovment and also to

Theory

and

Policy

with

a

few observations

mat-

on

may see fit to press.

with

the

p

y'.s

and

idp

Slde'
,

,

mav

d

.

-

,

well

level

bave

W 1 h

„

.

general

.

e

_

of labor
,

R

^

costs

42Nati°naI Industrial April 1948, ter
Conference
Management Record,

if mw."."
PerCent
a

nhour

or

I®*5 *?.15 "nt8-than 15 cents
rubber

the

the United

39.1

intent

2c ?
5.1

More

41 In

settlement

was

for

the electrical products industry for 8%, in aluminum for 10%.
cents,

stabilization policy

28.9

less_

5.S cents to 10 cents

11

10ofcXs-

in

ceeded.

on

Miners,

getting

TL0r0

m„cf

and Mr. Gossett were previously
with Friedman, Brokaw & Co.

With Walston Co.

•

,.

„f(

accomplished by
the miners were
more than the
steel
was

but

had won' and the miners suc"

44 United States Bureau of Labor Statistics, Current Wage Developments, May,
1952, June, 1952, July, 1952.

.

,

,

uavp

fnnnd

a

thp

better

resistance

of

I

■

of stiffening

employers

taxes
,

which
,,

VGIlt th6

bound

are

,

foCSt

to

yy. ^ ]yj

of

„

,

"Rmad*

107A

t

ery

"_*"*
PHILADELPHIA,Pa.

Scott

^

Mont-

Scott & Co., 123 South
Broad street, members of leading
gomery,

and

**

•

is

commodity
'

exchanges,

that Allan B. MargOllS

announce

o

hOW

associated with them 3S &

registered reoresentative

pre-

New Reynolds Partner
Reynolds & CO., 120 Broadway.-*;

»

US6

_rr*

to

excessive wage demands than by

v„

rGSOUFCCS,»

i

xy,.

r»U,»

NCW YOFK City, II16nib6r8 OI ttlfl

Clark's analysis of the problem of

New

operating

Feb. 1 Will admit Samuel S. Hall,

an economy

Which dO€S

not automatically keep
I

v

Thprp

answpr

way

registered representa-

a

b^e inth<nroff]ice at 1370 Broadway. New York Clty-

,

*

must be

the app0intment of Otto

jl„:

st0ck

.
,

and

Mr. Looper

inS securities exchanges, has an-

I hat would

answer.

under the

Looper

Mr.

meet

Nor do I think that the Swedes

the

"•
.

„raefafnl

Board,

4® Industrial Relations Counselors, Sup- pp> 254-256; May 1948, pp. 294-296;
Plcme"f fZ,£urre?t, ,ew~'
\ 1947*
June 1948, pp. 382-384. Even in June
Jnne 3, 1947, and July 7, 1947. Among and July most settlements were below
wag.e
iollfleen
?ej I3, the Pattern- °f 87 compiled by the n. I.

5 cents

.

of

Berther C. Gossett.

Walston & Co., member of lead-

wasteful. There must be a bet-

,

Manhattan Building,

the

keep

pattern that would be detri- the economy had no inflationary wage-fixing arrangements by demental to the rest of the indus- or deflationary bias—if they kept liberately creating unemployment
,

in

direction

the wage-fixing arrangements of correcting an inflationary bias in

ionger

'




and

a

•

of

j fear, too Utopian to be ade-

1S

quately achieved.

rivals making cars and would set

much

out

Sras
in

Neither of the first two propo-

sals is satisfactory, and the third Muskogee, Oklahoma

its

hold

branch office at 119 West Fourth

Street, Joplin, Missouri, under the

'
iheory and Policy
full employment and also to meet n(funced
Let me conclude these remarks
tonress
That would
Kaye as

'cut"^ion^ig^iMt^i(9:aJUons!enT4ie*bexciude
'gior.s, and

a

management of Vincent C. Looper,

ters of theory and policy. It confer intolerable freedom on
would fae a miracle, no doubt, if trade unions. At the same time,

..

changes
-resulting * from

measure

rates

'wage

'

.

Labor
Review,
November
"Urban wage rates," it will

659.

p.

recalled,

nerhans

wholp*

.

the economy as

for

good

are

cannot argue that the monetary

between General Motors and the
United Electrical Workers in
April

,

groups

led by public-spirited and responsible persons."

powerful trade
UP and by November were 5 cents uni(ms is extremely difficult. One
VIII

Dempsey-'

-

satisfectoril? Sna^ExXnTes^ha6 opened

be

when

only

economy

bi6ber than in July.

be

bManct^n'

time hourly earnings in manufacturing, which had been unchanged
since April, 1952, began to move

1 do not know the motives of
General Motors in making its settlement. Perhaps the management
'

ST. LOUIS, Mo

such as ours, which does

operated

large ibcrease in sPite of sbort-

reopening of the wage issue
was permitted after 120 days, The
pattern was set by the settlement

cause

economy

■

+«.

York

Stock

no.ftuiw.liin

Exchange,
f>,a

on

itself in Jr. to partnership in the firm.

The Commercial and Financial Chronicle..;

32

Thursday, January 14, 1954

(184)

Continued

ing tax reductions with respect to
working
children, medical
ex-

schools of workers who responded

from first page

to recent abnormal labor demand,

The Business Outlook

bearish

its

erroneous

to

®eems

be

danger of war or

a

shortage), speculation will
drive
prices
up.
Similarly,
a
unanimity of opinion that prices
are
bound
to
sag
will
affeet
commitments,
short
sales,
crop

other commodpositions
such
prices will go down. Busisentiment may help to bring

Inventories, and
ity
or
security
that
xiess

except those with inflated egos?),
learns from failures even more
than from his successes whether
his mistakes are due to errors in
observation and measurement, or
due to incomplete analysis, to
wrong economic theory, or to im^

plicit assumptions which he failed
to take into account, or to plain
stupidity.

pated, provided, of course, no one
does anything to prevent or delay
©r soften what he thinks he
sees
in the

offing.

'

detour

ment-

Any such projection is necessar-,
ily beset with if's, and s and but s.
It
is
unquestionably hazardous.

There is scarcely a

holding
that
tnat

^ Ch°rUS °£ **"

mean

disas-

ter. Toward the end of World War

H farseeing

executives in business
government realized that unless everyone put his shoulder to
the wheel of an intelligent pro-

and

there might be millions of
unemployed. Over fifteen million
gram

people were going to try to find
new peacetime jobs within a single year. Never in our previous
©conomic history had more than
five and

able to do
What

half million

a

ever

been

so.

American

did constitutes

one

then

business

of the proudest

economists

recently brought together by the
National
Industrial
Conference
Board arrived at the consensus

that the level of gross national
product in 1954 would be from 5
to 7% lower.
From a level of
roughly $365 billion in 1953 our
gross
national product, it was
thought, might go down to $348

$340 billion in 1954. The
accompanying decline in the Federal Reserve Board index of industrial production would bring
it down to the
195-205 range
(1937-39 = 100). In short, business
might readjust to the phenomenally prosperous levels of 1952.
or even

Some of the reasons will be exarmned later. But let me stress
bere that American business, labor, consumers, and government
ablest business
executives in have the power to counteract such
©very community, large and small. a decline. What happens in 1954
Bach local group was determined depends on what all of us do, not
to put the boys back to work as on what some of us fear
speedily as possible. Business
To be sure, there will be mbadgered both political parties to creased competition.
Consumers
pass helpful legislation—the G. I.
will have a wider range of choice.
Bill of Rights, the Surplus PropProfit margins may be smaller,
©rty Disposal Act, the Employ- inventories harder to keep down,
ment Act of 1946, Repeal of the productive
capacity ample and
Excess Profits Tax, etc. The list Prices lower. In short, business in
is much too long to relate.
many lines may find itself operAs a result, much to the dis- ?uting
more largely under

chapters in our history. Under the
leadership, especially of the Cominittee for Economic Development,
it mobilized the intelligence of the

Russia,
aSe~old peacetime conditions
no significant unemployment ocof vlg°rous competition,
curred.
With joyful amazement
But surely getting further away
the economists witnessed a post- from the abnormalities, easy sellwar
transition as smooth as the ing, lush profits and scarcities of
eomfiture

of

the
tne

cars.

a

hectic war period is not an ob-

that

of

that

is

when

the

making

1199354207846502

based

observtion

here and abroad, know-how, savings, and natural resources to
make possible a gross national
output of goods and services of
mists
as
crystal-ball gazers, — $370 billion in 1954 and over $425
would be ridiculously low, in fact billion six years hence.
We can
dirt cheap.
make mince meat of all bearish

The

ing
Ill,

careful

observation

of

economic

f°recasts-

(

The question still remains, will
we? In terms of the likely and the
probable, rather than the desirable and the possible, what
"guesstimates" seem to square
most with a professor's look at the

history and make tentative pro- business outlook?
Sections subject to estimated marFrankly and much too briefly
gins of error under stated assump- put, I am afraid that at some time
Hons. Many world-renowned sci- during 1954 more than 4,000,000
©ntists

other

in

fields

have

ex-

persons

under

65

years

of

age,

perienced hundreds of failures in
their experiments. So the economist, though he lose face when his

will be unemployed—despite fur-

projections

and further return to

ready, willing and able to work,

will

be

World

no

tension

the

between

countries and the

areas

over

$40

armed
men,

remain

to

billion.

forces

This

of

new
we

fronts

A professor

backward

means

tQ

over

military action
has

been

"l*

un-

projections

what

the

my

business

re-

view to do

urged

conditions

Specifically, that means
as decreasing FedReserve margins, supporting

the government bond market and
reserve

Federal

debt

,.

.

,

,

n

.

such

items

corporate tax
from
less

as

1951, six times that in the late'30s-

which

billion in the early '30s

one

nearly

$25

grew

billion

and

in

1953.

expenditures

times that for
twice even allowing for price changes.
nearly

four

more

than

1929,

have

The other

ratios;

investment

around $8 billion 20 years ago to

has

bllll0n

?n1QC-"tlme nign 01
ln iy53.

govern-

such measures

ine

shown

fMfcTstand acceletrate,d obsolescence, relocabeveral facts stand tl0n of industry nearer to marketSeveral

ing areas, suburbanization, ancL
The firsi ls the enormous infla- other forces will bolster plant
tionary shift in all magnitudes outlays. But even the lower levek
since 1932. The second is the ex- 0f $24 billion projected for 1954traordinary percentage increases is higher than any figure prior to-

1°

worse.

eral

exnaLton Co^aml ^'bl

olt exPanslon programs. To be
sure, rapid technological progress,

ni

1 kewse mushroomed fiom levels

less than the President has

make

are

thn

rayon, non-ferrous.

sucb as

hi

1929

nf

.

Government

Bearish

Another set of assumptions

will

year!

lhan

Economic Program Definitely

In

Th^sUmV^o^aufckTe write-otts,
writeoffs
.inf stlaamus
Q^ickle

going

liability

Failure to Carry Through Less
than
President
Eisenhower's

do.

economv

out

on

of

since

segmpnt«

Table t below

in

ment will

vital

'man

ended,

fond

period of

a

fluctuations

rPrtain

HI

current

is

over

how the variables hehaved

see

The

hope, in Korea.

around

1938, about 5%.
between 1948 and 1949. A fall of

tween 1937 and

in

looking at the busi-

outlook

neSs

or

H-bomb, a conof deterrent reand military
NATO countries,

that

i noo

Private Expenditures

It allows also for the continuation
of the type of

is.

expenditure

equipment

A

2,500,000
appropriate defenses against

delivery of the
tinuing build-up
taliatory power,
strengthening of

The story with respect to plant,
and

* likewise strikingly shown in TableJnon
?
if^
J929 a"J 1
niff>Q
?
efT

billion.

Cyclical Decline Seems Likely

ex-

near

.

the projected fall in investment,

billion to

TV

penditures including foreign aid,
outlays and the like
continue

inventory

reduce

,

eo

.

a

free

atomic energy

win

}}.

Thl

*
?! 5® J
^ if ^u j* P

.

P

gov-

balance will exert

on

levels of $25

over $26

behind the

Iron Cimtain such thad defense

,p

ooerattae

caDacUv

f
amount 01 tne Bnitt lib
inventorlJs may be $5.8 billion
95 en°ugn to account for half of

current

War

although there may well be
continuing, even if slightly dimin-

ishing.

*

®

nf

aPt °LS

bearish influence, despite the fact

assumption underlyprojection is of course

there

n__hrt+

that expenditures by State and local governments may rise from

basic

this

that

miraculous formula for per-

Despite the hazards, the economists will continue making proSections. They have to. They cannot experiment in a laboratory,
Instead of laboratory tests of their
hypotheses they have to substitute

i? <^^113are

70V?of

am

warehouses

?
' reducmg them
^y ^ Diiiion or some sucn amounu L

ernments

as-

sumptions unconsciously held.

ductive skills, basic human needs

prevent it, that would

uncriticized

rnlusps

government

in

given in

are

billion

of the President's program,

policy than
smatterings of

on

and

Details

year.

textiles^

$5

Table
I.
Even with
complete
adoption of the economic phases

business

sound

hunches

the

on

much firmer foundation

average a

for

on

Nearlv

atrrirMiltnrpl

nthpr

mum that the government needs
to do to offset the reduction of six

fiscal

take

a

at all is
Explicit in-

appliances,

wheat, corn, cotton and

mini-

very

textiles

aoDliances

01 auiomoDLies. ineariy $d oinion
worth of

•

the

reaucea prices

a

automobiles

national output the Federal government will buy in the coming

business, consumers, and govern-

be

porn

the end of World War II.
The Eisenhower economic prorepresents

reduced nrices

at

pushed nation wide m

television sets, and various makes

horn

revaluation constitute

derlying

manent prosperity. And the cost—
the loss of reputation by econo-

newlv

newiy

01

vigorously and constantly subjected to criticism and

volves

necessary to

of

slnce

facts

known

stacle to further advance but

measures

millions

minions

denied

How-

billion dollars in the share of the

rather a challenge to new levels
of achievement, given the gumption, ingenuity, hard work, persistence, daring, and enterprise
that are traditional in American
business. There are ample pro-

the

Pltals and otner tacmties now so household
much needed by the unprece- "ousenoia

no guesses

folly.

are being

so

all the

Their forecast had defeated itself,

would

now

gram

formed estimates based

was no cor-

BatSo^

Extensive sales

facilities

conservative

more

greater

mulation took place at the rate of

®

,

other

under the illusion

being

one

™^lng '®ans and assistance to

,

a forecast
dollar win
aonar will

increase.

or

the

,Cn
S?n
Is SUCH a fall in investment
"a1 security to an additional 10 likely? A shift in inventories is
™^llon' ]oans and assistan"ce S already underway. In 1953 accu-

dreds of thousands of schools, hos-

that is,
xnat is

great the follv of forecasting
great ine ioiiy oiioretdsurig,

Frequently economists are given
a good-natured ribbing about this,
However, if by forecasting a depression, economists could on
every occasion feel certain
that
ment

the
tne

of
01

value
vaiue

stable

remain

Communist

hydramatic shift in postwar

implies

cash,

the 1954 figure

At that

into hl2h Sear; and Federal assist- "7+
? 5
vir
fu
t,
buildin(? nf thp hl]n_
at the rate of a billion a month.

type of guess about the fu—
doing notning
aoing nothing

0f $43 billion would exceed
previous peak in 1948.

decades.

servation and reclamation projects

single business

transartinn whirh is not based on
transaction wnicn i<? not oasea on

Fven
iwen

prices. A fall of 20% or roughly
$12 billion in 1954 would be the
mildest percentage-wise in recent

w^ks. highwa^onstracU^con- «3'8 bi»ion: There

manlhas to'^'every day'

business

some

A forum of business

bridge-out sign

or

unprofitable amuse-

of not

source

tore
ture.

Rarely Happen
a

two

11

wen Advertised Recessions

But

or

year

a

prove

they will become merely a

hence

ever

ahead does not have to

that

so

all

Men Make Recessions. They
Are Not Foreordained
if a recession occurs in 1954, let
no
one
chalk it up to a cosmic

what the business man antici-

©n

will

nature

a

lot and sold at premium

car

price supports; extending unemployment insurance to 6Y2 million

say, I fervently hope
projection and others of

that this

driven around the block to

were

used

penses,
and working mothers;
more flexible allowances for depreciation, research and retained
earnings; maintaining agricultural

Needless to

raising

limit; liberaliz-

been

major component ot

—

new

construction—

booming since the out-

break of the Korean War due todefense and atomic energy outlays,

Particularly striking is the great The largest item, nonfarm residenvariability and recent lofty levels tion construction, began to show
of gross private domestic invest-

declines in 1953. And well it might

fell roughly 90% between 1929 and 1932, over 40%
between 1937 and 1938, 20% be-

for the rate of housing starts was.

ment.

It

tween

time

1948

when

much

in

and

1949.

That

automobiles

that

demand
TABLE

at

were

new

of

a

so

cars

larger than the ratefamily formation. The re-

nearly 50%
new

duced birth rates

of the mid-'30s-

will continue to keep

riages

and

housing

down

mar¬

demand

iot

n

Economic Growth, Investment and Corporate Profits After Taxes
In Billions of

Dollars, 1929-1954 *

Total

Personal

Gross

New

Gross

Consumption

Private

Plant

Ta*

of Farm

Total

Expendi-

Domestic

and

Inven-

After

Liabil-

Proprie-

Consumer

Goods and

tures

Investment

Services

National

Year—

Product

Corporate
Profits

Corporate

Government.

Income

Purchases o*

Equipmt.

tories

Taxes

ity

tors

Credit

$103.8

$78.8

$15.8

$6.4

$1.6

$8.4

$1.4

$5.7

$6.2

90.9

70.8

10.2

4.9

—0.3

2.5

0.8

3.9

5 6

92

75.9

61.2

5.4

3.2

—1.4

—1.3

0.5

2.9

4.6

9.2

58.3

49.2

0.9

1.8

—2.-3

—3.4

0.4

17

3 5

-81

55.8

46.3

1.3

1.8

—1.6

—0.4

0.5

2.3

3*4

8*0

64.9

51.9

2.8

2.5

—1.1

1.0

0.7

2.3

3.8

56.2

6.1

3.4

0.9

2.3

1.0

4.9

4 8

82.5

62.5

8.3

4.5

1.0

4.3

1.4

3.9

5 9
6.5

72.2

—

r

i

$8.5
I
1

I

9.8

"*

'

9 9>

i

11*7
ll'fc

(and who

cares

homes and

TABLE I

^.

Fiscal
1953-54

Military expenditures
Aid

abroad, atomic

$41.6

energy and other defense

revenues

II_I

8.5
20.5

$66.0

$28.3

23.7

Corporation income taxes

10:3

$32.8

Individual income taxes

Other

$37.0 !

$72.1

Total assumed outgo

Excises, estate and gift taxes

1954-55

20.2

NondeCense

11.4

5.4

2.3

4.7

1.5

5.6

64.5

6.3

4.0

—1.0

2.3

1.0

4.4

6 1

12R

91.3

67.5

9.9

4.6

0.4

5.0

1.5

4.5

7.0

13.1

j

101.4

72.1

13.9

6.1

2.3

6.4

2.9

4.9

8 2

13 9>

<

126.4

82.3

18.3

-7.7

3.9

9.4

7.8

6.9

8 8

247

'

161.6

91.2

10.9

4.9

2.1

9.4

11.7

10.5

5 7

597

194.3

102.2

5.7

4.1

—0.9

10.6

14.4

11.8

4 6

886:

213.7

111.-3

7.7

5.7

—0.8

10.8

13.5

11.8

51)

96^

215.2

123.1

10.7

7.5

—0.7

8.5

11.2

12.5

5 6

211.1

146.9

28.7

12.3

6.1

13.9

9.6

14.8

87

309

233.3

165.6

30.2

17.1

—0.8

18.5

11.9

15.6

11.9

286

259.0

177.9

42.7

19.9

5.0

20.7

13.0

17.7

14 4

36*&

258.2

180.6

33.5

18.7

—2.5

16.3

10.8

12.8

16.8

43.0

284.2

194.3

50.3

22.0

5.5

21.2

18.4

13.3

20.1

419-

329.2

208.0

58.5

24.9

10.3

18.7

24.2

15.6

20.6

626.

348.0

218.1

52.5

25.4

3.7

18.6

20.6

14.8

25.8

775

tl953

367.0

230.2

55.2

26.5

3.8

20.6

24.8

12.5

28.2

344.0

222.0

43.0

24.0

—2.0

1939.

1942——

Federal Budget Items in Billions of Dollars
Item—

67.1

1944—j—

week

90.2

1943

per

84.7

i-1954

go sour

ther reduction in hours

19 4

11.3

10^9

0.9

1.1

$68.7

$59.7

$3.4

$6.3

j

•Source

Federal deficit




Committee

of

data

on

the Eeonomic

other

than

1

estimates:

Historical

and

Descriptive

Report, December 1953, Washington, D. C.

jEstimated.

to

83 3:

79.0

•

Supplement

82 &

Economic

Indicators,

Joint

Volume 179

three

Number 5290... The Commercial and Financial Chronicle

four years.

or

fornia recent

or

of building

decline of 10%

a

Los

In

more.

Even in Cali¬

surveys

intentions show

Angeles County

decrease of 13,000 units or 15%

a

is indicated from the 83,000 units
in
1953.
An
overall
decline
of

10% in 1954 might prove to be

a

serious

underestimate,
particu¬
larly in view of the well-known
current

lethargy

in

real

estate

marketing activity.
There

the

kept, and fear of doss 6f "job
induce greater effort) "each

are

may

would

for

discussion

largest segment in

gross

na¬

tional

product

in

the

to

that

civilian

ized

lay-offs was well demon¬
in Washington, D. C. in

strated
1953.

of

Retail

sales

declined

back—a

40.5

in

1953

home

Such

than

more

decline

a

average of
will
reduce

39

to

pay

in

labor

3%.

income

currently

running at some $200
annually would in itself
represent a decline of $6 billion.
billion

Add

that

to

the

decline

in

in¬

suffered
by the 2,500,000
unemployed at the beginning of
1954 (despite unemployment com¬
pensation), and the reduction in
of

the

dropped

out

of

if

even

tered

1,500,000
the

old

who

labor

large fraction

a

on

force

were

pension

age

en¬

rolls.

Consider
able

furthermore the prob¬
drop in the incomes of farm¬

and in the profits of unincor¬

ers

porated

And

nally

for

entrepreneurs.
make allowances

fit
dis¬

placement of workers due to in¬
in

creases

more

a

$8

productivity of 2%

billion

small.

3V-z%

or

in

in

from

Table
1929

only

consumer*

II

to

roughly 40%, and

that

the

1933

was

in '37-38, 4%.

start

consumers

of

well prove far too

may

Note

decline

decline

doing

things
house,
farm, and garden; if they but re¬
for themselves

fuse to

further

increase

burden

ord

which

of

the

billion

nearly
billion or
or

10%

in

1953

and

20%

in

1952;

if they hang

their

and

cars

$4.8

rec¬

credit

consumer

$2.4

rose

the

around

to

for

postpone

on

a

while the purchase of other post-

ponable

expenditures—these

and

other factors may

readily bring a
decline in consumer expenditures
of far more than $8 billion.
Only a minority seem likely to
experience
Some

increases

unions

increases

in

income.

in

negotiate mild

may

Those

pay.

in

the

middle and upper income brackets
will enjoy a reduction in taxes,
which

in

large

will go into
More than half

part

increased savings.
of the income recipients

Catastrophic Depression

There

incomes.

Unless

raised

or

excise

taxes

offset

in

their

exemptions

are

substantial cuts made in

(and neither is

contemplated
income

on

now)

recipient

the

even

average

will receive

no

worthy of note to the cuts

take-home

pay already under
He is therefore almost com¬

way.

pelled to reduce his consumption
expenditures.
He
cannot
take
much out of savings since on balance

the 60% in the lower income

brackets

nothing and

save

less than

$200

on

possess

the average

in

liquid assets.
1954

may

the general

billion

in

neighborhood of $344
1953

dollars

(govern¬

definitely—

are

number

a

Since their work

40.5

eraged

product
$2.90.
in

in

hours

per man

Assume

1954.

in

week

av¬

length,

the

hour was roughly
change in prices

no

Then with

a

2% increase

productivity (the very mini¬
since, curly., the best workers

mum,




the future is

as

makes

extensive

bank

unlikely. Insured mort¬
with wise amortization pro¬

gages

visions

the

remove

wholesale

danger

foreclosure

of

hemes

on

and farms.

Unemployment insur¬
social security
payments,
veteran's
assistance,
and
farm
price supports are structurallybuilt-in flexibility measures pro¬
ance,

viding increased purchasing
as
employment and prices

power

drop.

corporate and individual
tax

come

structure-

lowers the tax bite

profits

fall,

decline

in

The

thus

in¬

drastically
income and

as

cushioning

the

take-home

net

Securities

pay.

and

Exchange
Commission, the Federal Reserve
Board, and the Department of
Agriculture have powers to reg¬
ularize

wild

cushion

fluctuations

distress

and

liquidation

and

addition there

of other long run

are

number

a

sustaining forces

undergirding the American
There

omy.

econ¬

first of all,

are

our

vital institutions of freedom offer¬

citizen opportunity and

every

incentive

make

to

the

maximum

of his constructive talents and

New ideas,

energies.
ods,

new

processes,

industries

new

whatever

labor

testimony

a

dyna¬
over¬

slack

mittee in the

advisor,

in

resources

occasionally

for

utilization.

the

before

National

rary

products,

soon

available

become

new

that

capital

or

Tempo¬

Economic

Com¬

capacity of economic

continuously

I

meth¬

new

create

mism and growth
take

empha¬

sized in the late '30s the ebullient

phrase

to

try

Unlimited"

"America

and

to

the remarkable
dynamic democ¬

describe

resiliency of
racy

our

uniquely

revolutionary

The postwar rapid pace
technological advance includ¬

economy.

of

industrial

ing

atomic energy,

applications
of
electronics, plastics,

petrochemicals,
others
make

too
even

antibiotics

numerous

to

and

mention

that phrase sound

like

understatement.

Moreover all of
a

us

good deal

about managing

our

affairs.

has

more

have learned

made

Business management

tivities of investment trust opera¬
tors.
And a good deal less ignor¬

prevails in the techniques of
managing our governmental af¬
fairs, national, State, and local.
ance

The

the

of

government

will

World

best

administrative

how of industry

Peoples Gas Light & Coke Co.

exist

II

S.

itself

proved

the farm, pro¬

on

Political

Economy"

"The

on

Population

Upsurge
and
the
Economy 1945-80" has
emphasized the importance of the
quantitative and qualitative
growth of our population in the
American

"Among

Says he:
fundamental

the

fac¬

tors which

jointly account for our
gains in productivity
and unprecedented gains in levels
of consumption and living, uni¬
enormous

versal education looms large. Our
resource is our peo¬

most valuable

Probably

ple.

most 'produc¬

our

tive' investment is in their educa¬
tion

and

development.

have

we

skimped

Recently,
this invest¬

on

While

our

standards of ed¬

ucation, like
keep rising,

our
our

other standards,
level of educa¬

ment.

tion

has

fallen

because of the

We

in

quality,

first

and second be¬

war

the postwar upsurge in
inadequately prepared for.

of

cause

births

face

the

increasing
schools

task

of enormously
investment
in

our

and

in

teacher-training
increasing the re¬

further

and

wards of teachers to

attract

into, and hold

in, this

more

more

pro¬

fession."

know-

has been poured

to

beyond

1975,

or

sound

next

year

the professor
optimistic.

to

tends
The

over

gives

Gas Pipeline, whose common stock is
Peoples Gas, operates a line from the Texas
Gulf Coast to a
point near Chicago. The entire transmission sys¬
tem has a daily
capacity of about 900 million cf. Another subsidi¬
ary, the Natural Gas Storage Co., is developing a
huge under¬
ground storage project for the system near
Herscher, 111.
Peoples Gas is encountering the same rate difficulties which

70.6%

owned

article

his

it

calls

been affected by higher field costs in
Oklahoma, by higher rates
requested by Colorado Interstate Gas, and
by proration orders of
the Texas Railroad Commission which have
reduced the volume of
gas which can be produced from the company's own wells and
thus

in

the

"Journal

ductivity

Peoples Gas has now itself requested approval by the Illinois
Commerce Commission of a $5 million rate
increase, in order to
offset the higher rates
sought from the FPC by the two pipeline
subsidiaries. The $5 million is designed to offset the
$4 million
increased cost of gas from Natural Gas

Pipeline, and

took

during

place

decades

the

of

S.

Paley,

commission

Columbia

headed a
might

System,

to

achieved

two

Chairman

the

what

assess

intelligent
farmers,
by
1975.
startling but

joint

by

action of business, labor,
the

and
Their

less

government

results

seem

the

than

so

facts

of

matters

which

a

Long-term

Common

hard

goods
will

cars

shall

of

table.

81,

million.

32

out

than

more

electricity

market will

as

3V2

:
;

common

is

of

one

'

stock record is shown in the accompany-

has followed
the

J

100%

a

conservative

highest-priced of the

dividend

policy,

stocks, with

gas

148V2-127), and based

on

136V2

(1953-54

the $6 dividend the yield

With earnings of $9.44 for the 12 months ended
Sept.

Revenues
Year—

no-

ranged

is 4.4%.

30, the price-

Common Stock Record-

—(Millions)

Earned

Dividends

Approximate Range

*$130

*$10.00

$6.00

148V2-

127

103

8.26

6.00

145

-

124

73

9.16

6.00

130

-

111

1950

67

10.02

6.00

139

-

107

1949

62

-10.23

6.00

137

-

96 y2

1948

53

9.32

5.63

99

-

86

46 '

10.35

5.38

101 y2-

81

44 • •

10.06

5.00

115

-

86

44

5.47

4.00

97

-

69

43

4.67

4.00

70

-

55

-

—

1951

We

times

today.

need 43%

3

1952.

_____

1947

_____

194-3

*

turn

j.

3

13,000,000
*123,000,000

Equity

J

earnings ratio is 14.4%.

capital equipment and spend
more
per
capita on public
works. Electric power plants v/ill
much

62%

12,000,000

It has recently been selling around

reasons.
was

machinery

more

i

present indication of any stock split-up, apparently for technical

and

50%

Dec.

The company

the stock

Passenger

50%

of

Peoples Gas

consumer

65

$240,000,000

40%

and

exceed

need

Stock

1952

capita.

per

As

1953

appliances

more

\

$388,000,000
"

ex¬

buying

the

Debt

Subsidiary Preferred
Minority Interest

work week of 30 to 34 hours will

implement

by the Illinois Commerce Com¬

System capitalization is approximately as follows:

Rates of pay for

million.

79

determined

were

mission in its rate decision of last May."

1953

compared with 1938. Jobs will
ceed

an

increase in rate of return, fair value of its
property, or other basic

in pro¬

last

the

of

Board

Broadcasting
be

$1 million

"It is the moving up of effective dates in a
series of rate pro- '
ceedings at the Federal regulatory level, each having the effect of
passing on inescapable mounting costs, that has caused Peoples
Gas to change its time schedule.
Insofar as Peoples Gas is con¬
cerned, its filing for increased rates is a move made
necessary to *

of

further advanced.

be

can

William

Mr.

a

increase by Texas-Illinois Natural Gas
Pipeline (all effective
under bond in January).
Peoples Gas has asked that its new rates
be permitted to go into effect Feb. 3.
Chairman James F. Oates
of Peoples Gas states:

real income which

and

•

require additional purchases of high-cost gas.
Also, the additional
required by Texas-Illinois Natural Gas Pipeline for its expan¬
sion program (now about
completed) will cost about 50% morethan if purchased under the old contracts.

for the

Advancement of Science")

*

gas

title

the

Association

American

the

by

have involved other large
integrated natural gas systems. Begin¬
ning last April Natural Gas Pipeline began
collecting under bond
a rate increase
of $3.5 million, of which
$1.5 million was appli¬
cable to its parent, Peoples Gas.
This increase was finally ap¬
proved by the FPC about Dec. 15. Natural Gas
Pipeline Co. has

"Futures Unlimited."
If adequate
investment, both public and pri¬
vate, is made in our human re¬
sources, the phenomenal
Ameri¬
can
explosion
(as the scientist
Turck

18 customer companies in six middle west¬

population of

some -3,300,000.
Natural Gas Pipe¬
line produces about half of its
gas requirements from reserves in
the Panhandle field.

economist, Philip Wernette, writ¬
ing in the "Michigan Business Re¬
view"

serve

a

offset increasing costs for gas it
purchases, and does not involve

Looking
1960

states with

Texas-Illinois Natural

mine, Dr. Joseph

Davis, writing in "The Journal

of

These companies
ern

has

'

.

Peoples Gas, with annual revenues of $129
million, is one of
the largest
integrated gas systems. It serves mixed gas (900
btu.)
to the
City of Chicago. It controls, through 100% common stock
ownership, Natural Gas Pipeline Co. of America and
Chicago Dis¬
trict Pipeline
Co., which operate a dual natural gas transmission
system extending from the Texas-Oklahoma fields
to Chicago.

human

be

War

-

By OWEN ELY

concerned—there

intelligence

they

Utility Securities

far

so

in

commodity mar¬
kets.
Minimum
wage
laws and
strongly organized unions limit
spiralling wage-price cuts. Liquid
savings are at an all-time high.

ing

all

rapid and continuing im¬
provement in the health, skills,

the security and

use

of

pro¬

has been

healthy

frankly 'spectacular
ment $79 B.
-p investment $43 B. progress. Business policies today
4- consumption outlays $222 B.). increasingly1
look
beyond
the
How many workers working 39 confines of the
plant' and care¬
hours a week, 50 weeks a year at fully
weigh the impact of business
a
rate 2% more efficient produc¬
buying and selling or hiring and
tivity-wise would be required? In firing not only upon their industry
1953 an employed civilian labor
but upon
labor, consumers, and
force of about 62,000,000 on the the nation.
The buying and sell¬
average, produced $367 billion of ing of Wall Street likewise bene¬
gross
national output, or $5,920 fits from the professionalized ac¬
each.

bullish

most

following terms.

of

under the economy that did

surance

trite

well prove to be in

fessor

a

trial front.

failures

The total gross national product

in

is

me,

Public

get out of hand.

Occur

not exist in 1929: Bank deposit in¬

In

cut

to

seems

props

experience a net increase, the
jump in payroll deductions to 2%
tax

unemployed
million.

