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JAU 1
o
ESTABLISHED 1839
Reg. TJ. S. Pat. Office
Volume
167
Number 4664
New
The Business
Universal Military Training
Prerequisite to National Survival
Outlook
By
Mr.
Babson
be year of
predicts
war
1948 will
j lar to 1938-40. Doubts effective
;
;
tional
welfare.
distress
seems
over
Says
na-
The
United
States is
end
senses.
of the
but
In addition to my formal Fore¬
which were in this news-
•
.
i
'
week,
I
now
treaty
add
aries.
but
readers
have
to
think over.
As
hereto¬
fore
will
much
tries.
be
joying
en¬
Babson
ders,
can
pression in 1948.
will
be
an
parations.
or¬
there
be
de¬
no
There, however,
increase
This
in
will
war
pre¬
the
mean
shifting of employment and cred¬
its from one industry to another.
For instance, we may expect some
slackening in industries devoted
wholly to unessential peace work.
Industries
which
were
booming
during World War II, such as air-
craft
tools
manufacturing,
and
machine
shipbuilding,
should
pick up again during 1948.
(Continued
on
page
but
Friedman
Others,
Others, but not
we,
elections.
have shot and
we,
their
opposition leaders.^;
policy has been Mive and let"
Our
live."
We
it. And
Politics!
This is
ready
for
demands
be
The international
deteriorated
ceased.
States with
on
The
for
situation
has
hostilities
is
struggling to
UN
an
Its charter pro¬
international
force. Until that
comes
police
into being,
the United States should not dis¬
The
Training
Universal
Act
is
self-preservation.
has
man
Military
essential
to
our
President Tru¬
on
page
Politics!
enter
we
the State of the Union which
And
he—or
his advisers, whichever devised this
depressing melange of platitudinous nonsense—are not
even
original in their selection of items for their
political menu. They have quite obviously taken them
bodily
from
Roosevelt's
;
of the most glaring of Franklin
hominem assortment of slogans.
nant
in
problem
our
eco¬
nomic
affairs.
When
an
flation is
way
of
President
Truman
in¬
in
progress, there
predicting
break of its
when
is no
will
it
own accord.
One
can
only be certain that, if permitted
r
President's
budget
avvears on
message
Page 6.
some
ad
"I
propose," says the President, for example, "that we
today toward those goals for the future which
have the greatest
bearing upon the foundation of our democ¬
racy and the happiness of our people. I do so, confident in
look ahead
the
to
run its own
course, it will break
with destructive force." "I there¬
fore urge," the report
continues,
"that the Congress consider with
the utmost speed the nature of the
problem
which
have
we
to
meet
(Continued on-page 39)
thought that with clear objectives and with firm de¬
termination, we can, in the next ten years, build
upon the
accomplishments of the past decade to achieve a glorious
(Continued
on
24)
page
State and
28)
Havana
Municipal
Lithographing Go.
R. H. Johnson & Co.
Established
★
the
year," he
said,
"the
was
imperative.
point that the President of the United
great solemnity reads to the Congress a message
urged its speedy enact-
(Continued
ever
fairly reeks with political
subterfuge and campaign -chicanery.
'
our
since
become effective.
vides
back
time, if there
Yet it is at this
peace.
to
Politics!
be
"As
new
a
time make both evident and
are
must
must
one; when every con¬
public welfare calls imperiously for real states¬ American
manship. It is a time when politics should be laid aside for people are
serious, constructive, straightforward, concrete formulation keenly aware
that inflation
of public
policy to promote ends which the needs of the is the domi¬
strong—the strong¬
est peace-loving power on earth.
We
trends
ary
sideration of
seek peace and pursue
we
We See It
curbed.
de¬
stroyed their
free
hanged
ex¬
not
have
Elisha M.
arm.
31)
we,
govern¬
ments.
large
unfilled
not
isting
most
companies
coun¬
deposed
least
manufacturing
Roger
As
warned
that inflation¬
we,
Others,
but
to Nov. 2.
With
splendid
but
columns in
like
1947—at
visers, created by Congress under the Full Employment Act.
In his report, the President forecast "another
year of
achievement,"
fifth
foreign
stated,
1948
not
"it will break with
course
In a 35,000 word
document, the President on Jan. 14
presented his annual "Economic Report" to Congress, which
is reputably based on studies of the Council of Economic Ad¬
;
Others,
something for
its
run
EDITORIAL
bound¬
to
want
up
we,*®—
pledges to res p e c t
their
last
paper
Others,
not
Bonds
1927
—
INVESTMENT SECURITIES
Hirsch & Co.
64 Wall
Members New York Stock Exchange
and ether Exchanges
BOSTON
Z5 Broad St., New York 4,N.Y.
■Anover
2-0600
Chicago
Teletype NY 1-210
Cleveland
London
Troy
Bond Department
Street, New York 5
PHILADELPHIA
Albany
Baltimore
Harrisburg
Wilkes-Barre
Woonsocket
Geneva (Representative)
THE NATIONAL CITY BANK HART SMITH & CO.
Syracuse
of new york
Scranton
Washington, D. C.
the
Government
in
Dept. Teletype: NY 1-708
*ABC
Office:
26,
Underwriters and
In India,
Colony
and
Burma, Ceylon,
Aden
and
Company
and
Kenya
Zanzibar
Common
&
4%%
Paid-Up
Reserve
The
Bank
Capital
Capital
Fund
;_£4,000,000
£2,000,000
£2,300,000
conducts
every
description
banking and exchange business
Trusteeships and Executorships
also undertaken
Preferred
(Incorporated)
of
1899
'•
CLEVELAND
New York
Cincinnati
Chicago
Columbus
Reynolds & Co.
Members
120
Denver
Toledo
Buffalo
New York Stock Exchange
Broadway, New York 5, N. Y.
Telephone:
Bell
Toronto
OF
THE
Brokerage
CITY
OF
NEW
YORK
Northwest
Utilities
'
*
Analysis
and Dealers
request
upon
request
OTIS & CO.
Established
NATIONAL BANK
1-395
for Banks, Brokers
Conv.
on
HAnover 2-0980
Montreal
Service
A
Corporate Securities
*Prospectus
Subscribed
Bond
Y.
Teletype NY
New York
*Robertshaw-Fulton Controls
Distributors of Municipal
Bishopsgate,
London, E. C.
Branches
Vending Corp.
CHASE
Security Dealers Assn.
WILLIAM ST., N.
Common
'
Kenya Colony and Uganda
Head
52
York
Bell
Bond
of INDIA, LIMITED
to
New
Springfield
NATIONAL BANK
Bankers
THE
Members
Buffalo
>
Defends his taxes revision proposal.
have broken
>.
casts
•
the only great
now
if inflation is allowed to
destructive force."
ing.
bring
lengthy document he appeals again for his 10 point anti-inflation
Foresees another year of splendid achievement, but
warns
power that is disarm¬
This is political folly and may be national suicide. 'Since the
war, others, but not we, have committed acts of
aggres¬
sion. Others, but not we, have overrun
neighboring countries.
economic
necessary to
people to their
In
Holds citizens have obligations, like taxation
and military service—the latter in effect for
generations in free,
peace-loving Switzerland—and that liberty requires vigilance.
inflation, since motives of self-
Copy
program.
to back it up.
power
will be taken to curb
measures
Price 30 Cents a
President's "Economic Report"
Renews Plea for Inflation Curbs
Disordered World
Economist contends deterioration of international
cooperation re¬
quires strong United States, and that foreign policy depends on
preparation simi-
predominate
a
Consulting Economist
•
interest
in
ELISHA M. FRIEDMAN
By ROGER W. BABSON
•
York, N. Y., Thursday, January 15, 1948
REctor
Teletype: NY
2-8600
1-635
Hardy & Co.
Members New York Stock Exchange
Members New York Curb Exchange
30 Broad St.
Tel. DIgby 4-7800
New York 4
Tele. NY 1-733
IRA HAUPT &CO.
Members
and
111
Neu)
other
Stock
Exchange
Exchanges
Broadway, N. Y. 6
REctor 2-3100
Boston
York
Principal
Teletype NY 1-2708
Telephones
Enterprise
1820
2
Prices-Profits-Productivity—'Three Peas in
Associated Elec. Co.
profits and production is due to collectivist propaganda to restore
prices are very essence of American competi¬
tive enterprise, controlling at same time production volume, investment trends and demand for wdrkers.
Cites oil industry as demonstrating increased production arises from prices increases and says cor¬
porate profits are exaggerated, and without adequate profit incentive industry is throttled.
v;
request
New York Hanseatic
to distort the
Teletype NY 1-583
BArclay 7-5660
truth and mislead the mass
nomic life
New York 5
Broadway,
prices, profits and productivity.
as
ity
Every media
Crompton & Knowles
forces at work in this
communi¬
of
Members New
distortion
1-1548
System Teletype NY
G.
Robert
merely
as
re-
today
in
clothing,.:The
common
home h. his
the
know, our money
us
a
hijn'.
of. builds for
measure
Com. & Pfd.,'"-1-
Bought
it is
has
but
Basically,
our
Financing" of the war by borservice, and this
value thus expressed in terms of rowing created a purchasing power
money, is price.
Accordingly, as far in excess of the production o
pieces fit
of
that
distortions
carefully
a
one
other
is led to
are parts
designed
of
plan
phia
Rotary
Quoted
Stock Exchange
Members Baltimore
goods. It was inevitable
that the result would be an un¬
satisfied
N. Y. 5
120 Broadway,
:'.V
,,
<•
WOrth 2-4230
Bell
C,*
Teletype NY 1-1227
consumer
of goods and
Dunlop be¬
Philadel¬
Pa., Jan. 7, 1948.
the
—
money.
or
money
*An address by Mr.
fore
good
our
any
becomes plentiful or exces¬
sive as related to the production
collectivists that has as its objec¬
Longchamps, Inc.
with,
exchange
of
purposes
Sold
MilcMl & Company
productivity which
materially changed in value,
not
good or serv¬
instantly be compared for
—
fellow-workman
^
the
Bought—Sold—Quoted
Elk Horn Coal
for
value
exchange
ice can
the
branch offices
our
for a suit of
automobile work-
garding these three vital elements
our economic life.
So neatly do
of
believe
to
of
terms
;et^hnqdhefivi ty; stilT fcas substah-
values by wlr'ch one
'*
v
of
all
Dunlop
economic
to
wires
Direct
state¬
purposes
tJ' hally
14 years.
As
what amounts
5
Telephone COrtlandt 7-4070
Bell
vious
'to disseminate
York Curb Exchange
exchange
policies pursued during the pre¬
has been used
SI Nassau Street, New York
that
Your own pro¬
value of the shoemaker's shoes for
country re¬
their origin in the
monetary
and
fiscal
fallacious
device
every
Vanderhoef & Robinson
effort
ductive
vealed they had
and
cation
will'-question
But pause.
NY 1-1557
La.-Birmingham. Ala.
New Orleans,
of you, I
Some
York 4, N. Y.
HAnover 2-0700
,t
prices. The myth was projected^thevgoods and services you con
that high prices caused inflation, sume and enjoy' is the equal of
whereas
even
the
most casual Of greater than the past. Tnere is
examination of the inflationary relatively little difference in the
Pod.
a
ment.
^
more
correctly,
valued money,
Co!
York Stock Exchange
on
Three
—
Peas in
lower
or
high prices.
knew,
imposed
time the wartime controls
its-Productiv-
Class "A"
not
gigan¬
campaign was
perpetuate in peace¬
launched to
system:
a
propaganda
tic
economic
Prices-Prof-
Savoy Plaza
debased
petitive enterprise.
'
Months before V-J Day
impor¬
tant factors in
most
our
Members New
25 Broad St., New
is,
development
breaking down of com¬
the
tive
these
of
tion
3/6s, 1956
Steiner. Rouse &
Accordingly, I would direct your thinking to
considera¬
a
Savoy Plaza
Bought—^-S old—Quoted
there has been in progress in this country an insidious campaign
of people regarding such vital factors in our eco¬
For several years
Corporation
Louisiana Securities
>
controls, Mr. Dunlop maintains freely functioning
wartime
120
Alabama &
_y.>tf.-.
Asserting confusion regarding prices,
5.1%
BOUGHT—SOLD—QUOTED
Memo oil
Sun Oil Company ;A
President,
Pod
a
DUNLOP*;,:^;;,">•
By ROBERT G.
5% due January 1, 1961
Current return
Thursday, January 15, 1948
FINANCIAL ..CHRONICLE
&
THE COMMERCIAL
(202)
is
services, more money
the available
to buy
goods anH services.
Club,
required
for
demand
consumer
goods that would push prices upv J Continued on naee.;30)
The resultant
.
Fred F. French Investing
Pfd.
Com.
&
Central States Eiec.(Va.)
Stock
Common
Detroit Fnt'l Bridge
frjc Ronnell & Co. Current :Replacemenf"CostS;13|p|||l
Aspinook Corp.
Members
York Stock Exchange
New
New
And
York Curb Exchange
Corporate Earnings
YORK 5
BROADWAY, NEW
120
By W. II. GARBADE
Tel. REctor 2-7815
Assistant
Treasurer,
Oil Co.,
Shell
•
Frank C. Masterson & Co.
Established 1923
Inc.
Members
;
OLctual'markets Qu
Aetna Standard Engineering
American Time Corp.
America's world position in full enterprise.
Mr. Garbade asserts present earnings are largely fictitious. Says capital expenditures are unprece¬
dented and are depleting cash resources. Contends, despite current high earnings, they do not reflect
increased replacement costs, and concludes a correction of the price level is not only unlikely but
Defending high business earnings
as
necessary
to support
64
Baltimore Porcelain Steel
Curb and Unlisted
than the
consider¬
thoroughly aired at a recent
Boston & Maine R.R.
subjects are currently commanding more interest in business circles
problem of accounting for replacement costs. The question has been discussed in
Clyde Porcelain Steel
able
Few
Bates Manufacturing
Electric Bd. & Share Stubs
General Aniline & Film
detail
meeting
"A"
dustry
International Detrola
many
a>
has
Kirby Lumber
Northern New England
minds of
Punta Alegre Sugar
f
in
one
way
another, de¬
or
pending on the individual case.
In discussing the subject, then, it
man¬
major
every
Pacific Telecoin
the
fail
in
agement in
Taylor Wharton Iron & Steel
far
so
simple cure-all
problem. Every solution
that has been proposed appears to
for
it is doubtless
prominent
said and written
been
is that there is no
repre¬
sentatives, and
Newmarket Manufacturing
It- was
published articles.
recently
in¬
petroleum
Hood Chemical
in
of
of
seems
ggf
reasonable to sketch in the
As is inevit-
main
Title Guaranty & Trust
able with such
way,
perhaps,
United Artists Theatre
controversial
Time, Inc.
United Piece Dye Works
d i
Taca Airways
s
marked
Telecoin Corp.
Earnings
W. H. Garbade
Members N. Y. Security Dealers
Assn.