No.

of

the

AVz

cluding the famous British econ¬
omist, Colin Clark? The answer,

will not

offsetting

readily
million per¬

Will there be a spiraling de¬
pression of the 19^2 variety, sucn
as
is being predicted by various
prophets of gloom and doom, in¬

In

de¬

allowed

Finally—and this makes

A colleague of

The

projected

spendings

If

or

year.

The

could

a

Cannot

it

be

fessional, engineering, and indus¬

A

come

incomes

will

and by whom
judged, used, cast
aside, improved, expanded, and
preserved. The magnificent young
generation that fought and won

cut

are

while

an

today

stuff for whom both business and

of

roughly

pression

respon¬

No

government.

of workers

forces

or

figure

in

be demobil¬

crop

that

posts':>of managerial

sibility
to

(185)' 38

equally versatile

bank deposits rose. The elimina¬
of overtime pay and reduc¬

take

force.. Add

may

armed

900,000
The

becomes

labor

new

total

tion

tion in hours from

To

into'

na¬

would

who

the

as

equal

effect

the

those

sons:

The

man

require
59,600,000 employed civilian
labor force. In November, 1953, a
total of 63,353,000 were reported

tional output—personal consump¬

expenditures.

per

about

tion

fear of

$2.96

produce $344 billion of gross

and

remains

contribute

hour to gross national product.

'n-f

■

-L—

1945

as

1944

"

The

more

cop¬

*Estin)ate0.

53% more lead, 39% more
zinc, and 100,000 • new railroad
per,

cars

a

lion

new

houses

and

apartments

will be needed.
These
These

pipe

ST.

achievable

dreams.

goals

and

targets according to the appraisal
of

of

some

best

the

American business
at

the

sary

as

what is
ble.

1954

it may
near

The

brains

today.

outlook

business
of

terms

is

be to be

perspective

15

years

sure

should

back and
The outlook
distinctly bullish.

forward.

Mo.

is

—

Clarence

with

now

With MacNaughtonGreenawalt

Chronicle)

E.

Waddell

Inc., 7 North Brentwood

(Special

to

The

Financial

Chronicle)

GRAND RAPIDS,

Mich.—Henry
S. Greenawalt, Jr. has joined the
staff of MacNaughton-Greenawalfc
& Co., Michigan Trust Building.

A. G. Edwards Adds
(Special

ST.

of
be

Financial

Boulevard, Clayton, Mo. He was
formerly with A. A. Tibbe & Co.

in

stum¬

The

LOUIS,

& Reed,

neces¬

one

widened at least 20 years

in

to

Hasselbach

To lobk

only

myopic,

at hand lest

then becomes

(Special

,

not

are

are

With Waddell & Reed

From 1.3 to 1.6 mil¬

year.

Van

staff

to

Financial
—

Brunt has been
of

A.

409 North
of

The

LOUIS, Mo.

the

G.

Rutgers G.

added to the

Edwards

&

Sons,
Eighth Street, members

New

York

Stock Exchanges.

With Stix & Co.

Chronicle)

and

Midwest

(Special

ST.

to

The

LOUIS,1

Waldemer is
509 Olive

Midwest

Financial

Mo,

now

—

Chronicle)

Alfred

with Stix &

CL-

Co.,

Street, members of the
Stock

Exchange.

34

The Commercial and Financial Chronicle

(186)

Hallowell Director

Bullock

Cautious;

v

Henry R. Hallowell, investment
banker, and member of the firm
of Hallowell,
Sulzberger & Co.,
Philadelphia, Pa., was\ elected a
director today of Fischer & Porter
Company, Hatboro, Pa., manufac¬
turers of industrial instruments.

Hallowell,
Sulzberger & Co., has acted as fi¬

For the past two years

nancial

advisor

Fischer

to

&

Porter Company.

Mutual Funds
DOLLAR

est

the

of

of

1953

sales

Shares, Inc., theslargmutual

funds

under

Calvin Bullock management, were
the highest for any of the 21 years
in

A MUTUAL INVESTMENT FUND

VOLUME

the

company's

history except
for, 1937, according to Robert E.
Vice-President

Clark,

in

13.3%;

increasing percentage of

an¬

tendency toward conserva¬
tism in periods of market ^uncer¬

F010ER AND

is

tainty

SECURITIES &
RESEARCH CORPORATION

NATIONAL

Established 1930

120 Broadway, New York 5, New York

reflected in these ^ales

figures," according to Mr.-Clark.
"The ability to diversify .broadly
among more than 100,„ dividend-

paying common stocks of good
quality and the reliance on pro¬
fessional management tends to in«the

crease

demand

for

mutual

conservative

records

funds

■Bbbm
!<*■■■■■*

with

and is

-mot—

expected to be

■■■

even

more

apparent in sales figures on Divi¬
dend Shares in

WELLINGTON

1954.

*■■■■■

iriihr

Company

today

10%
increase in total net assets during
1953.
The Dec. 31 total of $66,290,228 compares with $60,248,568
a

The number of out¬
shares increased to
9,995,160 during the year and since
ago.

year

then

has

mark.

,192JBT

share

per

paid

was

income

share

per

and

Government
from

31,

9.6%

1953

bonds

of

to

net

S.

paid

was

INVESTORS
bonds

and

continued

from

stocks

pre¬

stocks

common

speculative

over

favor

to

investment-type

ferred and income

in

1953.

This conclusion is based upon

at

the

ber of

todian

two

the

and

in¬

offer

free choice of four

preferred

stock

of

which

Funds
a

changes consisted

reauction

shareholders

wealth

investment dealer

four

common

each representative
particular segment of the

a

The

year

market.

in

of

"It

bond

is

clear

that

funds

the

period

relatively mild

a

and

exceeds

during the

797

This compares with $14,699,earlier. Assets per

12 months

share

to

amounted

$23.00,

com¬

Nov. 30, 1952.

on

offices

with

the

company's

Commonwealth Investment

Eaton & Howard

Eaton & Howard Balanced Fund

the $100 million mark and

the

year-end

$101,963,256
486,854

at

the

The

year.

had

beginning

year-end

of

assets

with

compared

owned

cash,

S.

U.

of

the

investment

short-term notes,

prospectuses

bonds,

describing these mutual investment

ing, San Francisco 4, California.

14.7%

in

and

17.3% corporate

preferred

stocks,

and 60.2% common stocks.
Eaton

be obtained from
Build¬

7.8%

was:

Governments

Ask for

assets

&

at

Howard

the

$20,861,370

Fund

with

$17,-

015,223 at the beginning of the
The Fund was 94% invested
stocks

common

at

the

year-

end.
&

Howard

mutual

had combined assets of

000,000

on

Dec.

31,

to

for

for

income

10%

only

a

high of 27.9 million.

new

than

of Dec.

$220,000,000

shares

Fund

by A. J. Wilkins, Vice-President.

pref¬

Gross sales for the year, he said,
amounted to $53,740,800 and were

the

of

invested

31, 1953 in the 10 Key¬

reported today

were

sales

of

$50,987,700

in

the

1952,

stocks.

best previous year.

shareholders
than

1953

to

Keystone

amounted

to

more

$10,000,000 from net invest¬

ment

income

and

than

more

21

years

of

made

these

sources

and

of

than

more

$54,000,000

re¬

DESPITE

generally declining se¬
curity markets, record high sales
of $47.li million during 1953 were

funds

over

1953,

$122,-

a

new

high in the history of the Funds.

Wain

by

in

Hare,

represents

National
release

a

Securities

today

by

Vice-President.
sales

a

sales

or

This

increment

$8.5

E.
of

million, or 22% better than
the previous record year of 1952.

only 3.48%

of total

liquidations

only

ran

on

17.55%

of

well below the rate of the

industry

whole.
1953, the

as a

Fund

added

shareholders at the rate of aproxi-

mately 1,800
total

at

with

Keystone
payments from

to

Monthly

average

time

spectively.

reported

the

$8,-

operation,

total

two

assets.

In its

000,000 from realized gains.
has

amounted

During

Payments in

the

the

to

the

at

close

the

in

1952.

Fund

shareholder.

per

of

of

the year amounted

of

$2,400

number

all-

an

compared

as

investment

end

to

year-end

96,000

Average
at

month to bring the

a

high of 117,000

The

shares*

of.,'Wellington
Fund outstanding in -the hands of
the

public

reached

597

De£/

on

31,

all-timCvjiigh

an

064,296 for

increase

an

shares

of

the

over

1953

of 14,2,269,-

11,794,699

Mr. Wilkins 'attributed
record

factors.

"First,"

definite

a

part

of

he.

*

several

said,

trend-last

the

from

the 1953

volume! to

sales

"there
year

general

speculative

towards

on

public
activity

conservative

more

investments.

With this trend," he

pointed

"we found

out,

more

se¬

curity dealers
Fund

as

an

selling Wellington
integral part of their

business than

before.

ever

In ad¬

dition," he continued, "the insti¬
tutional

;

mutual

broadened

as

a

result

we

noted

tirement funds."

NEW YORK

COMPARISON

Manhattan Bond Fund, Inc.

GENTLEMEN: At
a

no

obligation please send

prospectus on Canadian l'

und.

AVAILABLE

FROM

Name.

YOUR

ON

LOCAL

THESE

MUTUAL

INVESTMENT

FUNDS

DEALER.

OR

Cleveland

W.

Purcell,'

.

Mutual,
Inc.,
Investors
Fund, Inc., and Investors

Stock;

Selec->

ti-ve Fund, Inc.—were $576,768,102, [

with

compared
Dec.

31,

$494,904,147

of

the

total

net

Diversified
the
tors

Services,

showing
an
in-{
of $81,863,955 or 16.54%.
>

crease

number, of

shares

out-:

standing for the three funds was
40,553,811 as of Nov. 30. rindicat-l

ing an increase of 6.978.500 or:
20.78%, over last year's closing:
figure of 33,575,311.
During

this

27,300

shareholders,

new

total

a

the first 11 months ofthe three funds added

year,

of

187,600

income

ment

totaled

Syndicate

of

of

Inves¬

America,

Inc.,

for

the

$23,031,008

Address.

Los Angeles

Hugh W. long and Company

San Francisco

City

the

11-"

month period compared

with $17,-;
991,877, during the like period in1952.
Capital gain distributionsamounted

to
$6,176,673
$6,835,863 in 1952.

Investors Syndicate of

versus

;

Inc., wholly-owned I. D. S. sub-,
sidiary which issues face-amount
investment

certificates,

had

as




at

Parker, Elizabeth

3,

New Jersey

increase
end

over

figures

the

a

marked

of

complete

1952,

it

year-

was

re-

o£>

Nov.

30, total net assets of $267,-;
106,751, an increase of more than:

$41,000,000

entire

year-

accounts

out-,

the

over

1952.

The

an

of

number

standing

Nov. 30

on

increase

of

outstanding

27,539
of

as

237,827,;

was

last,

over

certificates,

Face-amount

year.

the

date

same

totaled $1,248,967,000,

in maturity,'
value, an 11-month increase of
$171,133,000 over the full yearj
1952. Sales of certificates for the*
11

months
an

of
1953) totaled,
increase of $22,-

the

same

inj

period

1952.

RECOGNIZING THAT millions

potential investors cannot
reached

of!
be

-

customary
fi-;
advertis-:

through

nancial information and

ing

channels

educational

—

a

device

new,

has

colorful,!
been

veloped to attract sidewalk
pects like shoppers,
workers

and

to

and

■T//>

de-!

pros--

theatre-goersL"

from

their

factory jobs—even the

office,
cop

fjeorye

PUTNAM

FUND
«■/' -fyjo-itan
Putnam Fund Distributors. Inc.
50 State

Westminster

r

America,,

during the 11-month period end¬
ing Nov. 30, 1953, shows

Incorporated

-

funds,-

three

in

Chicago
"*K

30.-

Dividends from invest-1

1952.

over

making:
Nov.

of

as

17.03% increase

man¬

Inc., and

subsidiary,

company's

on:

1952,

.

aged and distributed by Investors
PROSPECTUSES

Robert

more

assets of three mutual funds
me

by

-

V

■1

i

1'

Vice-

a

fund

purchases of Wellington Fund by
fiduciaries,
institutions and
re¬

Diversified Investment Fund

as

'

substantially!

and

fCAtVm BUfLOCK

,

market .for

shares

'

i

STREET

Albert

Chairman.
'
)' >->
As of Dec. 1, the combined total?
net assets of the funds—Investors'

$239,295,000,
916,000 over

and

Diversified Growth Stock Fund

of

Law,

I.D.S.

first

away

tl

ported

1952.

the

Diversified Common Stock Fund

became

Group

shares outstanding af/the close of

was

Fundamental Investors, Inc*

Jour¬

he

MF Cobb joined Dis¬

1946,

tributors

This represents a

The Wellington executive added
19% in preferred stocks,
that the expansion inhales volume
and
25%
in
common
stocks.
was accompanied by an unusually
Again, only 9% is invested in low
rate in redemption of shares.
stocks selected primarily for capi¬
For
the
year,
redemptions

common

Street

1940,

President.

-

largest in the Fund's 25-year
They represented an in¬
crease of $2,753,100 over the
gross

history.

in bonds,

appreciation.
These
figures
generally confirm the 1953 sales
pattern, with the latter indicating
a slightly increased
preference for
bonds
as
against preferred and

Mr.

a New
York advertising agency. In

the

break-down

1940,

Vice-President

Total

RECORD 1953 sales of Wellington

1953

stocks

Wall

In

Frank-Guenther

-

thus

of

income-type

similar

Series

Eaton

stock

totaled

year-end

year.

in

common

$97,000,000

Stock

compared

and

stone Funds combined shows 56%

$94,-

balance between different types of

securities

high of 76.-3
30%, while

of

gain

primarily suitable for capi¬

more
as

record

a

a

outstanding shares increased 35%

when investing in equities.
A

to

thousand,

tal

Over $100,000,000
passed

The number of shareowners in¬

22%.

than

nal."-

to

editorial writer

an

.

remaining

rather

1936

was

"The

for

orderly

the

growth

rela¬

York, a
joined
after

$14,876,997 on Nov. 30,
the company's fiscal year-

end.

in

Keystone
investors
indicated a clear-cut 3-to-l

which

in

authorized

1,000

Consistent

at

tal

public
New

totaled

funds

Preferred

stockholder

a

in

he

•/From
Cobb

Total net assets of Bullock Fund

creased

funds

as¬

Duff-Kelly

Publications Director.

character."

1953, pre¬
ferred stock funds for approxi¬
mately 20%, and common stock
for

City.

an

leaving Investors Diversified
Services,
where
he
was

of

for

accounted

sales

new

accounted

investment
throughout the
country participated.

INVESTMENT FUND

of

firm

company

last

the

of

corporate

tions

York

was

Organization,,
and

a

shortages is over," the text states,
"and that we face the intensively
competitive conditions of a buyer's
market. However, there are good
reasons
for expecting the read¬
justments now in progress to be
of

New

in

Cobb

sociate

hold¬

stock

common

pared with $24.30

sales.

now

$14,883,704

were

over

58%

erence

dealer

A BALANCED

Mr.

oils and chemicals.

bond,, 1953,

funds,

10,000,000

of

number

The company's sales

3, PA.

Church

investments.

stock

common

took

Wednesday at the Unitarian

fiscal

strengthening the investment cali¬
Principal

N. Y.
place

Brooklyn,
services

Funeral

May

on

and
portfolio changes
undertaken
for
the
purpose
of

experiences of the Keystone Cus¬
vestors

fi¬

the

at

Saturday at his

on

in

garet

increased

was

assets

13.6%

U.

year-end,

12

capital gains.

Common¬

the

passed

The

40,000.

Prospectus from

2529 Russ

cents

Investment

reported

standing

or

cents

investment

securities

COMMONWEALTH

a

PHILADELPHIA

28

died

age

and

Commonwealth, during its 21st ings in the railroad, retail trade,
of operation, made four dis-- steeli textile and utility groups,
tributions to stockholders. A total and an increase in holdings of the
from

ex¬

on

residence in the Hotel Mar¬

cash

of

reserve

■in

lillr
Rfllll

riinH

FOUNDED

largest industry hold¬
public utilities-electric,

were

of

"The

PROSPECTUS

The

writer

affairs,

of 49

well-

mutual fund

a

and

nancial

policy of constructive

a

year

Plan, administered by the
Irving Trust Co., New York.,,'.

FREE INFORMATION

may

stocks,

12.1%; oils, 11.2%; and chemicalsdrugs, 5.9%.

ings

Thrift

WRITE FOR

They

stocks, 61.9%;
20.3%; bonds,
and cash and receivables,
common

preferred

nual sales is being derived from
purchases made on a monthly or
regular basis under the Dividend

investment dealers

industries

major

4.5%.

An

SERIES

funds.

follows:

individual

337

of

25

charge
of sales for the Bullock organiza¬

SECURITIES

your

in

ecutive

Cobb,

T.

as

caution, the Fund's report states.

year-

tion.

NATIONAL

or

consisted

securities
as

known

The

policy of broad investment diver¬

sification, its portfolio at the
end

William

During the past six months, the
management of Bullock Fund has
followed

of Dividend

William T. Cobb

Increases Cash

By ROBERT R. RICH

Thursday, January 14, 1934

...

Street, Boston

orri

Volume 179

the

beat

Number 5290

it

—

The Commercial and Financial Chronicle

...

revealed

was

by

Continued

from

Arthur Wiesenberger, senior part¬
ner
of the New York Stock Ex¬

change firm of
berger & Co.
The

device

Arthur

'"Wiesenberger Projectograph"
is

window

automatic,

an

—

display

combining color and motion in a
series of animated slides about
funds.

mutual

tested

by

ness

firms

impact

a

in

It

is now being
and effective¬
number of investment

for

street

level

locations

*

..

Highway Aid

.

Eisenhower Outlines Program in
State of the Union Message

the

as

15,

page

To

Wiesen¬

known

—

(187)

tax

to

measures

stimulate

the

and

business
spending;
lending,
guaranteeing,
insuring and grant-in-aid activities; strengthened old age and
unemployment
insurance
meas-

sumer

Department

suitable

small

on

straints

taxpayers,

reduce

re-

used for group

the growth of small
bu^ggs; and make other changes
ures; improved Agricultural -pro-? that will encourage initiative, engrams;
public works* plans-I^dH51^?*3^^ and production. Twentywell in advance; enlarged oppoa^s^iS^®comrnendations
toward

at county

tunities

-

-throughout the country.

-

It was pointed out
:"Projectograph"
could

that

:

and

also

.'be

sales presentations,
fairs, in reception rooms
sales training.
Present

for

.plans call for its exclusive
.the

the

than

550

use

for

international

these

trade

and investment.

This

by

will

be

contained

in

summar-

investment

ment

PERSONAL

.MASSACHUSETTS
.Growth Stock Fund
election
Jr.

of

Investors
announces

Dwight

Chairman

as

1*

PROGRESS

P.

of

the

Robinson,
the

Fund's

Board of Directors and

as

,ber

this

as

community
is, to plan boldly
and with confidence, can between
them develop a climate
assuring
steady economic growth.
ours

its

executive

.since

1936.

At the

mem-

I

elected

ber

of

a

the

time John L. Cooper
director and mem¬

investment

manage¬

shall
Jan.

on

submit
21

the

to

the

first

income
tax should be kept at the current
rate of 52 % f<>r another year, and

pre-

pared

by this administration, for
period July 1, 1954 through

the

excise

Chairman

of

the

Fund's

advisory

board.

Inc.,

Distributors,
distributing organ¬

general

ization

for

Fund

of

The

George

Boston,

election

of

Putnam

Richard

A.

Buck

as

Executive Vice-President.
.

native

A
and

a

sity

in

of

graduate

1932,

with

•years
ance

Co.

man

and

and

in

the

sales

the

of

of

in

sales¬

Following

Pepsi-Cola

Co.,

concerned
In 1949

he moved to Boston to become

with

New

Enterprises

recently has

more

as¬

been

ac¬

tive in the mutual fund field.

President, in the interim report
to stockholders.
Net asset value
per

share

end

on

the

of

June

30,

1953, the
corporation's fiscal

after adjustment for the
2-for-l
split in the number of
year,

shares effective Oct. 28,

New

additions

to

quarter

the

portfolio

were

$3,500,-

American

Telephone & Tele¬
graph Co. 3%s due 1965; 20,000
.shares Bristol-Myers Co.; 25,000
.shares
Pepsi-Cola Co.; 20,000
shares

-American

BroadcastingTheatres; and 5,000

Paramount

shares

American

Refining
Sold

Requests for

ations

a

Co.

Smelting

and

by

about

next

new

year

In

reduce

the

spending

20,000

were

shares

Tobacco Co.

balance

of

R.

J.

..

,

despite

revenue

the

now

in

,.

shares

Glass Works,

and

tax

budget closer to

a

Chemical

Corp.,

leaving

40,000

shares; and 4,300 shares of Conti¬
Oil

Co.,

leaving

shares.




17,300

resources.

responsibility of

'Federal

develop

conservation

and

under way wju be continued,

projects

which

in

the

Fed-

revenues,

the

we

continue to reduce

tremendous

unfinanced

accumulation

obligations

incurred

propriations.
,,

!0UAh:„""d.?°f!:..5a.1!nS _°"
government's revenues are
debt

in the
entirely

be

cannot

stopped. Because of this—because
the government's bills have to be

paid

month, while the tax
to pay them comes in with

every

money

great unevenne^s

within the fiscal

Eh bto amfnalththrseeedno0rdebt, I find

in

the

my

it

necessary

request for
debt

statutory

ln

wiU

vj

he

next

started

Federal

The

Govern

these

projects

are

to

increase
limit.

an

neecjs

0f

the

whole

na¬

tjQn

™

conservation

program

will

"Jf, P„lafL"Zlll

tecting our soil lesources.

P

recommend enactment of legislastrengthen

to

on

agncultuial

conservation and upstream flood
Yen
wor^' ar?^ *o achieye a
better

lower

are

moving

levels of taxation

balance

with

major flood
in the down-

structures

we

A uniform and consistent water

must

^

revised

public

lands

policy;

ancj

tial savings already
made, and to
be made,

by the Post Office De¬

partment

cannot

and

Means, of the House of Representatives, in close consultation with

eliminate

>

-the

now
pending in the House
Representatives providing for

of

A sou"d P™8ram f°r safeguarddomestic production of
cntlcaI and strategic metals and
minerals.

non¬

of

the

people

in

permit the private and
insurance
companies

non-profit
to

serv¬

offer

broader
protection
to
of the many families which
want and should have it. On Jan.

more

18,1 shall forward to the Congress
special message presenting this

a

administration's

health

program

in its detail.

Housing Message Due
The details of

a

' A,

■

program to en*

large and improve the opportu*
nities

for our people to acquire
good homes will be presented to
the
on

Congress by special message
Jan. 25.

This program will include:
Modernization of the home,

long-term

mortgage insurance program of
the federal government;
Redirection of the present sys¬

aspects of this, I also recommend
that the Congress create a
perma¬

tem of loans and grants-in-aid
cities for slum clearance and re¬

the

adjustment

rates.

nent

To

of

reasonable

time

to

certain

handle

commission

and

the

to

establish

postal

time in

postal

fair

rates from

the future.

development;
Extension of the

advantages of
lending to private credit
in this task of rehabili¬
tating obsolete neighborhoods; *
Insurance of long-term mort¬
insured

engaged

Extend

Our

Social

Security

Social

basic

Security

pro¬

gram, the old-age and survivors
insurance system, to which indi¬
viduals contribute
during their
productive years and receive
based

previous

on

is designed

from

earn¬

shield

them

to

destitution.

Last

gage loans with small

families;
And, until alternative programs

prove

tion

.

effective, continua¬
public housing pro¬
adopted in the Housing Act
more

of

gram

the

of 1949.
If

I

year

down pay¬

ment for low-income

the

individual,

the

alike

will

ernments

selves,

commu¬

gov¬

apply them¬

American family

every

can

home.

decent

a

the

Federal

state and

be

soon

accomplished. This and
major improvements in the

other

insurance system
stantial

will bring
increases

benefit

broaden

Statehood for Hawaii

sub¬
and

the

The people of Hawaii are ready
for statehood.
I renew my re¬

membership of the
system, thus diminish¬
ing the need for federal grants-

quest for this legislation in order

in-aid for

officials

insurance

formula

such

will

A

purposes.

therefore

posed, permitting

be

new

pro¬

progressive

re¬

duction in such grants as the need
for them declines.

grant-in-aid

programs,

based

now

welfare

widely
varying formulas, should be sim¬
plified. Concrete proposals on 14
of

them

will

be

on

suggested to

the

appropirate committees.
The

that

in

year

creased.

My more-detailed

mendations
mentioned

Congress

be

sent

$

*

Against
I

to

the

the

states

Socialized

for

need

hospital
best

can

Joins Caunter Staff
(Special

to The

by

Co., Park Building.

With H. L Emerson
(Special

impose

severe

families.
can

still

do

are

rising

and

hardships

already
on

many

The federal government

helpful things and
carefully avoid the-sociali¬
many

Jr.
&

battle

-

.

Ohio —John N.

is now with H. L.
Co.,
Incorporated,

of

Stock

Midwest

the

Ex¬

change.

Boren

& Co. Formed
HILLS,

BEVERLY

Calif.—Irv¬

ing N. Boren has formed Boren &
Co. with offices at 9235 Beverly
Boulevard, to engage in a securi¬
ties business.
He was formerly;
with First California Company.

zation of medicine.

and

Chronicle)

to The Financial

CLEVELAND,

the

initiative of private plans. But it
is unfortunately a fact that medi¬
costs

Chronicle)

Financial

CLEVELAND, Ohio—Howard I.
Brown is with L. A. Caunter 8a

medical

met

Constitutional

of 18.

bers
so¬

The great

and

be

a

Union Commerce Building, mem¬

Medicine

cialization of medicine.

;

permitting citizens to*,
they reach the age

when

vote

Darrow,

s;<

flatly opposed to the

am

the

recom¬

Jan. 14.

on

with
this fall.

along

the country

amendment

problems I have

will

elect its state
representatives

fight for America. They should
participate in the political process
that produces this fateful
sum¬
mons.
I urge Congress to propose

this and the other

on

insurance

social

its

Washington

some

people can be saved each
year from illness and dependence
if this program is gradually in¬

may

and

For years our citizens between
the ages of 18 and 21 have, in
time of peril, been summoned to

60,000 handicapped individuals to
productive work. Far more dis¬
abled

Hawaii

rest of

to

for rehabilitation

program

of the disabled especially needs
strengthening.
Through
special
vocational training, this program

cal

sites,

addition,

we

other
as

natural and historic
well as our fishery and

publicly-owned

Ways

ice would

consideration by the Con¬
the Governors of the

It is apparent that the substan¬

and

ited government reinsurance

States.
v

Private

initiative

and

services

policy;

resources

the

on

for

gress

Recommendations will be made

Ifom time to time for the adoptl0n °*:

wildlife resources.
I hope that
pending legislation to improve the

Committee

it

also

their various communities. A lim¬

Emerson

revise our whole tax
system. The groundwork for this
revision has already been laid by

thoroughly

com¬

study of the present
system of financing highway con¬
struction^ I shall promptly submit

shall continue
tq protect and improve our national forests, parks, monuments

toward

In¬

on

Relations

Stream areas.

In

Tax Revision Necessary

can

its

presently returns each

Our

'

we

pletes

beyond

the
capacity of local initiative,
pUblic or private, and consistent

further reduced, the growth

public

k

control

.

.

...

j

ever

of

by the government under past ap^

feasible

and

also take into account the impor-

balance.

Commission

tergovernmental

Federal

Third, by keeping new appropriation requests below estimated

While

6,400 shares Food Machinery and

natural

standards- The Federal Governme"t will continue to construct
and operate economically sound
flo°d control, power, irrigation
and water suPP,?y projects wher-

-

ad-

the

program

-

and

in
the
harmony and partnership,

°tandards

substantial

in

leaving 10,000 shares;

its

common

improve and
always
working

pHate

in4he coming fis-

effect

highway

initiative.

have

justments which I shall propose,
our
reduced spending will move
the

expanded

be undertaken.

vate

I ask that this extension

L

a

cal year, resu ting fi om tax reductions

%-cent decrease which otherwise
will become effective
April 1, and
will maintain revenues so that an

disease

on

profit hospital and medical insur¬
plans are already in the field,
soundly based on the experience

persons.

New

level

,

we

war

better

a

ance

to

now

appropriations.
,

system,

must continue the Federal
gaso¬
line tax at 2 cents per gallon. This
will require cancellation of the

ings,

precious

development projects are
being reappraised. Sound projects

than $12,000,000,000.
We are also
reducing further our requests for
,

to

nity,

^.11

the

"B," leav¬

5,000

nation's

.resource

the two fiscal years by more

over

made

be

present inadequacies in
the interstate highway

The

working relation¬
ship between government and pri¬

recommended extension of the so¬
cial insurance system to include
more
than
10,000,000 additional

closest

further reduction in expenditures
of more than $5,000,000,000.
This
will

So that maxi¬

can

needs

them,

In

estimate

we

aid

nursing

homes.

ments

was

reduced.

progress

Federal

Federal, State and local Govern-

appropri-

$7,000,000,000.

fiscal

mum

also

Pr°~ eral Government has a part must
1 budget for the cur- be economically sound, with local
year has been reduced
sharine of C0J wherever aooro-

rAnt^ii^Qi

.the portfolio; 5,000 shares Corning

nental

initial acts

greatly

rent fiscal

mous

i

is

thft

renew

Reynolds
ing

our

our

during the
000

of

is

it is the

before this administration took of-

1953, was

$32.80.
,

one

revise, with the cooperation of
the Congress, the budget prepared

of our

heritage

my

to

loss of

Corporation on Dec. 31, 1953 was
$142,775,029, equivalent to $34.38
per share on the 4,153,124 shares
of
capital stock outstanding, it
was reported
by Robert Lehman,

1951

Natural Resources

Part

budget message, I shall mention
here only a few points about our
budgetary situation.

First,

highway program.

benefits

.

Pendmg the transmittal of

„

Lehman

of

ex¬

'

Second,

value of The

asset

Its tax and

penditure programs will foster in-

NEWS

Lehman Corp.
Net

Act

a

growth' initiatiVe a"d economic

new

CLOSED-END

be

economy.

branch

War

with distributor relations.

sociated

the

fice.

training

World

man¬

II, he be¬
Assistant "^ice-President of

came

and

10

Insur¬

specializing

supervision

in

spent

Travelers

offices in these duties.
service

Univer¬

Buck

field,

and

Conn.,

life insurance sales¬

a

later

recruiting

Yale

of

Mr.

The

as

agement
men

Hartford,

should

the

announces

including

"r^fefthlt^e&Tdg- g™r|^e purehase °f
stabilizing factor delense matflalJin

FUND

1,

be

to

Lnfto'pfeve'nt'waVtirf

cuJrtt'Snf tahdeTte t0 thf
et

PUTNAM

scheduled

April

on

negotiation

Merrill

Griswold, formerly
Chairman of Directors,
becomes

taxes

those on liquor, tobacco, gasoline
and automobiles, should be conHnued at present rates
Immediate extension of the Re-

Congress

June 1955

committee.

corporation

the

revenue

reduced

budget

continuing its

the

ill, and to encourage the construe*
tion of diagnostic centers, rehab¬
ilitation
facilities
and

the bill

Because of the present need for

.

Forthcoming Budget

director

a

in

ade¬

Fed¬

postal deficit. I recommend, there¬
fore, that- the Congress approve

the

.

same

was

ment

a

rolq

and

the

mgs.

business

a

safe

a

system,

preciation, research and develop™ent expenses, and retained earn-

is, to

committee.

of

Mr. Robinson has been

.

always ready,

take well-timed and vigorous ac-

tion, and
willing, as

central

When

budget message.
Without attempting to

subjects implies the vast amount -ize these manifold reforms, I can
.firms
now
participating 1 in the of study, coordination and plan- here illustrate their tendency. For
Wiesenberger nation-wide dealer ning, to say nothing of author- example, we propose more liberal
-service.^ It will, however, be made izing legislation, dhat ..altogether tax treatment for dependent child.available—at a later date—to all make our economic preparedness ren who work, for widows or widsecurity firms dealing in mutual complete.
.v
owers
with dependent children
If new conditions arise that Telfunds. '
and f°r medical expenses. For the
V
•/ ;•*
* -•
AThe "Projectograph" - was more quire additional administrative or
business that wants to .expand or
than one year in
development; and legislative action,- the administra- modernize its plant, we propose
.conforms to SEC requirements. Hon will still be ready. A govern- -liberalized tax treatment of de¬
more

citizen in

highway

my

enumeration of these

mere

on

ends

every

eral Government is

overcome

of the

Treasury,
We should now remove the more
glaring tax inequities, particularly

con-

quate facilities for the chronieally

protect the vital interest of

quate

35

conservation

and

management of

The federal government
encourage

as

should
medical research in its

with

cancer

such

mortal

and heart

diseases

ailments, and

Street.

programs.

The

rehabilitation

present Hospital
Construction Act

Survey

and

broadened

proved

assist in the development of ade¬

be

in

order

to

at

offices

from

and

Calif.—Con¬

is resuming its
activity in the investment business

in their health

should

Congress.

SAN FRANCISCO,

rad, Bruce & Co.

should continue to help the states

grazing lands in
national forests will soon be apby

Conrad, Bruce Resuming

The

235

Montgomery

principals were for¬

merly with J. R. Williston, Bruce*
and prior

& Co. in San Francisco

thereto
Co.

with

Conrad,

Bruce

36

The Commercial and Financial Chronicle

(188)

Deal

4Continued jrom first page

time he

same
as

apparently does not regard their costliness

something in their favor.

On the contrary he

be determined to reduce their cost

ably be done.

-

He

appears

far

so

as

seems to

it may reason-

to have arrived at the

con¬

clusion that these programs are

desirable—politically or
otherwise—despite rather than because of their drain upon

.

the

However,
the amounts were large, giving
rise to correspondingly heavy debt
service, and the movement fell off
abruptly in 1928. The shock to

pocketbook of the nation or the stimulation they
give to the general course of inflation.

lengthened, but enough has been said to indicate clearly
enough that what the President wants done this year can
scarcely be called anti-New Deal.
We make no profession of political insight.
This may
or

complish this election year.

with

shall still have much of the New Deal left
end of this year

in

their

The

from first

supply of dollars to foreign coun¬

page

tries

Oar Investment At road

Money

incredible

Of

waste

and

extrava¬

to use no stronger language, in defense operations
appeared to weaken this foolish notion not a

gance,

has often
whit.

of

;

a

gentleman who now occupies the White House
military prestige second to none in the world, and
our part are heartened by the fact that he has the

good sense to measure the effectiveness of our defense
preparations by other standards and the courage to suggest
.sharp reductions in defense outlays where he believes it
possible to get more defense for less money.