N. Y. 5
Hanover 2-4850
Bell Teletypes—NY 1-1126 & 1127
37 Wall St.,
the
nancial
1.
fi¬
And experts in
reports.
other professions
sides for another
accounting and
choosing
in
notes."
*;
•
Probably the
one
the
of
"battle
the
■
and they are just as in->
dispensable to the revitalizing of;
at peace,
ex¬
all
No.
corporate man¬
itself in the embar¬
rassing position of explaining, de¬
fending or even apologizing for its
income.
Obviously, if earnings
were accurate gauges of corporate
•
obvious con-
efficiency,
elusion to be drawn from all that
H. Hentz & Co.
management
New
York
Stock
Exchange
York
Curb
Exchange
Cotton
York
Commodity
Chicago
of
Noranda
Trade
&
United
Co.
Minn. & Out.
Inc.
Exchange,
Board
Pow.
Brown-
Paper
in,
tion
profits- caused by the use
facilities in a post-war
Crane & Hoist
that
profits quickly approach modest
■
Current Yield Over
price structure and you see
levels.
>
.1
,
:
•
Fitch
'J
Capital Expenditures
Unprecedented
•
I: Working had in hand
with the
mentioned are unpre¬
capital expenditures
factors just
cedented
(Continued
on
page
V
;
y " (When deliverable)
'90
\
i DAN RIVER
Canadian Securities
1;
New York
And other Exchanges
<
Department
N, Y. Cotton Exchange Bldg.
NEW
YORK
-
V.''-
"-v.
Members N. Y. Stock Exchange and Other
DETROIT
CHICAGO
>
PITTSBURGH
'' '
GENEVA. SWITZERLAND
'
'
-
<
■
'
•
(
>M.t'ft.;
|
i
.
'
■
115 BROADWAY
Telephone BArclay 7-0100
;
BOUGHT—SOLD—QUOTED ~ ;
/'■ /
Principal Exchanges
NEW YORK 6, N. Y.
Teletype NY 1-672
/;
Members
Security Dealers Ass'n
Teletype—NY 1-376-377-378
ty
Products, Inc. Com. & "A"
Detroit Harvester Co. Com.
Emery Air Freight Corp.
Department
Goodbody & Co.
N. Y.
4,
Securities
request
on
26)
MILLS
Scophony, Ltd.
British
Report
13%
Troster, Currie & Summers
;
Common
^Georgia Hardwood Lumber Coj
•
New Orleans Cotton Exchange
Teletype NY 1-1610
Shepard Niles
of prewar
DORSET FABRICS
Gaumont-British
Paper
Mines
Selection
New York 6
Broadway
Digby 4-3122
fictitious.
According to
Department
of
Commerce,
corporate earnings in 1946 totaled
$12.2 billion, of which inventory
profits accounted for 38%. Add to
this the distortion and exaggera¬
FUNDS for
Kingdom 4%
Rhodesian
Exchange
Exchange
Stock
largely
should
Exchange
New
Abitibi
Mgr.
the
Members
New
39
man¬
Curb
York
New
Members
*Air
We Maintain Active Markets in U. S.
Asst.
Joseph McManus & Co.
Chicago
private enterprise.
Unfortunately, however,
agement finds
foot¬
,
Furthermore,
y
considered
earnings in America,
that
pressed in dollars, are at an
time high—as shown in Chart
on
clash
1850
is
increasing replacement costs in
are
Established
Exaggerated
The first factor to be
field agree
best method of reflecting
Few authorities in any
SreenecmiGompan^
■■
,
by
fairly general
disagreement.
Warner & Swasey
approach for individual
sound
companies.
been
have
Merchants Distilling
a
port America's position in a world
KANE,
WALTER
today's.earnings, because they are
formulate
agement as it seeks to
cussions
MICHAEL HEANEY, Mgr.
pre¬
this
highlight
can
the basic issues confronting man¬
topics, all the
pfd.
U. S. Finishing com. &
we
of
agement can take little credit for
background
*
instead
credit
full
take
Securities
senting alibis. For high earnings
are
absolutely necessary to sup¬
the
against which
problem revolves. In
industry.
NEW YORK 5
HAnover 2-9470
Teletype NY 1-1140
highly undesirable.
Artcraft Manufacturing
York Curb Exchange
New
WALL ST.
;
:
;
-Common
k "
;<
*Prospectus on request
J-G-White 6 Company
incorporated
Reynolds & Co.
Members New York
STREET
37 WALL
.
.
NEW YORK 5
ESTABLISHED 1890
Tel. HAnover
2-9300
Tele. NY 1-1815
120 Broadway,
Telephone:
Bell
Stock Exchange
New York 5, N. Y.
REctor 2-86C3
Teletype:
NY 1-635
.
Volume
167'
Number 4664
THE COMMERCIAL
...
&
FINANCIAL
CHRONICLE
(203)
3
•
INDEX
'
Articles
'* >
-
and
News
' :
'•
The National Economic Outlook
Page -..v^
The Business
i
Outlook—Roger W. Babson-___>--_^-___-__Cover
Prices-Profits-Productivity—Three
Peas in
and company
Although asserting favorable factors in the immediate outlook
balance unfavorable ones, Mr. Natelson sees as
{•
over-
casting shadow on
prosy, present: (1) fear for stability of the price level; and
(2)
shortage of new capital. Says corporate profits are
^ 2'm
inadequate to
2
—
__
__
The-National Economic Outlook—Morris
Economics and Morals of Inflation—Sen.
Head of Industrial Department; Lehman Brothers
.
Pod\
a
'—Robert C. Dunlopj;
Current Replacement Costs and
Corporate Earnings
—WML Garbade.
-
•
Natelson__—_—_v"; 3'r"
Ralph E. Flanders.
attract
-
4'
_
Price Making in a Democracy—Saul Cohn
Which Way Do We Go Now?—N. E. Dodd_
c
Who Gets the Money Under the Marshall Plan?
result "we will be faced with
as
Pays
a
long-term
living." Sees immediate need of $20 bil¬
plant-investment to maintain and expand
productive
new
capacity, and does
—Henry J. Taylor
——8
Our Money Will Never Save
Europe—Floyd A. Allen.
9
Outlook for Real Estate Securities—H. R. Amott
•••: 9
A Revival of the Old "New Deal"—Sen. Robert
A. Tai't___u__ 11
MAD-MAN
LICHTENSTEIN
standard of
our
lions for;
7
capital and
new
decline in
4
llCHTOTfl
»
By M0RRIS NATELSON*'
Universal Military Training (Prerequisite to National
Survival in a Disordered World)—Elisha M. Friedman__Cover
no
one
else
upward price
pressure.
99 WALL
—...
"The
National
Economic
—.
the
for
Commercial
Finance
—William J. Drake
;/£*;.«
M
Companies
'
...
y,::;
•
■
.
■■'
'vr; V
the
present
;: "
in Inflation Fight.
11
Generally speaking, the national
right now is very
manpower,
materials
raw
though
even
These
17
-
relationship,
present.
produc¬
18
Some
18
taken
Export-Import Bank. 19
No sizable Recession Ahead
Says H. Ilentz & Co*..
191
Philip L. Carret Heads N. Y. Dealers Association-..-......- 20N. Baxter Jackson Scores Increase in Bank
Term-Loans!
Edward J. Proffitt Urges New York Chamber oL Commerce
20
goods which
Support Revival of Gold Standard:.
S. Sloan Colt Says
Self-Restraint'by Banks Can Prevent
Unsound-Loan Expansion
political
: >
27
20
(Editorial):
Because of
30
____.l_._-...18
.
.
.
...
_
_
is
.
■
_
.Bargeron_L_
_
6
^
37
—
even
16
_
NSTA Notes
43
—
News- About- Banks and
Bankers..
....
21
___________
Observations-^A. Wilfred May.
Our Reporter's Report:.—
Our Reporter on Governments.
___15*' *
**
________
1'
Prospective
Security Offerings
PublicUtility Securities
42.
-_1:'
—__________
Railroad Securities
__
Real Estate Securities._______
Securities Salesman's Corner.
L
_
_
8
14
__
___.
_____
Seciurities Now in Registration:.——
________
pages 9 and
on
Published
Twice
FINANCIAL
Regi.U.
WILLIAM
t
Weekly
Prices
and
of
even
items in
B.
S.
more
Other
DANA
Bank
Office
$25.00
REctor 2-9570
to
$25.00
the
indicate
at any moment and
a
D.
RIGGS,
Thursday,
:
Business
January
15,
1948'
records, 'Corporation
and city news,
news,
Mother
Chicago
1
Offices:
111.
3,
Drapers'
land, c/'o
bank
135
Edwards
&
clearings,
etc.).
,
S.
La
(Telephone:
Gardens,
Salle
State
London,
E.
C.,
St.,
0613);
Eng¬
Smith.
-Copyright 1948 by-William B. Dana
Company
Reentered
ary
25,
York;
ft,
.r
as
1879.'
'
'
second-class
the
under
1942,
N.
Y.,
■
matter
post
at
the
office
Act
.'V
Possessions.
In
Territories
Pan-American
Union,
and
$35.00
New
York
the
—
extra.)
Monthly,
fluctuations in
that
a
of
in the
into
pre¬
our
price
"An address
domestic
by Mr. Natelson be¬
the
system
ability
to
of
sustain
a
DUNNE & CO.
Members N. Y. Security Dealers Assn.
25 Broad
WHitehall
St., New York 4, N. Y.
3-0272—Teletype NY 1-956
in
of
the
demand
Shawnee
decline
for
BOUGHT
—
Pottery
SOLD
—
QUOTED
con¬
goods. Until then there will
temporary dis¬
last spring,
one
part of our econ¬
a
FIRST COLONY
CORPORATION
gives
our
us
a
discuss
to
quick summary
I would
status.
present
some
of these
as¬
52 Wall St.
New York 5,
Tel. IIA 2-8080
N.Y.
Tele. NY 1-2425
more
The major purpose of new capi¬
is to finance the purchase of
capital goods.
near
on
an
tal
Capital
standard of
1,
LAMBORN&CO.,Inc.
99
WALL
STREET
NEW YORK 5, N. Y.
goods
determine
living of
a
the
community
since they are essential to the pro¬
duction of
Even should exports decline
balance with imports, it would
have little effect
push
detail/ particularly
shortage of capital
which
appears
to be our most
pressing economic problem, and
prices, which are most important
to you as retailers.
offing after
sharp inflationary bulge.
a
Susquehanna Mills
the threatened
data.
to
Warren Brothers "C"
community to
capital require¬
wage
increases
price rises will
outrun
volume
pects in
not
extremely
dropss from ^current
are
Lea Fabrics
the finan
upon
Further
the
This
in¬
consumer
SUGAR
goods.
However, capital goods weaf
out
Raw—Refined—-Liquid
and they must continue to be re¬
placed to maintain the American
industrial plant at its present level.
Exports—Imports—Futures
Mere
replacement
of
wornout
plant is not enough; our popula-
DIgby 4-2727
fore the National Retail Dry Goods
Convention, New York
City, Jan. 13, 1948.
CERTIFICATES
Bond & Mtge. Guar. Co.
(Continued
on page
38)
year;
of
in
interested in offerings of
B. V. D.
High Grade Public Utility and Industrial
Corp.
PREFERRED STOCKS
Analysis available
Mtge. Co.
Spencer Trask & Co.
Prudence Co.
Members New York Stock Exchange
Members
S.
are
Lawyers Title & Guar. Co.
Newburger, Loeb & Co.
.
We
Lawyers Mortgage Co.
New
Members
/
and
at rising
will
higher will throw
affecting only
Association
March
States,: U.
per
that prices are at
level
Punta Alegre Sugar
Hydraulic Press Mfg.
omy.
It has been
postage extra.)
funds.
N. Y. Title &
;:"'V
United
in
Febru¬
at
of
'Subscription Rates' !
Subscriptions
of
us
which
turbances like the
factors
plunge
postwar depression.
though
The third round ol
be only minor and
goods
are
Teletype N. Y. 1-714
TITLE COMPANY
-
.
Every Thursday (general news and ad¬
vertising issue) and every Monday-(com¬
plete statistical issue — market quotation
state
postage
Record
(Foreign
account
a
we
still
decline
There does not appear to be
any
such danger, at least from current
Manager
•
.■,
year.
Record—Monthly;
(Foreign
Earnings
year.
per
year.
Publications
Quotation
year.
$38.00
per
rate- of
made
that
Broadway
Bell System
with
capital goods
production, unemployment, and a
on
would
exchange, remittances for for¬
eign subscriptions and advertisements must
be
WILLIAM DANA SEIBERT, President
WILLIAM
per
Note—On
9576
HERBERT D. SEIBERT, Editor & Publisher
V
Monthly
COMPANY, Publishers
25 Park Place, New York 8, N. Y.
and
per
favorable
in¬
It is still possible
funds
consequent
like
44
of
Canada,
Countries, $42.00
in
come;
these
and
them, and there will be
num¬
important, with family
1908
yet become too
as
financial
our
in line
are
of
industrial plant at
costs.
The shortage of
eventually
with costs of production
and, even
sharp
CHRONICLE
Patent
supply,
Established
Members N. Y. Security Dealers Attn.
REctor 2-4500—120
our
our
increased
and
65%
food, except for certain
short
J.K.Rice,Jr.&Cc.
ability of the
sumer
manufactured
32
Dominion
cial
meet
capital accumulation.
•K.
carious
and
about
year
Engineers Public Service
additional
increases
ments;
sitting on a trapdoor over a tobog
gan slide, which is likely to open
43.
Other
COMMERCIAL
Last
secure
prices
What
population end the large
levels
The
billion.
20
**Not available this week.
;
income'
pay,
additional strain
In
assumed
♦See articles
rebuild
wage
ber of retired persons who live
All
5
Tomorrow's Markets (Walter Whyte Says)
Washington and You.
national
interest rates.
deducting
40-
The State of Trade and Industry..
outgrowth
clearly evident.
new
appraising these fig¬
ures'■ consideration must be
given
to the
increasing average age of
*
_______
after
for
far have been in line
so
increased
families5 spent less than their
our
Mutual Funds
to
important is its dis¬
more
income:
7
^
even
almost $160
tribution.
:oF
8
Einzig—Britain's Wasted Exports
From Washington Ahead of the News—Carlisle
Indications';of Business Activity
totaled
8
Dealer-Broker Investment Recommendations.
an
to
reaching
selected
capital
has become necessary to
carry in¬
ventories at increased prices and
Jf, Liquid assets in the hands 6i
individuals have been increasing
steadily and at the end of 1947
18
Coming Events in the Investment Field
is
ability to
are
present high taxes.
12
Canadian Securities
with
our
full
been
high levels,
.Cover4
—
It
capital has not
has
two:
creasing prices. Even though price
pres¬
than
There
least
maintenance of
employment at
high wages, total income to indi¬
43
...
force.
Finishing Com. & Pfd.
Electric Bd. & Share
(Stubs)
present- price
action
viduals
29
:._
lem.
a
people working, attracted b,y high
Regular Features
Insurance Stocks:
heavy
employed at
the
the rosy
on
at
are
of
U. S.
un¬
begin¬
expediency
increases
labor
shadow
a
appear
the
are
Kingan Com. & Pfd.
Dorset Fabrics (w.d.)
present economic status, is begin¬
ning to be recognized-as a prob¬
year,
understocked
actually greater
WHitehall 4-6551
I
rather than
soundness; the other is
shortage of new capital?which
may develop later in the year;
The latter, which would; be: a
wages, who normally would not be
interested in employment.
on
Business Man's Bookshelf
is
natural
29
Sees New York Building Conditions
Stabilizedi-____-_-_L__
Bank and
ago.
The number
if
economic
year
21
Yugoslavia Wants Half Billion Loan from World Bank
were
that
wants!
Level, which is largely psycholog¬
ical but which
may bring: unwise
inventory has
place during the past
which
There
fear
real threat to
increase in
used
STREET, NEW YORK
Telephone:
probable
overbalance
ones
government
forced
but much of it has been in
ent
to
As We See it
has
is
one
peak production.
Recommendations for Combating Inflation..
Nat'l Ass'n of Securities Dealers
Elects Billet as Chairman..
Canada Gets $300 Million Credit from
Emil Schram Purchases Golden Gloves
Ticket...
Int'I Monetary Fund Summarizes Transactions
New Bond Issues of Republic of Peru Now
Listed
New York-Curb Exchange
demand
the
favorable factors
ning to cast
and
___
Monetary Policy Submit
at
guess
strongly
favorable
Louis II. Pink Offers 9-Point Program for
Germany.
11 •
tion of raw materials
exceeds the
Governor Dewey Says New Deal
Policy Aggravates Inflation 13 Av "peaks established
during the war
Newly Elected Officers of Economists' National Committee '
npriod, - and employment is at an
on Monetary
Policy for 19481
1.
15
all-time- high;
Dr. Aaron M. Sakolski Honored
by City College Faculty.
15
^ Demand has kept'pace with
pro¬
Mark Sullivan Forgets Cash Balance in
Treasury
17
duction, or to state it in its proper
Investment Trust Men Meet in
Minneapolis:..
Economists' National Committee on
wop't mind
you
creases.
to
availability of
>
hope
economy, except to halt price in¬
economic picture
plant; if
anything, it has been limited by
6
I
broad subject and
very
picture and
during ♦>
economic events
Industrial production is at
capac¬
ity of our industrial
Cover
for
those
discussion of the favorable and
unfavorable
favorable.
Truman's 1949 Fiscal Year Buflget Calls for $40 Billion
Expenditure
Beardsley Ruml Lists Steps for Retailers
■
:N."
Truman's "Economic Report" Renews Plea for
Inflation
Curbs
short
very
is-a
economic
19
7' .*>-' .:S
1
me
a
of
of
1948.
.
:v•
to
confine my remarks to
course
:
'
>
allotted
Outlook"
aspects
Britain's Position—Sir Stafford
Cripps
—12
Railroads in Our National Economy—Gustav
Metzrr.an._l__ 14
Railroad Outlook—Arthur Jansen____
15
The
Outlook
time
prices
foresee further government action to alle¬
not
viate
»
highest
stocks'—especially
15 Broad
New
York
St., N.Y. 5
Bell
*
Teletype
Stock
135 S. La Salle St.,
Broad.Street, New York 4
Tel.: HAnover 2-4300
1-2033
York
Curb
Teletype—NY 1-5
Albany
-
Boston
-
Glens
Exchange
Chicago 3
Tel.: Andover 4690
Exchange
Wllitehall 4-6330
NY
Members New
25
Falls
-
-
-
Request
Unterberg & Co.
Members N, Y.
Security Dealers Ass'Tt;
61 Broadway, New York 6, N. Y.
'-'h )
Schenectady
C. E.
on
s
V
Worcester
Telephone BOwling Green 9-3565
Teletype NY 1-1666
4
Economics and Morals of
By SAUL COHN*
RALPH E.
By HON.
U. S. Senator
f
•
It is
■
with
level at
boiling of water at sea
<*?-
that
of course,
operation,
sciences to
To
nomics belong
as
which
laudable
Ralph E. Flanders
on
part of the
social scientists, as represented by
the
economists, to broaden the
the
continued advance of
and
to prac¬
economic disorder so
will
be
eliminated or
assumptions need
in the light of any
particular situation to which they
may
be applied. The particular
situation which we have in mind
this evening is the uncontrolled
which
conclude,
the
matter,
inflation lies
inflation re¬
St.
Louis
actual distress.
is
with
price
the
This
advances.
it.
individuals
cial ills which result from
individ¬
Nature of Inflation
is the
J,
of
in¬
structure
tangible
yard of
be more or
because it is
less measured
rise. Of course,
one
it
as
of the money supply
also involved but in general this
plete. There is no naturaL stop¬
ping point. This cycle I shall refer
to as the "machinery" of inflation.
and the acts of
that
these
is
about
today,
Paid
Taxes
Hidden
on
the Problem
Different Taxes
126
78
Quart of milk
148
191
142
164
Overalls
Fence
Plow
Cake
of
soap__„
needless to
is
It
point out the
of excise and
producers.
we
for
Structure
Tax
The
—
Income
state taxes; royalty taxes;
sales taxes; license taxes; occupa¬
taxes
and
many
hidden
In our kind of economy a tax
di¬
problem structure must be judged by its
effect upon consumption. When a
of inflation.
One is by lowering
the
ceiling of the structure of tax bears down so heavily upon
inflation, which must finally be the price that consumption is ardone in any case.
To be done
*An address by Mr. Cohn before
safely
without
bringing about
severe
deflation, unemployment the National Association of Retail
and
depression,
this
approach Secretaries, New York City, Jan.
There would seem.to be two
rections of attack on the
*
(Continued on page
12.1948/
24)
'
basis
what
can
subsidies
Our
and
Bought—Sold—Quoted at Net Prices
CORPORATION
system, on which the
robatics,
tips in their favor at the expense
of the consumer. We, as retailers,
have
fully understood the
tactics upon the
never
effect
these
of
and have therefore ne¬
glected to make our influence
properly
felt,
nor
effectively
joined our forces with the con¬
sumer
in the
safeguard of his
interests.
y
Maintenance
Price
these
if
as
not
were
Corporation
ESTABLISHED 1927
Allen B. DuMont
'
New York 16,
22 East 4Rth Street,
free
Telephone: LExington 2-7300
A Leader in
N. Y.
which are the Price Main¬
among
Teletype: NY 1-2948
j
Acts
of Producers.v;
Electrol, Inc.
TELEVISION
General
DuMont
Title
120 Broadway, New
Direct
,
i
->,v '.:
York
Crude Oil
Laboratories
Guarantee & Trust
York S
2-8700
1-1286-7-8
•
jSecurity Dealers Association
WtrefsWd! PHILADELPHIA
'
NY
1926
Members New
y
REctor
i
Si fL9S
ANGELES
Seligman, Lufietkin &> Co.
INCORPORATED
■
41 Broad
Street
production
upon
Bought—Sold—Quoted
Phone:
various methods
by which cartels and monopolies
have further managed to. impose
Foundation Co.
Established
numerous
producing a rigidity ahd
of
price,
notable
market,
Add to this the
Telei
and
which affect the
movement of goods into the
tenance Laws....
Laboratories
Ward & Co.
market legis¬
Miller-Tydings,
inflexibility
' "r '
-
...
Laws—And
enough, we
long list of
a
other state laws,
Central National
'
various lob¬
in a good deal of ac¬
but with a balance that
bies engage
Robinson-Patman
AVAILABLE—
;
sanctioned
monopolies and exemptions make
but a trapeze of our commercial
lation such as the
:
prices
government
subsidies,
such as tariffs, farm prices and
numerous, others?
,,:t
through
have
:
defended the
be
support given to
artificial
economy
It results from an increase
clear.
.Vinthe volume of goods and servOlill'.
j ;
■
201
Gallon of gasoline
taxes.
EASTERN
\
V
Number of
Pair of shoes
i
/,_■
With
Purchases of Goods
'
taxes;
tional
Attack
School of of purchasing power which does
St. Louis, j not meet a corresponding increase
CIRCULAR
when
appeared
published by a leading New York
newspaper on Jan. 11, 1941:
repre¬
material and labor,
the value of which can
For example, see
phase of the tax
production.
the effect of
C loth
v:;:-y^;
V.yv y
sented in raw
Commerce and Finance,
Mo., Jan. 9, 1948.
The
Cohn
Saul
production are
dynamic
interference with the
flywheel of a democracy; an ar¬
rest of consumption is an arrest
The
inflation is also
nature, of
The
by
University,
instead of cur¬
the velocity
paid wage and salary earners who
have not succeeded in keeping up
Sen. Flanders
before the Alumni Association of
address
•■An
an
ele¬
ments:
and nat¬
taken,
which prices may
growing discouragement
furthermore
in the hands of
gree
being
Fundamental correctives to
after
^and organized groups of
Taxes which arrest
two
contains
flation are to decrease the money
The undesirability of a rapidly
examining moving inflation should be clear.
that the control of It is not necessary to spend time
to a determining de¬ in cataloging the personal and so¬
science.
must
steps
vates the situation
as
We
social
More
dy¬
only
satisfaction of
.
speaking,
every
price
a
not
freedom of spirit, but on a
needs and desires.
upon
fate is that of large groups
en¬
now
are
we
enjoying
parts.
"
S
Broadly^
urally taken, by organized labor
for meeting the inflation aggra¬
the case group includes many government
employees, school teachers, many
may
be.
We may venture with
white' collar
workers, those
in
some confidence to assert that its
intra-state service occupations and
control lies fully as much within
millions of others."
the realm of morals as it does of
or
prices
struc¬
is
based
economy
.
brought under control.
during
its component
tax
Ours
failure.
a
namic
And it cumulative effect
should think consumption" taxes, as well as
though viewed taxes in general. These are pur¬
The well organized, well paid, structure results in a ceiling be¬ singly they indicate but little, seen chase taxes which are all a part
neath which the active forces of
in their totality they reveal the of
wage earning groups who spear¬
prices, but in many instances
head the demands for increased inflation play their part.
full and staggering impact upon
they are not only this, but a
The active generating force of
wages fare best.
The pensioners,
prices.
;
foundation for profit
on
taxes.
those living on retirement allow¬ the price rises is the circular chase
Acts of Government
They seriously impair the na¬
ances
and on the painfully ac¬ after each other of wages and
tional income and reduce the job
It would be futile today to list
quired savings of a lifetime suffer prices. As prices increase, they
all the acts of government which opportunities available.
most.
Their position is indeed Jurnish a justification for wage in¬
Subsidies—But if some of these
find
their way
into the price
hopeless except as the tide of in¬ creases. As wages increase, costs
structure, but a few are sufficient taxes can be defended on the
Cost increase re¬
flation is arrested and rolled back, are increased.
to
indicate the powerful effect basis that they are • a legitimate
if that be possible. Similar to their quire, or seem to require, price
source of government revenue, on
they have on prices:
of low increases and the circle is com¬
in
sults
any
inflation
into
making
production, that
is
ture
visible
supply or increase production or and subject to appraisal. The in¬
both.
tangible comprises what cannot
j In my own mind I refer to these
very large group indeed gets left
be seen or measured and makes
behind with either a fixed income fundamental consideration as the
up a considerable portion of the
or one which
it is unable to in¬ "structure" of inflation. In a gen¬
price. Among the intangibles are
crease sufficiently. As a result the
eral way they set the ceiling to
included the acts of government
be
Both of these
divide price-
without more goods and
services to buy is simply more in¬
flation. It is clear, therefore, that
They manage actually
improve their standard of liv¬
ing in the process, while another
This assumption is
economic dis¬
to be examined
hoped to compensate.
must
we
rested, with its subsequent effect
upon
to
policies can be applied
it
ly
ing it.
passing of laws, the setting up
administrative
organizations
adoption of administrative
that
is
To
this clear¬
see
against expenses
success for cer¬
and the
tically
to match increased
complex <$>-
than ever.
is, therefore, a hopeless one. It is,
in fact, no solution at all in that
it accentuates the prices for which
it
meets with some
cured by govern¬
mental action. It is assumed that
f
power
every-day
to match income
that practically any
o
more
higher those prices rise.^ The solu¬
tion
of
increasing
purchasing
tain groups.
economic subjects has not
been made by the scientists so
much as it has been made by peo¬
the
of
holders
the
to many
ple in general.
the
purchasing power. The great¬
er the
disproportion between the
money spent and the
goods and
services for which it is spent, the
tangible and
the intangible.
with regard
Another assumption
to
big issues
major
■',,
can
en¬
available
ices
that confront us in 1948, and which have
undercurrents of influence in our lives, are peace
and prices. And while the two are interwoven, I shall confine myself,
in the main, to the matter of prices.
But price-making today is
two
The
always been great
money
impersonal objective elements of
their subject to the fullest extent
order
:
citizen sees an
inflation in terms of continuously
rising prices for everything he or
she has to buy.. To keep up with
this rising trend the citizen en¬
deavors to increase the family or
personal income.
This endeavor
continuous
possible.
ourselves
find
we
The
t
Yet
endeavor
1
on
Cohn lays blame partly on high
that
meshed.
of
there has been
and
will determine the
of the inflationary drive in
course
them¬
selves with the
a
great a degree
considerations or gov¬
ernment action
sciences which
water.
this eve¬
belief that
the
defending
economic
as
physical
boiling
it up, we are
moral issues to as
impersonal
are
the
concern
sum
ning
quite
not
are
slow effect.
of small or
which eco¬
so
their co¬
governmental action is
that, without
and
uals
social
the
f
science it is supposed to deal
in the same way that the
212° Fahrenheit is outside the realm of morals. It is clear,
confusion regarding price making elements, Mr.
and hidden taxes, subsidies, and
price maintenance laws which arrest production—"the dynamic
flywheel of a democracy." Holds acts of producers also responsible, and says there should be greater cooperation between pro¬
ducers and distributors. ' Urges more efficiency in distribution,
based upon a free market.
Commenting
1
old assumption that economics is a science. As a
and effects which are outside the realm of morals
an
causes
f
.
the circular chase after each other of wages and
prices, Sen., Flanders says problem can be attacked by reducing money supply and increasing produc¬
tion, or by applying brakes directly to rapid movement of prices, wages and resulting profits. Warns
against taking severe deflationary measures, and holds direct measures can be effectively applied only'
slowly. Sees most practical solution in self-discipline of both labor and management. Favors meat
rationing and stresses application of moral factors in curbing inflation.
y
Stores Co.