-

It

remains

will

President

to

be

seen

what

specific

measures

the

anti-depression steps.
These
when they are fully revealed may or may not be found to
be worthy of support, partial or otherwise. It is clear, how¬
ever, that the Chief Executive has taken pains to gather
about him

suggest

some

as

of the ablest of the nation's students of

the so-called business

cycle. What these gentlemen have
been planning we have no sure way of
knowing, but it
would appear that they have been at pains to determine
whether or not current developments
suggest the need for
any drastic action on the part of government.
This seems
to us to be a great advance over the purely political and
.sadly amateurish procedures of previous administrations.
It appears

reasonably safe to

also that the Eisen-

say

bower Administration has shown a realization of the horrible hodge-podge that is our present tax system. This, of

,

.

course,

is

a

lections.

matter quite apart from the volume of tax col¬

It has to do rather with the most

the most helpful—or should

;

bution

of

inevitable

we say

burdens.

tax

equitable and
least harmful—distri¬
We

have

no

way

of

^knowing at this time just what is to be proposed in this
connection, but the President has made it clear that he
and his Administration

are

well

that much needs to

aware

be done, and that

presently he will come forward not only
proposals about the amount of taxes which must be
raised, but about how the whole tax structure may be

•with

overhauled to the

advantage of all.

securities

The

equity or of debt, but in Amer¬
experience has consisted al¬
exclusively of debt (except

other similar

some

creasingly

for Canadian

the

equities) and, more¬
over, almost always of dollar debt.
In
this and
other
respects, the
which

discussion

will

follows

entirely in terms of American

ought to be duly thankful. At the same time, candor re¬
quires that it be plainly stated that there is as yet in evi¬
dence not the
slightest intention of going to work on many
public matters which can not be indefinitely ignored if this
country is to

.

Whether this

prosper

attitude

in the future
is

a

as

it has in the past.

reflection of what might

be

termed political realism, a
display of lack of understand¬
ing, or evidence of intellectual yielding to popular notions
; of the day is not here in question.
The fact is that the
President's platform is characterized
by an all too evident
leaning toward the New Deal and the Fair Deal, notwith¬
standing some serious effort to remove some of its excesses and to
modify its incidence.

Not
..

„

word is included about the need of

a

doing

and

so

far

as

we

are

aware.

The vast and

costly
brought

social

security program, far from being reduced or
degree of conformity with American tradition
and ordinary prudence, will be
expanded and made even
more
costly if the Administration has its way. It is clear
into

-

some

that the President is under the

spell-—political

or

other

of the nbtion that somehow the farmer is

^

^

sax generis, and
mysterious way the nation immensely ben¬
by policies which keep the farmer satisfied at public

that in

efits

some

'. expense.

The list of badly needed actions




with the

vestment

the

in

of

role

ments of the

United

of

made
tion.

States.

us

of New)

markets were higher than

ropean

United

the
portfolio invest-* ing
foreign countries by the partly or
States was in the 1920's, term foreign issues.

virtual cessation after 1930.

a

Examples of portfolio
Suffice

it

for

the

present to

abroad,

to¬

gether with the keen competition

re¬

profitable foreign issues among
been con¬ American investment houses, ac¬
refunding loans counts for the high volume of pub^to Canadian borrowers, a few re¬
lic offerings Of foreign securities
funding issues of other foreign during the period. The short-run
borrowers, borrowings by the In¬ fluctuations are to be explained,
that

mind

fined

to

they

ternational

tion

and

ing,

and

for

have

and

new

Bank

for

Reconstruc¬

Development for relendmedium-term

some

fi¬

There

was

the

a

precipitous de¬

middle

of

1928,

issues

a

little activity with the
exceptions noted above.
In a broad sense, the large vol¬
ume of portfolio
investment dur¬

States.
in

the

bringing out

with

good debt records
themselves been lenders

international

capital

rife.

had confidence

investing
the

in

arid

In

a

detailed

defaults

inevitable,

became

<

,

Portfolio Investments Since 1930

^

the
United States in foreign countries
since 1930, has been relatively in¬
Portfolio

ket

investment

by

conditions, but American in¬
consider

vestors

them

be in

to

a

category apart from other foreign
securities.

There have been

a

few

refunding issues, and a very few
new
issues, of borrowers other
than Canadian.

Beginning in 1947, the Interna¬
tional

Bank

Reconstruction

for

and

Development has sold its ob¬
ligations in the United States in
order
to
raise
dollar funds for'

standing as of December, 1953.
For this reason, as well as because
of

the Bank's assets, conservative

policies,

and reputable manage¬
International Bank bonds
have been readily taken up by
American institutional investors,

ment,

including savings banks
companies,

surance

It

is

perhaps difficult for

outside

sons

Canadian

1931 and the end of the active pe¬

alike:

to

Balance

In

ated

abroad

change

which

use

does not

of
and

investment houses
the

reinforces

one

port¬

has

that there

other.

governments which are

even

credit-worthy

on

the basis

outstanding debt, debt record,
dollar
position can borrow
at long-term or, in fact, borrow
at all except by way of shortterip bank credits or on a fully

cre¬

basis.

secured

With

rare

excep¬

\yide latitude. This tions,

mean

obli¬

capital market.
interest applies to

and

borrowers

foreign

with

Bank

World

of

freely disposable dollar ex¬

could

the

experience,

investment

per¬
com¬

the

in

lack

most

of Payments

American

folio

gations)

Not

Investment in the

Portfolio

public

and

investors

riod of

or

financial

complete present lack of interest
in foreign securities (other than

This

by the United States.

the

munity to understand the almost

foreign bond market in 1930 was
by the first defaults in
portfolio investment abroad

and in¬
also by

and

individual investors.

followed

market.

view,

the

of

revival

brief

A

recession

business

and

abroad.

I
more

more

stocks.

foreign countries
taking an unfavorable turn,
there were signs of falling

markets

investment

bankers.

and

key

and

The

annually

million

$900

of course, impossible in the
of these developments, and

was,
face

economic conditions

certain

were

private propa¬
ganda in favor of foreign' itiiding
was

more

domestic

on

in

on

had

rowers

was

Political and

United

high as com¬
comparable
Many of the bor¬

those

the

concentrated

attractively

were

domestic issues.

with

1928

of

middle

interest

tor

by an
tiable
appetite of investors for
foreign dollar obligations. Yields
pared

securi¬

rising, the values of outstanding
were falling, and, inves¬

selling them was
apparently insa¬

matched

the market.

securities

issues and of

new

off

for foreign

general decline in the bond mar¬
ket. Long-term interest rates were

The zeal of issuing houses

bond salesmen in

held

market

the

at

ing the period 1919-1930 is to be
attributed to foreign need and de¬
sire lor dollar exchange and to
the general exuberance of the se¬
in

of

States

by

ties in the United States collapsed

after very

market

borrowing

were

The

brief recovery in 1930, and there¬

curities

United

tractual debt service to the

relatively low and the

were

of

cost

proximately $1 billion in 1927 and
after

maintenance

The

relending abroad. These obliga¬
tions, although technically foreign
foreigners
securities, are guaranteed by the
accordingly reduced, new issues United States Government
up to
were
brought onto the market.
the
amount
of
$2.5
billion, as
When rates were relatively high,
compared with $643 million out¬

rates

increased every

from 1919 to 1927, except in
1923, and reached a peak of ap¬
1928.

changes in the domestic busi¬
and credit situations. When

to

1933.

ness

year

cline

move¬

ment of interest rates in response

nancing by commercial banks.
The amount
of new portfolio
investment abroad

the

noted, by

already

as

$2.4 billion in 1932of- con¬

1927-1929 to

nadian borrowers and money mar¬

circum¬

of

and

home

at

stances

since 1930 will be considered later.

4

combination

This

investment

of

includ¬
significant.
New and refunding
London market, were Canadian issues are offered in
entirely closed to long- accordance with the needs of Ca¬
these markets,

thermore,

The heyday of

with

Fur¬

United States.

the

in

those

ment in

in

Progress

long-term rates of-interest in Eu¬

pay¬

not

are

the same is true of
governmental
borrowers.

volume of foreign bond issues of¬
fered
in
the
American
market

to

tended

fluctuate inversely as
borrowing. During the
four years following the end of
the war, borrowings in the United

vestments of the

sold

in the

de¬

tute

a

including the pur¬
chase of specified goods and serv¬

peal

States

ices

non¬

basis.

to

countries

made

interest

though

even

were

high.

rates

loans

in

usual

to

finance their urgent
postwar import requirements and
were

examples of tied in¬

portfolio type in

were

made

for

fined purposes,

chiefly by European

were

be found

which

the cost of

a

the

case,

Upited
however,

The

States.
was

that of

foreign borrower, either a gov¬
entity or a foreign cor¬

ernment

of

poration, using the proceeds from

With the de¬

cline in interest rates in 1921-1922

the

sale of

and

saw

European capital mar¬
closed, a substantial volume

of Latin American and
ern
can

issues

came

market.

Far East¬

as

it

was

rose

steadily.

been
ment

investment

practical purposes, the
portfolio investment

of

by the United States has
shifted, apart from invest¬
in Canada, to the Interna¬
Bank

and

the

to

Export-

The Export-Import

since 1945

and the Interna¬

aggregate

or

even

unproductive in

an

of

the

'20's

The foreign loans

included

loans

for

public works, loans
to
cover
budget deficits, and "gen¬
eral purpose" loans. There were
instances of flagrantly wasteful

middle of

rowers

loans

to

foreign- bor¬
The annual

of $5.6 billion.

rate of lending through these.in¬
stitutions is comparable in abso¬
lute

terms to the rate of lending
during the 1920's through pub¬
licly-offered foreign issues but has

of
loan
prQceeds.
If
the constituted a much smaller per¬
amounts involved had been small centage of the total supply of
and if the flow, of portfolio in¬ dollars to foreigners than was the

new foreign
Conditions in

were

the

sense.

use

favorable.

A generally high leyel of business

vestment to the rest of the world

case

activity was accompanied by an
expansion of bank credit, and a

had

no

There

great. or permanent harm would
long-term! interest r^fes. have i been.,dQ.ne-jp thev procgss, of

noted.

decline in

an

tional Bank since 1947 have made

unfavorable.

1928, the volume of

as

ment

cially in Europe, turned distinctly

the United States

well

abroad

often Bank

sterile

issues

function

consti¬

since the ap¬
is on a senti¬

unrelated to the means of repay¬

a

nomic developments abroad, espe¬

until

all

States

The

being

the Ameri¬

economic

1924

For

as

now

case,

investors

to

mental

bonds

United

that Import Bank,

meant

investment

portfolio

dollar

special

tional

this

practice,

brief period of relative inactivity
as interest rates rose and as eco¬

From

Israeli

followed

onto

There

In

dollar

securities

fit.

with

,

to rid

prevailed

elsewhere.

foreign in¬

balance

bor¬

Europe and
was
being
toward currency stabiliza¬
But capital was scarce, and

ditions

ex¬

Portfolio Investment Before 1930

kets

some-

thing about the Securities acfs. In point of fact, up to the
present moment this whole question has not even been
mentioned

supply of dollars to the rest
the world from S7.4 billion in

and more prosperous con¬

settled

be

i

time conducive to

same

rowing in the United States. More

perience with foreign investment

Government

blessings the nation

situation
at

The

active.

in¬

was

abroad was also favorable and

had

But Much Is Left

For these and

in the

in turn for 26% of the drop

market

most

the
v

movement

capital

after the middle of 1928 accounted

ican

The

enjoys
we for

de¬

The

1928.

and

this

in

total

of the President's remarks

Revelation

made.

1927

in

cline

-

be

total

had accounted for 20% of the

Continued

may

strongly suggest,
moreover, a rejection of the fallacy that the degree of our
preparedness to defend ourselves may be simply measured
by the number of billions of dollars we spend for the pur¬
pose.
Not only have so-called defense outlays heretofore1
^been regarded as politically untouchable, but there hasbeen a disposition on the part of a good many in public life
to make a virtue of seeing how large these amounts could
course

had

fixed. Portfolio investment abroad

well

More Defense for Less

was

availabilities sharply

dollar

reduced, while their requirements
for dollar debt service remained

at the

us

economy

countries

Foreign

severe.

event.

any

international

the

could hope to ac¬
The fact remains that we

not be as much as the President

may

period.

of the

excesses

See It
We

As

the

by

investment

international

Deal follies could, of course, be greatly

Fair

and

1954

.Thursday, January 14,

..

.

been

sustained,

perhaps

during
are

the

earlier

period.

other differences to be

The development loans

the World Bank

and

of

Export-Im-

Volume 179

Number 5290

.The Commercial and Financial Chronicle

..

(189)

port

Bank

for

are

carefully

de-

fined

productive purposes, usually

of

kind

a

directly
of

will

which

contribute

indirectly to the

or

involved

service

sents

means

The dollar

servicing the loans.

debt

now

repre-

relatively small charge

a

on

dollar availabilities

current world

compared with the heavy charge
up
in the 1920's.
In the
interim, of course,
dollar debt
as

built

service

older

on

contribution of dollar exchange to
foreign countries.

issues has

been

Qn

the

other

hand,

direct

in-

vestment, which may or may not
create dollar exchange at the time
it is made, is
predominantly equity
investment entailing no fixed
turn.

re-

Nevertheless, direct investif successful, generates a

ment,

return flow of investment service,
The
major differences between
'portfolio and direct investment at

greatly reduced by repayments,
repatriations, defaults and adjustments
under
debt
settlements,

this point are that service on
portfolio investment is contractual and

while

investment

dollar

availabilities

have

greatly increased.

but

Direct Investment
Ampriran
American

-

d i rprt
direct

War.
fhP
the

hefnre
before

pvpn
even

investment
investment

It

terms

inrst WnrlH
world

as

during the period. The amount of

wIf$?3ebUhon as compillion, a\rm"

1«™ was $o.,5
iyiy-iy<5U

pared

with

billion

$3.3

of

direct

investment, including, in the latter
category, issues of domestic corporations

not

for

direct

on

only

variable

fluctuate roughly in ac-

may

? ??

countries. This is de-

monstrably
those

true

direct

investment

abroad.

the

in

importance

export

the

to

now

involve

the

myuive

States

the

means

rise

and
and

foreign

changes

and

is

the

enrp

has consisted

31

for

nafnrp

+hP

nf

and

Much

and

it

fall

will

*?..

annual

volume

of

direct

in-

vestment abroad reached its peak,

along with the general business
boom, in the years 1928 and 1929,
in each of which the amount

proximated
movement

$600

ap-

million.

This

of

corporate capital to
countries during the pe-

foreign

riod, like the movement of portinvestment, is to be accounted
for by the general expansionist

folio

sentiment

of

the

time

and,

a

as

technical factor, the great activity
in
the securities
market
which

it

made

possible

for

American

corporations to offer securities at
home to raise capital for employin

ment
-

—

investment

volume

after

the

fell

to

onset

small

of

the

Great

..

direct

of

investments

Xofd iiTordeTto
°

the

rover

r.°

oDer*

«r"ubsMiades

Woriti

War,

abroad

came

though perhaps commonplace,
differences between direct and

direct

proportions.

investment
significant

The

ranged

during

the last

war

and

has

amount

the

period

since

between $700 million

$1,700

million

annually, ineluding the reinvestment of earnings in foreign countries. The dollar

involved

amounts

rable

with

American

the

are

total

compa-

of

volume

private

investment

abroad, both direct and portfolio,
during the 1920's. In the earlier
period, portfolio investment predominated; in the period since the
recent war,

been

direct investment has

by far the

Direct

important,

more

investment

by

contrast

•with typical

portfolio investment,

may or may

not create disposable

dollar

exchange.

If

the

ment is in the form of

invest-

equipment

There

portfolio

investment.

is

rarely

Direct

in-

associated

with

technology and, by definition, not
at all with management. This
difference

is

largely responsible
for the fact that direct investment

is

almost always productive investment in an economic sense,

whereas

portfolio investment, at
least in American experience, has
often not been so. Furthermore,
direct
investment,
as
already

noted, is usually related in practic? to the .means of repayment,
This is manifestly true of investments in the production of raw
materials for export from foreign

rshipped from the United States, it

•obviously does not. On the other
hand, if it involves dollar expendi¬

of

operations

tures for local labor and materials,

products

it

imports,

obviously does.

tion

from

portions"

No generaliza¬

American

possible

seem

to the protwo "forms of

^these

of

experience

as

_

__

It is generally true also
investment in manufacturing

Dollar Exchange from Foreign

Investment
With reference to both portfolio
direct investment abroad,
are

"which

greatly
of

exaggerated

the

the

capital

can

serve

volved

extept

to

movement

in-

important

an

or

lasting function in providing dollar exchange to meet the requirements of

foreign countries for im-

ports of dollar goods and services,
Portfolio

lending does typically
exchange but, since
it is almost entirely on a contrac-

•create

"tual

dollar

basis

return
-

,

sets

of

flow
.

,

.

.

up

immediate

an

debt
,

for

service
,

,

..

mterest, sinking fund and amortirzation.
^debt
ume

As

service
of

the

on

of

such

with the vol-

outstanding portfolio init

,

must

the amount of

that

amount

grows

....

vestment,

new

balance

and

all

abroad

because

manufactured

the

displace

Direct

investments

countries

,

soon

,

overtake

investment,

there




is

no

so

net

thing,

that there
econ¬

such

abroad

premised

connection

a

almost

are

Also fallacious is the notion that

business recession in the United

a

States would produce

not

may

only

in

be

combination

foreign

increased

an

facilities,

trans-

foreign

would

be

reduced

would

a

economy, that
recession here would not be ac¬

companied

by a recession in the
world, with a resulting
reduction in investment opportu¬

rest of the

nities

abroad.
It is equally im¬
probable that American investors,
which means at present primarily
corporate investors, would be re¬
trenching at home and at the same

to

other

There

in

is

countries

could

securities

more

of

eyes

the

Direct

invested

have

been

forthcoming
corporate investors were

because

impelled

for business

reasons

to

find and develop sources of raw
materials
outside
the
United
This compulsion was born
in turn out of a desire for diversiStates.

fication

of

sources

outside

sources,

desire

a

the

dollar

for

area,

desire not to lose relative position in an industry by failing to

and

a

participate in the exploitation of
new sources of raw maIt happens that direct in-

but

in

the

the

ment abroad

production

large-scale
in

the

invest-

field cannot be explained
ground.

ital in foreign countries.

ments

the

for this is,

One of

doubt,
their disassociation with the savreasons

ing or
change.

earning

of

no

foreign

ex-

Direct

investment, if successful,
generates
additional
investment
,

by

Additional

sjnce the last

direct

large

abroad

have
war

of

material

raw

investments in such facilities are
unimportant among new direct investments of American capnow

been

since

direct

by capital transfer and rein-

war

change restrictions.

In

tions

to

years

direct

1946-1952.1 Addiinvestments

by

reinvestment of earnings of the
foreign subsidiaries of American

,

be

in

manufacturing facilities in for¬
eign countries will also continue
so
long as foreign markets are.
fenced off by trade and. exchange
barriers.
There is no indication

here,

either,

of

historical

trend.

It should be

emphasized, however,
plowing back of earnings,

steadily growing aggregate

a

American

of

nual

direct

investment
an¬

additions to the total.

will

undoubtedly make

cant

contribution

ment

the

of

countries

the

United

that

do

to

make

attractive

American

their

in

the

investors

by

strong induce¬

from

ments

The

the

general

American

apathy

side.

investors
and investment houses to foreign
securities shows no sign of lifting.
of

There is therefore great inertia to
On the other hand, the

overcome.

offering of the substantial tax
other

inducements

to

foreign in¬

vestments which would be

tion

offset

to

sary

domestic

of

best

the

new

of

counterattrac-

problematical.
channels

ment abroad.

these

There

opening

of portfolio

at

the

is
up

to

seem

investment
of

the

be

trust

type

the

industrializa¬

considered, however, the
tive

amount

of

such

cannot

be

than

minor role

a

expected

It would

things

prospec¬

investment

to

in

of payments of the

play
the

more

balance

United States.

be

folly to rely upon it
theory or in practice, in substi¬
tution for increased purchases
by
the United States
of goods and
services from foreign countries, as
a means of
maintaining or raising,
in

the

level

of

exports.

$40,000,000 Central
Bank for

Cooperatives

Debentures Offered
With the assistance of

a

nation¬

selling group of recognized

dealers

in

securities, the Central
Cooperatives, Washing¬
ton, D. C., yesterday (Jan. 13) of¬
fered publicly through Macdonald
G. Newcomb, its fiscal
agent, 31
Bank

for

Nassau
Street, New York City,.
$40,000,000 of collateral trust de¬
bentures
Feb.
not

1,

dated

Feb. 1, 1954, due
The debentures are

1955.

redeemable

The

before

debentures

2Vs% per

bear

maturity.

interest

payable

annum

at

Aug.

on

1, 1954 and at maturity. They are*
being offered at 100% and ac¬
crued

interest.

Net

proceeds from the sale to¬
gether with cash on hand are to>
be

used

Bank

to

for

redeem

the

1954,
in

and

the

Central

Cooperatives 2*/2%

bentures which mature

which

amount

de¬

Feb.

I,
outstanding
$40,000,000.
on

are

of

The Central Bank for Coopera¬
is incorporated under Fed¬

of

invest¬

The most promising

would

fund

neces¬

investment is

possibility of the

or

the

tion of their economies. All

wide

foreign

develop¬
of foreign

resources

and

signifi¬

a

the

to

tives
eral

law

and

supervision

operates

of

the

under

Farm

the

Credit

corpora-

many

exm-

played

important

so

or

which

It

is

a

role

Administration,

independent

an

sobering fact, how¬
ever, that holdings of foreign se¬
curities
by existing trusts and
funds

in

a

the

United

States

are

negligible.
Other changes have occurred in
the United States since the 1920's
which militate against the revival
of
portfolio investment abroad.

One

is

tion

of

hands
who

the

increasing concentra¬

investment
of

funds

institutional

in

the

loans

to

the

larger

farmers'
and

financing the 12 district banks

for

cooperatives.

debentures
of the

States,

are

Central

Government of the United

but

sumes

no

direct

or

the

Government

indirect.

Rejoins J. J. O'Brien
(Special

to

The

CHICAGO,

Financial

111.

—

Chronicle)

William

Tague

vesting in foreign securities.

John J. O'Brien & Co., 231

the

strict

as¬

liability for them, either

investors

are

is

Bank

instrumentalities

restrained by law or by
considerations of
risk
from
in¬
other

co¬

assists

An¬

has

rejoined

the

staff

E.
of

South'

regulation of La Salle Street, members of the
which, however
New York and Midwest Stock Ex¬
either manufac- desirable as a reform measure,
abroad or lost their mar- acts, nevertheless, as an impedi¬ changes. Mr. Tague was formerly
Furthermore, in competi¬ ment to offerings of foreign secu¬ with Edgar, Ricker & Co.

them.

kets.

could

Investment

in

kets, but this choice was not open
tured

which
trend.

a

20th.

stances, the managements of these

to

as

operative associations

capital transfer totalled $4.4 bil- States;andexport. to foreigni marthe

data

construed

ment
overseas
during the 19th
Century and the early part of the

made

earnings, respectively, corporations would have preferred
Additions to direct investments by to manufacture in
the
United
in

historical

invest-

vestment of

lion

type of investment

the Government. The Bank makes

investments them because of trade and

the end of the recent

cording to official projections, this>

though under materially different
circumstances) in British invest¬

of the reinvestment of tions have gone extensively into
earnings. The importance of this manufacturing operations in order
reinvestment is indicated by com- to retain or gain markets which
parative
data
on
additions
to would
otherwise
be
closed
to

American

of

depletion

this

on

in manufactur-

American

volume

the

If

agency in the executive branch of

jng facilities in foreign countries,
Here, again, the considerations involved are primarily business mo¬
tives- as opposed to investment
calculations.

annual

investment.

of domestic resources proceeds ac¬

(al¬

way

abroad

in

A

mutual

servicing them.

apply alike

domestic

and

investor.

considerable

new

foreign countries.

much

specialized

of

with

connection

no

would

investment

new

States and

expected

with

recession

ness

riod,

have

are

exported

or

and

seek

States in the world

primary materials has been quite
profitable during the postwar pe-

imported

because

surplus
employment
abroad.
It is improbable, consid¬
ering the weight of the United
capital

vestment

yielding services which

investment

capital

investment opportunities at home

portation facilities and other facileither

American

operations
way
of reducing economic risk
large percent- and
removing fears of adverse ac¬
age of direct investment since the tion
by governments.
Even
so,
recent war has gone into the exthe revival on any broad scale of
traction, transportation and proc- portfolio investment abroad
by
essing of raw materials, especially the United States seems
unlikely
oil. The large amounts of capital in
the absence of
of the

materials in foreign,
countries will continue and entail

of corporate managements to busi¬

profit as a separate and
isolated undertaking but to do so

terials.

power

into

of

except in

important

or are

movement

time increasing their investments
abroad. The conservative reaction

to yield a

The search for

war.

raw

•

the

anticipation of their yielding a
profit. However, unlike portfolio
investment, a contemplated direct
investment

industrial

abroad will insure substantial

investment

foreign

in

not made

are

since the last

••*
The investment abroad of Amer¬
meaningless except as an indica-\
tion of capacity to export
capital. ican capital in the. years ahead

in-

At

next pe¬

from

on

manner

dislocations.

be

not

the

over

ican

Same time' the return °n good
u nf fnZlv
domestic securities continues attra.ctive and lnvolves minimum

ments in

means

and

current

strife

economic

exported, or both,
On the other hand, direct invest-

not

ideas

political instability,

presumably

riod than its amount and character

however, there is nothing in the

agitation

For one

apparent

will

different

of

investment

that the

ities

direct investment.

'there

by

ternational

significant, al-

vestment usually carries with it
technology and elements of management, whereas portfolio investment

beset

risk.

other

are

countries.

would

be

direct

No systematic relationship
exists; hence, projections of Amer¬

economy

in

Depression and recovered
but slowly during the 1930's. Then,
after the interlude of the Second
again to

current

vv4wi

Fea rd
a11, In many instances,
indeed, it was necessary for the

capital,

character

may be accel¬
erated in the years ahead. So
farr

correlation between the vary¬

no

abroad
much

and

tries.

be¬

Historically, this distinction be- vation. Portfolio investment is
tween portfolio and direct invest- made on a calculation
of return
n*ent was
strikingly exhib- versus rjsk jn comparison with
*:ed wlt.h the onset of the Great investment opportunities at home,
Depression in 1930. The fixed This fact goes far to explain, to¬
charge on the dollar availabilities gether with the painful experi¬
of foreign countries constituted by ences <jf the 1930's, the
present
service on dollar debt became in- apathy of American investors tosupportable as the supply of dol- wards foreign securities. Heavy
*ars to the rest of the world taxation both on income and capidropped precipitously. During the ta] gains has the effect of reducsame period, the return on Ameri- fng the possible return on
foreign
can dnect investments abroad was securities to relatively small
proseverely reduced, largely because porti0ns, while the risk of loss of
fhe investments themselves pro- jncome or 0f
capital is generally
duced much lower returns or no rated high in a world
owners

foreign countries.

Direct

in

amount

the. other, the amount of Ameri¬
can
investment in foreign coun¬

^

The

American

future

its

measured, for example, by
fluctuations in
gross
national
product, on the one hand, and, on

nrin-

distinction

the

cur¬

in

omy as

tween direct and portfolio invest¬
ment lies in differences in moti¬

together.

.

basic

ignored
about

many

invest¬

ing size of the United States

of

0f

Another

typically

and

should

is

.

two

American

are

for its stimulation.

earn-

the

history and

of

speculation

course

11?le^est and repayments ot prin

Sance

the

abroad

rent

investment

of

facts

ment

invest-

renavments

of

the

of

The

a

Outlook for Foreign Investment

t"®.na;1ire ot tile case> investment
jntprPot

because of pro¬

or

means.

^STave ^ta
the investment provides ^ady describedf
7
^
of transferring
The

advantages

given to him by the host
country through tariffs and other

.en«rey

racP

on

tection

of debt rather than equity, is, in
th

in

American

cost

almost entirely

? 5 ??

rities

one

the
ground
would
capture
the
whole market either because of

which in American experi-

ment

of

market.

equivalent,

Portfolio

decision

Otherwise the competitor first

transfer from the United States to
foreign countries.

contrast>

the

often forced others to follow suit.

from the point of view of the
balance of payments, of a capital

By

fields

competitor to go into manufactur¬
ing in a given foreign country

has the effect, of course, of reducirig the amount of investment
service transferred across the ex-

uie subject to contractual payments

materials

United

of

now OI

American

in

ST&& ^Seraliy
ings,

of

case

investments

uiieu, investments

•

major

also m
experience
which
laree
22?' ;vmLn
large in Hnl •-production of raw
in dol-

J.Q

portfolio investment

as

is

substantial

was

1 Q90'c
1920s hut not
but not

lar

FirSt

the
tne

whereas service

tive

cor-

no

branches) amounted to $3.8 billion during the same period. Thus,
direct investment is not only permanent investment, by and large,
but it also multiplies itself through
the plowing back of earnings. This
reinvestment of earnings abroad

mesoTho^

abroad took place on a significant
ip
scale

fixed,

corporations (there being
statistic for

responding

37

They

security

issues,

•

38

The Commercial and Financial Chronicle...

(190)

Continued, jrom page

130 last week and 138 a year ago. Among small casualties involv¬
ing liabilities under $5,000, ajnild increase occurred. Sixteen busi¬

5

and Industry

The State oi Tiade

failed

nesses

with

liabilities

in "excess

of

$100,000

as

against

Becker Group Offers

10

in the previous week.

Offering
of
100.000
common,
shares of Marquette Cement Man¬

28 Months

output, "Ward's Automotive
Reports" noted last week that Chrysler and some of the smaller
romnanies
have reduced
their original January schedules.
It
addJd however, that the industry still will build 514,000 cars this
month
tSs, it adds, would be a drop of nearly 14,000 units from
original schedules, but still one-third higher than December out¬
put and 10% greater than the output of January, 1953.
v
It further reported that retail sales of new cars in December
were 380,000, below the previous 1953 low of 410,000 m Novem¬
ber. New-car stocks on Dec. 20 were almost 60 ^ higher than the
start of January, 1953, and only 7% below the postwar hi£h, set

....

of

The railroads' proposal would have to

..

Fall.

prices

Trading in soybeans

Institute

announced

that

ports of

rose

the

figured

124,330,410 tons

first time the

the basis of the

on

of Jan. 1, 1954.

as

annual

was

1,900,000 tons.

a

month

A

year

dgo the rate
ago

the

actual

716

the

crop

lifted

which weeks also included

the corresponding
a

week,

Year

of
a

85,152

cars,

at

.

or

surpass

slightly above the

merchants who

many

the sales

week,

As

figures of

increased

to

time
were 164,

a

year

did

-

was

202

in

more

1

rose

to

many

177

4-4;; South

and

Federal

more

Reserve

cautious
many

than

at

preferred

w

eek

about 10 to

a

value)
share.

of the offering is
of 70,000 shares of 4.20%
stock

($100
.»

preferred stock is

new

,

re¬

at the option of the
at prices ranging from
per -share
if redeemed

.prior to Feb. 28, 1957, to $102
share after Feb. 29,

Proceeds
•

from

and

common

.acquisition

this

Although buyers

time

last

year,

they

items for near-term delivery.
country-wide basis at taken from

a

New

York

For the four Weeks ended

aided

by

good weather

rose

last

11% above the initial week of 1953.

2, 1954, no change was reported.
For the year
decrease of 1% was registered from that of the 1952 period.

^*■^
♦The

;

per

per

1964.

the

sale

of

the

preferred stock will

be used to defray part of the cost
the utility's construction and

weeks ended Jan.

1953,

par

;

of

rof

According to the Federal Reserve Board's index department
store sales in New York City for the weekly period ended Jan.
2, 1954, registered no change from the like period of last year. In
the preceding week Dec. 26, 1953*, an increase of 19% was re¬
ported from that of the similar week of 1952, while for the four
'

consists

value) priced at $101.

$105.50

1954, an increase of 1% was reported. For the year 1953,
department store sales registered an increase of 2% above the
corresponding period of 1952.
in

of

company,

Jan. 2,

trade

stock

Light Co.

deemable,

Board's

from that of the similar week of 1952.

Retail

Cor¬

other part

The"

index, for the week ended Jan. 2,
1954, increased 1% above the level of the preceding week. In the
previous week, Dec. 26, 1953*, an increase of 12% was reported

the

from

Boston

offering for public
(Jan. 14) additional

and

made up

esti¬

a new selling season, the sea¬
wholesale markets came to a close in

Wednesday of last week.

on

Department store sales,, on
the

a year ago when 163 octhey remained 35% below

or

is

today

The

buyers prepared for

generally

,

which

program

cost

approximately $21,000,000 in 1953

trading in

ended

to

then

Blyth & Co.,

First

225,460 shares (without
being offered at $32.50

not

earlier.v

1

placed sizable orders for

the comparable week of
1939.

Failures with liabilities of
$5,000

many

the period

7, 1954, from the holiday low of 150 in the
precedl"g week, Dun & Bradstreet, Inc., discloses. While casualties

stock

Kansas City Power &
The common stock

response

sonal lull in

both of

Business Failures Soar in Latest Week
industrial failures

The

common

Bradstreet, Inc., to be from 1 to 5% larger than
Regional estimates varied from the comparable yearlevel by the following percentages: New England;-—2 to +2;

were

week ended Jan.

and

sale

particularly popular.

were

amounted

the

A group headed by

poration

sales

1952
on

$2 annual dividend basis.

Inc.

year ago.

or

decrease of 132,-

1952

WGCK»




unchanged

However, there continued to be discernible hesitancy in the
buying of television sets which many merchants attributed to the

comparable

in

match

creasingly popular.

.

«

level, to the surprise of

retail

and

Group Offers Shares i
Of Kansas City P. & L. ■;

1,712,839 bales.

was

.4,
to the traditional January promotions of house¬
hold goods was favorable in most sections.
Particularly activewas the attention stirred
by the "white sales"; bedding was in¬

holiday.

nSSor°uS
ihL prewar toll ofwhen there
in 1952 312
the

of

share

per

stock

shares.