President, City
of present price rises is
Asserting generating force
Price Making In a Democracy
i
Inflation
FLANDERS*
from Vermont
Thursday, January 15, 1948
CHRONICLF
& FINANCIAL
THE COMMERCIAL
(204)
New York 4, N. Y.
administered
prices and other kinds
tions, all calculated
the
to
of contrac¬
to increase
price of goods, and you begip
have some idea of how the
freedom
of
the
market is being
v
destroyed.
the head
example, only recently
of one of our stores (a
business,
which
As
an
does
over
$20,-
000.000) was asked "how many
items and lines in your store are
controlled by the manufacturers;
1.e. how many
'}
items [are you re-
(Continued on page
38)
. ,
•
Volume
167
Number 4664
THE COMMERCIAL
Steel
<:4
The
-7
;
&
FINANCIAL
CHRONICLE
(205)
A. R.
Production
Electric
Output
;
Commodity Price Index
Price
Auto
and
Of Lord, Abbetf & Go.
Retail Trade
Food
Industry
CAN
Failures
J
Total industrial
production last week held at the high levels of
preceding weeks, notwithstanding the fact that a number of factories
closed
were
for
the New Year's Day holiday. Turning the day to
good advantage some producers availed themselves of the
opportunity
to repair plant
equipment.
i
.
Reports coming to hand state that many manufacturers
themselves confronted with a considerable volume of new
find
orders,
while order backlogs continue to run
very large in many lines.
For the weekly period ended
showed
last, production of
increase, butter output rising about
moderate
a
; 5% to 16,600,000 pounds from 15,800,000 pounds. Activity at slaughter
houses was reported as considerable with meat
output placed at
276,400,000 pounds against 247,800,000 in the previous week, or an
increase of about 12%.
V;\v,rn Y.v
\.v
Automobile production rose sharply last, week to its
pre-holiday
peak. According to Ward's Automotive Reports, nearly all producers
at
were
above
or
December
levels
for
the
period, except for those
which put in overtime last month to boost 1947 totals.
Continued
improvement is looked for in truck production this week.
Output during January, the agency said, will be down somewhat
from
the December
level, with preliminary computations listing
325,000 cars and 100,000 trucks to be made in this country, along
with
10 500
attributed
who
and
6,300
material
the
moderately
dollar
above
in
trucks
Canada.
shortages,
induced by
reach 1947 goals.
depleted their stocks to
While
\
autos
to
volume
the
levels
of
of
The
decline
was
manufacturers
some
buying
consumer
last
week
was
both
the preceding week and the
unit volume was somewhat below
that of a year ago. Clearance and
promotional sales were frequent
and aided in
stimulating interest in many types of goods. Seasonal
corresponding week
mark-downs
year
were
a
neither
but what
ago,
year
ago,
large
as
bargains
A
large
as
a
of the
offered
Y
■
■
,t
and
number
widespread
nor as
were
consumers.
\ •"
of
buyers arrived
wholesale volume
consequence,
previous week
and
in
'"YYY-'Y'
above
moderately exceeded that of
were
'
*
*
a
year
level
ago.
RECOGNIZE
of
the
Chief
BRIBERY?
discipline to see through
goguery in future.
the
alarming for the
more
of
of
If
our
get himself retained in office.
voter can turn a deaf ear
$40-multiple siren
faith
our
For
in
then
our
we
song and look to the
democracy
dent
can
have
confidence
10 f
Hughes
to
that
realities,
the
he
A. Wilfred
will
May
can
uary number of the "Business Bulletin" of the Cleveland Trust Com¬
lending against which the President and his lieutenants
themselves
nave been
warning. Such credit expansion will be required even to
in 1940 and 1941.
•
;
in the form of liquid assets is
power
comparatively high in relation to the present rate of spending which
means a relatively large reserve which could be
used to supplement
current income, if
necessary, to maintain the level of spending.
It should
he borne in
mind, however, the "Bulletin" states', that
this applies to consumers as a
whole, and would not be true in a
good
many individual cases where liquid assets have
already been sub¬
stantially reduced.
Continuing, it notes that individuals' holdings of liquid assets
totaled $46,000,000,000 at the close of
1939, while personal
tion
expenditures
rate
.
of
consump-
in
the
£69,000,000,000.
final
All
quarter
through
of
the
1939
were
the
war,
at
an
annual
"Bulletin"
states,
liquid assets increased more rapidly than
consumption expenditures
due to money income
advancing faster than the supply of civilian
goods, so that the public put a substantial
part of its earnings into
government bonds and other
savings.
However, since 1945, the "Bulletin" concludes, expenditures have
increased faster
than'liquid assets, with individuals' holdings of
such assets now
probably close to $160,000,000,000, and the annual
rate of personal
consumption expenditures placed at $166,000,000,000
in the third
quarter of 1947.
•Y'.'v:
'Y;-7YY-YY'*
*
*
YYYYY
Y7YYYYYYYY,'''Y'777 ''Y,:,Y
,
.
,
,
On Friday of last week the Federal
Reserve System undertook
another step in its effort to curb credit
expansion by increasing
the rediscount rate or
interest rate which member banks
pay to
borrow from the Reserve Banks
to Wa% from 1%.
The Federal Reserve Bank here in
New York initiated the
move which
was rapidly
put into effect at Chicago,
Cleveland,
Philadelphia,
Richmond,
Atlanta, St. Louis, Minneapolis and
Three other banks which will
undoubtedly take similar action
near future are San
Francisco, Kansas City and Boston. Two
ago the Federal Reserve
System reduced the price levels at
;
t
,
.
announce
Samuel,
a son
partner,
Dallas.
it had been supporting United
States Government bonds.
Y
The rise in the rediscount rate will have the effect of
in the
'
a
on
*\-
1
v/7;.'Y"" y.?
nel and
he
was
buy
\ii<
of
these
shares.
M.::'
<■;(•
?;• >11
any
neither
offering
He
(Par
nfrfnv'io
Value
$1.00
per
Keeping the
>»'
,,A
It
is
extremely
nor
is
a
made
Cart" Behind
important
to
some
a
the
it;
to
realize,
in
this
■
150
obtained
Y- ,V
January 6, "1948
BROADWAY, NEW
,
.
attended
where
the
class
he
of
is
on
solicitation
only
by
from
—
52 WILLIAM
was
YORK
7,
—
connection,
a
ST., N. Y. 5
Bell
•
Common
Teletype NY
HAnover 2-0980
1-305
Montreal
Toronto
that
DULL
or
DYNAMIC?
as a
7
."
v
•
as
indis¬
l/our Jtnnual Report~
•
settlement of this broad problem
Will it contain
S
Rocky Graziano, middleweight champion,
banned from New York State
boxing merely for failing to turn
a bribe offerer.
Y-Y-YiY::' Y7.: ■" 7 •'■'"'I'.1
'
.Y'
7Y
uninspiring
statistics only...or facts and
pictures, dramatically
sented in
of offers to
a
way
pre-
that will
holder relations?
Prospectus.
As specialists in
prepara¬
S
tion and
Southwest Gas Producing
American Maize Products Co.
"
'
•
'
'
'
^
»
"
•
design of annual
reports, in pamphlet form and
for
publication advertising,
help you. Write, or
we can
.
telephone—COrtlandt 7-5060
\
complete details.
Bought—Sold—Quoted
Share
Albert Frank
undersigned.
N, Y.
a
1941.
Company
Preferred
New York
Commonwealth Gas
the
Be¬
Dart¬
HART SMITH & CO
was
:
FREDERIC H. HATCH & GO., INC.
Established
1888
MEMBERS N. Y. SECURITY DEALERS
DIgby 9-4224
Wall
Street, New York 5, N. Y.
Y
Guenther Law
1
'
-
Incorporated
;k3?-
'■
Advertising
-
.
1
63
26:
he
serv¬
Major.
Noranda Mines
normalcy must be regarded
society rather than as a gift.
#
MERCER HICKS & COMPANY
.
of
of
Abitibi Power & Paper Co.
Horse
semblance of
free
To represent the $40-bonus
sad joke. Incidentally,
Underwriter
•
overseas.
expen¬
share)
Offering Price: $1.50 Per
be
war
Brown
for
may
rank
College
Bonds
general tax reduction at this time would not
represent some windCall, but rather a cutting down of the wartime and
long-term in¬
creases.
With double taxation of
corporate dividends, with individual
incomes being taxed at 50% in the
$18,000 bracket, with tax collec¬
tions quadruple the
prewar amount, with our taxes as a
percentage
of national income greater than
Communist Russia's prewar rate,
with the nation's large
income sources and estates already
effectively
redistributed; the reduction of taxes along with government
Corporation
Copies of the Prospectus
the
the
member
make its appropriations
accordingly. It is always easy to find ways
of appropriating available
funds, no matter how large they may be.
iY>fV: American Cladmetals Company
Pennsylvania
V
bomber group
separated from the
ice with
mouth
half years as an execu¬
a
a
was
fore
Prior thereto
■■yy.'-y 7 -7;v
-
simple principles of good housekeeping should reveal the
logic of first taking into account the amount
available for a year's
spending before totaling the prospective expenditures.
Similarly,
the government should
first impose a reasonable tax bill, and then
Common Stock
>
supervisor.
benefit public and stock¬
offer to sell,
The
with
Mere
1,000,000 Shares
Y
'
an
associated
now
in the Army Air Corps for
two and
tive in
■.
This announcement is
Ex¬
of the firm's senior
He was formerly with Robert
Hall Clothes for two years as dis¬
trict manager, director of person¬
Probably it is a bit harder to discern the fallacies in the Presi¬
dent's glib statement that corporations "can well
afford to carry a
larger share of the tax load*"
Nevertheless, it should be realized
that the investment in the
average business corporation, even when
figured on a prewar cost basis, is now about 40%
higher than then.
A 40% increase, in net
profits would be required even if the price
level had not doubled.
Hence, even if industry had been earning
a normal return in
the 1930's (which it was
not), profits should now
be double or triple those of
the earlier period.
pensable to
short time
is
Stock
that Donald C.
Profit Delusions
which
31)
page
7V-Y
ditures
'
(Continued
our present volume of activity.
Nor should it be so difficult
recognize the great boon to inflation resulting from the transfer of
$3V4 billions of corporate savings to the $40-a-head
consumers; or the
boost to prices
arising from the passing-on of increased tax costs.
weeks
increasing
ithe cost of business
borrowing, since past performance has shown
that such advances in the
rediscount rate have within
support
La
direction
them.
to
'
;
Thus, it adds, purchasing
;
change,
I
points out that while the ratio of the public's consumption
expenditures to its holding of liquid assets shows a
steady increase
in the past two
years, it still remains about one-third lower than
pany,
South
bers of the New York
industry's
Presumably it does not take esoteric economic insight to realize
stripping business of its reserves will
directly prevent such
expansion; or at best must force the very over-inflation of bank
Abbett at
the
Ralph E. Samuel & Co., 115
Broadway, New York City, mem¬
message remember that
his tax bonanza to be di¬
that
under
With R. E. Samuel Go.'
the President's
scarcely ten minutes before he broached
vested from "the corporations,'? he set
forth the need for
$50 billion expansion of facilities?
Street,
Donald G. Samuel Is ^
spender, because of the inflating effect which such
the listener to
Hughes
of Mr. Hughes..
generates?
power
R.
by Lord,
address, 120
same
Salle
President Truman, together with
his economists and
legislative leaders, is at the same time contra¬
dictorily proposing the curtailment of consumer credit
facilities to
And
Albert
or¬
continued
be
inflationary, stating it should
small
con¬
by the
ganization will
in any event await over-all
revision of the entire tax structure.
Can the lay voter realize that
same
0 r e
ducted
repel similar future brazen attempts to mislead
the public by
complete distortion of the inflation process and
bandymg-about of other economic concepts, for political
aggrandizement.
It is vital to our
democracy's future whether the man-in-thestreet voter can be
expected to turn a deaf ear to such a
$40-perhead bonus; whether he can
at least remember that twice
within
the past six months the same
President insisted on vetoing tax reduc¬
tion on the grounds that it
would be
the
di¬
Tne
or.
business here-
•:
that
R.
and
rect
be maintained.
can
A.
Vice-Presi¬
as
maneuver
the
Presi¬
dent of
Hughes & Co.
has joined its
organization
~
*
Hughes, for¬
merly
by a rather kindly and wellmeaning officeholder who merely has the human
desire to
announce
that Albert R.
democratic processes is the fact that our incum¬
bent President is no
arch-villain, and that this
latest gesture at a voters' bonus can
be cynically
shrugged off as a forced and rather clever Elec¬
tion Year
Affilated
Funds,
Inc.,
dema-
cause
American
Trus¬
teed
having the selflevel
any
of
Inc.,
sponsors
Shares,
Union
Executive's tax
the electorate's
over
Inc.,
Fund, Inc., and
.
accentuated
Co.
Business
ATTEMPTED
v
civilian expenditures and liquid assets, the Jan¬
upon
VOTER
"plan" propounded in his
message on the State of the Union, is the public's reaction to it. For
it a large
proportion of the body politic becomes
won
over
by this blatant bribe, thinly camouj,
flaged in
"economics"
lingo, doubt must be
centers
the
large with de¬
very
..
Touching
wholesale
well
THE
connotation
buying
the
rose
Reorders for most types of merchandise
liveries prompt in most areas.
*
1
as they were a
eagerly sought by
were
&
Apparently President Truman is confident he cannot!
In any
event, it seems to this writer that the most important
All
January 7th,
foodstuffs
CHICAGO, ILL.—Lord, Abbett
By A. WILFRED MAY
Index
Production
Business
Hughes Is V.-P.
(
Carloadinga
State of Trade
5
N rtV>S
:
ASSOCIATION
r-r
c
1
Bell
Teletype NVJl-897
i L'
-Y'-li'"
\
mt
-•?* wr i
134 C.ed^r-Street
JSIew York 6, N. Y.
'
7;
<6
THE COMMERCIAL
(206)
$40 Billion Budget Ashed by Truman
President transmits to Congress
'
budget
message
Thursday, January~15, 1948
CHRONICLE
FINANCIAL
&
From
Receipts forecast as approximately $44V2 billions and expenditures, includ-;^
Marshall Plan, placed at $39>669,000,000. Wants surplus used for debt reduction. ;
Ahead
priations in U. 5. history.
ing proposed costs of
12, President Harry
On Jan.
S. Truman submitted to Congress the Administration's
the
To
Plan)
I
was
estimated
at
for*the
United
States
ending
An
June
recom¬
my
the
Budget of
fiscal
the
for
year
together
30, J 949,
estimated
with revised estimates for the fis¬
surplus
cal
of
existing laws and proposed legis¬
billion, the
$5
lation.
President
for
used
iPi
be
ternational and domestic require¬
debt
port
President
Truman
to
United
the way of
-encouraging
by
States
widespread international eco¬
tax reductions.
text
It affords essential sup¬
the foreign policy of the
Budget.
offered
size of this
account of the
ments
nothing
The
existing in¬
The realities of our
redemption,
and
was
to
material
within
resources
our
all
fiscal-
a
to stage a "bundles for Congress" campaign^the reac¬
tion became so strong that they let up, and of recent, I have not been
.able to see. anything of an-organized attack upon that body.
This i,s
expenditures
Government
eral
Fedf
still
are
mest
the
by
aftermath.
its
the
of
dominated
capably
and
should
1
The
In
the
of
introductory
portion of the President's budget
message follows:
while
cooperation
nomic
taining
strength.
armed
our
main¬
It
the effects of war, and our
efforts to prevent a future-warwar,
National
Defense
Affairs—Veterans'
terest
This
thought to air of us as we , strive
the creation of lasting peace
among the nations of the world.
Only 21% of our expenditures
the
government's
in the broad
pro¬
of:
areas
So¬
cial Welfare—Housing—Education
—Research—Agriculture-*--Natural
Resources
Transportation -—Fi-n
—
nance
Commerce
—
Industry
—
~
Labor—General Administration.
Stix & Co.
■In
the two years
render
Maine
&
St. Louis 1, Mo#
Traded in Round Lots
;24
-
Federal Street,
Members St. Louis Stock Exchange
Co., Inc.
1949
in
current fiscal
the
be
further
a
decrease
to
slightly below $34 billion.
Tele. BS 128
It would be
gratifying if I could
and
to their, Senators and Representat
tives
in
the
Congress .that. our
existing programs fulfill our na¬
tional requirements.
But this is
salt lake city
say
Utah Power
American Air Filter
Light
Amalgamated Sugar
Utah-Idaho
Mountain Fuel
Murphy Chair Company
the
that
mand
national
responsibilities
de¬
undertake
we
new
activities and expand some
Supply
ties in which
are
we
activi¬
already en¬
gaged.
Co.
Expenditures of $5.7 billion will
EDWARD L. BURTON
ESTABLISHED
Incorporated
l*t
cal,
8c COMPANY
™I BANKERS BOND
160
Salt
Floor, Kentucky Home Life Bldg.
BELL
LOUISVILLE 2, KENTUCKY
lake
City
1,
this, $4.4 billion is needed for
aid
Utah
the
to
Program
TELETYPE SU 464
our
European
Recovery
for aid >to other
and
countries, including China.
Bell Tele. LS 186
Long Distance 238-9
1949 to finance programs
proposed legislation. -Of
year
under
1899
S. main STREETv
SYSTEM
therefore be required for the fis¬
opment of
rial
philadelphia
Buffalo
Bolt
Steel
Data
on
Thus
Corporation
AND
tures
Properties
Also
.
New
..
1420
New York
of
A. IYI. LAW & COMPANY
Los
Angeles
♦Pittsburgh, Pa.
Hagerstown, Md.
N. Y. Telephone—WHitehall 3-7253
■*
Private Wire System betioeen
V;
L. D. 51
which
existing tax
This
and
will
balance
provide
should
be
at $44.5
$4.8
the
billion
to -reduce
used
the public debt.
1892)
SPARTANBURG, S, C.
'
estimated
laws
billion.
(Established
Receipts
billion.
$39.7
are
Budget
Street, Philadelphia 2
at odds, he has never
the
(Continued
.:
on
page
"
sought
eight. He lives in his brief case,
fretting to every one who will
listen to him about the squander¬
..Notwithstanding that there has
ing
change, our jokesters,
and editorial pundits
still occasionally poking ridi¬
been, this
cartoonists
are
sistence upon
to
QUGstion foss ever seen o.
Congressman, knows that there is
a' Senate and a House, that there
are
three branches of Govern¬
ment.
He
has
simply become
has
money as- an
the ham actor
to
who always yearns
Shakespearean roles, he
to be an "influence"
play
wants
now
cartoonist,
another
is
the brunt of his humor, a
as
pot-bellied figure whom he calls
Senator Snodgrass.
The impres¬
sion is that
this fellow is just
being funny, because his charac¬
are funny, without trying to
American Box Board
';.v a;'Botany Mills
SECURITIES
Empire Steel Co.
For
Empire Southern Gas
or
of
Pittsburgh Rys. Co.
Exchange
from
Std.
Pac.
10:45
Time:
on
to
Floor
There is no doubt,
either, that he depicts some real
ply
pontifical
real,
characters, >some
humbugs.
hardest work¬
Yet some of the
ing men, some ol' the most sincere,
I
have ever known, are
of Congress.
some
of
particularly
year,
members
'I would not work as
do for $100,000 a
in
days
these
when the Government takes away
much
so
taxes.
in
Two
come-readily to
members
hun¬
either
mind and I could think of a
dred
I
more.
doubt
that
Dick Wigglesworth
of Massachusetts, or Carl Stefan
of Nebraska, has ever been home
for dinner—when Congress is in
Congressmen
session—before 7 o'clock. They are
1948, tions
the Appropria¬
Committee,
both
chairmen
bf ■ sub-committees.
tremendous racket of spending.
v
Stock Exchange Bldg. Phila. 2
Teletype
PH
reports- of the
which are held on
Department demands,
the
read
closed hearings
State
the
decent citizen
is
still
honeycombed with Commies and
the present loyalty hunt is not
weeding any appreciable number
make /any
would
The
sick.
department
of them out.
We
a
what is called
Russia, so the
having
with
are
cold
war
Department spenders—-in¬
General
Marshall — are
running high, wide and handsome.
Stefan's job is to keep this horde
of
spenders .within
reasonable
bounds and all he gets for his
State
cluding
efforts
is abuse.
He is abused for not
willy nilly
for
funds
approving
the
Civil
Aeronautics Administration which
34)
merce.
across
and
jurisdiction of Com¬
Only recently he came
the fact that CAA o;wned
Wigglesworth has to handle the
GA.
STATE AND MUNICIPAL BONDS
aids
it
were
was
operating properly, and
that the CAA
developed
flights
make oc¬
but most of the
time, the planes rusted in the
hangars. By making the CAA do
away with this luxury service and
the
regular
with
course,
and
the
taxpayers
He could play
of
bureaucrats,
have
the
use; of
couple of planes of his own.
LOCAL STOCKS
in¬
airways. for
he saved the
millions of dollars.
BONDS
hundred
inspectors actually did
ball
CORPORATE
several
operated
planes of its own with which its
"inspectors" ' were
supposed to
ride the airways and see if the
beacons
and
other navigational
casional
a
But
he doesn't.
other hours.
Byllesby & Company
Telephone
bills.
is under the
With Herrick,
CORPORATION
•RIttenhouse 6-3717
appropriation
The latter two are not much of a
problem. But State and Commerce
have
in recent years become a
them
STANDARD SECURITIES
PHILADELPHIA OFFICE
different
entirely
an
Department
spection
at
as .a
type, who has charge of the State,
Commerce, Judiciary and Justice
cause.
a
11:30
Sp-82
him
v
v
Warner Company
H. M.
of Orders
Quotes call TWX Sp-43
A.M.,
Sterling Motor Truck
Nazareth Cement
Immediate Execution
misguided
to
ters
ATLANTA,
NORTHWEST MINING
is
is pretty much true
same
Stefan,
use
_
some
or
referring
likely
papers
pinchcr.
To
a
daily one panel fellow, however,
who at least three times a week,
has
is
The
oni' public affairs.
There
he
Bureaucrat
aggrieved
squealed
p^jy-y
of
the
in
name
an
editor
>
and made plenty of
entertainer and like
prominent
his
see
when
against Congress in his strips. It
successful young
in
which
in
way
The only time you are
this.
is doubtful if the
msn
the
of
cause
with his news¬
because of his in¬
patting propaganda
clients
the "American
to
savings
pruned the Bureaucrats' requests.
But he never gets any praise for
trouble
paper
the Bureaucrats.
of
people in the current fiscal year
would run around $2 billions be¬
country, in fact, is
the
dinner
for
His
cule at the Senatorial and Con¬
gressional type. One of the most
widely
syndicated
comic
strip
Philadelphia, New Yor% and Los Angeles
spokane. wash.
what it is, to sit
with guests at
than occasionally
legislative body do what it will.
.
members of
revised estimates included in
Teletype SPBG 17
■
down
both
For the current fiscal year.
■'
prestige of that body.
expresses himself and lets the
He
fiscal
Budget for the
under
and
York Curb Exchange
Walnut
■-
during this period
Stock, Exchanges
Member o;
'
•
.
the
scientific
and
1949 calls for total expendi¬
year
Request
York, Philadelphia
Los Angeles
research.
Textile Securities
BUCKLEY BROTHERS
Members New
housing,
surance,
DuMont Laboratories
Portsmouth
resources
training, aid to education, expan-.
sion of social security, health in¬
Southern
Company
human and mate¬
through universal
our
^0-]
ways
Most
of the remainder is for the devel¬
spartanburg
wealthy New Eng-
a
living in Washington's
fashionable
Georgetown
section,,,;
it is doubtful if he knows, more
to lower the
and
Our
case.
international
Sugar
Consider II. Willett
to the American people
not
American Turf Ass'n
Varnish
year
solely to carexisting laws, there
out
.
would
louisville
Reliance
year.
for the fiscal
be confined
to
Tying
Boston 10
Tel. HUbbard 2-3790
body
to be al-<
artists in
billion
Although
lander and
Carlisle Bargeron
seem
having
Were the budget
;Walter J. Connolly
ex¬
sharply from
$63.7 billion in the fiscal year
1946, to $42.5 billion in the fiscal
year 1947, and an estimated $37.7
S TRE E T
509 OLI VE
sur-.
Powers,
ated, seemingly comes in for be¬
the year is out.
fore
legis¬
lative
regardless of
originally appropri¬
much is
how
he
while
and the
year
which every agency,
it
the
to
penditures of the-Federal Govern¬
RR.
Preferred
Prior
since the.
Axis
the
Be
.
ment have decreased
INVESTMENT SECURITIES
Boston
the
of
accounting for more
than $7 billions alone. He has to
handle
the
deficiency estimates
Truman,
ry
sobering
a
fiscal
in
Bureau
Veterans'
late
Great-.
for
grams
the
by
Roosevelt
spending,
the
the current
Government
the
or
credit of Har¬
Debt—Tax
be
or¬
more
that
should
Commission, the RFC et al., They
account for billions of dollars of
that
highly
said
Benefits—In¬
Public
e e p
less stimulated
Refunds.
finance
st. louis
boston
the
on
the
International
—
k
,,
in: mind
was
1949, 79% of our expends
reflect the costs of
year
appropriation requests of the in¬
dependent agencies such as the
Veterans'
Bureau, the Maritime
ganized attack
war
fiscal
the
the
and.;;I
t h i n k.' ,w e
plan designed to help combat-in-*
flation.
as.
t o,
good
tures directly
proposed
should
Budget -in¬
both
This
1943.
year
cludes estimates to carry out
approximately
support
policies by advanc m
development of human and
the
transmitting
am
essential
affords
Congress got so bad a few
When the subversive runners-down of
years ago
domestic
mendation
$39,669,-
000,000.
United
the
of
Congress
States:
Marshall
the
of the News
By CARLISLE BARGERON
1948. 'The budget expenditures,
finance" (covering in large part
budget estimates for the fiscal year beginning July 1,
which includes $7 billion for "international affairs and
proposed
outlays under
Washington;
for Fiscal Year 1949, asking for highest peacetime appro-
73
Members
Standard
ef
Brokers
-
Peyton
WadcJel! & Co.
Stock Exchange
(Special
Spokane
Dealers
-
Underwriters
Building,
Branches
Established
Spokane
at
Kellogg. Idaho and Yakima, Wn.
RHODES-HAVERTY
BLDG.
Teletype AT 288
to The
KANSAS
1894
ATLANTA
Long
1,
GEORGIA
Distance
108
Financial
CITY,
Chronicle)
MO.—Earl W.
Foley is with Herrick,
Waddell &
Co., Inc., 1012 Baltimore Avenue.
Volume
167
Number 4664
THE COMMERCIAL
Britain's Wasted Exports
&
FINANCIAL
Which
f
Britain's repayment »of wartime sterling balances has been
excessive, and unless British Government ceases
being magnanimous in its funding agreement terms, there is no
hope
for restoring
equilibrium in balance of payments, and further
American assistance to Britain "would
go down the drain."
LONDON, ENGLAND—At
she
can
'
•
'
'
Agricultural* Department official
'
•
"
that
1
cannot
afford
Santa
as
Promi¬
:
The
Egypt
series
is
-It's
of
agreement
latest in the
quixotically
you
generous
declare
lars
stop, but
have
done
to
and
value
a
of : $29
off
millions
during
ments
will
1948.
These
reduce
the
pay¬
total
-
of
low
words
Dr.
Paul
Einzig
their
up
by
ac¬
of
It seems
>t^at
short
tion.
nothing
stern
a
American
minder of the
duty of
to
of
a
debtor not
his
treatment
could
discriminate
his
re-
bring the
in
creditors
Government to its senses and save
the British
people from the disas¬
trous
consequences,
of
its
own
Government's folly.
•
;
Since the cessation of
hostilities,
Britain repaid wartime
sterling
'balances running into hundreds of
with its original amount of
millions. If the
India,
pired,
which
should
liberality with which
ground
"new
owned
by
around
which
£ 3%
is
holders
overseas
is
billions,
half • of
unfunded.
This
still
means
that, in theory at any rate,
there is nothing to
prevent over¬
seas holders of
sterling balances
from buying up in Britain
goods
to a total value
of £1% billions
without paying for it in
any
form
which would enable Britain to
pay
for her own
imports, In practice
allows
fore controlled
don,
and
are::held
largely from (Lop-
further
by.
large
British
amounts
Dominions
which
voluntarily refrain from
.;embarrassing Britain by drawing
on
their
balances
to
an
unduly
large degree. Even allowing for
this, purchasing power amounting
to several hundreds of
millions of
pounds is liable to be let loose on
the British
only
can
of
ford
to
be
explained
on
old
money
until
is
is
the
of
away
;to
realities
of
there
no
hope
is
President
.for
a
great holi¬
Truman's
by Congress just before
Whether
the
serve
debt
repayment
American
would
'
"
simply
their
go
to
■
'
,
for
see
Britain
debt
mixed
repay¬
1
.
signs.
new
year,
About half of the
sterling bal-'
ances
havebeen
cannot be
extent.
so
funded,
used to
Under
the
and
Farm prices and
various
ing
agreements,
however,
Government released far too
grapefruit
more
the
results
better
sterling
in
financial
shape than they have known for
sides
reconstruction, since it endangers
own
reconstruction.
'
of
selling
list
a
If
which
parity prices
the
list
parity
of
all
-
•«.
r:-; •
,
BUT
IN
THE
V-.
v.
.
WITHDRAWN
AS
i .v.,..
.
A
t
Zryu?