Blyfh-First Boston

Slightly Spurred by Reduced-

volume

preferred

par

i

>

to

Early

the

and

ago

dollar

ac-r.

cotton for the

decline of the preceding week.

1,159,158,000

agency reported, there were 25,803 trucks
as against 19,300 in the previous week and
the like 1953 week.

Commercial

a

many reduced-price promotions, shoppers in¬
spending slightly in most parts of the nation in the
on Wednesdaly of last week.
The spurt in shopping'

total

present

outstanding and in the first ten
months of 1953 to $4.08 per share.
The stock was recently placed on

mill

pound.

a

in

common

Earnings in
$4

sharply from the market

*on ^ar<?'s",
stated Canadian plants turned out 7,813 cars and
1,630 trucks last week, against
5,772 cars and 1,090 trucks in the
preceding week and 6,614 cars and
1,964 trucks in the

IvDo

cotton

—1 to
+3; Midwest and Northwest 0 to
Southwest 4-1 to +5 and Pacific Coast -f 2 to 4-6.
The demand for apparel recovered

^?1S country>
in

175,000
950,000

totaled 53,The amount of

East

Automobile output for the latest week
advanced above the
previous week, according to "Ward's Automotive
Reports."
The industry turned out an estimated
118,883 cars last week,
compared with 67,131 (revised) in the
previous week. A year ago
the weekly production was
103,266.

27,776

for

financingin

the

quisitions the company will have
long-term debt of $12,000,000, $3,-r

season

reported at

was

price

to

with

cumulative preferred

ago

U. S. Auto Output Rose in Latest Week

Last

the

effect

connection

introduction of color.

Loadings totaled 477,805 cars, a decrease
15.1% below the corresponding 1953
week, and
below

for

at

'

Giving

a

revenue

21.7%

crop

The total dollar volume of retail trade in the week

Association of American Railroads.

or

1953

; located

are

mated by Dun &

freight for the week ended Jan. 2, 1954,
which included New Year's
holiday, decreased 3,173 cars, or 0.7%
below the preceding Christmas
holiday week, according to the

cars

parity

Clearance sales of Winter coats

Loadings Drop 15.1% Below Like Week of Last

311

the

year

figure represents an increase of 626,689,000 kwh.
the preceding week, and an increase of
639,372,000

Loadings of

of

Withdrawals

cotton still under loan

period ended

The current

Car

200,176 bales.

mid-December

expect

and

Miss.

slightly higher
year-end

plants

Oglesby, 111.;
Des
Moipes, Ja.;
Cape Girardeau, Mo.; Nashville,
Tenn.; Cowan, Tenn., and Brandon,

Encouraged by

pro¬

of Jan. 1, 1953.

the comparable 1953 week

re¬

country.

Price Promotions

Electric Institute.

over

loan entries

Trade Volume Improves

weekly production

the like week in 1952.

Co.,-

at which figure the
company is
estimated to be fifth largest in the

through Jan. 1, at 5,359,461 bales, indicating entries for the
of

1.952

The amount of electric energy distributed
by the electric light
and power industry for the week ended
Saturday, Jan. 9, 1954,
was
estimated at 8,824,801,000
kwh.,1 according to the Edison

7.8%

announced

bales, leaving 5,305,745 bales still under loan.

Electric Output Rebounds Sharply
Upward in Latest Week

above that of

Coal

'

purchases of

The

placed at 2,238,000 tons and the operating rate was
99.3% of
capacity. The percentage figures for last year are based on annual
as

...

during the year 1953, according to the New York
Exchange, totaled 4,129,211 bags, or slightly above the pre¬
Green coffee prices in the New York market also
to new highs for all time as the new year
opened.
With holiday influences affecting
trading operations spot

34.36 cents

was

capacity of 117,547,470 tons

Portland Cement

York

increasing it to 13,354,000 barrels;

a

year.

season

75.4%

84.3% and

over

cocoa

creased their
was

New

as

month' from'1

proximately '2,000*000 barrels to,
the;. company's annual capacity;,

-

disappointing despite
European countries to buy American farm

some

daily

The CCC

(actual), yielding 1,798,000 tons.
For the like week

and

acquired

this

will bring total cost'
neighborhood of $10,000,000.
Necessary funds,
aside
from;
those provided by the present fi¬

of grain exports continued

capacity rate of

Last week the rate

were

of

provements

time

covering, scattered commission house buying and reports to the
effect that the Administration has given
up its idea of a twoprice system.
1

industry's ingot production
new

active and prices moved

was

cotton prices held in a narrow range and finished
than a week ago.
Supporting factors included

capacity for the week beginning Jan. 11, 1954, equivalent to 1,788,000 tons of ingots and steel for castings.
was

280.90 at this

Cocoa

vious

operating rate of steel companies having 96.1% of the steelmaking
capacity for the entire industry will be at an average of 75% of

Last week

and

High asking prices from producing countries as a result of
tightening world supplies continued to exert an upward pressure
on
cocoa prices which rose to the
highest levels in history.
Im¬

week

Steel

week earlier,

grain and soybean futures de¬
clined to about 45,000,000 bushels last
week, from 47,000,000 the
previous week, and 59,000,000 a year ago.

"Steel."
and

plants
first

Other

Average

prices of silicon steel (used in electrical
equipment) are being raised $3 to $18 a net ton.Reflecting the easing in demand for steel are plates, this trade
magazine notes. Only a few weeks ago the plate demand out¬
stripped supply. Now one of the principal producers of plates has
laid off 200 employees because of a decline in demand for that
product. It is expected that the decline will soon bring steel pro¬
ducers around to absorbing freight charges on plates too.
Order books for January delivery did not fill completely and
as a result steel ingot output in the week ended Jan. 10 was
only
1,788,000 net tons compared with 2,000,000, a year ago, concludes
Iron

a

surpluses.

other hand

American

of

Ga.,J

Rockmart,

*

further grants to

.

being cut to standard levels, continues

are

ac¬

Superior, Ohio.
the

Co.

wide range during the week.

down are some of the few remaining premium 1
prices. The blade of competition has become so keen that products
that had been considered "special" or "noncompetitive" and which
carried premium
"Steel."

at

Southern States

the announcement that Argentine oats exports to this coun¬
try would be limited to 2,500,000-bushels between now and -next-

being made.
Also going

or

Mildly Higher in

the

improvement

plants

These
of

and

Most of the current contracts expire at
However, some downward adjustments are

the end of next June.

and

irregular in the week with early strength giving
way to weakness as the new year opened.
nancing, are being obtained by;
Wheat, corn and rye
futures were under considerable hedging pressure as the result
additions to long-term
borrowings:
of heavy country selling in the cash markets.
and from internal sources.
Oats prices reg-"
;
f, ;/ 4
istered moderate gains for the, week, reflecting small
vl The new plants will add
offeringsap¬

proaching, it points out.

over

and

were

The volume

widespread cuts in standard prices of steel are in prospect
while renewal of a wage contract with the steelworkers is ap¬

kwh.,

the

year ago.

Grains

be submitted to the Inter¬

No

kwh.

show

cement

to the

with 273.55

compared

approval, it adds.

state Commerce Commission for

was

is to

quisition

by the com-;
with

spectively, at an aggregate cost
of $6,300,000.
The projected im¬

a

by the eastern railroads to make rate reductions of 18% to 20%
shipments of many iron aijd steel products. Aim of those railroadsisto combat truck competition and increase business for 1954.

On the

its chief function

and

connection

as

"Steel," the weekly

for

duction

use

in

pany

generaPeommodity price level, as measured by the Dun
& Bradstreet daily wholesale
commodity price index, moved ir¬
regularly the past week.
The index closed at 273.92 on Jan. 5,

shipments to buyers, it states. Another prospect of a lowering of
the amount of freight the buyers will have to stand is a proposal

rate

general

the sale will be used

The

and more opportunities to

money—at least foi^ the near term, says

The

in

Wholesale Commodity Price Index

magazine of metalworking, the current week.
The savings will be made largely on freight charges, although
some savings will come from price cuts on steel.
With keen competition prevailing in the steel market, steel
sellers are increasingly absorbing some of the freight charges on

.

foods

writing group managed by A. G.J
Becker & Co., Inc. Proceeds from

general trend of food prices at the wholesale level.

Scheduled This Week at 75% of Capacity

buyer can expect more

The steel

V

31

was made on Jan.,
$34 per share by an under-;

12 at

food

Latest Week

Steel Output
save

upward movement of the past two months,
price index, compiled by Dun & Bradstreet,
Inc., advanced from $6.81 on Dec. 29, to $6.85 on Jan. 5, marking
a new high for 28
months, or since Aug. 28, 1951, when it stood
at $6.89.
The current level at $6.85, compares with $6.23 on the
corresponding date a year ago, or a rise of 10.0%.
The index represents the sum total of the price
per pound
wholesale

30.

last Sept.

ufacturing Co.

Continuing the

.

the

i

Marquette Cement Sfk."

Wholesale Food Price Index Touches Highest Point in

marctmmentiligeSupone autoiM.tfve

Thursday, January 14, 1954'

pi

4 1

large increase shown for this week reflect in part the fact that this
year Christmas
fell on Friday and the week therefore included four days of
heavy pre-Christmas shopping as compared with the three days last year when
Christmas fell on Thurday.
'

1

and

is

expected

000 in

to

cost

$21,500,-

1954,

The

company's

principal

busi¬

is the production and sale of

ness

electricity in

an

area

in Missouri

and Kansas which includes Kansas

City, Mo. To a lesser degree it
^distributes natural gas, hot water

heat,
also

and
serves

water.
an

The

area

company
northern

in

Iowa, including Mason City.
For

the

12

months

ended

Oct.

31,

1953, the company had total
operating revenues of $45,127,-

000, net income of $6,521,000, and
per share earnings of $2.42.

Loewi Adds
(Special

to

The

to

Staff

Financial. Chronicle)

.

MILWAUKEE, Wis.—Harvey J.
LaChapelle has been added
staff

of

Mason

Loewi

Street,

Midwest Stock

&

Co.,

.

to the

225

members

Exchange.

East

of
4

the

Volume 179

Number 5290 ...The Commercial and Financial Chronicle

(191)

The following statistical tabulations
latest week

or

month available.
,•

Latest

IRON

AMERICAN

STEEL

AND

steel operations

Indicated

or

Previous

month ended

Dates shown in first column
"

„

Month

Jan. 17

1175.0

Ago

*75.4

84.3

ingots and castings

AMERICAN
Crude

PETROLEUM

and

oil

(net tons)

111,788,000

PERMIT

*1,798,000

1,900,000

2(238,000

6,179,490

6,515,950

"'of

INSTITUTE:

VALUATION,— DUN

INC.—215

(bbk.

average

*

Crude

to stills—daily

runs

Gasoline- output

.

England

'

Middle Atlantic

of

:—jan.

2

---Jan.

2

§7,202,000

*6,233,700
7,011,000

--—Jan.

2

25,141,000

25,192,000

.

(bbls.)—^

average

(bbls.)——

Kerosene output
Distillate fuel oil

*

—

i

——V-

(bblS.)————1,———-.Jan.
(bbls.)

output

-...Residual fuel oil output

—

(bbls.)

2

jan.

2

——:

Kerosene

(bbls.)
fuel

Distillate

.

Residual

ASSOCIATION

at———i

oil

(bbls.)

at—,—

oil

fuel

(bbls.)

at—

OF

AMERICAN

160,075.000

£667,000
9,664,000

156,030,000

150,098,000

•30,251,000

34,775,000
130,053,000

99,713,000

freight loaded

freight received from connections

(number of cars)—'

; 49,810,-000

49,435,000

.—Jan.

477,805

cars)—Jan.

NEWS-RECORD;

463,906

Total

\
S. construction—.——

U.

Private

Public

-

"

-

construction :

construction

T„n

51,073,000

480,978

49,459,000

662,035

518,935

.

$225,873,000

————"j®"'
:—"j*"*

—

573,538

$153,197,000

78,926,000

$655,138,000

52,193,000

146,947,000

„—

New
<

101,004,000

562,957

$323,666,000

528,209,000

135,062,000

126,929,000

"

coal

Bituminous

and

OF

lignite
Pennsylvania anthracite (tons)

'*■

Beehive

coke

89,087,000

118,072,000

York

8,857,000

.70,846,000

6,940,000

6,515,000

8.200.000

7,725,000

Manufacturing number
Wholesale
Retail

410,000

499,000

557,000

514,000

'

•

40,900

'

*51,200

70.800

163

190

Construction

Electric, output -(in

FAILURES

(COMMERCIAL

INDUSTRIAL)

AND

—

9

8,824,801

,

8,661,131

8,210,012

/

*8,198,112

&

DUN

'

-

BRADSTREET, INC.—

Jan.

—

—Jan.

_1—„—

7

■

202 '

.

216

150:

\

163

IRON AGE COMPOSITE PRICES:

Finished steel
"

Pig iron

(per

Scrap steel

.

—i_i—

(pet lb.)

(E.

M. J.

&

Electrolytic copper—:

4.632c

$56.59

$56.59

$56.59

$29.67 *

$30.17

$32.00

Wholesale

December

29.295c

28.600c

34.800c

84.750c

83.250c

121.500c

13.500c

13.500c

13.500c

14.750c

13.300c

13.300c

13.300c

14.550c

State

10.000c

10.000c

10.000c

13.000c

96.97

96.83

96.22

95.79

MOODY'S

St.

Louis)

BOND

at—

PRICES

—Jan.

——

Jan. 12
Tan. 12

—

106.39

111.44

111.25

110.88

108.52

108.16

108.16

106.21

Public

Group

106.21

106.21

106.04

108.70

100.32

100.16

100.32

104.14

104.14

104.14

103.80

Utilities

106.74

106.56

Industrials
MOODY'S

Group

—

Group

—

107.98

108.34

corporate-:

Aaa

2.71

2.72

2.76

."2

——

3.37

3.38

.-Jan. 12
:^-Jan. 12

3.09

3.10

3.12

Baa

3.27

3.27

Railroad

3.38

3.38

3.39

Utilities

Public

Industrials

3.73

3.74

3.73

3.50

Jan. 12
Jan. 12
.—Jan. 12

MOODY'S

Group

COMMODITY

NATIONAL

i;

Group
INDEX—

3.50

3.50

3.52

3.33

3.35

3.36

3.21

3.26

3.28

3.26

3.04

—Jan. 12

418.9

412.7

408.8

404.8

Orders received
Production

.Dec. 31

(tons)

Dec. 31

(tons)

145,118

**185,853

„

**103,430

—

192,667

200,597

1312,725

235,824

1299,914

—Dec. 31

Percentage of activity—
Unfilled orders (tons) at end of period

**43

77

86

166

Dec. 31

**392,425

313,963

374,435

$478,354

2

=

Jan.

100

107.47

107.38

107.45

OF ODDLOT DEALERS AND
SPECIALISTS ON N. Y. STOCK
EXCHANGE — SECURITIES EXCHANGE COMMISSION:

Odd-lot sales by dealers
Number

Number of shares—
•"

Dollar value

19,289

—:

OF

24,661

18,876

21,368

580,262

750,883

559,576

$31,713,691

$24,192,630

$26,891,345

Customers'
Number of

short sales

short sales

Customers

other

Dollar

-

1

other sales

-

value

Round-lot

'

141

139

187

88

'•

22,739,

28,531

20,119

846,235

589,933

All

4,915

7,002

2,576

841,320
$30,885,477

582,931

285,260

304,640

200,590

—Dec. 26

285,260

304,640

200,590

229~990

Dec. 26

...

149,610

216,600

186,440

—2—2—2—2.2—-2-—

182,520

ON THE NEW YORKTRANSACTIONS
(SHARES):

SALES

STOCK

OF MEMBERS

263,540

298,280

235,670

Dec. 19
Dec. 19

8,095,420

7,058,190

6,788,740

2

3,326,700

7,321,730

7,087,020

*13,862,000

13,477,000

♦8,065,000

7,634,000

*5,797,000.

5,843,000

111.8

*112.1

109.0

*151.4

143.3

17,215,000

Average=100)—
150.0

of

in

manufac¬

.'

•17,265,000

16,680,000

*10,019,000

9,440,000

*7,246,000

7,240,000

130

132

133

131

136

134

$26,451

♦$26,430
*20,084

$23,615

19,843

$46,294

!

——

9,952,000

7,263,000

goods

MANUFACTURERS'
(DEPT.

OF

INVENTORIES

COMMERCE)

Month of October

NEW

(millions of

Inventories—

of

•$46,515

$43,415

Nov.:

Durables

&

SALES

SERIES—

dollars);
*

,

.

I

—

Nondurables

—

Total

of

OF

19,800

791,560
127,930

633,540

Dec. 19

sales

Dec.

696,950

19,

initiated off the floor-

138,350

152,140

Service

692,070

938,840

692,600

199,260

203,580

6,700

19,400

6,500

151,790

157,590

177,930

197,330

—

300,960

222,860

407,353

22,670

56,050

28,650

211,510
267,560

247,390

362,937

251,420

276,040

393,377

1,250,670

1,123,390

158,500

189,080

1,014,080

181,980
942,470

186,400

Dec. 19

979,040

1,408,577

Dec. 19

)r.

Total sales :—:

1,318,370

Dec. 19

1,172,580

1,124,450

1,165,440

S.

DEPT.

of Jan. 1.1954. as

**Five days

M




•33.8

33.1

4.0

3.9

in-

*

51.4

transfer

payments—

14.6

—

U.

—

FARMERS
DEPT.

OF

1909-July,

—

13.3

•270.0

258.0

250

BY
S.

September,

13.6

271.0

nonagricultural income
RECEIVED

5.0

256

282

INDEX

AGRICUL¬

1951=100

15:

231

234

260

grain

223

219

240

grain and hay

187

200

219

439

452

Crops

—,—-

>

—

5

110.4

110.6

110.1

109.8

96.2

*97.1

95.0

101.1

Fruit

—-Jan.

5

105.8

•105.7

104.7

104.0

Truck

91.6

86.8

97.1

——

Cotton

5

—--Jan.

5

pf foreign; crude runs.t

114.5

§Based

on

>

new

114.5

114.5

Meat
,

-

|

:

and

animals

Dairy products

products
—

——r-r—

Poultry and eggs

——

221
159

255

251

304

267

—7r.,«—.

279

214
175

crops

Livestock

annual

429

274
'

Oil-bearing crops

112.9

capacity of 124,330,410 tons
against the Jan. 1, 1953 basis of 117,547,470 tons. tPrellminary figure. tEleven days ended Dec. 31,1952.

ended Dec. 31, 1953.

social

income

Tobacco

TIncludes 616,000 barrels

for

33.8

84.7

21.3

—As of Oct.

u*

91.4

•Revised.figure."-

contributions

50.0
22.4

5.1

Jan.

Ail commodities other than farm and foods

-v—

-

*24.1

22.7

-Jan.

products.—
—

—

•52.7

24.1

Unadjusted—
All farm products

,

commodities

foods—

—

-

186.6

•89.3

53.0
=.

190.2

•196.0

88.8

-

industries

labor

NUMBER

Commodity Group—[

Processed

$277.3

1

•199.9

195.9

Feed

•

-•

U.

—

•$286.3

199.7

Food

——

_—

PRICES, NEW SERIES
LABOR—(1947-49=100):

WHOLESALE

1,609,973

$287.3

♦49.0

PRICES

1,597,657

<—

—

sales.

1

5.1

TURE

purchases

1,486

49.1

Total

of members—
Dec. 19

1,777

,

22.8

30,440

.

1,820

UNITED STATES

Personal interest income and dividends
Total

314,430
228,750

$29,644,000

Proprietors and rental Income

265,440

Dec. 19

sales

Other

258,940

164,290

Dec. 19

Total round-lot transactions for account

IN THE

Industries

employee

246,500

7,900

$30,275,000

'

OF

producing industries

Government
Less

212,380

159,690

Dec. 19

INSUR¬

income-

Distributing

786,700

Dec. 19

Short sales

Short sales

Commodity

553,720

Dec. 19

2_;

personal

119,230

761,470

24,651

COMMERCE)—Month
(in billions);

573,370

.

*25,398^

4.0

956,120

Dec. 19

—2

Total sales

Total sales

750,450

the floor2

LOAN

CORPORATION—Month of Sept.

of October

$30,398,000

FORECLOSURES-

AND

Wage and salary receipts, total
Total employer disbursement

Dec. 19

Short sales

ESTATE

SAVINGS

(DEPARTMENT

Total

Dec. 19

Other transactions initiated on

REAL

PERSONAL INCOME

specialists in stocks in which registered

Other-transactions

24,902

MONEY IN CIRCULATION—TREASURY DEPT.
—As of Oct. 31 (000's omitted)

10,054,720

:

ACCOUNT

FOR

Dec. 19

as

13,829,000

Avge.=100)—

SYSTEM—1917-49=100—Month

9,819,050

sales

Other

All

;

Seasonally adusted

ANCE

231,280

Dec. 19

Farm

(1947-49'

(1947-49

number

FEDERAL

.Dec. 19

purchases

Other

workers)

——

manufacturing '

2

TRANSACTIONS

Transactions

Total

Indexes

NON-FARM

MEM¬
BERS. EXCEPT ODD-LOT DEALERS AND SPECIALISTS:

Other

(production

Sales

Dec. 26

;

;

Total sales

Other

1,711

SERIES—Month of

INDUSTRIAL PRODUCTION—BOARD OF
GOV¬
ERNORS
OF
THE
FEDERAL
RESERVE

229,990

sales

ROUND-LOT

.

1,738

DEPT.

manufacturing

All

$27,115,753

696,944.

$25,251,188

Dec. 26

sales
—

ACCOUNT

Other

.

S.

goods

Estimated

678,961

$22,176,603

Dec. 26'

Short sales

-■

2,839

1,726

;

manufacturing

All

681,537

4,570

Dec. 26

sales.

ROUND-LOT

Total

PAYROLLS—U.

manufacturing

Payroll

23,321

701,514

purchases by dealers—

Total Round-lot sales—

•

————*—

Employment Indexes

EXCHANGE AND ROUND-LOT STOCK
FOR

credit

23,409

Dec. 26

sales—

Number of shares

TOTAL

20,306

Dec. 26

——

2,100

2,811

—

sales by dealers—

Other

Roundr-lot

28,670

Dec. 26

—

Number of shares—Total
Short sales

".

22,880

Dec. 26

shares—Total sales—,

Customers'

'•

Dec. 26

—

6,650

2,131

loans

Unadjusted

Odd-lot purchases
Customers'

credit

LABOR—REVISED

Durable

624,121

$23,617,381

by dealers (customers' sales)—
Number of orders—Customers' total sales

3,750

6,680

goods

September:
All

s'

—Dec. 26

—

1,393

4,198

5,820,000

—

Nondurable goods

Dec. 26

.

;—

>4,962

1,585

30:

modernization

EMPLOYMENT AND

Durable

Dec. 26

7,856

5,366

RE-.

credit

i

consumer

Service

108.50

>

(customers' purchases)—

orders

of

17,961

10,337

8,009,000

term

employees
turing industries—

8

$24,611

21,486

530,230

SERIES—Esti¬

intermediate

Single payment loans—!
Charge accounts

OIL, PAINT AND DRUG REPORTER PRICE INDEX—
1949 AVERAGE

$28,166

2,840

FEDERAL

credit

Noninstalment

STOCK TRANSACTIONS FOR ODD-LOT ACCOUNT
*

$28,252

2,100

THE

REVISED

and

Nondurable goods

ASSOCIATION:

PAPERBOARD

SYSTEM

short

OF

.

3.35

1.

130,283

6,666

—.

OUTSTANDING—BOARD

GOVERNORS

Other

3.24

Jan. 12

Group

74,855

1,604

—

Automobile

3.07

:

—

—

246,463

5,406

municipal

1

Instalment

2.99

3.25

A

376,746

314,417

21,586

•

;

millions as of Nov.
Total consumer credit

3.20

22_.

—

and

in

2.80

3.36

i

Aa

389,272

76,383

*

Personal loans

2—Jan. 12

2

—

$794,315
405,043

$906,976

929,340

.

construction

Repair and

—2„Jan. 12

Government Bonds

$74,189

—

construction

SERVE

112.37

Jan. 12

U. S.

*$79,380

—

construction

mated

YIELD DAILY AVERAGES:

BOND

Average

OF

109.24

108.34

20,652

CONSTRUCTION
EN¬
NEWS-RECORD
Month
of

CONSUMER CREDIT

106.74

107.09

10,122

*22,280

505,198

4T—

(000's omitted):

S.

Public

111.81

Jan. 12
•_Jan. 12
Jan. 12

:2

„

U.

Private

113.31

Jan. 12

;

Railroad

Total

109.42
„

Jan. 12

Baa
'

106.56

Jan. 12

corporate

...

A

.

«

Jan. 12

Average
Aaa
Aa

24.200c

AVERAGES:

DAILY

U. S. Government Bonds

$43,415

*10,585

581,581

———„j.,

Federal

—

(East

•$46,515

22,061-

COM¬

October

ENGINEERING

29.700c

Zinc

$46,294

$1,510,921

OF
of

3,027,000

$18,757,000

10,680*

DEPT.

3,848,000

$37,076,000

Total

85.250c

———

2,424,000
5,865,000
1,588,000

4,218

—

SERIES—Month

L:

28.650c

29.700c

$5,853,000

—

Jan-

29.700c

$14,956,000
4,235,000
9,671,000
4,366.000

10,358

NEW

GINEERING
—

61

590

62

$36,795,000

—*

—r_

INVENTORIES

refinery at—_
2——__—.———Jan.
Straits tin (New York) at
——.-Jan.
Lead (New. York) at_—~~——Jan.
■Lead (St. Louis) at—
,_j.
.Jan.

.

——-

JVIanufacturlng

CIVIL

—

66

840

4,836,000
-11,083,000
4,621,000
2,687,000

$42.00

Export

121

280

75

$13,568,000

—:—

(millions of dollars):

.

Domestic refinery at
«

-

'

$79,035

liabilities

MERCE

$55.26

QUOTATIONS):

.

89

815:,«•*'

__—------—■——.—

4.376c

5

'j

ton)—

gross

4,634c

5

(per gross ton)___

METAL PRICES

4.634c

5

Jan.

__

-——--—

188»

66

—;

Retail'

.*

39,097,490
288,549,567

97

number———l—s.——

liabilities,,—1

'

7

kwh.)—_—2

000

.

56,692,401

368,016,559

84

Commercial service liabilities

BUSINESS

EDISON ELECTRIC INSTITUTE:
:*

82

$327,647,057

8,950,612

404

—

Total
2

$424,708,960

•^175

—

—

liabilities

64,633,141

26,352,714

.

Manufacturing liabilities
Wholesale,, liabilities
Construction

10,433,981
75,398,061

—-1,

number;——_—___j.

number

29,289,713

68,994,047
58,664,223
20,667,868

55,122,379

—

——

81

"

—Jan.

———-

-4-

——

Commercial seryice
Total

64,576,550

94,164,738
-

BRADSTREET,.

92,000
'

"

100

$375,582,397
49,037,818
-v" 326:544,579
•

.

number

number

Retail
...

——————

AVERAGE

States——^

City-_-4^'vt-$-^l---_?rJ^-Il.-:_^'tC_.
-

$14,807,902

99,264,320
34,015,310

*

j

„

BUSINESS FAILURES—DUN &
INC.—Month of November:

117,758,000

11,917,000

(tons)—2—————---

SYSTEM—1947-49

13,772,199

67,862y773«

Outside New York City—

.

MINES): I

(tons^-_——^•
—

.'t

188,604,000

11,655,000

————————

OUTPUT. (U: S. BUREAU

COAL

:C<>~

.,

511,981

135,292,000

St^te and municipal——

-j—t.—

*

Total United"

,

: i*

—

——

——

ENGINEERING

—

1

Pacific

"

CONSTRUCTION

ENGINEERING

of

(no;

76,524,092
53,394,793
-.22,832,476

-

RAILROADS:

Revenue

Central

•

$27,020,458

"

—

Mountain

28,094,000

117,231,000

Ago

46,213,936

——_

Central'

West

137,016,000

29,081,000

——

—

9,524,000

Year

Month

$16,918,929'
78,063,194

—

—

,

South Central

10,921.000

8,628,000

113,582,000

jan_

Revenue
CIVIL

2,505,000
8,702,000

'

Atlantic

4*,

1— jan
—

East

7,221,000

f9,952,000

8,805,000 '

at———jan..
1
't-——Jan.

.

6,964,000

24,876,000

South

24,306,000
3,009,000

•*'

10,358,000

Stocks at refineries, bulk terminals, in transit, in pipe lines—
Finished and unfinished gasoline (bbls.)

.

-

3,020,000 "

2

jan.

—:

6,194,900

Previous

November:

New

output—daily

:

of that date:.

CITIES—Month

—

condensate

gallons each)

'

as

&

——

42

either for the

are

r

Month

BUILDING

BRADSTREET,

Jan. 17

—

*

Latest

99.3

Equivalent to—
Steel

'

that date, or,inpases-of
quotations^^are

Year

Ago

INSTITUTE:

(percent of capacity)

on

production and other figures for the

cover

m

week

39

276

301

273

299

328

283

274

316

236

231

228

311
,

-

215
189

40

The Commercial and Financial Chronicle..

(192)

saleST ho additions,

Continued from page 16

it

dividends

no

the end of each

reinvested since

NYSE Monthly Investment PlanAn Idea lor Democratic Capitalism!
direct

dividends

reinvest

to

or

and member firms will
them. While there would be ad¬
annual reports, ikfid vote
your
full shares in accordance vantage in having these new in¬
vestors get the feel of ownership
*vith
your
written instructions.
from those dividend checks it will
After you have received a stock
-certificate, your dividends, reports probably be more desirable for

t>ought,

£end you

di¬

proxies will come to you

und

the company.

from

rect

You

the
Monthly In¬

get your stock at

can

completion of your
vestment Plan or when the shares

account total 50 or more.
no charge for delivery.

for your
There is

If

want any or all of your
more frequent intervals
be a charge of one

you

shares at

Ihere

will

dollar

plus mailing

cost on each

delivery.
Investment Principles

Good

Monthly Invest¬
provide the
investor with a sound
based on good invest¬

Thus, with the
Plan

ment

average

program

principles. Of course every-

ment

has a different set of invest¬
principles, but let's check

one

,

can

you

ment

In every instance
value is greater than

Now, I would like to show you
slides

few

a

would

automatically but
them. As
member firms have pointed out,
.bringing in these new investors
carries with it the usual necessity
and opportunity to
inform and
guide them in the principles of
«>und investment—to prevent the

with this Plan

fared

have

investor

an

the past 25 years.

over

We asked

Standard & Poor's to compute the
investment return

Plans of $40 a

on

21 five-year

month.

Instead of

trying to pick an individual stock
we suggested that they use a com¬
posite of their 90-stock index.
Dividends
were
reinvested, less
income

estimated

the
man

with

an

and

wife

and

tax

two

for

a

children,

income of $3,000,

annual

and less the 6% commission on all

purchases.
Slide 1: Here you see the results
of

five-year plan starting the
after World War II—
1950. At $40 a month the

one

1946 to

elements

how

on

year

invested

amount

dividends

riod
after

five

During this

$2,400.

years was

the

over

deducting

the

pe¬

reinvested

were

6%

regular

commission and the estimated in¬
The result in terms of

tax.

come

Poor's

&

Standard

the

90

stock

As

plans is more than double the
original investment. Of course, no
adjustments have been made for
sales commissions, or capital gains

plans since the end of the
five-year period. The percentages
shown are not the current rate of

would

these average an¬
from a low of
7.4% to a top of 11%. The bar
for the 1949-53 period shows the
current

7.7%

range

little

rate—a

less

than

which is the amount of
the 90 stock index

—

dividends

paying now on a plan
which was just completed. On this
would

be

basis people who might have
bought
stocks under the Plan
from 1929 on and held on to them
would have done very well in¬
deed.

give

can

bearing whatever on

no

us

figures

these

course

ture, but at least it is interesting
to see how the Plan might have
worked out over the past 25 years.

such figures as these
can't be used with the public, un¬
Naturally,

carefully qualified
as being historical and having no
right for December, 1950—$3,061,
validity for future performance.
purchase of common stocks by a net gain of 27.0%. Of course,
An excellent piece of sales am¬
"those who can't afford the risk, if the holdings were sold at that
munition for periodic purchasing
and to tailor the stocks purchased time, commissions and taxes, both
is provided by the University of
to the prospects' desire and abil¬ transfer and capital gains, would
Michigan study with which you
ity to bear such risk. If we are have to be deducted. The red por¬
are
probably familiar. "The Ex¬
tion at the top of the bar repre¬
to interest new millions of people
in share ownership, the Plan must sents the increase in the value of change" magazine for November
carried the story of that study
not
be
over-sold.
One of the the holdings caused by the rein¬

against

things that we must guard
is

buyer

the

letting

assume

a

is shown

index

the

as

the

bar at

vestment of dividends.

The shares

purchased by the dividends have

monthly Plan which he can't af¬
ford to keep up. It would be ex¬

also

tremely shortsighted to encourage

for 21

Monthly Invest¬
a month only
to have him drop it because it is
too heavy a burden.
How much

ing at the first of each year from

and

Plan of $50

The

a

buy

a

Plan of $100

better
a

to

man

ment

sell him

to

a

month, which he

for

maintain

can

period of years.

a

im¬

portant
contribution, first,
by
helping the investor to define his
-objectives, and second, by guiding
stocks.

of

selection

the

in

him

investor
may be interested primarily in in¬
stitutional type stocks. Even if he
is buying just one Plan and one
iftock, he can provide diversifica¬
tion by selecting a stock in a di¬
versified company.
Perhaps the
simplest way for a firm to handle
selection is to develop a list of
the

Naturally,

average

suitable

stocks which it thinks is
for

the

On

JPlan.
even

such

include

ment

in the
list you could

investor

average
a

invest¬

closed-end

preferred

and

companies

stocks which are listed.

Also, it is

•obviously easier and less expen¬
sive

review

to

such

a

list

pe¬

riodically rather than to try to
keep tract of many Plans among
the list of 1,200

Slide 2: Now you see

1929

different stocks.