MEMBER
ANNOUNCE
INVESTMENT
WITH
PLEASURE
BANKING
THAT
BUSINESS
Mr. John
IN
•••
HE
and to
sort of
::
•
•
'
•••
part
of
then
and
say
my
in Con¬
own
move
"\v
WILL
••
'number of
are *a
farm cooperatives and how
I feel about
necessary
1948,
agricultural pro¬
gram and the broader national and
international
economy
which have great
all
—
bearing
on
One
farm
major
ture, let
I
questions
some
for
of
your
I
being
WITH
and
before
come
am
the
Con¬
referring, of course,
waged
destroy
cooperatives.
The
our
the
wisdom
of
the
approach
are
particularly those of the cities—
are suffering from
hunger. They
have
terrific food shortage all
possibly even worse than
has
been
pictured.
Hunger is
something you can't describe very
a
right,
well.
leaders
You
have
(Continued
MR.
pleased to
of
to
experience it
on
page
32)
announce
that
January 1, 1948
M.
CARTER
GUNN
will be associated with
us
as
■.
and
US.
We
are
MR.
C. Legg, hi
as
a
also
A
LIMITED, PARTNER, HAS
INTO
GENERAL
BEEN
ADMITTED
PARTNERSHIP.
MR.
member of
pleased to
GARNETT
•
Mackubin, Legg
6c
NATHAN
will be associated
,
Company
of
O.
IL
with
our
Vice-President
our
firm.
announce
that
LEE, JR.
MORGAN
us
members
as
firm.
BALTIMORE. MARYLAND
SCOTT, HORNER & MASON, Inc.
JANUARY
1.
INVESTMENTS
1948
Richmond
rec¬
ommended. You have heard a lot
about how the people of Europe—
and
HERETOFORE
of
visited
which President Truman has
of
may
important
Europe in both 1946
1947, and there is not the
slightest doubt in my mind as to
the pressing need for this
program
pay my respects to
legislation which is
needed, but which neverthe¬
less,
most
and
me
item
the
of
recovery.
Before I begin discussing legis¬
lation which is needed by agricul¬
one
1948
these questions is aid to European
consideration.
not
farmers—in
European Recovery Problems
of
Major Questions
Today I want to raise
these
our
anxious to discuss them
am
with you.
must face in
we
I
and
prob¬
our
CONTINUE
ASSOCIATION
from
v
gress—and
So there
V"'
'/■
senti¬
on
y
'
the
insert it into
they
111., Jan. 6, 1948.
THIS -FIRM
_
WE
which
trate my point.
to
,/>.>a*'*1
OF
faith
Since most of you know how
long I have worked with and in
shape
worse
farmer
:
you
like to add my whole¬
there.
they
■/
•
HAS
you
strong
them, I don't think it
for me to labor this
point. v-There are other very im¬
portant issues that will face Con¬
than
in
appear
of
CooDeratives, Chicago,
were
of
actually are—as, for
example, the citrus crops—I think
these figures are adequate to illus¬
(these items
campaign which
Farmer
farm
record—as
ments
longer. Though weaknesses in the
parity formula may make some of
is
Under-Secretary
repre¬
Some
the
of
gress—as
published,
selling below
be
considerably
to the undercover
!;:An address by
'
\
the
those
would
addressed
Northwestern
hope that the rest of
would
ment
our
items for
Dodd before the National Council
Mr.Laurence m.simmonds
V
v
of
of
hearted endorsement to that state¬
are
as
.*
I
10'
below
of 30
include
we
We
:
oranges
That's
important agricultural prod¬
gress.
scale, be¬
th2
20%,
42%.
are
ucts.
Some
years
that the repayment of old
balances on the present
Britain's
which
I
Everett, Wash.,
friend, Secre¬
Department of Agriculture has in
the cooperative movement and the
strong opposition which it takes
in the fight now being"
waged to
destroy farm cooperatives.
sweet
lemons
one-fifth
being contrary to the spirit
of the Loan
Agreement, is con¬
trary to the best interests of world
large
for example, this
potatoes tat
95% of parity, chicken prices at
90%, apples at 97%, eggs 93%,
peanuts 86%, potatoes 94%, hay
war
nullifies
Anderson,
laration
15,
62%,
18%,
at
your
who have not read the
speech will
do so.
That speech was a dec¬
prosperity.
generally high.
and
fund¬
unlimited
an
Dec.
included
Net
are
gained from our
history and only 5% below
market, and is liable stopping the
import of American the 1946 record.
to absorb a
Farmers have
very large proportion; films
and
tobacco.
Washington ;paid off a lot of debts and
of Britain's
exportable surplus of should
many
try to make London realize of them are in
goods.
of
list
involving
we
11
boss and
cooperatives.
Average
prices of several important farm
products are already below parity.
'•
higher than 1946.
Pro¬
having lent Britain duction is running
high.
In spite
$3% billions, would of the bad weather last
year our
have every moral
right to protest itotal crop production was near the
against the folly of a policy which
average of the best five
ment,
since the
On. Dec.
there.
As
the
and
chance.
much
in trouble.
are
farm income in the year which we
have just completed
was
about
income
down the drain.;
war
,
look at the prospects for
we
agriculture for the
States, having waived
claim
toj
Mixed Signs in Agriculture
v
As
war
further
any
assistance
The United
of
purpose
r
too
year.
know you,
I
sentatives
lems which
of
payments.; So long as
high proportion of British ex¬
much
tary
•
1948.
balance
ports
not
or
hope is justified depends
considerable extent upon the ac¬
tion taken by this country
during
anything like equilibrium in the
a
people
<,a
situation,
restoring
is
if
groups which are allied with you,
this
campaign
doesn't
have
a
my
parity out
ses¬
proposal for
Jong-range aid and in the interim
the
There
items
chief
day message of encouragement in
.aid voted
face
Britain's
Europe received
British tits adjournment.
to
its their
brought
made
The
grave.
1 *
and
their
Today, the second regular
style,'and
somebody.
senses
bring,
may
psychology of sion of the 80th
Congress is con¬
has not yet
vening in Washington. The issues
can no longer af¬
before it are
even
Government
it
hope lies in the United States.
though every penny he gives
to others has to be
borrowed from
and
Politi¬
who
resist giving
Unless
The world is
„
what
But
modities
slowing down recov¬
in much of Europe. As those
people welcome 1948, and consider
the
poor"
live in the
cannot
to
heavy legislative
spite of general good times,
producers of a number of com¬
ery
Britain
balances
be
realized that he
a
large part of this amount is held
by British Colonies and is there¬
unfunded
in
In
N. E. Dodd
cal turmoil is
magnanimity of the terms
these funding agreements, and
the
corn-;
this winter progresses.
as
peak
rising rapidly.
a v e
may be increasing hunger
suffering in many countries
and
the
in this country.
Farm
production costs have also been
•hungry and restless and confused.
There
of
up.
1946.
troubled times.
;are
They hope to thus ride their de¬
structive legislation through in the
confusion which characterizes a
4%
land fever
But, unfortu¬
nately,
these
The
of
more
of the party in power in
Congress.
„
the
y ear
•■'ortable world.
export to hard currency countries.
the
sterling balances
a
on
which reduce Britain's
capacity to
the
present the total
renewed
through direct conversions "!ahd
partly through unrequited exports
mainly by exporting goods to the
At
be
wish
other factors not
Farm land values
are
1921 and still slowly
Though farm mortgage
indebtedness went steadily down
all during
the war it has been
going up1 since the beginning of
been born into
also 'ex¬
which the British
gold ^reserve is
used
up
in • this
year,
partly
creditor countries in
imports from those countries.
has
reached
to
<coukL ,.<h
equally generous terms, it would
greatly accelerate
the
pace
at
used,
of her
£440
funding agreement
with
millions of pounds,
partly by con¬
verting them into dollars, but
excess
I
evj;
m
of that campaign are trying to tie
their selfish ends to the
program,
within
now
going
make it.
t ically Egyptian sterling
balances to
nothing to fol-. about .£300 millions, compared
to the
are
encouraging.
are
you
choose
p r a c
''
But there
so
what¬
be
can
ever
things
good.
a
record
new
($128 mil¬
lions)
with
All those
years,
sheet; as
though the
with unrequited
exports to a
of £32 millions
value
were
clean
supply Egypt with gold and dol¬
edly
*
starting
Under it Britain will
repeat¬
~—-—
:
new
the
ment
unre¬
farmers.
many
*
goods.
with
agreements.
quited exports
helping
not
amounts
nent members
must
says Marshall Plan will involve considerSays Republican measures against inflation are inadequale: and points out need for long range agricultural
program based on maintenance of high domesconsumption and a policy of abundance. Defends price parity
concept.
sacrifice, while
•season
of the Govern¬
that
some
siveiarm land values and rising scale of farm
mortgages, and
able
:
Everybody realizes,
"
Claus.
despite large production and general high prices, producers of
serious problems in 1948 must be faced. Warns of exces-
warns,
in trouble and
are
exceptionally pleasant to make a speech during the New Year season. This is the
when you take stock and look ahead to
future plans. The old
year is over and done.
both for conversion into
Its record—both of successes and failures—is
dollars and for spending on
completed. The feeling of the season is al¬
Brit-r most as
though
—
ish
sterling balances!
to continue to
act
w*:
-s
^
time when Britain needs
every cent
Britain
commodities
some
H
through exports, hundreds of millions of pounds are
through her Government's irresponsibly extravagant !. atti¬
tude in the matter of wartime
r
a
Under-Secretary of Agriculture j
•
earn'
wasted
7
By N. E. DODD*
Pr* Einzig ,contends
:V' '
-(207)
Way Do We Go Now?
By PAUL EINZIG
;
CHRONICLE
Lynchburg
-
Roanoke
8
THE COMMERCIAL
(208)
Who Gets the Money
Under Marshall Plan?
Taylor reveals State Depart¬
ment proposes to spend about
one-third of $17 billions to be
;
Corporation of N. J., $700,000,000 holding com¬
Service
Public
of New Jersey, is about
of the holding company
recapitalization of the electric and gas operating company has
system serving a large part of the State
to be "integrated." A plan for the dissolution
pany
and
been
munism
expected to be rppear to be satisfied with the
with¬ plan, following amendments to. the
delay,; since there are original terms. However, the usual
long delays, and is
confirmed by a Federal court
undue
out
fight by any interests to the plan.
Disagreements were pretty well
corporate delays may
prevent complete consummation
of the plan until sometime late in
ironed
-
is
out, it is understood, dur¬
Corporation, largest
stock, now
holder of the
Public
Service
common
of
Corporation
6%
:<■,
■
$1.40 pref. common stock
doesn't
money
$1.40 pref. common stock
%
v
1
sh.
to
j f
Common.
The
-"preference
new
bus
of
Because
;
tric
lift
the
in
ent
delphia-has
regular
a
issue of moderate size,
that its
really
is
preference common
second preferred.
'
The
preferred
so
a
Electric
Gas will con¬
&
of $201,000,000 funded debt,
6,063,000 shares of $1.40 prefer¬
sist
ence
of
common,
common
and 5,503,000 shares
The preference
stock.
stock will be cumulative, will be
non-callable for 12 years (after
which
will
it
be
is
callable
at
convertible
amounts
of
the
.
$35), and
into
varying
common
during the initial -12
stock
The
latter period will be divided into
years.
four three-year periods, with con¬
version
declining from
11/10
shares
the
of
in the first to 1
share, 7/8
share and % share, respectively,
in the remaining periods.
Earnings of the Public Service
system have been somewhat dis¬
jnd
considering
large
the
and
size
good record of the company, the
stock might be expected to sell at
higher levels, bringing the ratios
in line with" corresponding
more
figures for leading utilities (per¬
times earnings, and a
around 5Vz% to 6%).
However, the latter can hardly be
anticipated unless the system rids
12
of
haps
yield
earnings require capitaliza¬
itself of the large transit
property,
since the wide fluctuation of trac¬
a
on
also
rather substantial
a
amount
ceived should result in substantial
of manufactured gas revenue,
restoration
this may
power.
Sept.
of
system
earningIn the nine months ended
30th,
on
be somewhat of
earnings
until
a
natural
and
gas
is
share
estimated at around $1.85,
as
compared with $2.54 in 1946. How¬
ever,
earnings on a pro forma
basis would work out around $2.45
share, it is estimated, because
of the savings on dividend
re¬
quirements of the new preference
stock, as compared with the old
per
5-8% issues. Conversion of the
preference
stock
into
(xpected to be gradual over a
period of years—would, however,
again
(oi
reduce
the basis
slig tly below
earnings
of
per
share
1947 operations)
the
from
Texas
level,
to ; bout $1.80 a share.
These fig¬
ure s would be
improved, of course,
present
contrary
The electric part of the system
number
Fact
setts
the
of
booklet
financial sta¬
State, its counties,
cities, towns and districts—Tyler
& Company, Inc., 11 High Street,
Boston 10, Mass.
in
strong
tems: in
position,
however,
of the few large
one
sys¬
the country which has a
good surplus of capacity.
100,000 kw. generator
was
A
new
ly
placed. in
recent¬
Essex
operation
Station, arid
an
at
the
additional
300,000 kw. will become available
at
the
Sewaren
next two years,
company
pated
plant
over
the
thus keeping the
fully abreast of antici¬
expansion
in
business.
It is
a
It's hard to imagine
left out, but it was.
fact I think we have a right
was
to know.
who
was
get the money was
Actually, the plan, to
be
truly revealing, should never
given to Congress and
to the public without this funda¬
mental information: Who gets the
have been
money?
cycli-graphs
to
which
his
where
know
than the
man
entitled
goes
money
who pays the bill—
means us
all? But, the State
Department in Washington could
not reveal this fact and still fea¬
anti-communist
the
propa¬
$17 billion, "all-ornothing" basis.
'
ganda—on
a
,
I want to be factual and exact
in discussing on the
air this latest
project so important in your land
and mine—so heavily involved in
inflation,
the cost of
prices, taxes,
living that is bearing
down
all, and
our
So,
on
for
every
us
high
on our
future.
weeks I've been making
possible attempt I could
get official information
in Washington as to what coun¬
tries were to get our new $17,-
make
to
000,000,000
was
and
how
$4 for Folio CFC-112—Securities
Research
to
know.
Economic
&
BROADWAY, NEW YORK 6, N. Y.
Chicago^
distributed
being
Vilas
by
&
Hickey with the current issue of
their
Railroad
Developments of
Week—Vilas
the
Wall
&
Hickey,
of
the
Co.
(Continued
on
page
&
Co.,
Engi¬
Wellman
Products
neering, and Tennessee
& Chemical.
'
■
Corporation—Changes
Lehman
portfolio—Ira Haupt & Co.,
Broadway, New York 6, N. Y.
in
Ill
entire
40)
Company—Analysis
Roi
Le
Street, New York 5, N. Y.
Digest"—Loewi
& Co.,
Street, Milwaukee
nancial
225 East Mason
This issue also contains a
2, Wis.
discussion of the Outlook for Wis¬
consin Industry in 1948.