(2) Periodic Purchases: Since
the Monthly Investment Plan is a
periodic program it provides auto¬

through

For

1949.

obvious

wanted to include 1929

reasons we

the period

of the depression.
of the bars shows
the result of reinvesting the divi¬
red

come

part

commission

less

in¬

and

taxes.

Slide 3:

Here is the

same

chart

the percentage, loss or
gain, in the market value at the
end of each five-year period over
the original investment of $2,400.
Five of the periods show a loss.
Seven others have gains up to
12%.
The remaining nine plans
show increases ranging from 24
to 87%.

evident

is

that,

based

this

from

chart

Standard

upon

&

Poor's 90 stock index, the Monthly
Investment Plan is not

a

get-rich-

quick proposition. However, when

recall what happened to most
property values during the 30's,
it seems significant that due to
dollar cost averaging the greatest
loss at the end of any five year

you

period is only 16%.
Slide 4: This is what would have

happened to the investor who
bought the Plan from January
1946 through December 1950, and
held

to

on

securities

his

Instead of

now.

the

dollar cost averaging sounds like

he

now

to

a

27%

up

gain

to

over

$3,884.

lot of people and it is
inherent
advantage
in
the

magic to
an

a

Plan. However, the

ticularly
will

the

come

new

in

investor—par¬
investor who

this Plan—must

on

that

he

can

benefit

downswings

in

the

price

realize

from

of

the

stock he is buying only providing
its long range price trend is up¬
his

periodic purchases during the

pe¬

and

of

riod

(3)

he

has

continued

ward

declining

the

investor

to

Dividends:

receive




an

his

increase in value

of

the

which
was

original in¬

vest

for

year

period of years in a

a

that each

20

held

intact

five-year

plans

the second slide
up

to

now.

No

stocks,

common

reinvested all divi¬
dends, the return you could ex¬
pect would be the equivalent of
if

and

you

compound interest on you?

money,

without providing for in¬

taxes.

come

After

you

probably

about it. The commission
should give the customer's

go

rates

broker

that

return

a

mutual funds.

nized

by

Moreover, the Plan

highly

simple and

so

compares

offered

that

with

favorably

further company

mecha¬

with

either

payments

lot houses take over

should

stop.

The

the job

making the purchase, handling

bookkeeping, sending out the

receipts and confirmations, mail¬

ing or reinvesting dividends,
taking custody of the stock, and
receiving, handling and acknowl¬
edging future purchases.
This should
centrate

on

permit you to con¬
developing new busi¬

ness.

Some firms may regard ,the

Plan

as

merely

a

new

to

way

and as an additional

buy stocks

tool for their

present sales

opera¬

For other firms it may lead

to

n e w,
low-cost,
techniques—perhaps

mass-selling
even

special

sales departments.

invest

a

over

period about $10,000..
Or $150 per month could cover
as many as nine
quarterly Plans,
of $50 each with three payable
each month. If he could set aside
year

$200

a

month he could buy five
stocks in five monthly

different
Plans

Of

groups

each.

at $40

the cost of

course

commission rate.

or

achieving

is a higher
For example, on

diversification

$50 purchase the commission is
During these 6% as compared to 4% on a pur¬
meetings
representatives
might chase of $150.
explain the nature of the Plan
As
NYSE Chairman,
Dick.
and the investments which they
Crooks, has pointed out, the Plan
recommend.
also seems to provide an ideal
a

after busines hours.

in

Plan

vehicle for investment clubs.

folders describing

To distribute

pay

company

There

enve¬

are

tunities

lopes.
To set up information and
booths in

to

other oppor¬
special mer¬

many

develop

chandising

needs.

a

It would also seem advisable to

program

or

try to get the cooperation of the

For

companies may wish to offer-

some

fices.

for special
example*

packages

investment

order

company plants and of¬

for college education,,
portfolio.
Of

retirement

a

the reason for developing;
special Plans is to give thean opportunity to approach
program.
a
particular group of prospects:
If a listed company agrees to with a
specially tailored packagemake payroll deductions for its and a
special sales story.
own stock
under the Plan, mem¬
Yesterday in cooperation withi
ber firms should suggest that the member firms we released a mer¬

local
sure

unions

that

make

will

to

its

make

counsel

activities

its

registration

its

require

Securities Act of

the

In the

with
that

sure

not

under

least

at

check

company

to

or

they will not oppose the

1933.

course,

such

broker

chandising kit. I believe that you-,
found copies of the portfolioon these seats.
Since this kit con¬
tains a number of important sales:
all

opinion of counsel for the

tools to help you sell the Plan,,
Exchange, registration is not re¬ perhaps it would be a good idea,
quired unless the company's ac-' to go through it quickly to indi¬
tivities
in
connection
with
the cate the kind of information which*
Plan constitute a "sale," as de¬ you will fnd in it.

fined

by the 1933 Act.

After

In the first

purchase order,
should arrange with
his employer for the appropriate
payroll deduction.
A
company
can
make payroll deductions for
the Plan weekly or otherwise in
signing

a

the employee

amounts

small

as

$4

as

a

week

basic

and

pocket inside is our

question and answer book
a
six-page leaflet digesting

important features of the Plan.
folders can be imprinted',

the

These

the

with

name

and'

of your firm

They are thethe Plan. Also,,

available at cost.

are

basic sales tools for

employee's plan of, say, in the first pocket is a booklet:
or about $10 a which can give you some prac¬
week (under a plan of $40 per tical advice on getting the best
month). The company would ac¬ results from direct mail. You will'
cumulate funds for such deduc¬ also find three
offering letters
(under

an

per

quarter)

remit them

tions and

check with the list
amounts at

intervals.
address

monthly

1 The

by

single which

can

be used

as

they

are

or

adapted in any way you see fit..
quarterly These letters are directed toward

or

inquiries

would getting

company

remittance

its

a

of employees'

the

to

for

basiccullf

the

In this way you can

booklet.

firm, in care of the cen¬ out of a large mailing list the best
office box of the Monthly prospects at lowest cost. A sug¬
Investment Plan
in New York. gested transmittal letter for en¬
From then on all details, includ¬ closing the booklet to the prospect
of

notices

ing

Investment Plan

individual

execution,

would

Monthly

the

under

handled

be

and

Plan

How

cover

of

Markets

The

look

trative
any

You will

stock

own

of

ing the highest share ownership.
This

means

that

55%

of

applications

actually take the Plan
field. Certainly, no

the

us

at

this time

can

see

all of the opportunities

all

of

the

problems.

And

fore¬
—

nor

one

of

the advantages of the Plan is that

address

and

representativewithi

also

next
a

few

days.

sample mailing

filled

in

on

a

cardi

requesting the booklet.

And this is a group hav¬

panies.

The

plete

next pocket contains com¬
material for a newspaper

these

campaign,
including
nine
sug¬
for gested newspaper ads. (Mats for;
new accounts.
Here is a tremen¬ any or all of these ads are availadous business potential for almost able at no cost.)
The advertise¬
any firm and another possible ap¬ ments are only suggestions; theyexecutives should be prospects

We

all

know

With

new

a

now

executives

salary.

many

see

the

The

kind—even in their own com¬

We think you will dis¬

to

during

at the Execu¬ showing the most efficient direct;
Brookings study mail technique with window en¬
showed that only 45% of adminis¬ velopes and the prospect's nameLet's

tive market.

how

use

Plan

You will notice-

of the firm will get in touch

Executive Market

matter

you

also included.

him

the Monthly
sell special

can

into

Special

is

that the transmittal letter informs

directly with the the prospect that

employees.

plication for the Plan.

out

an

tral post

the

The

him

give

would

he

dends

of

during

Plans of $50

would

This

five

cooperation. For

meetings

employees,

$150 a month he could

member

odd

tion.

hold

To
of

may

opportunity for diversification by
investing in three different stocks.
Through
reinvestment of divi¬

of

idea

portfolio

three monthy

each.

such

sighed, the broker and his

firm have little else to do—unless

the

the

may

you

—

special version

a

If the executive can

years.

buy

example:

that after the purchase or¬

der is

of

chance

groups

executive

aside

set

getting the company to
make payroll deductions,
firms might try to get

member

$52

afford to sell this Plan?
depends on how

Can you
That

one

first

we saw on

of

section

cross

when you

assume

Ex¬

concluded that if you were to

markets?

year on his
vestment of $2,400.

the

and

from 1937 to 1950, that study
in¬
a fixed sum of money every

ence

turn before income taxes of about

Iper

Are

change will have a booklet with
that article available to Member
Firms at cost.
Based on experi¬

Investment

9.3%

Good

"How

Stocks,"

gain, the investor would have re¬
ceived during the three year pe¬
riod—from 1951 through 1953—a
total of $672.40 in cash dividends,
an average of about
$225 a year.
This represents an additional re¬

Slide 5: Now

The Plan provides the opportunity

for

shows

This represents a gain
of about 62%. In addition to this

prices.

Compounding

original investment of $2,400,

title

Common

is
It

are

the

under

12.2%

showing

matic dollar cost averaging. Now

*

the results

such five-year plans, start¬

dends,

So the broker can make an

*

appreciated.

they

less

the

approve

agree to

investment return for the fu¬

the

five

It
them

of

and

professionals

$5,000, $10,000
or
$25,000
a
period of time, perhaps

over

their own

some

men.

—

Plan.

the

vest

purchase

making payroll deductions at the
request of employees.

the

Of

that

welcome

company

these

offer the executive a Plan to in¬

permitting our member firms to
sell their stock, or stock in other
listed companies, under this Plan.
All that is necessary is that the

As you can see,

yields

stock

encourage

likely

seems

by the number of years since the
plan was completed and applied
to the original $2,400 investment.
nual

to

similar

Your

com¬

employees to buy their stock.

of each plan divided

completion

of

plans for their employees and are

these

dividends

have

not

reluctant

of

own

and

wish to work out

in listed companies. Fre¬
quently, however, these compa¬
do

lot of

a

merchants

and

companies

many

pany or

So, in addition to the

the total amount
received since the

the

couple of examples

owning stock in their

capital gain shown on the pre¬
vious chart, this is the average an¬
nual rate of dividends for each of

are

attractive to

To sell these executives
a

know,

you

nies

They

payment out of income will seem

many

strongly in favor of employees

are

taxes.

6:

so

situations

for different markets:

the

20

Slide

to

investment

Let's take

In fact,

original investment.

the market value for 13 out of

return.

dends.

(1) Investment Advice and Re¬
view: The Plan does not provide
broker can supply

program by reinvest¬
compounding the divi¬

and

ing

first

the

accelerate their

to

investment

against these three:

these

them

of

most

the

adapted

of

and markets.

five-year Plan.
the market

be

can

types

.Thursday, January 14, 1954

trying to

save

the

money

large

or

every

of

today, no
small the

pay

increase

be

used

as
is or adapted in
In this pocket also are
suggestions on how to use news¬

can

problems

any way.

paper

paper
to

use

advertising and a
publicity release for

news¬
a

firm-

in

announcing its partici¬
and expenses seem to
keep pace. We all know execu¬ pation in the Plan.
The pocket on the following
tives on generous
salaries who
have great difficulty accumulat¬ page
includes display material"
ing sums to invest in common and "on the air" promotion. Heretaxes go up

idea

stocks.

The

list

stocks

i

of

of

acquiring

through

a

are

periodic

use

some
suggestions on how to
radio and television and spe-

Volume 179

cially

Number 5290... The Commercial and Financial
Chronicle

»•

prepared

both

media.

commercials

There

counter card.

is

for

So that's

sample

a

Plan

The window poster

larger size is identical. Both
the counter card and the window
case

available

are

have

you

about

the

at

cost.

occasion

Plan

to

clubs

opens

and

In

to

for

other

groups, we have included
speech material which you

All this material is available
The project will be

of

self-liquidating.

the

the

ownership.

it

calculate

.

Miles of Carlisle &
the

Haskell, Vice-President

lot

raise

questions,

any

hand

you

I'm

and

these experts will be
glad to

sure

a

without

more

sive

rate

below

be

vide

a

fair

a

return

estimated

of

million,

earnings
share.

6%

of

to

be

$105

on

in

in

A continuation of the

to

from

the present $1.50 annual
rate,
much as $1.80 per share

with

as

possibility.

a

sound

Public

Commission

of

stock

The
tablished

growth
On

of

million

I have pointed out.
basis of an estimated

as

$50 million

of

sales

for

1953

the

the

will

In

amounts

de¬

I

attention

to

1

would
the

22

like

fact

to

that

assume

stock

common

It

seems

earnings
of

on

pany

close

to

Neon

in

is

traded

the

on

under

WINTERS

Brooklyn

cate

Gas—Common

splendid

Stock

for

next

n

e n

d s,

pected

tions

and

be

the

IMM

ill

\%

of

use

natural gas. In

>

slip
Sii

m,

through

many cases,
however, the
conversion

O.aney

iv.

of

vylnler3

^

System

the

and

consum¬

ers' appliances from
manufactured
to natural
gas, brought with it
a
series of new problems.
until

And,

these

were

solved

and

sur¬

mounted, the expected profitabil¬
ity of natural gas failed to mate¬
rialize

and

—

the

shares

then

generally reacted.

As time passed
became obvious that

on,

and

the

problems

and

it

were

earnings

were

proving, the shares
upward

being solved,

trend.

finally

renewed their

Brooklyn
Union Gas Co., and its common
shares; followed this typical pat¬
tern fairly closely.
Brooklyn
service to
in most

Union

provides

gas

some

of

900,000 customers
Brooklyn and a large

part of Queens, in New York City.
The service area has a
population
of around
3,138,000.
Residential
sales provided 71% of 1952 rev¬
enues, commercial 19%, while the
industrial and interruptible kind

provided 10%.
receives

from

its

Line

under
current

90

which

gas

Transcontinental

with
of

The company now

natural

million
80

a

20-year

allocated
cubic

million

is

feet

supplies

Gas

Pipe
contract,

deliveries

daily, of

firm

and




earned

10

It

and

available

$2.24
The

change¬
It

was,

for

declined

came

point

the

obvious at

was

1951.

pointment
this

of
sec¬

completed in

from

in

be

period of the contract

completely

to

the

$1.83
share

per
real

disap¬
in 1953, since at

conversion

to

frustrated.

I

can
rec¬

ommend that the law be amended
so

to

as

to

of

1953

decline.

riod

from

ment

Profits

share

earned

1952

when

largely
ation.

in

the

the

that

first

system

pe¬

not

was

half

gas

until

of

still

was

manufactured

a

It

oper¬

after

the

middle of 1953 that it became
ap¬
parent
that
the
company
had

finally
profits
once

a

turned
were

the

and

corner

trending

upward

more.

The September quarter showed
* nominal
deficit of
$0.04

per

share

compared to a deficit of
$0.25 in the like 1952 period. And
I

now

estimate

that

of

around

$0.50

the

Disputes

Emergency

only
the

$0.15
final

though
for

1953

per

versus

a

share

of

the

Act

protection
and

1952

the

quarter.
full year

will show

profit of
in

the

to

President

mendations.

without

In

place. t*"
This

actually
V i» ■ -

taking

improvement

attributable to interim

■

President may have the
to

in

rate

gas

costs.'

the

union

dues

Ther

individual

an

to his
check-off
of

check-off,

employer;
the

em¬

should

be:

unless

suclv;
employee

the

revokes such authorization.

sooner

The provision of the Act which.:
require reports from unions con¬
and fi¬
should be simplified so as*
eliminate duplication in the*,

nances

information required by such

re-

Ports.

1;

.

Congressional Action Urged

will, I am certain, wish to
keep the law under continuous*
study and in the light of experi¬

recom¬

require the board's

has

received

to the

and

of

recommen¬

been

empowered to
direct it

dations

the

to

make
for

the dispute.

Although the
of

the

of

recom¬

board

would

be

binding upon the parties,
yet there is real value in obtain¬
the

ing

recommendations

of

in¬

formed and impartial men for the
settlement of

the

perils

dispute which im¬
health
and

a

national

Act

to

Contracts

usually

casual,

termittent.
these

I

temporary

the fund

industries

the

to

meets

protect

the

pre-hire

a

certain standards.

are

welfare

tion that

ough
sion

adequate

in

trust

individual

study

for

union

is my recommenda¬

Congress initiate

funds

these

conserve

held

of

It

not

are

and

that

members.

of

by

with

agreements,

a

of

enacting such legislation
will protect and conserve these
millions of working
women
who
are
the

and

men

beneficiaries.

I

also

be

The Act should make clear that

the

several

when

states

confronted

and

territories,

with

emergen¬

cies

implied, de¬

that in these indus¬ prived of the right to deal with
employer and the union! such emergencies. The need for
of
permitted to make a union- clarification
jurisdiction be¬
the

an

em¬

ployee, within seven days after
the beginning of his employment,
shall

become

member

a

of

the

union.

the

tween

and

Federal

Territorial

and

the

State

governments

in

the

labor-management field has
lately been emphasized by the
broad
implications of the most

decision of the Supreme
dealing with this subject.
The Department and agency heads
recent

Union

Responsibility

ers

are

actions

made
of

responsible

Court

their

agents.

for the

In

order

a

union

can¬

tional

common

law

rules

of

applicable.

Non-Communist Oath for

relief

Employers
The Act

Thus,'the company is the

presently provides that

facilities of the National Labor

change. It will be con¬
challenge to govern¬

a

sense
the aspirations oil
working people of our couxirtry, that all may have the oppor¬

tunity
our

to

of

fairly share in the

the

productive

time, from which

material

re¬

genius ait
the

comes

and

concerned

presently
in

areas

diction
nation
my

are,

at

examining
which

occur.

my

the

request,
various

conflicts of juris¬
When such exami¬

is completed, I shall make

recommendations to the Con¬

gress

for corrective legislation.

Employee Strike Vote
In the

employer-employee rela¬
tionship there is nothing which so
vitally affects the individual em¬
ployee
the loss of his pay when
he is called

on

strike.

In

such

an

important decision he should have
an

a

blessings of the present.:
greater

promise

for

th»

DWIGHT D. EISENHOWER

•

House,

(
4

Hooker & Fay Adds
(Special

SAN

to

The

Financial

1

1

Chronicle)

FRANCISCO, Calif.—Mar¬

vin

Wong is now with Hooker Sr.
Fay, 340 Pine Street, members oi

the New

Stock

York and

Exchanges.

viously

with

San Francisco

He

Davies

was

&

pre¬

Co.

andi

Stone & Youngberg.

Merrill Lynch Adds
(Special

SAN
liam

A.

Lynch,
301

to

The

Financial

Chronicle)

FRANCISCO, Calif.—Wil¬
Rhea

Pierce,

is

with

Fenner

Merrill

&

Beane,

Montgomery Street.

W. E. Conly Opens

recommend

shop contract under which

men.

to

(Special

State's Jurisdiction

Federal law, actual or

bargaining.

the»

of

the

pen¬

for

tries

ment

collective

the union will be treated initially
as
the employees' representative
collective

women

tinually

as

thor¬

and

welfare

covered

a

funds for the

in

union under which

a

and

Plans

endangering the health or
safety of their citizens, are not,
through any
conflict
witji the

contract with

the-

Jan. 11, 1954.

in¬

or

employer be

permitted to enter into

Pension

These standards
funds

as

that

recommend

of

employment change
products, habits and needs

union to assist in the financ¬

a

view

Pre-IIiring

lot

of

presently prohibits an
from making payment

bargaining

safety.

the

and

man

woman, mind¬
that conditions and standards

ful

ing of union welfare funds unless

recommen¬

settlement

mendations
not

Union

employer

he be

improve

The White

The

the board

to

ures

working

future.

dispute

settled )>

reconvene

him

to

(if

&

Government should continue to
diligently for sound meas¬

search

available

made

inquiry

its administration.

equally to labor and management
in every aspect of their relation¬
ship.

public the last report of the

has not then

and

that they be entirely elim¬

ence
under
it
propose
further
amendments to implement its ob¬
jectives and constantly improve

clear that the right of free speech,
now defined in the Act,
applies

authority

part

granted the company in July which
was calculated to offset increased

will

as

dations, I recommend that after he

agency

is

changes ict

recommend.

gives

ployee's

sults

the

not be held responsible for an act
of
an
individual member solely

now

then

The right of free speech is fun¬
damental.
Congress should make

recom¬

that

order

to make it clear that

modest

I

unnecessary,

inated.

improvement over the 1952 re¬ because of his
membership in the
sult, the careful student will
union, I recommend that the Act
quickly observe the sharp im¬ be amended to make the tradi¬
provement

study.

mend

Thus, al¬
a

un¬

If such legislation is
making the Communist
disclaimer provisions of the Act

As the Act is

safety.

statement

only

whose

enacted,

to

National

the

of

der

provi¬

essential

are

written, the board of inquiry
to
inquire into the
facts of the dispute causing the
emergency must report the facts

fourth

earned

available only
officials

are

unions

infiltration generally are now

a profit
Under
the
Act
as
presently
share, and written, both unions and
employ¬

per.

those

being

quarter of 1953 will show

perhaps better,

to

during

time industries have unique prob¬

equal to only $1.45 per
compared with
$1.89 per

share

Relations Board

lems because their employment is

for

Message

required
to er provisions are not presently
its term unless applicable to employers.
I rec¬
the contract so authorizes or both ommend that they be made appli¬
cable. Specific proposals for legis¬
parties mutually consent.
lation
dealing with Communist
negotiate

first

were

I

I
hope
that
the
foregoing
changes will be enacted by Con- '
gress
promptly,
for
they
will'
more
firmly establish the basic
principles of the law. The appro¬
priate Committees of the Con¬

izations. The Communist disclaim¬

continued

earnings

an

agree¬

bargaining

natural

time to iron out and for the

employee

to

26 V2

affords

execute
affidavits
disclaiming
membership in Communist organ¬

Employees engaged in the con¬
gas were complete.
However, the
problems of a new operation take struction, amusement and mari¬
half

around

a

protect both parties to

valid collective

board

March

in

was

stock

share

per

for the

now

This

other

brought

earnings

common

im¬

The

in

issue

RecommeidingLaboiLawChanges

the

gas.

Brooklyn

the time that this year of
over
would be difficult.

brought about
by savings in
costs

were

August of 1952.

ex¬

to

territory

Progressively,

of

the NYSE)

on

the

14

page

that

gress

health

indi¬

income.

of

and

prices

that

opportunity for income
eventual appreciation.

established

business should

area

from

lag,

The National Emergency

per¬

years.

net

time

conclusion

Text oi Eisenhower's

sions

load growth

few

conversion

of

higher earn¬
ings and divid

costs

of natural

new

small

a

1952.

course,

tio

at

stimulated

potential 40%

Union's

in antici-

was

p a

com¬

Natural gas was first introduced

while.

a

be

use

through to

into

performances

This, of

to

by the

the

flow

companies turned in

market

The

operating

competitive

derived from

gas

a

augers well for profits since the
character of the operation is such
that a large part of the revenue

With the advent of natural gas
in this area, the shares of manu¬
factured

and

National

sales

the

a

over

Leading Exchanges-

Union

presently

Forecasts in this connection

Partner, Abraham & Co.,
New York City
Members, New York Stock Exchange
and Other

on

cents

Although the company operates
a highly matured
metropolitan

mitted
R.

m.c.f.

per

90%.

heating

American Stock Exchange.
SIDNEY

cents

service area, nevertheless a sub¬
stantial load growth is
projected
with the
development of space

issue.

issue

mil¬

daily under

factor, to about 32

is

the

Claude

feet

100% load factor.

a

logical
on

cubic

a

con¬

additional 25

an

37

65% load

will
increase, in view of the
growth factor, and a higher mar¬
ket price should result for this
This

million

around

for further expansion in net sales.
The company has a
very simple

capital structure.

for

common

attractive

ap¬

has

a
storage
arrangement
with
Transcontinental. Costs to Brook¬
lyn
Union
now
average
from

that

the company has a large
backlog
of orders, and that we can look

to

recent

(listed

Subject to

Commission

company

lion cubic feet
daily from Tennes¬
see
Gas
Transmission, and has
also contracted for an
additional

the "tax situation."

conclusion

draw

the

tracted

great extent,

on

at

Continued

temporary.

Power

proval,

substan¬

share

is

Federal

company should report
tial earnings. To a

pend

the

Security I Like Best

the

per

to

without

law

equity, the foregoing leads cerning their organization

an

supplies,

remarkable record

a

Since this

is by statistical standards

gas purchase cost ad¬
which gears the com¬
pany's rates to the cost of its gas

Continued from page 2

two other

are

authorization which

ings, to my mind, was the ap¬
proval by the New York State
Service

There

for

,

Check-Off Requirement

the

automatic

answers.

The

better investor regard for the

a

justment,

supply the

choice by secret ballot held undec
^
government auspices.

earnings as above indicated ma¬ made valid until the termination-'
terialize, therefore, I would antic¬ of the collective bargaining con-i
ipate an increase in dividends tract which provides for

more

important than the

more

expen¬
This should pro¬

stability of earnings
future, and should result

Dividends in recent years have
been on the liberal
side, and there
has been some indication here
of
a
75%
payout
policy.
Should

recent
trend
of
earnings
will
readily result in such a figure.

Even

necessity of

cases.

better

the

in

permit
$2.50
per

around

(193)' At

business.

a

the

million

would

the

for

although

reattainment of satisfactory earn¬

have

you

please

of money over what it would cost
to prepare them for themselves.

$110

of

Exchange.

If

use

Jacquelin, and

earn

considered

a

neighborhood

which

months

John

base

rate

several members

us

that

ff.VJ,

r"'Ti

and proper return on the
capital
invested in the business. I would

may

have any questions

you

be

'

M

•

results would still

what would

market

working on
this
Plan.
They are George Zipp of
DeCoppet
&
Doremus,
Oliver

at

1953

works,

original committee

spent

largely
Obviously, indi¬

vidual members will find that
of these materials will save a

broaden

have with

we

may
find helpful.
On the last page are order
forms
and reply envelopes.
cost.

share

Plan

in which it

ways

to

you

Now, if

some

the

which

JfcU

I (•*''.

Ml

how
beginning to
satisfactory return,

it—the tremendous

how

up,

some

help

talk

or

quick picture of the

a

as we see

potential of the market

in

poster

let t'W'.i P'

opportunity to

express

his free

to

The

Financial

Chronicle)

LONGMONT, Colo.—William
Conly, Jr. is engaging in
rities
518 V2

business

from

a

B,
secu-'

offices
North Main Street.

afc

With Harris, Upham & Co.
DENVER, Colo. — William U
Pfeiffer is with Harris,
Upham &
Co., 740 Seventeenth Street.

The Commercial and Financial

Chronicle

.Thursday, January 14, 1954'

..

(194)

42

if INDICATES

Securities Now in Registration
Commercial Finishing Co., Inc. (1/15)
(letter of notification) 120,000 shares of class A
common stock. Price—At par ($1 per share). Proceeds—
For equipment and working capital. Office—728 South
Wheeling, Tulsa, Okla. Underwriter—White & Co., Tulsa,
Okla., and St. Louis, Mo. Offering—Expected in Okla¬
•

A & B

18

Dec

if Aeronca Manufacturing Corp., Middletown, Ohio
Jan. 11 (letter of notification) 8,000 shares of common
stock (par $1) to be issued in exchange for all the assets

($100,500) of

and liabilities

$120,500)

(approximately

Manufacturing Co., Inc., Pittsburgh, Pa.
market value of Aeronca's stock, $2.50 per share.
Robb

writer—None.

N

Present
Under¬

Proceeds—For

Price—At
investment. Underwriter—None.

writer—None.

Inc.

Growth Industries,

Amalgamated

Sept. 28 (letter of notification) 149,999 shares of common
stock (par 10 cents). Price—$2 per share. Proceeds—For

acquisition of patents, etc., and for new equipment and
working capital. Office—11 West 42nd St., New York
City. Underwriter—R. A. Keppler & Co., Inc., New York,
N. Y.

'

.

American Diamond Mining Corp.

shares of common
stock (par $1). Price—$1.15 per share. Proceeds-^To ex¬
plore and develop the Murfreesboro, Pike County, Ark.,
property and for general corporate purposes. Office—
99 Wall St., New York 5, N. Y. Underwriter—Samuel W.
Dec. 8

ment.

Dec.

Enterprises, Inc., New York (1/21)
filed 350,000 shares of common stock (par 25

21

(letter of notification) 260,000

bank loan, to

REVISED

become

Illinois

Northern

Price—To be supplied by amend¬

bonds due Jan. 1, 1979.

Commonwealth Edison Co. for •

Proceeds—To pay

acquisition of
Illinois Gas

<

mortgage

first

Co.

Gas

ISSUE

and heating properties by Northern
Underwriters—The First Boston Corp., *

gas

Co.

New

York; Halsey, Stuart & Co. Inc., Chicago and New
York; and Glore, Forgan & Co., Chicago and New York. 1

acquire capital stock of nine Louisiana companies and to

* Constant Minerals Separation Process, Inc.,

expand their ammonia storage and distributing facilities.
Underwriter—Lee Higginson Corp., New York.

Reno, Nev.
Jan. 4 (letter of notification) 1,000,000 shares of class A
non-voting capital stock (par 10 cents). Price—20 cents
per share.
Proceeds—For expenses incidental to gold
mining. Office—530 Calornia Ave., Reno, Nev. Under-

Industries, Inc., Oklahoma City, Okla.

Cherokee

Dec. 3 filed 5,000,000
mon

shares of class B non-voting com¬
stock (par one cent). Price—$1 per share. Proceeds

,

,
,

>

.

writer—None.

Underwriter—None.

mill.

Clary Multiplier Corp., San Gabriel, Calif.
23 (letter of notification) 16,000 shares of common
stock (par $1). Price—$6.25 per share, or last sale price
on
the Los Angeles Stock Exchange preceding date of
Dec.

sale, whichever is lower. Proceeds—For working capital.
Office
408 Junipero St., San Gabriel, Calif.
Under¬
—

writer—None.

ic Colorado Mineral Refining Co., Inc.
6 (letter of notification) 20,000 shares of common
stock (no par).
Price — $1 per share. Proceeds —For
equipment and operating capital.
Office —1020 Yuma
St., Denver, Colo. Underwriter—None.

Jan.

Colorado Oil & Gas Corp., Denver, Colo. (1/26)
5 filed 1,000,000 shares of common stock (par $3).
Price—To be supplied by amendment.
Proceeds—To re¬
Jan.

tire $500,000 5% 3-year notes due Sept. 21, 1956, and to
acquire and develop oil and gas properties. Underwriter
—Union Securities Corp., New York.

if Commonwealth Edison Co. and Northern
Gas
Jan.

7

Co.

filed

Illinois

•

3

of

$60,000,000

Commonwealth

Edison

Co.

"gas divisional lien bonds due Jan. 1, 1979" which bonds

filed

Jackson, Mich.
common stock

679,436 shares

of

,

(no par))

being offered for subscription by common stockholders
of record Jan. 7, 1954; on the basis of one new share for
each-10 shares held; rights to expire on Jan. 22.

Unsub¬

scribed shares will be offered first to employees.

Price

—$36.75 per share. Proceeds—For construction program.
Underwriters—Harriman Ripley & Co.,* Inc. "and The ■
First Boston Corp. (jointly).
;
.

if CorpAmerica, Inc., Wilmington, Del.
v'A
Dec. 29 (letter of notification). 20,000 shares of class A ;
non-voting common stock (par $10), of which-7,819 v
shares are to be offered to class A stockholders pro rata v
and the unsold

balance, plus 12,181.shares are to be sold •
Price—$15 per share.
Proceeds—For work- *
ing capital.
Office —1901 W.' Fourth St., Wilmingtofl,
Del.
Underwriter — Laird, Bissell & Meeds, Wilming-.
to

public.

ton, Delaware.
Danielson

Manufacturing Co.
10,704 shafts of class^A
preferred stock (par. $5) to be offered for4subscription »
by stockholders. Price—$9.50 per share. iPrdceeds—For f

Dec.

(1/27)

Power Co.,

Consumers

Dec.

24

(letter of notification)

New York, N. Y.

Gordon & Co., Inc.,

Armstrong Rubber Co.

,

(probably

cents). Price—To be supplied by amendment

—To construct

^ Alpha Instrument Co., Inc., Washington, D. C.
Jan. 8 (letter of notification) 200 shares of $4 cumu¬
lative preferred stock (no par). Price—$50 per share.
Proceeds—For plant expansion and working capital.
Office—1213 20th St. N. W., Washington 6, D. C. Under¬

/

None.

Chemical

PREVIOUS

ITEMS

•

will

•

ADDITIONS

SINCE

„

.

• Affiliated Fund, Inc., New York
Jan. 12 filed 4,000,000 shares of capital stock.
market.

•

ployees. Price—At par (in units of $50 each). Proceeds
equipment and working capital. Underwriter—

—For

around $10 per share). Proceeds—To repay

homa only.

V

(letter of notification) 1,000 shares of class A
stbck (no par). Price—$21 per share. Proceeds
A. Walsh, the selling stockholder.
Under¬
writer—Gruntal & Co., New Haven, Conn.

NEW ISSUE CALENDAR

Nov. 27

common

—To James

if Army-Navy House, Inc., Philadelphia, Pa.
(letter of notification) 4,000 shares of 6% cumu¬
lative preferred stock. Price—At par ($10 per share).
Proceeds—For fixed assets and general organizational

Jan. 6

January 15
A. & B. Com'l Finishing
(White

Oil

Aztec

&

to

of Southern Union
underwriter)
2,055,977 shares

Address—c/o Robert W. Lees, 616 Harrison
Bldg., Philadelphia 2, Pa. Underwriter—None.

Ohio

(1/25-29)
Dec. 28 filed 61,000 shares of series B 6% cumulative
convertible preferred stock.
Price — At par ($10 per
share). Proceeds—To increase working capital. Under¬
writers
Bioren & Co. and H. G. Kuch & Co., both of

Saint Anne's Oil Production Co

expenses.

Automobile

Banking Corp.

—

Edison

.

•

Aztec

Oil

&

Gas

(1/15)
stock (par $1)
subscription by common stockholders
Union Gas Co. of record Dec. 28, 1953 on the
Co., Dallas, Tex.

Ritter Finance

Dec. 14 filed 2,017,801 shares of common
to be offered

of Southern
basis

of

common

$3.83

per

property,

Co

*

'

&

of

Aztec

for

each

Southern

share held; rights to expire on Feb.

8.

Union

Price—

Proceeds—To acquire equipment and
drilling wells and for working capital.

General

Natural

EST)

noon

(Bids

$5,070,000

Ohio

Edison

Capital Bakers, Inc., Harrisburg, Pa.
Jan. 11
(letter of notification) $30,000 of general
debenture

bonds

to

be

offered

to

CST)

a.m.

EST)

a.m

(Reed,

Western

Lear

&

Peabody

Surety
& Co.

Common

Co

Prescott,
150,000 shares

Wright,

&

Co.)

50,577

10:30

a.m.

EST)

(Bids to

(Offering to stockholders—Central
&

Co.,

Inc.

Fenner

&

Merrill

and

Beane)

March
Common

Republic Co.,

Lynch,

Pierce,

January 21
(Lee
i




offices

(Bids

■

■

(Thursday)

Tail

Co.

and

Power

First

Boston

Glore,

Illinois
First
and

H.

Glore,

(Wednesday)
Bonds

Co
invited)

be

$4,000,000

16

to

be

(Tuesday)
Bonds

invited)

$17,000,000

First

Boston

Corp.)

:

Common

$6,000,000

Power

Co...

(Bids

to

be

(Tuesday)

__Bonds

...

invited)

$11,000,000

&

Co.)

$610,000

^.Debentures
Inc.)

"

$2,500,000

(Tuesday)
Common
1,000,000 shares

Corp.;

Forgan & Co.)

Stuart

&

Co.

Stuart

&

Co.

$9,660,000

make

your

advertising of

tising counsel or nearest Chicago Tribune representative.

Inc.;

$60,000,000

Equip. Trust Ctfs.
EST)'

advertising medium, the Chicago Tribune,

securities and services more effective, consult your adver¬

CHICAGO TRIBUNE
The World's Greatest

(Thursday)

Southern Pacific Co.
noon

your

Bonds
Halsey,

Forgan & Co.)

one

major Chicago and midwest investment markets—

For facts which show how you can

Inc.;

$60,000,000

Co

Corp.;

just

professional buyers and the general investing public.
Bonds

Halsey,

You need

to reach both

(Wednesday)

January 28
(Bids

.

.Preferred
Kuch

G.

Co.,

Gas

Boston

Bonds

$7,500,000

(Monday)

Co
&

invited)

April 6
Georgia

shares

■

January 25
&

be

National Union Fire Insurance Co

Common
350,000

,

em¬

and

all

j

Bonds

$5,000,000

(Thursday)

Higginson Corp.)

January 27

to

(Wednesday)

Co...

Power

(The

Commonwealth Edison Co.

Private IVires

Alabama

Inc.,

318,000 shares

(Union Securities Corp.)

Cleveland

.

Bonds
$20,000,000

Northern Indiana Public Service Co
Blyth

Electric

Suburban

shares

Michigan Consolidated Gas Co
(Bids

to

March 3

Common

(McDonald

(The

Bonds

$12,500,000

Pittsburgh & West Virginia Ry

January 20- (Wednesday)
Harris-Seybold Co.

Northern

.,

$12,000,000

Co..;.——

County Electric

(Bids

Colorado Oil & Gas Co

San Francisco

invited)

be

February 17

Chemical Enterprises, Inc

Chicago

to

$94,600

and

January 26

Pittsburgh

invited)

be

Public Service Co. of Oklahoma

Essex

$30,000,000

& Co.)

Snider Co.)

(The

Bonds

16.> (Tuesday)

Electric Co.
to

February 25

Casualty

(Kidder,

4%

;

Common

(Blyth

Philadelphia

Gas &

(Bids to be invited)

Otter

Boston

Bonds
$5,500,000

—Bonds
11

Trion, Inc.

(Bioren

New York.

Louisville

$4,000,000

Automobile Banking Corp

r,

(Wednesday)

Preferred

Co

Co..
(Bids

Gas

if Blaske Lines, Inc., Alton, III.
Jan. 7 (letter of notification) 65,990 shares of common
stock (par $2), to be first offered for subscription by
stockholders; then to public. Price—$2.62% per share.
Proceeds—For down payment on purchase of six new
barges. Office—210 William St., Alton, 111. Underwriter
—G. H. Walker & Co., St. Louis, Mo.

Electric

10

$5,300,000

EST)

noon

February

-

&

(Bids

Corp., Santa Fe, N. M.
Dec. 23 (letter of notification) 748,000 shares of common
stock (par five cents). Price—40 cents per share. Pro¬
ceeds—To acquire properties and leases. Office — Blatt
Bldg., Santa Fe, N. M. Underwriter—Hunter Securities
Corp., New York.

non-convertible

Preferred

Equip. Trust Ctfs..

&

EST)

noon

(Tuesday)

Great Northern Ry
(Bids

Dillon,

(Wednesday)

February 10

(Bids

Gas

by

Mystic Valley Gas Co

Tully & Co, and Paine, Webber, Jackson
Curtis) $4,000,000

Iowa-Illinois

.....Common

272,500 shares

Equip. Trust Ctfs.

(Bids

Debentures

Telephone Co. of California

(Mitchum,

Inc.)

Pennsylvania RR.

(Bids

share.

if Bank Shares, Inc., Minneapolis, Minn.
Jan. 4 (letter of notification) 15,000 shares of class A
stock. Price—At par ($20 per share). Proceeds—To ac¬
quire shares of capital stock of The Marquette National
Bank and the Chicago-Lake State Bank. Underwriter—
M. H. Bishop & Co., Minneapolis, Minn.

Co.

&

February 3

7

$1,000,000

Co., Inc.)

...Preferred -

$6,000,000

-

Common

Inc.

,

January 19

Underwriter—None.

Basin

$800,000

EST)

noon

stockholders—underwritten

to

Read

for

obe share

for

(Offering

stockholders—The First Boston Corp.
act as advisors)
$7,650,000

(Stroud

(Tuesday)

Southwestern Public Service Co...

Common

January 18 (Monday)

will

(Bids

527,830 shs.

Fire Association of Philadelphia
(Offering to

$7,000,000

Co.)

&

Mississippi Power & Light'Co.!

T

Harris)

&

EST)

a.m.

...Preferred

...

Morgan

February 2

Co.

Common

(Sills, Fairman

,

Gas

Co

(Offering to stockholders—bids 11

Philadelphia, Pa.

r*

(Peter

Common

stockholders

—no

Corp

Sulphur

$120,000

Co.)

& Gas Co

(Offering

Gulf

(Monday)

1

February

(Friday)

Co., Inc. Class A Common

The Tribune gives to
the

Newspaper

each day's market tables and reports
largest circulation they receive in America.

Volume 179

Number 5290

...

The Commercial and Financial Chronicle

(195)
wording capital. Underwriter—Coburn & Middlebrook,
Inc., Hartford, Conn.
Decca

Records, Inc.
Dec. 22 filed 145,842 shares of capital stock (par 50
cents)
to be issued only in exchange for shares of
Universal
Pictures Co., Inc. common stock (par $1).
Detroit Edison Co.
Dec. 10 filed $43,358,000 3*4% convertible debentures due
Feb. 2, 1969 to be offered for subscription
of record Jan.

ers

6, 1954,

by stockhold¬
the basis of $100 of deben¬

on

tures for each 25 shares of stock

Feb.

1,

1954.

loans

bank

Price—At
and

for

held; rights to expire on
(flat). Proceeds—To repay

par

construction.

new

Underwriter—

None.

Douglas Oil Co. of California

Krieger, President of

Shearson.

Hammill

Federal
Dec. 17
stock

&

Electric

Underwriter—

company.

Co., Los Angeles, Calif.

Co.,

&

★ Hyer

(C. H.) & Sons, Inc., Olathe, Kan.
Jan. 4 (letter of
notification) 9,000 shares of common
stock
(par $10).
Price—Initially at $15.90 per share
(thereafter at book value as determined as of the last
day of the previous calendar quarter). Proceeds—For

(letter of notification) 10,000 shares of

(par

ark, N. «L

$1).., Price—Aggregate

Underwriter—H. M.

offering

common1

price

will

Cole, who
Street, New¬
Byllesby & Co. (Inc.),

Chicago and New York.
Federal Pipe & Foundry Co. (N. J.)
Nov. 16 (letter of notification) 39,000 shares of common
stock (par 25 cents). Price—$1 per share. Proceeds—For
purchase of land and machinery,„to erect buildings and
for-

working capital. Underwriter—A. Kalb
"Market St., Trenton, N. J." *
;;V.' : '•**

&

Co., 325
i

^Financial FUnd Inc., Seattle, Wash. ^
Jan. 8 filed 25,000 shares of common stock.

Price—At
Proceeds—For investment. -Underwriter—None.

market.

Fire Association of

Office—111 North Chestnut St., Olathe,
Underwriter—None.

Iowa-Illinois Gas & Electric Co.

(1/19)
(letter of notification) 40,000 shares of cumula¬
tive preferred stock (par
$100). Proceeds — To repay
be

Philadelphia

(Pa.)

14

(1/18)

determined

rights to expire

Feb. 17.

on

share

new

for

each

Price—$22.50

per

share

held;

share. Pro¬

ceeds—To increase capital and surplus. Meeting—Stock¬
holders will vote Jan. 14 on
increasing authorized num¬
ber of shares from

The

visors

360,000 to 800^000. Underwriter—None,
Corp., New York, will act as ad¬

First Boston
the

to

company.

bidding.

Florida Telephone
Corp., Ocala, Fla.
(letter of notification) 24,975 shares of common
stock (par $10) to be offered first for
subscription by
common

stockholders.

holders,

and

Price—$10.75

per

share to stock¬

$12 per share to public.
Proceeds—For
construction, etc. Underwriter—None.

new

Florida Western Oil

Nov. 6

Co.

(letter of notification) 250,000 shares of common
Price—$1 per share. Proceeds—For

stock and

share of

one

stock.

common

Price—$300 per
unit. Proceeds—For acquisition of
contracts, notes and
mortgages.
Office—1217 Old
National
Bank
Bldg.,

Spokane, Wash.

Fla.

see,

Office—803 N. Calhoun St., Tallahas¬

Underwriter

—

D.

Cerf, Jr.,

Co.,

Inc.,

it Frontier Industries, Inc.
Jan. 4 (letter of
notification)

Dec. 28

ing

3,000 shares of common
(par 50 cents) to be offered for subscription to
employees of company and its subsidiaries.
Price—At
95% of market price at time of issuance (about
$14.75
per share).
Proceeds—For working capital.
Office—70
Underwriter—None.

Office—28 West Second South, Salt Lake

Underwriter—None.

shares of common stock
(par $1) to be offered in units
of $350 principal amount of debentures and 23
shares of
stock. Price—$359 per unit
($336 for the debentures and
$1 per share for the stock). Proceeds—For general cor¬

porate

purposes.
Business
Oil and gas development.
Underwriter—None. Office—Oklahoma City, Okla.
—

•

General Telephone Co. of California
(1/19)
Dec. 28 filed 200,000 shares of 5% cumulative
preferred
stock, 1947 series (par $20). Price—To be supplied by
amendment. Proceeds—To repay bank loans and for new

construction.

Underwriters—Mitchum, Tully & Co., San

Fracisco.

Calif., and Paine, Webber, Jackson
Boston, Mass.

&

Curtis,

For

work

on

harness

track

race

in

Louisiana

and

for

working capital. Office—National Bank of Commerce
Bldg., New Orleans, La. Underwriters
Gearhart &
Otis, Inc. and Hunter Securities Corp., both pf New
York; and T. J. Feibleman & Co., New Orleans, La.
Medina Oil Corp., Orlean,
Dec.

be

first

offered

subscription by the
89,333 shares presently outstanding for a 10-day
standby;
then to public.
Price—To be supplied by amendment.
sale

of

stock, together with proceeds
from private sale of
$200,000 of series A bonds, to be
used to repay bank loans and for
construction program.
Underwriter—F. L. Putnum & Co.,
Inc., Boston, (Mass.)
and Providence (R. I.).
Guardian Chemical
Nov. 30

(letter of

stock

(par 10
Price—S2.37V2

Corp.
notification) 52,500 shares of

cents)
per

to

be

share.

issued

to

common

Proceeds—To

holders.

selling

stock¬

City, N. Y.

• Guardian Mutual Fund, Inc., New York
Jan.

11

•

Gulf

filed

60,000 shares of common stock. Price—At
Proceeds—For investment., Underwriter—None.

Sulphur Corp.

(2/1-5)

Oct. 27 filed 700,000 shares of convertible
preferred and

participating stock (pan 10 cents). Price—$10 perfshare.
Proceeds—To develop company concessions.
Underwriter
—Peter Morgan &
Co., New York.

Harris-Seybcld Co., Cleveland, Ohio
Dec.
to
of

be

filed

offered

record

share

Feb.
be

30

for

1,

49,605
for

Jan.

shares

par

Haven, Pa.

(par $8)

being

offered in

ity stockholders

stock

(par

$1)

underwriting

corporate

purposes.

exchange for common stock
Light Co. held by minor¬

the basis of 4% New England shares
for each New Bedford share held. The offer will
expire
on Feb. 23. Financial
Advisor—The First Boston
on

Corp.,

New York.

it Northern Illinois Gas Co.
See

Commonwealth Edison

(1/27)
Co. above.

-Northern Indiana Public Service Co.

(1/20)

>

Jan.

5 filed 318,000 shares of common stock
(no par)
to be offered for subscription by stockholders of record
Jan. 8 at rate of one new share for each ten shares then

<

held; rights to expire about Feb. 3.
Price—To be sup¬
plied by amendment.
Proceeds—For construction pro¬
Underwriters—Central Republic
,Cp., Inc., Chi¬
111., and Blyth & Co., Inc. and Merrill Lynch,
Pierce, Fenner & Beane of New York.
cago,

•

Ohio

Edison

Co,

(1/15)

10 filed 527,830 shares of common stock
(par $12)
be offered for subscription by common stockholders
of record Jan. 14, 1954 on the basis of one new share for

each 10 shares held (with an oversubscription

privilege);
$35.75

Proceeds

on

—

Jan. 29,

For

Ohio Edison
Dec.

10

filed

Co.

Corp.

at

rate

of

share

one

stock for each 2.1 shares of

(par $1) of Newport
of

Merritt-Chapman

Newport stock.

Underwriter

—None.

be

To

—

(1/20)
amendment) $20,000,000 first mort¬
gage bonds, dated Jan. 15, 1954 and due on Jan.
15, 1979.
28

filed

due

(by

To repay $20,000,000 3 xk % bank loan notes
July 30, 1954, issued to provide temporary financing
—

for additions to the

company's utility plant. Underwriters
by competitive bidding. Probable
bidders: Halsey, .Stuart & Co.
Inc.; White, Weld & Co.

—To

and

be

determined

Lehman

Brothers (jointly); Smith, Barney & Co.
Blyth & Co., Inc. (jointly); Harriman Ripley & Co.
Inc. and Union Securities
Corp. (jointly).
On June 15,
1953, a group headed by Halsey, Stuart & Co. Inc., Har¬
riman Ripley & Co.
Inc., and Union Securities Corp. bid
100.125% for the issue as 5s. It was rejected. Bids—Ten¬
and

tatively expected to be received

up

to 10:30

a.m.

Jan. 20 at 415 Clifford
St., Detroit 26, Mich.
it Mines Prospecting & Exploration Co,
Jan. 8 (letter of
notification) 350,000 shares

(EST)

on

common

share.

stock (par one cent).

Proceeds—For

general

(1/19)

For

determined

Jan. 19.

(convertible at rate of $2 principal amount of notes for
share of

one

mon

common

stock); and 25,000 shares of

stock to be issued

on

of

non¬

expenses.

Office—218 Radio Central Bldg.,
Missoula, Mont.
writer—None.

Under¬

it Mississippi Chemical Corp., Yazoo City, Miss.
26,666 shares of special common stock (par
$75—limited dividend) and $1,500,000 of certificates of

Jan. 5 filed

participation (to be sold in multiples of $75—5%
est).
with

Proceeds—From
bank

facilities.

sale

of

these

inter¬

securities, together

borrowings, are to be used for expansion of
Underwriter—None. Sales will be handled by

(par $100).

(2/2)
60,000 shares of cumulative preferred stock
Proceeds—For additions and improvements.

Underwriters—To be determined by competitive
Probable
bidders:
Union
Securities
Corp.;

bidding.
Lehman
Brothers; W. C. Langley & Co. and The First Boston
Corp. (jointly); Blyth & Co., Inc., Equitable Securities
Corp.. Shields & Co., White, Weld & Co. and Kidder,
Peabody & Co. (jointly). Bids—Tentatively expected to
be received up to noon

(EST)

on

Feb. 2.

Montex Oil

& Gas Corp., Baytown, Tex.
(letter of notification) 100,000 shares of common
stock (par one cent). Price—15 cents per share. Proceeds

Jan.

underwriter, I. J. Schenin Co., New York.
12

(2/10)

filed

$5,500,000 first mortgage bonds, series A,
pay an equal amount of out¬
standing promissory notes. Underwriter—To be deter¬
mined by competitive bidding. Probable bidders:
Halsey,
due

1974.

Stuart

&

Proceeds—To

Co.

Inc.;

Kidder,

Peabody

&

Co.:

com¬

share for each-

so cancelled by the six directors of
Price—Of notes, at face amount; of stock,

share.

Proceeds — For development of
mining
properties and payment of current indebtedness. Office
per

St., Phoenix, Ariz.

Underwriter—

~
„

•

Otter Tail Power

Dec.

28

Co., Fergus Falls, Minn. (1/25)
$2,500,000 of 4V4% convertible debentures
1, 1964, to be offered for subscription by com¬

filed

stockholders of record Jan. 22,
1954, on the basis
$100 of debentures for each 25 shares of, stock then
held rights to expire on Feb. 8.
Price—100% of principal
mon

of

amount.

Proceeds—To retire bank loans and for
capital
expenditures. Underwriter—Blyth & Co., Inc., New York
San Francisco.

and

it Ozel Oil Co., Washington, D. C. ~
Jan. 7 (letter of notification) 1,000 shares of
capital stock
(no par). Price—$100 per share. Proceeds—For drilling,
equipment
Circle

related

and

expenses.

Bldg., Washington 6, D.

C.

Office

909 Dupont
Underwriter—None.
—

Perfecting Service Co., Charlotte, N. C.
Dec. 28
stock

(letter of notification)

to

offered

be

holders.

Price—At

for
par

15,001 shares of

common

subscription by present stock¬
($10 per share). Proceeds—For

working capital and general corporate purposes. Office
Ave., Charlotte, N. C. Underwriter—R. S.
Dickson & Co., Charlotte, N. C., for up to a maximum
of

8,001 shares.
i

,

it Radon Reseach Corp., Boulder, Mont.
Jan. 4 (letter of notification) 100,000 shares of common
stock (par 10 cents).1 Price—25 cents per share.
Pro¬
ceeds—For

Lehman

Brothers; Merrill Lynch, Pierce, Fenner & Beane and

general office and mining

Under¬

expenses.

writer—None.
•

Ritter

Dec.
and
B

Finance Co.,

(Pa.)
(1/18-29)
5V2% debentures due 1966,
12-year warrants to purchase 100,000 shares of class
24

filed

common

debenture

Inc.

$1,000,000

of

stock, to be
and

shares

a

of

offered in units of one $1,000
to purchase 100
shares; and

warrant

5V2%

cumulative

$50) and 20,990 shares of class B
to

be

offered

in

shares of class B

units

of

common

one

preferred

common

stock

(par
(par $1)

stock

share of preferred and

stock.

10

Price—For units of de¬

bentures and

warrants, $1,000 per unit; and for units of
preferred and class B stock, $65 per unit. Proceeds—For

working capital and other corporate

Under¬

purposes.

writer—For debentures and warrants, Stroud &
Co., Inc.,
Philadelphia, Pa. For stock units, none.
Offering—Ex¬

pected the week of Jan.
•

Dec. 21

—To

one

$1 of indebtedness

2,099

it Mississippi Power & Light Co.
Jan. 7 filed

the basis of

—332 Atando

Price—10 cents

mining

per

Under-

program.

it Oro Flame Mining Co., Phoenix, Ariz.
Jan.
11
(letter of notification) $25,000 of registered
three-year notes payable on or before Dec. 31, 1956

due Jan.

Michigan Consolidated Gas Co.

Dec.

—

of first mortgage bonds due
property additions, etc. Under¬
by competitive bidding.
Probable bidders: Halsey, Stuart & Co.
Inc.; Morgan
Stanley & Co.; The First Boston Corp.; Glore, Forgan &
Co., White, Weld & Co. and Union Securities Corp.
(jointly). Bids—To be received up to 11 a.m. (EST) on
writers

—

None.

stock

Price

$30,000,000

Proceeds

—1217 West Jefferson

common

1954.

construction

writers—White, Weld & Co.

Dec. 31 filed 513,594 shares of common stock
(par $12.50)
to be offered in
exchange for 1,078,546.25 shares of
.

.

to

$1

Merritt-Chapman & Scott Corp., New York

-

Dec.

the company.

it Mystic Valley Gas Co.

seven
shares held; rights to
expire on
Price—To be supplied by amendment
(to
below the market price).
Proceeds—To



i

common

(1/20)

subscription by common stockholders
19,
1954, on the basis of one new

each

1954.

somewhat

of

Price—At

company employees.

warrant

holders. Office—10-15 43rd
Ave., Long Island
Underwriter—Batkin & Co., New York.

market.

N. Y.

(letter of notification)

2,800 shares of common
($100 per share).
Proceeds—To
purchase drill rig, etc. Office — 10 East Corydon St.,
Bradford, Pa.
Underwriter — Winner & Myers, Lock

per

(no par) to
holders of the

for

Proceeds—From

9

stock.

assessable

Greenwich Gas Co.,
Greenwich, Conn.
Nov. 12 filed 75,468 shares of common stock
<

20%

a

Proceeds—For general

of New Bedford Gas & Edison

1984.

Magnolia Park, Inc., New Orleans, La.
Dec. 29 (letter of notification) 300,000 shares of common
stock (par 10 cents).
Price—$1 per share. Proceeds—

Proceeds

General

Hydrocarbons Corp.
Aug. 12 filed $1,010,800 of 20-year debentures and 66,424
„

*

New England Gas & Electric Association
Dec. 10 filed 32,126 common shares of
beneficial interest

share.

(letter of notification) 800,000 shares of capital
Price—25 cents per share.
Proceeds—For drill¬

expenses.

Steel

stock

Niagara St., Buffalo 2, N. Y.

Exchange, with

commission.

authorized and issued

Floyd

Miami, Fla.

ex-

10.

rights will expire

Underwriter—None.

King Oil Co., Salt Lake City, Utah

:

stock (par 10 cents).

drilling test well.

Bids—Tentatively

about Feb.

gram.

(Charles E.), Inc., Spokane, Wash.
(letter of notification) 300 shares of preferred
stock (par $100) and 150 shares of common
stock (par
$100) to be offered in units of two shares of preferred

—

Dec. 30

or

Underwriter—To be named by amendment:

Probable bid¬

Dec. 29

City, Utah.

one

competitive

on

Dec. 18 filed 1,000,000 shares of common stock
(par $1).
Price—To be related to the bid price of the shares on
the Toronto Stock

Underwriters—To

it Kiefner

18

basis of

construction.

Co., Inc.; Kuhn, Loeb & Co.; Glore, Forgan & Co.; Mer¬
rill Lynch, Pierce, Fenner & Beane and
White; Weld &
Co. (jointly); Harriman
Ripley & Co. Inc.;( Salomon
Bros. & Hutzler.
Bids—Expected to be received up to
10 am (CST) on Jan. 19.

stock.

the

new

ders: The First Boston Corp.; Lehman
Brothers; Blyth &

Dec. 11 filed 340,000 shares of capital stock (par
$10) to
be offered for subscription by stockholders of record Jan.
on

by

Securities Corp. (jointly).

pected to be received

New Bristol Oils,
Ltd., Toronto, Ont., Canada

Co., Coral Gables, Fla.

Dec.

Union

Cleveland, O.

Hydrocap Eastern, Inc., Philadelphia, Pa.

bank loans and for

Products Co.

not exceed $100,000. Proceeds-^-To Estelle M.
is the selling stockholder. Office—50 Paris

but

&

Oct. 30 (letter of notification)
100,000 shares of common
stock. Price—At par ($1 per share). Proceeds—To
pay
debt and for working
capital, etc. Underwriter—Barham

Kan.

(letter of notification) 14,200 shares of common^
Price—At market. Proceeds—To Wood-

(par $1).
G.

row

Underwriter—McDonald

working capital.

Dec. 28
stock

reimburse company's treasury for its investment in C. B.
Cottrell & Sons Co., and for general
corporate purposes.

43

Saint Anne's Oil

18

or

April 23 filed 160,000 shares of
Price

—

$5

per

25.

Production Co.

share.

Proceeds

(l/15r18)

common
—

stock

(par $1).

To acquire stock of

Neb-Tex

Oil Co., to pay loans and for working capital.
Office—Northwood, Iowa. Underwriter—Sills, Fairman
& Harris of Chicago, 111.

it Schoonover Oil Development Co.,
t*
Bismarck, N. D.
Dec. 28 (letter of notification) 6,000 shares of common
stock. Price—At par ($1 per share). Proceeds—For deContinued

on

page

44

*

44

The Commercial and Financial Chronicle

(196)

Continued from page

Woonsocket Rubber & Plastics Products Co., Inc.

43

Dec. 29

velopment of well. Address—Box 421, Bismarck, N./D.
Underwriters—H. G. Schoonover and Lina M. Kurtz.

£ Southwestern Public Service Co. (2/2)
Jan. 12 filed 272,500 shares of common stdck (par $1)
to be offered for subscription by common stockholders
of record Feb. 1 at the rate of one new share for each
14 shares held; rights to expire about Feb. IS.
Price—
To be supplied by amendment. Proceeds—To repay bank

additions and improvements.
Underwriter—Dillon, Read & Co. Inc., New York.
property

for

and

loans

common

Price—$3 per share. Proceeds—For
note and for working capital.
Office—212

payment

on

St., Woonsocket,
Co., Providence, R. I.

R.

Underwriter—Barrett &

I.

ceeds

1,000,000 shares of com¬
cents per share). Pro¬
ceeds—For machinery and equipment.
Underwriter
E. W. McRoberts & Co., Twin Falls, Idaho.
stock.

Halsey, Stuart & Co. Inc.; The First
Blyth & Co., Inc. (jointly); White,
(jointly); Union Securi¬
ties Corp.; Lehman Brothers; Morgan Stanley & Co.;
Kuhn, Loeb & Co. and Salomon Bros. & Hutzler (jointly);
W. C. Langley & Co.
Boston

Corp.

and

Weld & Co. and Shields & Co.

Delhi Oil Corp.

For

drilling expenses. Office — 301 Kittredge
Bldg., Denver, Colo. Underwriter — Robert W. Wilson,
Denver, Colo.
—

Thursday, January 14, 1954

Probable bidders:

Wyoming Oil Co., Denver, Colo.
Nov. 3 (letter of notification) 5,000,000 shares of common
stock (par five cents). Price—5^2 cents per share. Pro¬

Wyoming Oil & Exploration Co., Las Vegas, Nev.

(letter of notification)
Price—At par (25

30

Oct

(letter of notification) 100,000 shares of

(par $2.50).

Clinton

Co., Hailey, Idaho

Snoose Mining

mon

stock

...

Dec. 7 filed 300,000 shares of capital stock (par $1.

Price

—To be supplied by amendment.
Proceeds—To pay for
leases and drilling.
Business—Oil and gas exploration.

Dec. 29 it

announced

was

plans to offer to its

company

stockholders the right to subscribe for additional capital
stock (with an

will

oversubscription privilege). Stockholders
on a proposal to increase the author¬

Jan. 18 vote

on

ized capital stock (par $1) from
3,000,000 shares to 5,000,000 shares.
Price — To be below the present market

(about $20

per share).
Proceeds—To retire debt, to in¬
working capital and for general corporate pur¬

crease

poses.

Underwriter—None.

Essex County Electric Co.

(2/17)

Dec.

Inc.
(letter of notification) 99,000 shares of common
(par 20 cents). Price—$3 per share. Proceeds—

•4- Stone

7

Jan

-stock

of America,

Corp.

which simulates stone under trade name
Stone."
Office — 705 Arnold Ave., Point

ficial compound

"Pura-Tex

Theatre

Dec.

Inc., N. Y. City
shares of preferred stock

200,

filed

10

(no par)

5.000

shares of common stock (par one cent) to be
•offered in units of 25 shares of preferred and 75 shares
•of common stock. Price—$2,500 per unit. Proceeds—For

•and 15,000

Underwriter—None.

•working capital, etc.

Uranium Corp.

Three States

(letter of notification) 2,000,000 shares of com¬
(par one cent). Price—15 cents per share.
Proceeds
For drilling, surveys and working capital.
Office—354 Main St., Grand Junction, Colo. Underwriter
Tellier & Co., Jersey City, N. J. Offering—Not expected
until late in February, 1954.
Nov. 13

Dec.

15

sale

—

Trion, Inc., McKees Rocks, Pa. (1/19)
4 (letter of notification) 23,650 shares of common

it

three

To

&

air

electric

filters.

Underwriter—Reed, Lear

Co., Pittsburgh 19, Pa.

United

Merchants &

Co., asked Federal Power Commission to authorize
struction

Exchange
—To

a

through secondary distributions). Proceeds
of selling stockholders who will receive

or

group

$he

said

and

common

shares

basis of 6V2

Juilliard
None.

in

outstanding preferred
stock of A. D. Juilliard & Co., Inc., on the
exchange for

shares of United Merchants stock for each

common

preferred

or

share.

Underwriter

—

Statement effective Oct. 26.

Wallace Container Co.
Dec.

18

(letter of notification)

75,000 shares of class

A

Price—At par

stock.

common

of

through

$130,000,000

a

the

issuance

—To expand
Dos Angeles,

Calif.

($4 per share). Proceeds
Office—5862-68 Croker Street,

facilitiees.

Underwriters—The First California

Co., Inc., Bateman, Eichler & Co. and Lester, Ryons &
Co., all of Los Angeles, Calif.
West Coast Pipe Line Co.,

ferred

stock

at

stock

common

pipe

line, to be financed
$97,500,000 of first mortgage

of

option

of

company,

Atlantic City

$20,500,000

of

new

ers

l-for-10

on

raise

a

bonds and make
basis

additional

an

of

an

offering to stockhold¬

sufficient

estimated

common

$3,000,000.

be

may

Co.

Union

Securities

Previous bond issue

Corp.

stock

common

stock

and

Smith, Barney
placed privately.

was

Baltimore & Ohio RR.
Nov. 9 it was reported

to

Proceeds—For

construction program. Underwriters—For

&

shares

of

•cents) to be offered in units of
♦one

share

ment.

of stock.

Price

one

To

—

Proceeds—From sale

be

stock

(par 50
$50 debenture and

common

supplied by amend¬

of units

and

1,125,000 addi¬

tional shares of common stock and private sale of $55,d300,000 first mortgage bonds to be used to build a 1,030

xnile.^rude oil pipeline. Underwriters—White, Weld &
Co,. ,and Union Securities Corp., both of New York. Of¬
fering—Postponed indefinitely.
West Coast
Nov. 20 filed

Pipe Line Co., Dallas, Tex.
1,125,000 shares of common stock

(par 50
cents). Price;—To be.supplied by amendment. Proceeds
—Together with other funds, to be used to build pipe¬
line. Underwriters
White, Weld & Co. and Union Se¬

is planning to issue $60,-

company

Dec.

29

to">-be
-about
each

filed

Jan.
two

for

shares of

including Halsey, Stuart & Co. Inc.; The First Boston
Corp.; Merrill Lynch, Pierce, Fenner & Beane; Alex.
Brown

&

Sons;

and

others.

The

bankers

would

then

offer the bonds to the public.

Central
it

by

19, 1954, on the basis of one new share for
held; rights to expire on Feb. 1, 1954.

Insurance

92%

Securities

Co., the
of the presently outstanding

parent,

announced

common

stock,

.

Western Empire Petroleum
Co., Ogden, Utah
(letter of notification) 3,000,000 shares of com¬

Oct. 22
mon

stock

Proceeds

—

(par
For

10

cents).

additional

leases, drill well, etc.
Utah.

Underwriter

—

Price—5

working

cents

capital,

an

issue of $4,000,000 first

by

bidding. Probable bidders: Halsey, Stuart
Inc.; Stone & Webster Securities Corp.; Kidder,
Peabody & Co. and White, Weld & Co. (jointly).
&

Co.

Central Maine
Oct.

7

it

was

share.

per

to

plans sale during the
of 1954 of $10,000,000 common stock after
distribution by New England Public Service Co. of its
holdings of Central Maine Power Co. common stock.
company

Probable bidders: Blyth &
& Co. (jointly); Coffin &

Co., Inc. and Kidder, Peabody
Burr, Inc.; A. C. Allyn & Co.,
Bear, Stearns & Co. (jointly); Harriman Ripley

Inc. and

&

Angeles, Calif.
Wilhelmina Adams, Inc.,
Washington, D. C.
11 (letter of
notification) 4,500 shares of common

Jan.

•stock

(no par).
Price—$10 per share.
Proceeds—For
expansion and working capital. Office—3214 P St. N.
W.
Washington, D. C. Underwriter—None.

Wilson Organic Chemicals,
Dec. 14
♦stock

(letter of notification)
(par $1). Price—2.12%

underwriter.

York,

v

Inc. (N. J.)
15,000 shares of

per

share.

Underwriter-^-Graharn,
.

Proceeds—To

Ross

&

Co.

New

'

i




common

.
.

Price—

just prior to the offering date.

Pro¬
Un¬

Georgia Power Co.

(4/6)
was reported company plans issuance and sale
$11,000,000 first mortgage bonds due 1984. Proceeds

Dec. 15 it
of

—To

bank

repay

loans

Underwriters—To

be

for

and

construction

program.

determined

by competitive bid¬
ding. Probable bidders: Halsey, Stuart & Co. Inc.; Blyth
& Co., Salomon Bros.
& Hutzler and Shields & Co.

(jointly); Harriman Ripley & Co., Inc.; Union Securities
Corp. and Equitable Securities Corp. (jointly); The First
Corp.; Lehman Brothers; Morgan Stanley & Co.

Registration—Planned

negotiated sale.

a

Proceeds—To
provements.
asked
be

ICC

first

repay

for

March

1.

Bids—Expected to

loans

and

a

23

for

capital

Bids—Halsey, Stuart & Co. Inc.

to

sell

on

im¬

Dec. 14

reject company's request and that bonds
at competitive
bidding.