Secured 6% 1940—
New Haven
&
Memorandum—Stern
Stocks—Discus¬
Insurance
Fire
in
current issue of "Business and Fi¬
49
Co.,
25
Street, New York 4, N. Y.
Broad
sion of their investment values—
Dempsey-Tegeler & Co., 210 West
Seventh Street, Los Angeles 14,
Northwest Utilities—Analysis—
New York
Need
Broadway,
Haupt & Co., Ill
Ira
6, N. Y.
Imports—In the cur¬
for
rent issue of "Investors Almanac"
Portsmouth Steel Corp.—Data—
—Estabrook & Co., 40 Wall Street,
Buckley Brothers, 1240 Walnut
Street, Philadelphia 2, Pa.
York
5, N. Y.
available
Also
New York
City Bank
Stocks—
Operating Earnings and Ratios of
Stocks—Laird, Bissell & Meeds,
tion
is late
informa¬
Du Mont Laboratories and
on
Buffalo Bolt Co.
20
Broadway, New York 5, N.Y..
120
Special Situation—Analysis of
85-year-old New England com¬
pany with large dividend accumu¬
lation—Raymond & Co., 148 State
Street, Boston 9, Mass.
Master Metal—Cir¬
the
industry and stocks
cular
on
Shepard Niles Crane & Hoist-
Report—Troster, Currie
& Sum¬
74 Trinity Place, New York
mers,
6, N. Y.
Mohawk Cotton Mills,
Utica &
Inc.
—
Circular
—
Mohawk Valley
Inc., 238
Street, Utica 2, N. Y.
Investing
Co.,
Genesee
low-priced speculative
companies—Mercer Hicks &
of several
steel
COMING
Co., 150 Broadway, New York 7,
"
N. Y.
'
EVENTS
"Lackawanna"
Three
Brief
other
Bonds—
& Co., 25
Broad Street, New York
4, N. Y.
;
»
Feb.
(Chicago, IIL)
3, 1948
Mid-Winter Dinner of the Bond
♦
♦
American Water Works & Elec¬
Kidder &
Co., 1 Wall Street, New York 5,
tric—Analysis—A.
M.
Traders
La
Club
of Chicago
at the
Salle Hotel.
(Kansas City, Mo.)
Club of Kansas
Feb. 5, 1948
V/t.;
Y.
N.
Field
Investment
In
analysis in "Railroad and
Quotations"—B. W. Pizzini
Bond
Traders
City annual dinner at the Hotel
Artkraft
—Full
231
details—Comstock
South
cago
Manufacturing
La
Salle
Corp.
&
Street,
Meuhlebech.
Co.,
Chi¬
Traders
of
Club
St.
Louis annual dinner at the Chase
randum— New
York
Hanseatic
Hotel.
5, N. Y.
-
27,
Feb.
Corporation, 120 Broadway, New
York
(St. Louis, Mo.)
Feb. 6, 1948
'Security
4, 111.
1948
(Philadelphia, Pa.)
Investment Traders Association
of
Philadelphia
Twenty-fourth
Annual Mid-Winter Dinner at
B.
Corporation—Analysis
Unterberg
&
Co.,' 61
V. D.
E.
Cerro
de
Pasco Copper
the
Benjamin Franklin Hotel.
(New York City)
Security Dealers As¬
sociation 22nd Annual Dinner at
the Waldorf Astoria.
March 5, 1948
ration—Investment appraisal and
amount, $5,348,000,000 of the $17
to
Conditions—Govern¬
.
ment-Finance—Copies of special
letter prepared by National City
Bank
of New York, which are
will find that a full
third of our $17 billion goes pri¬
marily to another aid-to-England
project. The lion's share of the
you
third
Corp.—
Lubetkin
^
Broadway, New York 6, N. Y.
fund—one
bifect Wire
;
Associated Electric Co.—Memo¬
to get.
First,
Chicago So. Shore & So. Bend
29
Milk
141
The Lion's Share to Great Britain
Pettibone Mulliken
Postley
Corporation,
Street, Boston 9, Mass.
—C.
Gilbert J.
years'
12
each
much
last, here are the facts,
the
official
figures — obtainable
only
yesterday.
They
indicate
much we've not been permitted
Benguet Mines
picturing
Motors
...
in 500 leading listed stocks—send
Steel, The
After all, who is more
Graham-Paige
Analysis—Seligman,
Co., 41 Broad Street, New York 4,
New York.
•':• ,.7- ■ -J. '.- :;.?
Also available are analyses of
dramatic market swings (1936-48)
plan, the question of
to
omitted.
Street, New
Inc., 41 Broad
4, N. Y.
York
Foundation
three-trend
vCycli-Graphs—500
New
already spent $22,000,000,000 abroad since the end oi
the war. Now we're expected to
spend $17,000,000,000 more. Yet,
in the mountain of words and fig¬
in this
control
hydraulic
of
equipment for aviation and indus¬
trial uses—Seligman, Lubetkin &
edition,
the
of
We've
ures
5, N. Y.
Electrol, Inc.—Analysis of man¬
ufacturer
up-to-date
tistics
gets
At long
Skilsaw
—
giving
money?
that fact
-
is
being
40th
Massachu¬
of
Calif.
is—who
one
120
Co.,
&
Ward
—
Broadway, New York
Co.,
Commonwealth
impression—
public
to
An Amazing Omission
ture
eventuate.
new
common—
cost
high
living—we need to hear some
facts.
These are facts that run
of
drag
earnings were" obtainable, which might occur
$1.38 a share, as compared with
within two or three years if pres¬
$1.94 in the previous period. For
the calendar year 1947 earnings ent plans for bringing more gas
are
through
and
the
and
places
work
Taylor
Henry J.
When fully seasoned,
yield 7.3%.
of that portion of share net
more liberal basis.
There is
increase in the basic fare from 50
70, and any rate adjustment re¬
homes
Laboratories
DuMont
B.
Circular
—
—
paying
/v- the bill in our
ings, the stock would be selling at
bout 9 times earnings, and would
tion
to
basis
original presentation of the Euro¬
pean Recovery Plan itself.
recent pro
tion
an
noth-
or
this basis, using the
forma estimated earn¬
On
$1.
to
Tabula¬
vertible Preferreds.
facts which were withheld in the
common
latter
has asked for
an
stock will prob¬
ably not be worth more than 500
Gas
sey
—
including approximate price,
dividend
payment, and yield —
Newburger, Loeb & Co., 15 Broad
Street, New York 5, N. Y.
Also available is a list of Con¬
and before we
since the old stock has
appointing in 1947 because of the
sharp decline in profits of the
transit subsidiary.
However, the
company
•
look
selling recently around 22 %
the 1/10 share of South Jer¬
Records
'
"when
a
on
on
start
probably be
would
basis
around 22,
been
common
new
"all
ing"
The price
forma basis?
pro
issued"
capital structure of Public
Service
a
V
:i
is consummated.
How do the new securities
on
must be
/ handled
$1.40 to $1.60 a share
rate of
when the plan
that- the
plan
earnings to result from the plafty
it is anticipated that the dividend
rate can be raised from the pres¬
present' amount of Philadelphia
stock.
On the other hand, Phila¬
idea
'v
share
Company, although the initial
amount to be outstanding will be
about seven times as large as the
further by the
■S.new | $17 : bil);'lion European
fares.
stock" is modeled somewhat after
that issued by Philadelphia Elec¬
in
rise
anticipated
the
by
common
f
,
^
Dividend
...
on
v.
South Jersey Gas
N. Y.
4,
chal leng e d
.
Co., 14 Wall Street, New York 5,
Y.
'•
N.
tion
e'r e
o r ev w
Forecast—
and
Allen
along,
get
York
ing
j ? at- best..; Be-
1/10 share
and
common
new
grow
parties the following literature:
Common Stocks with Outstand¬
It's hard for most any of us
trees.
shs. $1.40 pref. common stock
3.25 shs. $1.40 pref. common stock
.7:7
r.
Our
3.70
$5 preferred stock
Common stock
New
re¬
Exactly who gets the money in
the latest European Recovery Plan
involving $17 billions?
I've just
discovered the facts. I think you'll
be very surprised to learn them.
Gas
4.15 shs.
preferred stock
.
and
Electric
shs.
4.70
preferred stock
Service
of
Review
Annual
writing.
50-yr. debenture 6s
"
8% preferred stock
7%
exchange
Public
New Jersey
6% perpetual debentures
cludes Marshall Plan needs
securities of
the holding company for those of
the recapitalized operating com¬
pany will be as follows:
The
ing the SEC proceedings.
Repre¬
sentatives of the preferred stocks
and of United
and
interested
H. Hentz & Co., 60 Beaver Street,
Says
$6 billions is to go to former
enemy countries, where commu¬
nism might be discouraged. Con¬
1948.
legal
present indications of a court
no
send
to
problem."
no
mentioned will he pleased
It is understood that the firms
"dispensed under Marshall Plan
as aid to Britain, "in which com¬
by the SEC, after ^
approved
Recommendations and Literature
Mr.
Corporation of New Jersey
Public Service
Dealer-Broker Investment
By HENRY J. TAYLOR*
*
Thursday, January 15, 1948
CHRONICLE
FINANCIAL
&
New York
Corpo¬
analysis—Kalb, Voorhis & Co., 15
Broad Street, New York 5, N. Y.
Also available is a review of
Lanova Corporation and a study
entitled "A 'New Look' at Public
March
1948
12,
(Toronto,
Ontn
Canada)
the Toronto
Bond Traders Association at the
Annual
•
Dinner of
King Edward Hotel.
;
5
-
Utilities."
*Radio broadcast by Mr.
under
Taylor
sponsorship of Generaf Mo¬
Jan. 12, 1948.
tors Corp.,
Nov.
Douglas
Aircraft
Company
—
Special review—John H. Lewis &
15-18, 1948 (Dallas, Tex.)
National Security Traders Asso¬
ciation Convention.
Volume
167
Number 4664
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
Harry C, O'Brien With
Floyd A. Allen & Co., Inc., Los Angeles
y
and social ideas
others.
on
Says
Europe
save
problem is not
our
to save ourselves.
as
K
but. The
rights
parties
of both
must
be
ment
its
rec¬
ognized
and
dent
tain
most
would
Floyd
A.
Allen
Shy-'
of
Russian
erty loving people
The
menace.
treaties
that
officials
of
one
committed
our
to
us
were largely
responsible for the confused con¬
prevail in Eu¬
those treaties were
because
rope
So it
ple
to
seems
that
us
wildly
our
The
peo¬
not conceived
was
ton
as
Plan
wholly al¬
a
Our Washing¬
usually think firs'
terms—then for our
measure.
manpower
in
political
ideas of pouring out our resources
national
of money and goods in a vain at-
tarianism in only "show' posit'on.
So our foreign program is un¬
temot
feed
to
and
the
support
welfare
—
humani-
with
world will continue to prove, just
as it has already, a false and un¬
doubtedly intended to construct
sound
itarian flood
hope both
those
and
it
as
whom
we
affects
tingly trying to help.
The
has been
war
us
unwit¬
are
1
,
,
for
now
than two years. If the prob¬
of
peace
had
been
ap¬
more
lems
with
proached
solid
dam
that
anything like the
intensity and
businesslike
England
position
or
of
the road toward
a
peace¬
time adjustment in Europe as they
are
here.
Instead
of
that
the
overall
picture makes us wonder
so
few ! tangible
results
We
started
world
by
No
wealth.
thrift.
-
out
to impress the
elaborate show of
our
admires
one
They flatter
spend¬
a
him
and
ac¬
his gifts but condemn and
laugh at him behind his back.
Again note the similarity of na¬
cept
tions
individuals.
and
end of the
madmen
war
we
Since
the
have acted like
by
scattering our dol¬
lars and' goods all over the world,
not on a fair basis of exchange
would
which
their
in
ated
of
have
commanded
but rather with
respect,
that
recklessness
have
must
countries
many
a
a
cre¬
feeling
of Business Propaganda
It is not difficult to find a basis
Russia's
for
of
is
States
control
trying
Western
other countries by
cial
that the
propaganda
United
to
Europe
buy
and
offering finan¬
support with the ill-concealed
provision that the beneficia- ies
adopt the economic measures that
we
prescribe. We may be quite
sincere
in wishing other coun¬
tries to enjoy the many blessings
that
and
liberties
way
of life provides, but to im¬
those measures upon them by
pose
decree
the
be
would
our
too
that
measures
wonderful
much
like
Russia
has
adopted in forcing her policies
upon her recently acquired satel¬
lites.
<
Besides,
the
whether real
at
least
or
that
was
quite universally accepted. I refer
to the one giving to each country
the choice as to its own type of
government.
so-called
been
tnai
It is clear that the
border
accorded
tact
uoes
states
have
that privilege
not
wairanc
us
goods
almost
or
the
under
eaves
by using the only universal
language known and recognized
international
politics, the lan¬
of might.
guage
\
We
we
trying
are
selves
are
to convince our¬
our
policies looking
that
toward
the
relief
and
upbuilding
of
foreign countries are
many
activated by motives that are pure,
unselfish and highly ethical. But
we
are already
faced with criti¬
cism, ingratitude, loss of trade and
defiance.
Our money will
save Europe.
Her salvation,
when it comes, as it will in time,
open
never
be
result
a
efforts.
of her
France
own
con¬
has
already
set an example in that direction,
not by pussy-footing or compro¬
mise, but by an admirable dis¬
play of force and determination
which
agents
and
the
cowed
from
the
the
won
infiltrating
Eastern empire
nearly
approval of the
proud country.
unanimous
citizens
of
that
sights must be readjusted;
one
problem is not
much to save Europe as to save
our
so
number
imagined
attack
10
identify and
fortify
expose
necessary!,
port, if
of
our
our
and
even
Prescott Co. Admits;
society and
defenses until
country
whelming
by
display
such
of
of
an
any
over¬
force—both
military
but
other country will be rash
and
can,
confidence, defy
over-aggressiveness
other
we
economic—that
no
enough
to test the strength of our armor.'
31,
1940,
average
,
$1,-
a
bond,,;;
as
Changes in Affiliate
of Robert' O.
oartner
Jr.,
Shepard
and
half
P.
Palmer,
hpstilities
Shepard & Co., Inc., corporate af¬
of
Prescott
&
Co.,
has
changed the company name to
Prescott, Hawley, Shepard & Co.,
/-:AV
Officers
and
personnel of
affiliate
remain
corporate
the
un¬
changed, with Mr. Shepard con¬
tinuing as President and J. C.
Anderson and Tom D. Morrow
Vice-Presidents.
Mr.
Shepard
as
is
member of the Board of Gover¬
a
and former Chairman of the
nors
Northern
Ohio
vestment
Vice
Dealers
of
Group of the In¬
Bankers
President
-
the
of
Association,
of
Investment
Ohio, Inc., Chairman
Municipal Advisory
Ohio
Council, member of the National
Municipal Committee of the In¬
vestment Bankers
Association, and
past President of the Cleveland
Bond Club.