*■

reported that corporation is a prospect
very substantial emission of debt capital.
was

President, announced that company
plans to issue and sell in the latter part of March $3,000,-'
000 of first mortgage bonds due 1984. ' Proceeds—To re¬
pay bank loans and for new construction.
Underwriters
financing

was

channels.

done
-

Connecticut Light & Power Co.
Dec.

7

it

.

18

stockholders approved plan of merger into this

company of Bank of

through

private

1

was

Co.; Chas. W. Scranton & Co., and Estabrook & Co.
privately.

Bonds may be placed

Continental Oil Co.
was

Syosset, L. I., N. Y., which will in¬

volve the issuance of 12,000 additional shares of Hemp¬
stead
be

Bank of

offered

$10 par value.

publicly.

Price

reported that this company is expected to
new capital.

Delaware Power & Light Co.
Oct. 5 it was announced company plans to issue and sell
in 1954 ahout

$10,000,000 of first mortgage and collateral

trust bonds. -Proceeds—For construction program.
Un¬
derwriters—To be determined by competitive bidding.

(
1

Unexchanged shares will
$31.25 per share. Under¬

writer—Francis I. duPont & Co., New York.

Offering—

Expected in January.
Houston Lighting & Power Co.
it was reported company plans

Sept. 25

some

new

fi¬

nancing to provide funds for its construction program.
Bidders for about $25,000,000 of bonds may include Hal¬
sey, Stuart & Co. Inc.; Kuhn, Loeb & Co.; Union Se¬
curities

Corp.; Lehman Brothers; Smith, Barney & Co.;
Kidder, Peabody & Co.; Equitable Securities Corp.
National

was

stock

Bank,

Houston, Tex.
following proposed two-

announced Bank,

split-up,

plans to offer its stockholders

50.000 additional shares of capital stock on a one-for-two
Price—At par ($10 per share).
Proceeds—To in¬

basis.

capital.

crease

to

vote

Meeting—Stockholders

on

Jan.

12

were

changing the authorized capital stock from
50,000 shares (par $20) to 150,000 shares (par $10), <'
on

>

Idaho

Power

f

Co.

Aug. 6, officials of Blyth & Co., Inc. and Bankers Trust
Co., New York, testified before the Federal Power Com¬
mission

that

this

company

finance construction

of

plans

raise

to

$184,550,000
projects

three hydro-electric

Snake River, Idaho. If approved, the financing will
consist of $105,000,000 of bonds through 1962; $27,400,000
of

preferred

stock;

and $52,150,000 of common stock.
financing period, the company would
borrow and repay $29,000,000 of short-term loans. Final
financing details would depend on market conditions.

Throughout the

Inter-Mountain Telephone Co.
23 it was reported company in

Dec.

offer to

its

common

stock.

mon

stockholders

April,

some

Underwriter—Courts &

1954,5

additional

may
com¬

Co., Atlanta,, Ga.

Jersey Central Power & Light Co.
16 it was reported company tentatively plans to
issue and sell in 1954 about $6,000,000 first mortgage
Dec.

bonds due

1984.

Underwriters

Proceeds

To

be

—

For construction program.

determined

by competitive bid¬
ding; Probable bidders: Halsey, Stuart & Co. Inc.; White,

Weld

&

Co.;

Co.; Union
and

Merrill

—

Glore,

Forgan & Co.; Kidder, Peabody

Securities

Corp., Salomon Bros.

Lynch, Pierce,:Fenner &

&

Beane

&

Hutzler

(jointly);

The First Boston Corp.," Lehman Brothers.
.

1

—

.

reported company plans to raise between
$10,000,000 and $20,000,000 in 1954 from sale of bonds
and stock.
Underwriters—For common stock: Putnam

Dec. 23 it

(1/19)

on

Jan. 5, R. L. Bo wen,

bond

Ry.

Co.

Dec.

to

Community Public Service Co.

—Previous

Northern

Probable bidders: Halsey, Stuart
Inc.; Salomon Bros. & Hutzler; Kidder, Peabody
& Co.; Blair, Rollins & Co., Inc.

offered

it

April 6.

1, 1954 to Feb. 1, 1969.

&

for-one

Price—To be announced later.

bank

Chrysler Corp.
Dec.
for

on

Houston

Dec. 3 company
sought ICC permission to issue and
$6,000,000 of collateral trust bonds due Nov. 1,

&

Great

Dec. 21 it

be in the market for
^

to
the

derwriter—None, but Merrill Lynch, Pierce, Fenner &
clearing agent.

Co., Inc.

Chicago Great Western Ry.

acquire

Office—812 Eccles Bldg., Ogden,
Samuel B. Franklin & Co., Los

share for each 15 shares held.

be determined

on

Beane may act as

Power Co.

reported

first quarter

Underwriters—Kidder, Pea-

body & Co., New York, and Prescott, Wright, Snider Co.,
Kansas City, Mo.
■

(par $5)

probably

Hempstead Bank, Hempstead, N. Y.

intends to offer and

company

competitive

which

will not subscribe for any stock.
Price—To be supplied
by amendment.
Proceeds — For working capital, etc:
Office—Fort Scott, Kansas.

new

stock
—

ceeds—To be invested in the domestic subsidiaries.

Illinois Electric & Gas Co.

was

Proceeds—To repay bank loans and for
construction.
Underwriters—To be determined

new

through

stock (par $5)
stockholders on or

common

subscription

shares

'Western
•owns

150,000

offered

one

April, 1954

Bids will be received up to noon (EST) on Jan. 19 for
the purchase from it of $5,070,000
equipment trust cer¬
tificates to mature in semi-annual instalments from Aug.

1978,

(1/19)

basis of
To

or

plans to offer about

common

struction Finance Corporation. The latter in turn
plans
to offer the new bonds to a
group of investment houses

—

Western Casualty & Surety Co.

600,000 additional shares of
stockholders in March

Corp.

company

be received

of new collateral trust 4% bonds to mature in
l-to-16 years in exchange for a like amount of collateral
trust bonds due Jan.
1, 1965 now held by the Recon¬

curities

Corp., both of New York. Offering—Postponed
Indefinitely.

Utilities

announced

000,000

mortgage bonds.

580,000

Public

was

Boston

sell around the middle of 1954

and

General
Dec. 16 it

Electric Co.

England, President, announced that the com¬
plans to issue and sell early in 1954 about $4,-

15,

t

and

pre¬

(par $100), the latter to be sold to parent.

Nov. 20 filed $29,000,000 12-year 6% debentures due Dec.

1964,

was authorized by the SEC to
1,500,000 shares of its holdings of Gas Service Co.
stock
through negotiated sale, rather than
through competitive bidding. The highest bid ($32,000,000) is understood to have been made by Missouri Pub¬
lic Service Co., subject to approval of the
City Council
of Kansas City, Mo.

common

Oct. 5 B. L.

Dec. 9

Dallas, Tex.

con¬

bonds, $12,000,000 of interim notes convertible to

000,000 of

Manufacturers, Inc.

Pipe Line Co.
subsidiary of American Natural Gas

Kansas City, Mo.

sell

1

pany

Oct, 7 filed 574,321 shares of common stock (par $1).
Price—At the market (either on the New York Stock

Gas Service Co.,

Dec. 11 Cities Service Co.

American Louisiana
Nov. 10 company, a

Proceeds—
Business—Manufactures

selling stockholders.

sells

and

of

Price—$4 per share.

(par 50 cents).

(3/16)

reported

was

March 16.

Jan.

tstock

Power Co.

company is planning issuance
$17,000,000 first mortgage bonds due 1984.
Proceeds—For construction program.
Underwriters—To
be determined by competitive bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; Union Securities Corp., Equit¬
able Securities Corp. and Drexel & Co. (jointly); Blyth
& Co. Inc. and Kidder, Peabody & Co.
(jointly); Morgan
Stanley & Co.; Lehman Brothers; The First Boston Corp.;
Harriman Ripley & Co., Tnc. Registration — Tentatively
scheduled for Feb. 8. Bids—Expected to be opened on

stock

mon

'

Alabama

and

Underwriter—None.

Pleasant, N. J.

Prospective Offerings

Business—Manufactures arti¬

working capital, etc.

Uor

14 it was announced
company plans to issue and
$5,000,000 of 30-year first mortgage bonds. Under¬
writer—To be determined by competitive bidding. Prob¬
able bidders: Halsey, Stuart & Co.
Inc.; Lehman Bro¬
thers; Kidder, Peabody & Co.; Merrill Lynch, Pierce,
Fenner & Beane and Union Securities Corp. (jointly).
Bids—Expected to be received on or about Feb. 17, 1954.

sell

•

■

*;

*•

1 ■

•

•

*

Volume 179

Number 5290

The Commercial and Financial
Chronicle

...

(197)
'

Louisville Gas &

Electric

Co.v(2/16)

Pacific Gas & Electric Co.

Dec. 16 it

was reported company
may issue and sell $12,000,000 first mortgage bonds due 1984. Proceeds
For

Dec.

construction program.

Underwriters—To be determined
by competitive bidding. Probable bidders:
Halsey, Stuart
& Co. Inc.; Kidder, Peabody &
Co.; Lehman Brothers
and Blyth & Co., Inc.
(jointly); Kuhn, Loeb & Co.; Glore,
Forgan & Co.; The First Boston Corp.; Harriman
Ripley
& Co., Inc.
Bids—Tentatively expected to be received
on

Feb.

Pacific
sell

pected

>'• v.'A*'-*'

I

:r

Metropolitan Edison Co.
Dec." 16 it

was

*

-

ex¬

Dec.
sell

Corp.

*

rV:' L-*

28

it

was

announced

"'•*

Bids

issue

banks

Jan.

14,

W.

A.

Insurance

Rattleman,

company plans to issue to
March 16 the right to

Co.

President,

stockholders

of

record

16

it

was

reported this company
tentatively plans

new

1954 of about

Proceeds—To

construction.

$3,000,000 first mortgage
repay bank loans and

for

Underwriters—To be determined
by
bidding. Probable bidders:
Halsey, Stuart
& Co. Inc.;
Kuhn, Loeb & Co. and Lehman Brothers
competitive

(jointly); Equitable Securities Corp.; Union
Securities
Corp. and White, Weld & Co.
(jointly); Merrill Lynch,
Pierce, Fenner & Beane.
North Shore Gas Co.
Dec.

14

defer

it

was

that

it

has

been

decided

to

bond issue by this
company for at least several
It had been
reported that the issuance and sale
of about
$3,000,000 of first mortgage bonds had
been
planned. Underwriter—To be
determined by competi¬
tive bidding. Probable
bidders: Halsey, Stuart & Co.
Inc.;
a

months.

Lehman

Brothers;

Lynch, Pierce,
Corp. (jointly).

Co.

&

&

Hutzler

(jonitly);
in March

(2/3)

or

First

it

6

it

of

writers

April, 1954.
*

Kidder. Peabody &
Co.; Merrill
Fenner & Beane and Union
Securities

was

reported company may

(jointly).

-

-

Peabody & Co.

of

—

To

issue
1984.

be

..

mortgage

bonds

due

and

sell

Under¬

determined

on

Feb. 25.

13 it

was

-

(EST)

financing, in part, a $17,000,generating plant to be constructed in
Denver,
Underwriters—To be determined
by competitive
bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.;
Kuhn, Loeb & Co.; The First Boston
Corp.; Harris, Hall
& Co. Inc.; Harriman
Ripley & Co., Inc. and Union Se¬
curities Corp. (jointly); Lehman
Brothers; Kidder, Pea¬
body & Co.; Blyth & Co., Inc. and
Smith, Barney & Co.
(jointly).
i
—

000 electric

Service Co.

of

8

company applied
sell $12,500,000 first

Oklahoma

(2/16)

to

SEC for authority to issue
mortgage bonds, series E, due

1, 1984. Proceeds—To pay for property additions
improvements and to repay bank loans. Under¬
be

determined

by competitive bidding.
Halsey, Stuart & Co. Inc.; Equitable
Corp.; Salomon Bros. & Hutzler; The First
Boston Corp.; White, Weld & Co.
and Shields & Co.
(jointly); Lehman Brothers; Blyth & Co., Inc., Kidder,
Peabody & Co. and Stone & Webster Securities
Corp.
(jointly). Registration—Expected Jan. 22. Bids—Around
Probable

bidders:

Securities

;»

-

$9,660,000 equipment

Hutzler; Kidder,

Vr.YTV/'

-

share

share.

for

each

Suburban Electric Co.
Dec.

shares

14

it

was

company

Bids—Tentatively

expected

to

be

Roy Klein
Let

us

close with

a

our

season

Co.

Inc.; White, Weld & Co. and Stone & Webster
Corp. (jointly); Union Securities
Corp. and
Barney & Co.- (jointly); Lehman Brothers and!

Securities

Smith,
Bear, Stearns & Co. (jointly); The First Boston
Corp,
and Blyth &
Co., Inc. (jointly); Kidder,
Peabody & Co.;
Salomon Bros. & Hutzler.
(2) Previous common stock
offering (in 1952) was made to
stockholders, without
underwriting.
If
competitive,
bidders
may
include
Blyth & Co., Inc.; Kidder,
Peabody & Co. and Merrill
Lynch, Pierce, Fenner & Beane
(jointly); Lehman
Brothers; The First Boston Corp.; Union SecuritiesfCorp. and Smith, Barney & Co.

(jointly).

West Coast Transmission Co.
Oct. 14 it was announced that

company




plans to

now

issue

$29,000,000 in l-to-S^-year serial notes;
$71,000,000
20-year, first mortgage bonds; and $24,440,000 in sub- ^

in

ordinated

long-term debentures and

4.100,000 shares aK
to be sold to the
public.
Proceeds—To
finance construction of a natural
gas pipe line from thoCanadian Peace River field to
western Washington and
stock

common

Underwriter—Eastman,

Dillon & Co., New York*

SECURITY TRADERS ASSOCIATION

Baltimore

Security Traders Association has elected the

officers for 1954:

McGrath Securities
Sells Micro-Moisture

Controls Common Sfk*
York

Securities

City,

stock

on

Corp.
12,

Jan.

olt
an¬

the

common

Bowl¬

the

issue

at

has

$1

per

been

share

as

over-sub¬

scribed.

Micro-Moisture

new

Inc.
mod¬

ern

plant at Miami, Fla., where
on the Weather-Guard
(the automatic micro relay mech¬

42Ms

production

38
38

anism for

38

H.

L. Kellermann

Wm. C.

36

Roberts, Jr.
J.

Claire

and

Sowers

closing convertible tops

automatic

windows

on

cars

in case of

34

President: Howard L. Kellermann, Alex.

33
32

Controls,

have moved into their

47^2

^

Vice-President:

30

William

C.

Roberts,

Jr.,

Brown &

C.

T.

Sons.

Williams

Co., Inc.

1

28V2

l

'

&

^.11*

Secretary: David L. Pindell, Lockwood, Peck & Co.

22

Jack Manson

_

aboufc

May,i 1954, approximately $15,000,000 of debentures*.
Underwriters—(1) For debentures to be determined
by
competitive bidding. Probable bidders:
Halsey, Stuart
&

NEW YORK

closes with the games of Jan. 28.

good showing!

or

closing of the books
on
the sale of 299,000 shares o£
Micro-Moisture
Controls,
Inc.

5 Point Club

202

The first half of

on

Light Co.
reported company plans to offer in
March,,
200,000 shares of common stock and in

Points

Club

and

was

about

Klein

200 Point

issue

Utah Power &

nounced

(Capt.), Fredericks, Murphy, Weseman, Huff
Bean (Capt.), Bass,
Valentine, Eiger, Bradley
Leone (Capt.), Nieman,
Gannon, Tisch, Greenberg
Serlen (Capt.),
Rogers, Gold, Krumholz, Gersten
Krisam (Capt.),
Pollack, Cohen, Smith, Strauss
Meyer (Capt.), M. Meyer, Frankel,
Wechsler, King
Donadio
(Capt.), Craig, Gronick, Bies, Demaye
Kaiser (Capt.), Hunt,
Werkmeister, Swenson, Ghegan
•Growney (Capt.), Boggs, Siegel, Voccolli, Lienhardt
Hunter (Capt.), Brown, Reid,
Farrell, Barker—
Burian (Capt.), Gavin,
Clemence, Montanye, Whiting_____
Manson (Capt.) Jacobs,
Topol, Weissman, H. Frankel

plans to

received

March 3.

New

Team:

Prices—

(3/3)

announced

McGrath

OF

owned.

$4,000,000 of 30-year first mortgage bonds. Under¬
writer—To be determined
by competitive bidding. Prob¬
able bidders:
Halsey, Stuart & Co. Inc.; Lehman Bro¬
thers; Kidder, Peabody & Co.; Merrill
Lynch, Pierce*
Fenner & Beane and Union
Securities Corp.
(jointly).

Oregon.

new

six

F

Treasurer: J. Claire Sowers, Mead, Miller & Co.
Board of Governors:

(3

year

term expiring 1956)—Allison M.

Berry, Robert Garrett & Sons, and Charles Gross, Harry M. Sheely
& Co.

I

.

*(

.

.

-

!

» ■

i

■ ■

.

—

!

q-

I

111—1,

L.

HAl»

j

Proceeds—For improvement and modern-

Notes

Traders Association of New York
(STANY)
ing League standing as of Jan. 7, 1954 is as follows:

v

•

Jan. 28 for

on

ization program.

Colo.

writers— To

new

per

1954,

reported company is planning to float an
issue of $15,000,000 first
mortgage bonds, due 1984, early
in 1954.
Proceeds
For

Public

one

Dec. 23 it

Public Service Co. of Colorado
Oct.

;f Security

? •

(1/28)

Spokane International RR. Co.
/■£-"\&*z:.wJfcV
29, F. C. Rummel, President, announced
companyfiling an application with the ICC for
permission to
offer 28,484 additional shares of
capital stock (no par)
to its stockholders of
record Dec. 31, 1953, on the basis*

(2/25)

reported company plans to

following

i

in

Peabody &

* '~r

-

sell

The

SECURITY TRADERS ASSOCIATION

sell

Dec.

Underwriter—Paul C. Kimball &

BALTIMORE

;

issue and

is

Feb. 16.

NSTA

Co.*

15

$15

first

of

be received

and

&

1, 4954"and to mature?
equal annual instalments. Probable" bidders:.*
Hal¬
sey, Stuart & Co, Inc.;*,Salomon Bros. &

in

by competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; The First
Boston Corp.; Smith,
Barney & Co.; Kidder, Peabody &
Co. and White, Weld & Co.
(jointly). Bids—Expected to

and

it

be received up to noon
the purchase from the
company of
trust certificates to
be/dated Jan.

$5,300,000 equipment trust
certificates,

interest.

was

$7,500,000

•

include:, Blyth

may

Bids will

Boston

was

accrued

Jan.

Jan.

8

it Southern Pacific Co.

f

:

*

The

it Pittsburgh & West Virginia Ry.

Feb.

(Mass.)

announced

-

about

Light Co.

issue and sale in
bonds due 1984.

Bros.

Co., Chicago, 111.

that

subscribe for 200,000 additional
shares of capital stock
(par $5) onthe basis of one new
share for each two shares
held.
Price—Expected to be
$30 per share. Proceeds—To
increase capital and sur¬
plus. Underwriter—The First Boston
Corp., New York.
New Jersey Power &
Dec.

Peabody

stock

common

Underwriters—To be determined
by competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; The First
Boston Corp.; Blyth &
Co., Inc., and Kidder,

1984.

&

Offering—Expected

5

and

(3/16)

announced

due

for

March, 1954, about $20,000,000 of first
mortgage bonds'.

and

reported company plans to issue and sell
$300,000 of 6% convertible debentures. Price—At
100%

and

stock and

—

Fire

issue

it Peoples Finance Corp.,
Denver, Colo.

in

Union

may

of

Southern Natural Gas Co.

Dec.

-

company

letter of

a

value

up to*
Underwriter—Eisele & King;

Inc.; The First Boston Corp.

series BB, to mature in
l-to-15 years. Probable
bidders:
Halsey, Stuart & Co. Inc.; Salomon Bros. &
Hutzler;
Kidder, Peabody & Co.; Blair, Rollins & Co. Inc.

Peabody & Co.

it National

that

$12,500,000 of first mortgage bonds

chase from it

borrow $18,000,000
connection with
proposed acquisition of
1,500,000 shares of common stock of Gas
Service Co. of
Kansas City, Mo., at a total cost
of $32,000,000. Follow¬
ing consummation of proposed
merger of the two com¬
panies, it is planned to sell $18,000,000 in
bonds and de¬
bentures to retire the bank loans.
Underwriter
For
stock: Kidder,
from

bidders

parent,

outstanding stock. Offering—

reported

aggregate

refunding mortgage
bonds, series F, may include:
Halsey, Stuart & Co. Inc.;
Blyth & Co., Inc.; The First Boston
Corp. and Harris,
Hall & Co. Inc.
(jointly); Kuhn, Loeb & Co. Probable

expected to be received up to
noon, (EST) on
Feb. 3 by the
company at Philadelphia, Pa., for the
pur¬

Co.

plans to

Co.,

an

are

Jan.

company

common

was

it Pennsylvania RR.

reported company may sell in 1954 about

$14,000,000 of

and

basis.

Pacific's

issue

Southern California Edison Co.
C. Mullendore, President, announced
that it
probably will be necessary for the
company to obtain
approximately $50,000,000 from the sale of
additional
securities in 1954, the type of which is not
now known.
Probable bidders for new first and

until the early part of 1954.

Kidder,

Salomon

$3,500,000 first mortgage bonds due 1984.
Proceeds—For
Underwriters—To be determined
by competitive bidding. Probable bidders:
Halsey, Stuart
& Co. Inc.;
White, Weld & Co.; Kidder, Peabody & Co.
and Drexel & Co.
(jointly); Kuhn, Loeb & Co. and Salo¬
mon Bros. & Hutzler
(jointly).
Public Service

of

to

securities.

Dec. 30, W.

Co., Merrill Lynch, Pierce,
Beane, Union Securities Corp. and
White,
Weld & Co.
(jointly); Harriman Ripley & Co., .Inc.;
Kuhn, Loeb & Co., Lehman
Brothers, Drexel & Co. and

construction program.

Missouri

l-for-7

reported company plans to file

soon

new

Libaire, Stout & Co., New York.

Securities

Corp.;

Bryan

*•;

a

Proceeds—For

approximately $5,000,000 of common stock;:
.Price—Expected to be about-$2'per share.
Proceed#—
•For expansion program.
Underwriter;
'
*

it

about

Fenner

early registration is

$300,000 of

construction program.
Underwriters—
To be determined
by competitive bidding. Probable bidders: Halsey, Stuart & Co.
Inc.; Equitable

of

-Houston,: Tex..

1,004,603

issue

was

notification

N

plans to
additional

Telegraph

16

sell

400,000

.

Houston, Tex.

Jan. 7 it

undetermined

company

Pennsylvania Electric Co.
Dec.

bottling

McBride Oil & Gas
Corp.,
Nov. 8 it was announced that

presently

company

«

stock to its stockholders
at
rate of four new shares for each
share held. Price—$5
per share.
Prcoeeds — To help finance a new
v

on

Not expected

common

.

stockholders

91.25%

owns

(jointly).

Maier Brewing Co., Los
Angeles, Calif.
April 18 it was announced company will offer

Underwriter—None.

a

shares of
Price—At par (100 per
Proceeds—To repay bank loans.
Underwriter—
American Telephone &

None.

Underwriters—May be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co.
Inc.;
Morgan Stanley & Co.; White, Weld & Co. and
Salomon

plant.

its

to

share.

pur¬

poses.

additional shares of

sell

announced

was

capital stock

$24,610,000 Atlanta, Knoxville & Cincinnati Division
4%
bonds due May 1, 1955, and for
general corporate

Bros. & Hutzler

and

Telephone & Telegraph Co.

July 2 it

company may issue and
1954. Proceeds—To retire

in

it Riddle Airlines, Inc.

Black, President, announced that
issue

refunding mortgage bonds, series W.
Proceeds—For construction
program. Underwriters—To
be determined by
competitive bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; Blyth & Co.,
Inc.; The First
Boston Corp.
Offering—Expected about the middle of
February, 1954.

16.

issue of bonds late

an

B.

to

amount of first and

Louisville & Nashville RR.
Nov. 12 it was reported that the
sell

16 J.

expects

—

4S

rain) and the WeatherMatic (a similar device for
oper¬
ating all gear-operated Jalousie
and Casement

windows) has been
to meet the increasing
demand for these units.

stepped
The

up

management

also

advices

that the Weather-Guard automo¬
bile unit has been tested and com¬

pletely approved by the engineer¬
ing division of one of the leading
automobile manufacturers.

46

The Commercial and Financial Chronicle

(198)

Continued

from

ous

16

page

terests.

The Legal Situation

The

tinuity in
important

visions

Under the Atomic

Enterprise

Energy

modified

are

ownership,

to

permit

at the very least, a

or,

long-term possessory right in fis¬
sionable

Act

in

materials

adequate

quantities (and more than enough
Act of 1946 for an atomic
bomb)", the types of
huge legal problem

The Atomic Energy

is in fact

one

private enterprise that is
planning to build and operate a

for any
nuclear

Act

plant.

power

is

the

Until

•

certain

in

amended

very

substantial particulars, there

ply will be
look at
tant

power.

of the

some

more

Let us
impor¬

difficulties created

legal

the

no

electric

nuclear

.

sim¬
privately financed

by

The Foundatioii of Owner¬

(a)

ship of Facilities Is Lacking: Sec¬
of the Atomic

tion 4

Energy Act

the present time precludes the
foundation
of
private

at

:

essential

ownership of the most likely kind
of nuclear power

reactor, the

called "breeder reactor."

tion

The

makes

the

Atomic

Commission

,

the

exclusive

of all facilities for the

of

fissionable

includes
cilities

not

sosec¬

Energy
owner

production

materials

this

and

only production fa¬

themselves, but also fa¬
the separation of fis¬

cilities

for

materials

sionable

waste

from

products.
The section expressly
prohibits private ownership of all
such facilities.
We

suitable for power

most

reactors

cannot be charged with

purposes

reasonably

quantities

or

to

necessary

from

least

materials

source

at

consumes,

fissionable

elements.

when

So

Section 4 prohibits private own¬
ership of facilities for the produc¬
tion of fissionable
materials, it
effectively closes the door to pri¬
vately owned electric power gen¬

eration.

Furthermore, since, as I have
already indicated, Section 4 is so
worded
that no private person
may own facilities to separate fis¬
sionable

materials

substances, such

other

from

for example,

as,

from the waste products of a re¬

actor, chemical companies, which
will,

doubt, be operating as es¬
partners in the nuclear

no

sential
power

enterprise, are prevented

from

carrying

chemical
It

is

on

essential

an

operation.
within

not

the

range

of

remote

even

possibility that pri¬
financed nuclear power
will be built until the

vately

plants

to

all of these public in¬
including strict account¬
for all fissionable mate¬

ability
rials.

Such

compliance

will

be

one

of the unique and positive le¬

gal

duties

of

the

nuclear

power

industry.

Lacking:
Section

sition

Furthermore, this

5

of

restricts

is,

Lacking:

Section

contains

also

of

5

the

provisions

Act

which

will make it

for

exceedingly difficult
private nuclear power plant,

a

if

even

owned

the

facilities

by private

could

be

capital, to get

the

fuels

ful

operation.
The section pro¬
for comprehensive govern¬

to

carry

a

on

success¬

vides

ment control

terials

cluded.

actor
tial

over

well

as

fissionable
over

as

ma¬

raw

or

:

materials necessary to re¬

operation.

fuel

As

These

are

essen¬

supplies.

to

all

fissionable

materials,
absolutely

private ownership is
prohibited and government own¬
ership is prescribed. Even posses-

'X sion by private
of loan | or
:

respect

tary

persons

by way

lease is prohibited with

to

construct

still

another

a

amounts
bomb

weapon.

sufficient

or

Unless

other

these




to

milipro¬

the

Energy Act, as at present
written,
interposes
a
seriously
discouraging factor — a legal de¬
although not

permitted.
ever

and

To

assure

reasonable

cer¬

electric power industry,

which, of

course, must be able to assure its
customers

continuity of service,
licensed persons should
be granted the right to own, pur¬

properly

chase,

lease,

materials

source

Such

and

use,

in

sell

the

such

market.

rights should exist without

No

for

in

the

inven¬

solely
fis¬

or

production

of

(but this is ob¬

chemical

the

also

from
So

of

processes

non-fissionable

the prohibited
In

one.

addition,

with

materials.

is

area

phases

nuclear

or

patent

no

other

of

technology

confer

the

of

the

use

duct

of

right

of

patent

which

the

prevent
in

the

the
con¬

present

Act,

issued

any

in

the

Commission finds that the li¬

censing

of

such

invention

"is

necessary to effectuate the pol¬
icies and purposes of the Act." In
such

the normal encourage¬

cases

by

cluding

who

the

of

by

private
Subject to these limita¬

persons.

tions,

amounts

held

however,

the

traditional

given by the American pat¬
ent
system is withheld, for all
persons licensed by the Commis¬
to

the

by

time,
and

tion and to encourage the entry of

ress

of

the

nuclear

,

(d) The Foundation of Right to
Continuity in Business Is Also

from

terials

atomic

energy

in

ma¬

any

unless licensed to do

way

the

utilizing fissionable

or

Atomic

The

,

license

present

so by
Commission.

Energy

Act

granted

under

the

is

subject to some
troublesome legal
limita¬

very

tions, the most difficult of which
is

the fact that it may be termi¬

nated by

the Commission at any
time, and it may be done without

notice

or

opportunity for hearing,
and
without showing of cause.
Recognizing fully that it may be¬
sion

necessary for
to terminate

license

in

the

health, safety,
vate

capital
a

or

of public
national security,
a

fact

cannot

reasonable

in the form of

occasional

an

interest

it is nevertheless

without

the Commis¬

a

be

foundation

is

lacking under the

present Act.

Private capital sim¬
so

precari¬

rewards.

The

windfall.

a

this

have

science

chances

The

in

are

that

his

on

the

"free

What
the

legal problems arising

certain, other

ef¬

field?

,

shall

we

see

a

It produces not

only heat for steam for turbines,

but, also heat

intense

that it
may
be used for revolutionary
chemical processes, "waste prod¬
ucts"
that
will
probably have
many
applications
in
chemical
so

industries,

Federal

who

embark

and

upon

Stream

Pollution:

streams

into

If

there

they

by

the

arrangements

made

the

United

under¬
streams,
-

be

streams

(Title

the

serve

various

involved,

are

legal

the

tions

of

the

interstate

commissions,
such
as
Valley Water Sanita¬

Ohio

i

compacts, and
regula¬

administrative

appropriate

compact

of

requirements

interstate

follow

ginia),
Basin

the

or

Water

Delaware

River

Commission

where.

medical
The

therapy,

nuclear

chem¬

or

else¬

(cover¬

ternational
commissions
set
up
with jurisdiction over such waters
must be dealt with.

Stream

pollution

clearance,

in

other wordSj may become one
the essential
legal problems

of

nuclear power enterprise.

(b)

Antitrust

important

more

Laws:

in

result

special
limitarMust

se¬

and

Exchange

Must intercorporate

likewise

What

be

reports

made to the SEC?

questions

The

ap¬

be

must

answers

depend

to
a

extent

of factors—the

upon

of

stock
ownership by the parent
companies, the materiality of the
income derived by each of the
parent companies from the sub¬

sidiary

company,
the extent to
the
public
interest
is
likely to be adversely affected by
the operations.
Without attemptr

which

ing to

the questions, suf¬

answer

fice it for the moment to say that
each must be given careful con¬
sideration

in

initiation

connection

of

thing like

with

the

enterprise any¬
hypothetical situa¬

an

our

Problems

more

der the Federal antitrust

the

power

will

be

a

production

activities

function
with

connected

multitude

of chemicals, waste
isotopes, and perhaps

products,
other
ucts

end

products.

must

greatest

be

possible

vantage if

These

disposed

the

of

prod¬
the

to

economic

business

is

ad¬

to

Now

be

economically successful.

turn

we

from

away

Fedr

that must be asked and answered
in

connection

with

V

tory laws.

state

regula¬

.

(a) The Certificate of Conveni¬
and

Necessity: Each nuclear

a

certainly a
difficult problem arises un¬

State

From

eral laws to the very considerable
number of special legal questions

ence

and

Arising
Laws

enterprise must, of course,

power

obtain

certificate

a

and

ence

icate

will

state

be

utility

certificate

a

conveni¬

requested

public

Such

of

necessity in order to
operation. The certif¬

commence

from

the

commission.

is

required; of

all
utilities, but nuclear power
projects will present some new
and

unusual questions.

missions

tionary
are

authority
such

required

will

over

com¬

discre¬

the

issu¬

certificates.

to

They

issue

if they find that

them only
"public interest"

be

properly served by the
enterprise. Are they likely

new

to

The

given broad

are

of

ance

withhold

certificates

unless

they become convinced that elec¬
tric power can be generated
by
the

Consider,, for example,

anti¬

an

trust question facing the manage¬
ment of a nuclear power plant

products
power

to

make

arrange¬

dispose

of its

chemical

as

well

as

the

usp of nuclear fuels as cheaply
by conventional means?
Are
they likely to refuse certificates
as

because

What

enterprise?

cause

of

the

fear

due

questions

utility

for

their

end

pany

.chemical com¬
that has invested heavily in

example to

the

economic factor in the total enter¬

enterprise?
native, is the

prise.

quired

by

the

a

Or, in the alter¬
management

antitrust

laws

re->

to

speculative

the

electric

it generates.

the

of

ure

which

of

acter

but also many valuable associated

con¬

therefrom?

Securities

proved?

plant shall it. da with these chemical
will be a complex producer de¬ products?
May- it
sell
all
of
livering not only electric energy them to one chemical company,

Indeed, without their

applies,
what
obligations, and

Federal

.

,

^

Perhaps

power

products. These end products
likely to become a significant

the

iso¬

curity issues be approved by the

Finally, if the boundary waters
happen to be international, the in¬

wishes

in

to

its

and

tion.
And yet
the hypothetical
ing New York, New Jersey, Dela¬
situation is not far removed from
ware
and Pennsylvania, not yet
the corporate structure to be an¬
operative), or the Interstate Sani¬
tation Commission (covering New ticipated for early nuclear power
enterprises.
York, New Jersey and Connecti¬
IV
cut).1

to

values

tions

these

(a)).boundary

waters

or

products

relationships

matters.

if

its

systems,

Act

Surgeon

the nuclear power plant must ob¬

ments

peculiar

the

duties,

number

Furthermore,

selling

power

company,,

Commission?

States

33 U. S. C. Para. 466

chemical

obtained

which has juris¬

such

over

which

must

clearance

and

from

into

waters

suitable

from

carried

be

may

ground

com¬

provisions of the Federal Public
Utility Holding Company Act? If

by

the. ground

the

by

this

discharge of
radioactive susbtances into them,
or

to

Its

pany.

is likelihood of pollution of navi¬

gable

sep¬

plant.

topes to the manufacturing com¬
To what extent, if at all, is
organization subject to the

nu¬

clear power enterprises.

(a)

the

to

chemical

lawyers

a

erept

A

created

plant,

power

electricity
its

which

may

nuclear

un¬

laws

businessmen

of

forms

radioactivity that

purchased

attention

isotopes that may be
used in medicjne, in industry, and
in agriculture, neutrons and other
of

is

—problems that will demand the

prog¬

reactor is far different from

the steam boiler.

are

ply will not flow into

gets

istry,

in business for those who
comply
all lawful regulations. This

of

wholly different type of industry.

invested

with

a

laws, the
laws which prohibit monopoly, re¬
uation from embarking upon
large
straint
of
scale
research
trade, and unlawful
and
development
programs.
It is true that during competition. As I have said, the
nuclear power plant is doubtless
recent years patents have not
fig¬
ured very importantly in the elec¬ destined to be a far more com¬
tric power industry.
When nu¬ plex organization than.is the ex¬
clear electric power
plants are isting type of steam or hydro¬
electric
built and operated,
plant.
Integrated with
however, the

have

right to continue

person

Industry may even be affirma¬
tively deterred by this legal sit¬

that pri¬

foundation

The

produces

normal

will

into

royalty fees fixed

invention

fect

capital
field.

may
upon

initiative, ingenuity,
a new and
is
deprived of

energy,

money

useful
the

energy

invention

expenditure

the

rider"

power

the

Commission.

founda¬

private

of

the payment of

to

necessary

atomic

use

use

freedom of the market is essential

provide the

look at

is

the

manage

to

cooperating in the enter¬
prise.
The
operating
company
proceeds to build and operate the

Energy
brief

take

energy field is subject to tion
Commission
(covering Illi¬
being declared
by
the Atomic nois,
Indiana,
Kentucky,
New
Energy Commission to be "af¬ York, Ohio, Pennsylvania, Ten¬
fected with the public interest," if
nessee,
Virginia and West Vir¬
the

corporation
and

and

company

panies

Atomic

shall

diction

or

is

the

chemical

a

stock

Problems

patent

to

with

manufacturing 'company
a
nuclear power plant.

Other Federal Legal

we

J

.

What is its

own

now,

•

Public

Act.

arate

Leaving

legally en¬

a

briefly, at
the
Federal
Utility Holding Company
application to our
nuclear power plant?
Imagine a
hypothetical case. Suppose one Or
more public
utility companies join

pro¬

Ill

Certain

nuclear

(c) Public Utility Holding Com¬
pany Act Problems: Novelet us

in the field.

atomic

safety and national security, in¬
control

production in
lightened manner.

complete

a

before

answer

power

tainly an important deterrent to
rapid and effective development

General's office,

invention

research

feature

make

materials

not

to

participate in

glance

short, the present patent
are

have

cjan

visions of the Atomic Energy Act,

multi¬

development
activities. Furthermore, and this
is perhaps the most
discouraging

sion

to

certainly
they

velopment.

a

monopoly with respect to weapons
or to the
production of fissionable
material, nor may such patent

interest, and also subject
regulations that may be
necessary to protect public health,

source

patent encouragement

most valuable stimulant

a

confer

invention,

purpose

broad

a

if it is issued for

can,

to

ment

of

there will certainly be a substan¬
tial drag upon research and de¬

Act

in

normal

.prove

these supplementary activities.
Without
such
encouragement

der

the statute includes not only pro¬
duction in the normal sense, but

national

govern¬

will be

weapons

ment

the right of the

electric

enterprise,

not

whatso¬

products

under

it

the

are

sense

solely useful for
(this is unobjectionable),

useful

in

patents

obtained

be

can

restriction, subject only to the
priority claims of the Atomic En¬
ergy Commission necessary in the
any

Whatever

In

chemical

market

electric competitive
conditions?"
Unan¬
possible.- swered and perhaps unanswerable
may
mean
to the at the present time, this is a ques¬
power
elements of the tion that chemical industries will
not

powers may

absolute

an

patents

tions

atomic

mate¬

uranium

production

sources

.

respect

Atomic

"source

tainty of fuel supply necessary to
the operation of a normally stable

come

source

The Patent Problem
In

dealing

the

open

heat

barrier to the broad scale realiza¬

private acqui¬

so-called

that

same

these

the

conventional

the

•

tion of all of the potentialities qf
nuclear power reactors, are cer¬

II

separation of fissionable materials

(c) The Foundation of Acces¬
sibility of Source Materials Is Also

sell

with
in

although they

such industry.

sionable material

sons

(b) The Foundation of Owner¬

is

jectionable). As previously men¬
tioned, "production" as used in

The barrier is absolute.

ship of Fissionable Fuels Is Also

there

terests,

legal ownership is
laid by amendment of Section 4.

of

if

safeguard

Lacking: The Atomic Energy Act
in Section 7 prohibits private per¬

foundation

-

to be any

barriers

American

power

i.e. it must be a
"breeder," for only in this way
can
full advantage be taken of
the economic possibilities inher¬
ent in uranium, thorium, or other

,

these

remove

normal

adopted

sets

serious legal barriers, virtually
precluding private nuclear electric
power operations.
Congress must

Private

with regulations

Act

up

barrier.

ance

con¬

then, the

Energy

terrent

rials,"

much fissionable material

as

it

as

Atomic

for

operation, and that all neces¬
precautions must be taken
to prevent injury to public health,
Ac¬
safety, or national security.
cordingly, private owners of nu¬
clear power plants must assume
responsibility for exact 1 compli¬

of

Thursday, January 14, 1954

.

tribution, economical competition

to

In these four respects,

present

course, that government priorities
for national purposes will be para¬

mount, that private ownership
possession
may
be
limited

right

.

requisite quantities of fission¬
able materials,
ft is assumed, of

that no pri¬ thorium ores and their refined
plant will be but non-fissionable
products, also
permitted to produce fissionable essential as fuel
supply. Such ma¬
materials for the purpose of fak¬
terials can be acquired only pur¬
ing atomic weapons. But to be¬ suant to license issued
by the
come a successful operation, eco¬
Atomic
Energy
Commission
in
nomically competitive with fuel- accordance with such
procedures
burning plants, the nuclear power as the Commission
may establish.
reactor will probably have to pro¬
Open market operations are pre¬

;

..

the

assume

may

vately owned

duce

legal

sary

Act.,

be

must

business will be very
to the nuclear power

industry.
Legal Foundation of Nuclear

Act

to

provide the essential
foundation, at the same time,
however, retaining enough Fed¬
eral control to protect public in¬

Nncleai Power

The

The

field.

a

amended

...

by

to

of

can

be

power

answered

commissions

char¬

Or

shut-down?

approaching. the

vipws.

-

be¬

fail¬

These

only

appropriate
to

ascertain

Such contacts

as

we

have made have revealed lack of

knowledge of the subject and not
a

little of

skepticism about it all.

Volume 179

:

Number 5290... The Commercial and Financial Chronicie

(199)
J At the outset, at least, certificates
will not be issued as a matter of
t

Proper proofs will be

course.

*-quired.
•

-

'■>

within

of

plants,
necessity

r

the

,

proval
be

again encounter

we

power

„

of

obtaining

the

before

ap-

securities

can

upon the market. Pub¬
utility commissions are given
broad discretionary power to re¬
fuse approval if the "public inter¬

placed

lic

•r

im est" will not be properly served.
!f In requesting approval a number
bf

questions

must be answered;
example, what about absorb¬
ing initial losses? What about the

h for

|i

use

i

curities

of proceeds from sales of
finance

to

research

seand

development?: Theses are - prob|'1 terns':that the lawyers will have
C
to help solve.:
'• ^ v '*'

^Acquisition

(e)

*

seems

i
-

of Stock: It
likely that at least the in-

itial huclear power plants will be
built by "corporations the stoek of
which

will

be

owned

by

one

or

"

existing

more

utility ; companies,
by utility companies

'

*

perhaps
acting in cooperation with nonutility companies, such as chemor

.

;
'

ical companies," or manufacturing
companies; ' Under such circum¬

stances, approval, in
;
.

,

and

July

ployees,

Industry

to

enforce

and

safety

given

is

general
for em¬

a

act

Vol. 4 (a) M.S.A. Para. 2973.)
with
to

shall

see

ministrative

regulations

„

in

the

property will

at

least

in

the

to

deal

with

Furthermore, the

law

common

establishes liability for civil dam¬

a

rent

trend

keen

this

in

that

interest for

letdown in

direction

'

'

This

Ideas

Telephone & Tele-'
33/4s

represented

the

clearing

of the tail-endt of the

away

com¬

pany's last offering of debentures
to

shareholders and consisted of
sales by the company of securities
not taken up on "rights."
This

Difference of

,

with

ahead

Co.'s

fell swoop.

one

*

.

problem.

while

a

American

of 1965, added
$5,823,900 to the day's turnpver in

T commercial

With

showing a record drop last
week, the investment world naturally will be watching the cur-

was

accomplished in

the

regular

way
and when the job
Competition for the privilege of was rounded out, it was put
This ends our brief cataloguing handling thfe
^standby" under- through on the Big Board floor
of legal barriers, obstacles, and writing of Ohio Edison Co.'s 527,-. with the record
appearing on the
major and minor juristic < prob--830 shares < of Common stock re-> tape. "
lems.
Lawyers are often accused fleeted a wide divergence of opinof raising legal objections to novel, i°n
Gn the part of investment
Paine, Webber Adds

Conclusion

•

-

_

years to come.

to be

seems
a

in

graph

ioans

unlikely that sper
enabling tegislatiori will

necesary

rates.

money

3.35%

a

quickly,

up

tendency to look for

It is not

cial state

3Hs with

new

But back of it all

be

populous

more

of

yield, snapped

looked upon with local disfavor,
especially at the outset, by county
and township zoning authorities,

be

We

such statutes and ad¬

and

persons

active

materials.

nucleat reactor
potentialities for harm

its

areas.

many more

UnV^009,000

doubtedly -the

section of this act
making especial provision for pre¬
vention of injury due to radio¬
one

states

many

ages to persons and

property,

pecially in

case

sioned

dangerous

by

Workmen's

of injuries

es¬

occa¬

substances.

compensation

laws

provide awards for industrial

ac¬

cidents to employees.
laws- will affect the

nuclear,

actor

the

industry,

and

All of these

will be confronted with
and

unusual

Careful

have

be

ployee

for

kept

each

Exposures

re-,

lawyer

some

problems

exposure

to

I

new

proof.

of

„

enterprises without using imagination

initiative

and

solving
The successful bid called for
Let it be observed that all- compensation of 11.9 cents a share

them.

of/ the

legal

problems

have

mentioned

must

which

L for taking
and, indeed,, subscribed

be

can

solved, atlhough the cooperation of Congress and the
state legislatures may be required

records w i 1 h to resolve some of them. We seem
for each em¬ to be on the verge of embarking
day of service. upon a new and challenging field

Approval of these

transactions
upon

will

again

be

the determination of

whether "public

interest" will be

properly
served.
A g a i n> the
unique character of the new in¬
dustry will give rise to the

sity

neces¬

of

presenting special and
convincing
proofs to the
controlling state administrative
agencies.
(d)

Approval of Intercompany

Contracts:

vision

is

In

commission
tracts

many

for

made

regulation
If contracts

entered

into

power

plant

other

pro¬

utility

of

affiliated

between

companies.

states

public

con¬

they

are

to be

management

utilities

.for

and
sate
of

the

with chemical or manu¬
facturing companies for the sale
power, or

of

end

products,

these

contracts

will have to be filed with and ap¬

proved

the

by

commissions.
of

the

utilities

Again, the standard
or
disapproval will

approval

be

some

public

public interest, and again
problems of proof are

do

the

exceed

maximum

be

must

taken

mimimize

to

progress.

arise. *

cally all of the states of the Union
the rates of public utilities are
regulated
by
state
commission
action. Nuclear power plants will,
of

the rate

exception. Will
schedules be required to

conform

with rate schedules that

course,

be

no

would be

approved for plants util¬
izing conventional sources of en¬

ergy? Or will the rates be ad¬
justed to the costs of the new nu¬
clear enterprise?
If the latter,
what action

with

take

will the commissions

respect

to

the

selling

price of the waste products and
byproducts which are sold for

chemical, manufacturing, medical,
agricultural, and other purposes?
Will not the utility commission
regulate

sate

the

price of

these

items in order to keep control of
the

balance

electric

sheet

related

to

as

well

surance

commissions

Also public utility
regulate

certain

is

to

be

will

be

vate

encountered, for

company

without

unique

these

for

erage

afford to be
insurance cov¬

hazards.

The lawyer is going to have some

interesting and challenging prob¬
lems of proof with which to deal.
How, for example, will he defend
his client if the proof requires
bringing out "restricted" informa¬
tion?

..

(g)* State Conservation: Men¬
has already been made
of

tion
the

necessity of obtaining Federal

clearance

with

respect

to

water

authorities are
also going to have an interest in
State

pollution.

this

state

commission

commission

vation
be

The

matter.

sources

water

the

will

re¬

conser¬

have

to

satisfied that the public inter¬

est is being

will again have
clearances

and

made

be

Ap¬

properly served.

propriate proofs
to

or

at

Legal Problems

Finally, at the local level we
shall find that the nuclear power
will be required to solve
unique legal problems.' In

plant
some

of

many

our

states we

have

now

Zoning Acts, con¬
ferring upon county boards of su¬
pervisors, or their equivalent, au¬
thority to adopt ordinances estab¬
lishing zoning districts regulating
the uses of property within the
boundaries subject to their juris¬
diction.
(In Michigan, for ex¬
ample, the pertinent legislation is
Act
183, P. A. 1943, Vol. 4 (a)
County

M.S.A.

Rural

5.2961.)

Para.

also township

are

There

in Act

P.A.

of

re¬

rates

money

from

their

sistance

attitude

recent

of

re¬

to

prevailing yields
securities, it appears.

new

This

trend

marked

that

has

is

new

brace

the

Edison

slow

a

rapidly

recent

so

new

had gotten away

sj^irt, have cleaned

of

Co.

Michigan

one

with

sponsoring

of Public

indicative

on

was

offering of 679,436 shares of

additional

about

five

weeks

ago

on

basis of 3.15%.

features

of

the




utilities

Waddell

a

.

New

Stock

days

the

accorded

$100,000,000

splendid

the

of

recep¬

World

Bank's

3^%

new

bonds

lent stimulus to the general

like

ket along with the steady nibbling

which has made for

the

saw

seasoned

a

DIVIDEND

is

*
co

217th

see

more

on

at

this

week

NOTICES

CONSECUTIVE

CASH

A dividend of twenty-five cents

January 6, 1954, de¬
one

dollar

share

has

been

ers

of record

March 19,

at

declared

,

Sheldon F. Hall,

Detroit, Mich.

Vice President

January 5, 1954

and Secretary

Common Stock

No.

payable
record

The

tion
New
man.

&

with New

as

common

City
a

or

sales¬

Box A17, "Commercial

Financial

Park

York

Jersey firm

Chronicle,"

Place, N. Y. 7.

on

the

stock, both payable

on

February 1, 1954,
ers

of record

ness on

at

to

sharehold¬

the close of busi¬

January 20, 1954.

A WESTERN RAILROAD
COMPANY

BAY
of

Board

Secretary

Directors

has

fixed

and

declared

$50.00 the amounts payable on Class "A" Deben¬
tures
(Payment No.
58),
and a dividend of
$5.00 to be payable on the capital 6tock, and
$15.00 to be the amount payable oil Class "B"
Debentures (Payment No. 36), out of net earn¬
ings for the year 1953, payable at Room No.
3400,
No. 20 Exchange Place, "New York
5,
New
York,
on
and after February 3,
1954.
The dividend on
the stock
will
be paid
to
stockholders of record at the close of business
20,

1954.

York, New York,

W.

Secretary.

COX,

7,

January

1954.

THE SOUTHERN COMPANY
Directors

-

of The Southern

meeting held on
1954, declared a
quarterly dividend of 20 cents
per share on the outstanding
Company, at

a

January 12,

shares of

stock of the

common

Company, payable

on

March 6,

1954 to holders of record at the
close of business

on

February

Jaeger, Treasurer

RAYMOND

has declared today the fol¬
lowing dividends:
$1.25

per

share for the first

CONCRETE

of 1954 upon the $5
Preferred Stock,payable March

PILE

CO.

quarter

15,

1954,

record

at

to

140 Cedar

stockholders of

cents

per

share

upon

Street, New York 6, N. Y.

Soil Investigations •
Foundationsj

the close of business

securities

stock and

Dale Parkbk
-

NOTICE

fifty

share

share

per

/

January 7, 1954

L. H.

Board of Directors

cumulative preferred
per

78, 20^

February 15, 1954, to holders of
close of business January 20, 1954.

on

at

goop/IEJW

perience in over-the-counter

(50tf)

SYSTEM, INC.

The Board of Directors has declared this day
the following quarterly dividend:

©

75

cents

;

1,1954.

share

(5%)

NOTICES

(INCORPORATED)

upon

the close of business

1954.

Gentleman with 25 years' ex¬

the five percent

1319

THE COLUMBIA

Heavy Construction

February 15, 1954.

on

Lynch,

Beane,

($0.25)

the
stock
of
Burroughs
Corporation,
payable April 20. 1954, to sharehold¬
a

DIVIDEND

their regular

dividends of

of

DIVIDEND

The

Corporation

Merrill

&

Burroughs

and twenty-five cents ($1.25) per

posi¬

with

W.

CORPORATION

Vis¬

Chronicle)

Calif.—Richard H.

GAS

January

$20,-

AMERICAN VISCOSE

meeting

Tuesday

NOTICE

C7

clared

like to

Yesterday

Electric's

Financial

Fenner

GREEN

brokers

strong front

list.

Appalachian

cose

bond

"cleaning-up" transaction

a

mar¬

WANTED

desires

The

DIVIDEND

New

York's

Doubtless

in

would

DIVIDEND

,

week and moved out to investors.

tion

Exchange

doubtless

yield

$35,000,000 of
30-year 3%% bonds, brought out
a
week ago at a price to yield
3.23%, also took fire early this

South

Franklin Street.

Swelling the Total

Meanwhile Consolidated Edison
of

Bankers then

common.

portion remains unsubscribed.

Included among this group are
Philadelphia Electric Co.'s $20,000,000 of 30-year, 3V8% first and
refunding
bonds
brought
out

Directors of the American

field

to

will proceed to take up whatever

when

trend.

connected

550

•/

•

OAKLAND,

first mortgage

the

The Board of Directors has this

Common Stock, payable March
15,

1954,

record

at

to

day declared

stockholders of

the close of business

dend

of

February 15, 1954.
Common
The

Goodyear Tire I Rubber Co.

March

By Arden E. Firestone, Secretary
Akron, Ohio, January 11, 1934

record

a

quarterly divi¬

75^ per share on the

stock,

payable

on

3,1954 to stockholders of
January 20, 1954.

25
WILLIAM H. BROWN

Secretary

The
Greatest
Name

safety

(Special

to subscribe for Consumers Power

groups

3.23% basis

a

the

of

Co.,

Consoli¬

Service Co. of Indiana's

bonds

new

&

as

Three
days later brings the
expiration of stockholders' rights

up

able to announce closing bf sub¬
scription books. Quick absorption

become

Walston

Spring Street.

first

With this

new

Chronicle)

issue of $30,-

an

30-year,

new

$20,000,000 of

1943,

SALESMAN

of

has

Wells

with

Pierce,
Ohio

Staff

to

Financial

With Merrill Lynch

field
a

The

bonds.

Co.'s

become

several

emissions which

on

Dividend Notice
SITUATION

is

tending to stir institutional buyers

(In Michigan

185,

expectations

easing in

are

building regulations

with which to deal.

they

Growing
newed

Co.

Laws and

Local

D.

sched¬

substantial

plus

Tuesday

starter,

a

ob¬

tained.

offerings,

to

dated Gas Co., on Wednesday will
look over bids for its projected

to

_

cbrporate
two

mortgage bonds.

can

adequate

issue

new

will open bids for

pri¬

no

the

000,000

(Special

LOS ANGELES, Calif.—Howard

of£ered

Jan"29T

on

Walston Adds

of^

shareRe¬

a

Week's Prospects

week's

by

On

liability

and

coverage

(f)

employees.

spread

a

cents

a

equity projects.

property that may be brought
years
later. 1 Numerous
special
problems in connection with in¬

byproducts of nuclear reactors?

of

stock

in

debt

actions for injuries to persons and

the

tions concerning health and safety

The

ule

possibility of workmen's
compensation claims and civil1

rates? If so, what
will be the impact of this regula¬
tion upon the development of the
collateral industries utilizing the

given authority, sometimes rather
limited it is true, to issue regula¬

for

4.5

cents

tween the two extremes,

topped

operations data

as

power

Safety Regulations: As we
all know, the nuclear reactor pre¬
sents some very special problems
relative to employee and public
safety. Under state laws depart¬
ments of labor and industry are

16.4399

of

making
than

more

Next

will be necessary in order to deal

V

(e) Rate Regulation: In practi¬

share,

Next

Unusual care in the long
preservation of individual

ANGELES, Calif. —Joyce
Clark, formerly with Hill Richards
&
Co., has joined the staff of
Paine, Webber, Jackson & Curtis.

a

figure

OfrSe&O* expiring

d&mage.
time

(Special to The Financial Chronicle)

LOS

a

the

new

certain to

un-

high

limits, special health precautions

utility

between the nuclear

stock left

over any

by
holders.
But
series of other bids ran out to

to

with the

fiscal

bankers.

in

radioactivity must of human endeavor.
Legal ob-. $35,75 a share to holders of recnot-exceed certain specified fig¬ stacles cannot and
will not be
prd as of today, with the offering
ures. -If
by accident in any case- permitted to stand in the way

records

based
•

health

utilities in the subsidiary nuclear
power enterprise, and likewise by
ity enterprise.

-

•

at least, will be required for the
acquisition of stock by parent

non-utility companies in the util¬
*■

case

.

(

t

Labor

authority

If

_.

effective

A

recent Pennsylvania

a

13, 1953,
pursuant to which the Department

;

security issues are required in
order
to - finance
the
nuclear

jurisdiction.

is

statute,

re-

(b) Approval of Security Issues:

*

their

in point

47

In Rubber

M.

M.

UPSON, Chairman of Board
G.

F.

January 6, 1954

FERRIS, President

The Commercial and Financial Chronicle..

48

Thursday, January 14, 1954

*

(200)

Washington... £
Iron the Nation's

them there

(This column is intended to re¬

he is proposing to Con¬

program
gress.

gram is broad.
Because of the
peculiar nature of the Presi¬
dent's delivery, many failed to

the extent of the welfare
proposed.

grasp

his

surprised

he

all

of

Most

Republican following who,
they gleaned from the
leadership conferences at the
White
House
his direction,
while

thought he was playing political
give and take. Until they saw
Annual
Message
on
the

the

State of the Union, they

thought

commitments he

Thus, in talking about health,
off with a ringing dec¬

he led

against socialized medi¬

laration

cine, thereby aligning himself
against the Truman scheme of

bompulsory national health in¬

Roosevelt political warehouse.
Mr. Eisenhower discloses, as

—Also included

facilities

it:

his

That

of

concept

leader¬

ing persons, for nursing homes,
and also diagnostic centers.

means

down

its

to

last

details, after
pleasant and respectful listen¬
ing to Congressional ideas.
A President, of course, is sup¬
posed to be the "leader of his
party."
This does not mean,
however, that a la Roosevelt he
should

the

all

frame

36

party

explicitly write

objectives and
ail their terms.

How

also

con¬

Federal

for

out

came

if this

The

factor.

coming

put

the books, it could

on

into

slide

easily

is changing, is illustrated
the housing picture. After
Albert M. Cole, Housing and
Home
Finance
Administrator,

finally gave forth the Advisory
committee's report and recom¬

tional

mendations

total

a

gov¬

also compulsory.

sage:

Instead,

White

the

writing the ticket.
two

Banking
had

men

two at
a

committee

chair¬

to say was a word

White

the

House

whose

program

is

House

All that the

or

about

variety

and

potential cost is tremendous.
In

i

the committee have

choice

and

Before

real vote

a

about

legislation.

Roosevelt, it used to be
Eisenhower

housing

is

sending

a

Congress,
With housing as with

however.

most of the other 36 issues the

President has raised,
the

therefore,

will be whether Con¬

news

is going along with or op¬
posing
the
President.
The
President is placing himself on
gress

as

to

the

main

addi¬

programs

con¬

President's

the

mes¬

the

itself

vation

program.

consistent"

and

"uniform

An
water

resources

policy.

Safeguarding of domestic pro¬
critical

of

duction

gic materials.
An expanded

and

strate¬

highway

con¬

struction program.

Broadening the coverage and
old

of

pensions.

age

Broadening the coverage and
benefits of unemployment in¬
surance.

a

bear

help

ment's

You

dividuals, Partnerships and Fi¬

is

for

A broad extension of govern¬

mental intervention in

housing,

extension of

ing with
ment

grants

to aid cities in

and loans

deal¬

much1 broader seg¬
their housing
prob¬

of

government housing and
care for military
per¬

sonnel.

Mr.

mass

party.

general

a

On

is

there

Hill

Capitol

the trick, and

a

litical

pretty prevalent private feel¬
ing that any leader who simply

rank with the po¬

geniuses.
Can

have

that most of them will come to

Democrats

laugh at Eisenhower, unless the
President yields to those who

sabotage Mr. Eisenhower's "lib¬

urging the President to be
"strong man" like
Franklin D. Roosevelt. In that

viewpoint
it
doesn't go far
enough.
The expansion in coverage of
the old age and survivors "in¬
surance" program represents a

On the other hand, when they

are

another

he

more

than

might

viewed,

be

as

annoyance.

an

party line-up and anxious
to get away by mid-summer,
can
pass
little of Mr. Eisen¬
hower's program, little can be
will

what

probably neatly

by simply

taking the

case

anced

about

can

in point.
At the present time the White
House wants to go somewhat
farther toward liberalizing this

Beyond the fact that this ses¬
sion, with a precariously-bal¬

forecast

their poise, the

recovered

possible

about

junking

grant-in-aid
House

hap¬

taking

whilst

program

pen

this

in view of the revolution
Eisenhower has

the

old

pension

time
age

program.

Republicans want to get

the

political outlook.

The

President's

latter

When

in

worked

liquidated.

this

comes

up

viously is that if you advocate

has

to vastly liberalize

ments and include pensions for

Then, with what GOP member¬

here

or

ever,

this

poses

the President," will be the

like

pension

news

headlines

"Congress

op¬

frequently

for

a

President

Eisenhower

was

urged both by his seasonal lead¬
ers

and

by

some

of

the

less

is

neither

He

man.

acting

"loyal"

remains

to

Expensive

as

are

the Eisen¬

hower housing ideas, Democrats

the

down

the

runs

Revision of the Taft-Hartley
A

Bibliography

up

Regulations Concerning Dealings,
in Gold and Foreign Exchange

(paper), 16. Swiss francs (com¬
plete series of regulations plus

supplements), 140. Swiss francs*

jectives.

In

the most he

case that
is
get out of Con¬

any
can

and why muddle up the
works by proposing a couple of
gress,

dozen

things which cannot
handled, he was told.

be

Mr. Eisenhower rejected that

advice.




who

wonder

just

what you do when your oppo¬
nent tries to swipe and wear
your

States:

1953—U. S. Department

of

Commerce

of

Documents,

ment Printing
ton

Superintendent

—

U.

S.

Govern¬

Office, Washing¬

25, D. C. (cloth), $3.50.
Without

Profit

Market

Stock

Forecasting—Edgar S. Gensteir*

45

University Court, South Orange,
N. J.

(cloth), $3.50.

TRADING MARKETS
Tejon Ranch
Gorton Pew Fisheries

Manufacturing

Riversido Cement

:

Worumbo Manufacturing
*

*

Atlantic Coast Fish.

Carl Marks
FOREIGN

SECURITIES

&

Ho Inc.

G. G.

M. Co.

41/2», 1958

5's,

Federal Coal 5s,

1958

1969

SPECIALISTS

political pants.
50 BROAD STREET

There

is

only

one

namely

licans,
in

the
who
and

Republican

left-wing
have
year

party

♦

NEW YORK 4, N. Y.

group
TEL:

whom the President has pleased,

year

United

Statistical Abstract of the

has also somewhat confused the

Democrats,

Switzerland

Basle,

ments,

Settle¬

International

for

•

istration to urge upon Congress
a limited program of a few ob¬

Supplement—-

France—14th

in

Bank

Seneca Falls Machine

Eisenhower

starry-eyed within the Admin¬

Act

Selected

National Company

block

Mr.

—

References, Industrial Relations
Section, Princeton University,
Princeton, N. J. (paper), 20c.

neighbor hints about it.
Curiously

York 16,

(paper), $1.

Dennison

sounding
off about his wife's conduct, nor
admits the delinquency when a
and

Recommended Small Program

following

ship

caught his wife flirting with the
ice

1954.

Eisenhower

N. Y.

pay¬

well-bred gentleman who

there,

programs,

Madison Avenue, New

the disabled.

flabbergasted
his
Republican
following. At the moment, how¬

his

Jules

probably offer the Lehman bill

ob¬

ocrats will have to vote for you.

of

—

Publishers Association, Inc., 232:

—Investment Research Press,

for the

yonder roll call, Democrats will

strategy

Post Office
Backman — Magazine

of the United States

Sabotage

pulls out all the stops on the
political organ just looks fool¬
ish.
It isn't beyond possibility

eralism"

Practices,

Rate

Policies and

Rate

Avenue,

(paper), $5.

1, 111.

Chicago

House, Inc.,

Michigan

North

214

—

simply

most

Commerce Clearing

do

to

prove

may

what Democrats stand for, Dem¬

Confuses Republicans

details

Republican

the

will win the

Eisenhower

Mr.

More

At

a

lems.

medical

the

clock."

con¬

local schoolhouses.

and

century.

back

turn

Republicans.

principle, the
guy who can swipe not merely
a piece or two, but all the mer¬
chandise of his opponent, ends
up
a
miserable failure.
Mr.
As

just waves

mid-20th

can't

a

votes for the Republican

Little Will Pass

assistance
of

the

legisla¬
and this

put

across,

time

same

"liberalism"

impatiently and says,

just

reelect

the

welfare pro¬

finances, he

program

will

of

cross

can

tive

would wreck the govern¬

heart ailments.
Federal

the

and greater

new

gram

case

|

More research into cancer and

struction

party that is willing

the
poor, the
halt, and the lame.
When anyone suggests to this
type of Republican that maybe
to

"This

flood prevention.
"strengthened" soil conser¬

Upstream
A

President, he

not
merely with broad objectives.
So if Congress changes a thing

of

0-

York State Income Taxes on

duciaries—Samuel M. Monatt—

his hand

a

record

in

tained

;j

bare listing of

a

welfare

antees

to

message

Here is

Programs

by more liberal mortgage guar¬

that way in fact for sure.
Mr.

the

List

benefits

Congress
writes
legislation. In theory Congres¬
sional committees hold hearings,
gather information and opinion
about issues, and make
deci¬
sions, good, bad, or indifferent.
In theory all the members of
theory

perhaps

insurance,

•

by

housing, a study
the President, not the Congress
wanted, Mr. Cole thought that
it would be up to him to com¬
promise a housing program out
with Congress.

"Frankly, gentlemen, I think 1953 was a more chal¬
lenging and stimulating business year—with Marilyn
Monroe on all the calendars and everything!"

from

to New
In¬

Monatt's 1954 Guidebook

heaven, and once such a scheme

ernmental

on

Chicago 1, 111. (paper), $4.

health
to fi¬

money

is not

this

nance

House, Inc.,
Avenue,.

Michigan

North

214

anything, it means

means

Federal bearing of a big
cost

M.

Commerce Clearing

re¬

It is felt that

health insurance.

Samuel

—

Tax
Monatt —

Income

Farmers

1954

insurance of private, non-profit

cept of his relations with Con¬
gress

Monatt's

President

the

Furthermore,

was

President's

the

cycles made in 1954
(Chart
C-14)—Foundation for Study of
Cycles, 9 East 77th Street, New
York 21, N. Y.

ill, for rehabilitat¬

chronically

the right to pick
the entire Republican program,

ship

reprints of

chapters and postscripts is¬
plus a Chart Projection to.
1990 of various
stock market
sued

the

for

caring

for

business—$10

are

six

posed that the government, al¬
ready aiding in the construc¬
tion of local hospitals, also aid
in the construction of physical

they

cyclic research

stocks, prices,

in

people may have

What many

giving

reports

Monthly

—

results of latest

missed is that the President pro¬

merchandise from the Truman-

a?;.

Cycles

financed by payroll de¬

surance

ductions.

they had arranged a compro¬
mise, and that their President
would not stock too heavily of

now see

not coincide with
own views.)

"Chronicle's"

Mr. Eisenhower's welfare pro¬

by the variety
of the welfare

everyone

Capital

pretation from the nation's

Program Is Broad

WASHINGTON, D. C.—Presi¬
Eisenhower surprised just

dent

magnitude

for

peepul.

flect the "behind the scene" inter¬

the

and

nothin'

done

ain't

and may or may

about

spend

to

So the Repub¬

legislation.

licans

Yoit

Capital

ways

greater sums of money.
Possible result: In the tangle
no

Behind-the-Scene Interpretations

of

think

can

BUSINESS BUZZ

must

iimiiii,

ji.

show

LERNER & CO.
10 Post Office

-fy,}?!:*

saying

out that the

TELETYPE NY 1-971

Investment

Repub¬

been

HANOVER 2-0050

\

A

\

\

■

tjr

.

J
*■

-- j-*

Securities

Square, Boston 9, Mass.

Telephone
HUbbard 2-1990

Teletype
BS 69