Mr. Palmer had been a special
partner of Prescott & Co. and its
predecessor firm for several years
before
bonds
joining
the
Guard Reserve for
U.
S.
Coast
than four
more
of active duty outside
United States, retiring from
years
the
the
of
find that real estate
we
selling
are
one-
cessation
50
some
The
points
explanation for this re-i
in real estate bond prices
covery
difficult
too
not
to
find.
With
our
entry into World War II all of
our
urban centers—both
cial
as
well
life.
short
of
Within
people
urban
in
from
rural
and
businesses
filled these
of
descrip¬
every
centers of
activ¬
ity to the bursting point. In addi¬
tion, during the ensuing three and
one-half years of hostilities there
the
neither
the
nor
time,
office
and
buildings
alleviate the space shortage.
in
vacancies
result,
all
to
As
rapidly
Landlords for the first time in
in
themselves
and
of
number
great
in
a
sellers'
a
found
years
market
spite of the enactment of
Federal
the
a
of
types
disappeared
buildings
the
nor
homes and
new
loft
the
nor
material
labor to construct
new
and
local
rent
controls,
earnings of buildings climbed
grade.
heights and with
labor
a
New
York
are
City, building costs
approximately
130%
;
above; the 1939 level and about
110%
higher
than
during
the
1926-1929 building boom.
With
replacement costs at so high a
,
level it
the
is
evident that
rentals in
constructed
buildings
newly
be
must
rentals
the
substantially higher than
in
existing structures, for
current
rates
buildings
are
required
to
the
the
support
building.
new
in
older
far below the level
cost
of
Competition from
building, therefore/will be of
new
healthy kind since it will not be
a
on
price basis.
a
:
J
Stability Required
To
have
economic
requires stability in
market.
History
that in every
business
level
real
high.
In
tivity
at
records
period during which
were
at
was
earnings
estate
real estate
our
clearly
activity
the
and
1948
will
estate
further
a
values.
and stocks
ward.
most
no
Real
there
new
sued to the
we
will
in
real
estate
bonds
move up¬
have
been
al¬
real estate bonds is¬
public dating back to
approximately
exchanges
ac¬
continue
gain
similarly will
Since
of
correspondingly
high level and with it
a
high
a
value
opinon, business
my
during
witness
:
prosperity
1932
of
other
—
issues
than
through
re¬
organizations, foreclosures, etc.—
steadily.
the dollar amount of realty bonds
Pessimism Unwarranted
■■■
in
sub¬
factories, government agencies
tion
money,
to record
on
corresponding scale.
Similarly, in terms of replacement
costs existing buildings took on
entirely new values. For example,
cities to work
our
and
was
rose
upon
into
areas
tremen-.
a
it the cost of materials and
cn
astern
an
period the influx
thousands of
thousands
our
commer¬
industrial—took
as
renewed
the
service late in 1945 with the rank
of Lieutenant, senior
r
issues,
$ 2 8 1.
178% above their prewar level;
or
is
after
years
ishingly
Inc.
the
Thus, approximately two and
general
a
filiate
com-
was
special partner is an¬
nounced by Prescott &
Co., New
York Stock
Exchange firm in the
Guardian
Building.
Announce¬
ment is also made .that
Hawley,
as
and'
with
supply of money. Along
the
National income
this,
in-| today
same
Admission
as a
William
;
prising
Amott
R.
H.
;.by
same
dex
"
/
has progressively diminished year
Those
Amsterdam S.E. Chess Men
Challenge NYSE
A
to Match
team of
chess players repre¬
senting the Amsterdam Stock Ex¬
change, has
challenged members
of the New York Stock
to
Exchange
radio-cable match.
a
The
date
who forecast the
full occupancy
The facts
in
that
selecting
members
the
York
New
wishing
to
represent
Exchange. Those
qualify for member¬
to
on
the
Herbert
W.
Marache
end
of
consequent
war
terminated
time
built
and still
up
and
a
are
war
an unprece¬
backlog of orders of
goods
would tax the
of
were
changeover to
our
dented
under
a
failed to reckon properly with the
facts.
preparations
are
the
when
values
economy we
14, and
way for
and
decline in earnings and real estate
is tentatively set for Feb.
services
peace¬
which
producing capacity
industrial
machine
for
&
team
should
contact
Marache, Granbery,
Lord, or Isaac Kashdan, Jacques Coe & Co. '
our
long time.
In addition,
our
a
gen-
after year
by sinking fund
opera¬
tions, property sales and refundings.
There
will
be
a
further
shrinkage in the dollar amount of
bonds this year
will
add
nounced
in
the
sues
to
which
the
as
I
it
see
already
pro¬
tightening of the market
remaining outstanding is¬
and
will
stimulate
further
equity stock values.
In sum,
the general outlook for
real
estate
bonds
1948
looks
basically
and
stocks
very
in
promis¬
ing.
ACTIVE MARKETS
Lynch, Allen & Co., Inc.
Formed in Dallas, Tex.
de¬
the disrupting
own
with courage and
the
from
years
but to preserve our resources,
to
years
the "
ourselves; not to build another
vague
Maginot Line against an
now
soared
short
a
,
measured
—
and in the
back
seven
group
000'
O.
ourselves
with
price of
',;jr ship
Our
of
found
dous increase in the National Debt
7.2%. Looking
Committeeman for the Cincinnati
a
striving toward
certain goals by methods that are
highly controversial as any poll
of public opinion would indicate.
Today
not
in
money;
to
in¬
an
Stock and Bond Club.
nance
elements
Atlantic Charter,
fancied, contained
nrovision
one
•.
occupied for 100 years
powerful
and jealous
countries, acquired her dominant
position in world trade and fi¬
crete
Basis
not purchase her
national prominenc
$730
crease
nicipal
u
us.
other
will
and animosity.
jealousy
engulfs
tight little isles, precariously
located
in
evident.
be
a
author¬
did
with
more
well
should
the
before it
of
which she
Her
how
check
That objective is highly laudable
but the means clearly question¬
able.
cooperation that marked the war
period things would have been
on
will
-
over
from
$783,
.for
25
director of
CLEVELAND,
-..V:'
Marshall
so-called,
'
■
extravagant
ac-
—
is-jt eral.\ economybecame
vastly
changed and by the war's end we
rose
—
the
in
in-3-
an
—
sues
Dec.
j
v.'V"..v'.'v;,./ Altruistic
truistic
^
common
m
ages
4ex of 200
the
themselves of that
'
Dec. 31, 1946, and Dec. 31,
1947, the average price of a $1,000 real es¬
tate bond, as measured
by Amott-Baker Real Estate Bond Price Aver¬
for many years was National
sufficiently
are
of
spite of a rather dismal year for the securities markets in
gen¬
eral, the holder of real estate bonds fared quite well in 1947.
Between
!
now
grossly inequitable.
rid
as
ge r
He served as a
die:, Cincinnati municipal
Marshall Plan Not Wholly
at Yalta and Teheran
that
Communists
stock values.
In
field
until her naturally proud and lib-'
r
.tive
Harry C. O'Brien I.
and
aroused to
ditions
•
advocate.
political
a
O'Brien
years.
lock in his unreasonable demands.
former
ardent
ex¬
has been
her
they nearly dominate her
political status, let her pay the
penalty just as she is now doing
any
sustain
.
until
to
until
than
Portia
its
to
filtration
unfair
more
it
continue
penetrates
chooses to blind herself to the in¬
sus¬
mani¬
a
her
Mr.
Observes that there has been
year.
real estate bonds issued
the municipal
departmen t.
machinery into reverse without
any ouside admonition. If France
be broken. No
contract
stock
m a n a
during the present
no new
of
principal
changes,
our
Then she will throw her
contract will
festly
the
Incorporated
to public since 1932 and
further contraction of the available supply this year, with
consequent beneficial effect on outstanding issues and
equity
expects
First
members
fiber and its futility is evi¬
every
protected;
otherwise, the
court will
let
bitterness
Co.,
virtually
-Building,
will upon
other, nations. If England wishes
to try out her Socialistic experi¬
work
never
imposing
Hutton
National Bank
One idea that seems to deserve more consideration on the
part of
diplomats is that dealings and treaties between nations rest upon
the same identical
principles as do dealings and contracts between
individuals. Many well drawn contracts are broken before their ex¬
piration, but
unfair, oneadopting similar iron-hand meth¬
in
in values
with
E.
&
our
ods
has
W.
Co.,
Pointing out that holder of real estate bonds fared quite well in
1947, Mr. Amott states that conditions favor a further enhancement
asso¬
ciated
A
President, Amott, Baker &
and
z
O'Brien,
5
sided contracts
t
a
become
much to
so
By H. R. AMOTT
CINCINNATI, OHIO—Harry C.
O'Brien, formerly an officer of
Asserting wildly extravagant ideas of pouring out our resources in
vain attempts to support the world will prove a false and unsqund
hope, Mr. Allen scores use of Marshall Plan to enforce political
9
Ontlook (or Real Estate Securities
W. E. Htttton & Co.
By FLOYD A. ALLEN
(209)
DALLAS,
TEX.—Lynch,
INCORPORATED
Allen
&
Co., Inc., has been formed with
offices in the First National Bank
Building, to
ties
business.
engage
in
Officers
a
securi¬
are
Wil¬
liam F.
ville
Lynch, President, and OrG.
Allen, Jr., Vice-Presi¬
dent.
Both
were
of
the
ment.
was
REAL ESTATE
Wholesaler and Retailer
STOCKS & BONDS
Investment Securities
Bought—Sold—Quoted
co-manager in
municipal
bond
charge
depart¬
Our
Trading
of
Department
specializes in real estate bonds
and
formerly associ¬
ated with the local office of R. H.
&
Co., of which Mr.
Johnson
Lynch
Amott, Baker&Co.
ALL
stocks, title company and
bank participation certificates.
SIEGEL & CO.
39 Broadway, N. Y. 6
Teletype
NY
150 BROADWAY
Dlgby 4-2370
1-1942
Boston
NEW YORK 7, N.Y
1
Philadelphia
10
FINANCIAL
&
THE COMMERCIAL
(210)
.
CHRONICLE
Thursday, January 15, 1948
¥.
——
Atherton Elected Pres.
Connecticut Brevities
'•■fit !-.
ended Sept. 30, 1047; Norwalk Tire & Rubber;
Co. reported net sales of $9,913,258, against $10,426,518 for the pre¬
ceding fiscal year. Net income was $201,574, against $469,828 a year
ago. Earnings per common share were $1.00, against $2.25 (after pre-;
For the fiscal year
ferred dividends) in 1946.
*
'1;
1
■■.1•—'—*
undivided profits, bringing the
♦
.
.
to
;
The plan
Connecticut
curities
total
of dissolution of the
Gas &
Coke Se¬
Koppers Co., Inc.,
and The United Gas Improve¬
companies
approved by the
Securities and Exchange Com¬
mission on Dec. 9. In accordance
District
States
Court
for
at
ended Dec. 27,
si:
sjs
declared a div¬
share payable
Collins Company
of
idend
Jan.
$5.00
a
•
.>
;
*
sjs ■_
;.t
•
Wilbur G. Hoye, a partner
director of the Security Insur¬
Co.
Hoye
of
is
ance
also
Haven,
and
surplus.». With the
transfer of
$25,000 from undivided profit and
loss to surplus, both the new capi¬
Lyman
elected
Co.
was
Vice-
plete
concern as
Newlin F. Da¬
owned
&
urer;
of
•
a
has been
director of the Phoenix
Co. of Hartford.
November^
Gunn has become
..
V
$
■
.
■■
si;
si:
.,
«/,
,
and Har¬
Life Insurance Co.
Jan.
Stock
v
represented
stock exchanges were
Presidents,; including
Harry Besse, Draper, Sears & Co;;
Boston; James Day, Chicago, and
Richard Gottron, Gottron, Russell
their
Cleveland, :who were
welcomed
to
the reception and
Co.,
Carter dinner by Milton A. Manley, re¬
associated with tiring President of the local 'Ex
LYNCHBURG, VA.—M.
headed
/ California
i
•
the speaker;
rise
is
G.
against a back¬
log placed in 1945.
<:
<
si;
^
.
.
V.
Building,
of
,
For the year
Hartford
Building,
against $1.84.
Gunn
Co.
Total
were
showed
net
assets at the end of
1947
$146,764,072 compared with
$135,853,633 a year ago. Deposits
at the year-end totaled $135,472,716 against $124,780,765 as of Dec.
31, 1946, an increase of approxi¬
mately 8i/2%.
Book value per
share
increased from
$25.09 to
Vice-President.
Mr.
an officer of
C. F. Cassell & Co., Inc. Also as¬
at the end of
are
Detroit
the
of
,.
T;
syn¬
Edisor
This is
1947
Miller, Ke/
31,
of Dec.
as
"*'■ ■ *
.
;. /1
*
*
particij
formed
Options,
with
coverin? 260,000
$1
■
* ■:
offices
Trust
the year 1947. This
compared with $79,445,324 a year
ago. There was no change in capi¬
tal and surplus; $103,098 was added
has
ciated
Godnick
at
30
Broad
City.
as
have
Farr
been
Neville
been
Charles
Berton
in
&
Co.,
New
City, died at his home in Palm
Beach, Fla., of a heart attack. >
asso¬
partners of Godnick &
Son.
Higham Dead
Neville G. Higham,
the
New
York
member of
Exchange,
Stock
with offices at 50 Broadway,
York
poisoning,
according to
a
police
Mr. Higham, who was 78
report.
years
New
City, ended his life by gas
old,
that he
left
was
indicating
note
a
ill and despondent.
CAPITAL
Members
-
.
New
and
Members
New
Exchange
PRIMARY MARKETS
Statistical
Boston
.
;
1
are
of
basis
share
one
ex-!
in
two shares off
each
for
stock.;
being issued on
Great Lakes Chemical Corp. $1
par-stock under an exchange of -:
fer which will expire March 15,
next.
"f:.. •'
;
H:
*
.
On
24
Dec.
shares
of
stock of
Adrian
$1
■
.
V.'v " /
H:
of
the
Hartford
of
serially ; from
maturing
share for the account ol
Gerit.y, Jr., its Presiden
General Manager, who con
per-
hold 60,000 shares or
the corporation's out¬
tinues. to
of
7.82%
standing 767,500 common shares.
•-
■"
'v.
H:
H'
'
125,000
.
to
working
debentures
of
issued
constitute the
authorized
the
Chas. W. Scranton
MEMBERS
NEW
YORK
STOCK
&
Co.
Hartford
shares
of
$1
f
/V:.'•
:
Brewing Co., Detroit, in'
Goebel
placed privately
4V2 % cumu¬
lative preferred stock at par ($100
per share) with a group of four "
1947,
December,
issue of $2,500,000
an
New
■
New London 2-4301
New York Canal €-3662
T«*Io*vne
NH
1P4
used
to
repay a
Established
bank loan in the
$2,000,000, ■ and
the
be used to finance
of
will
breweryi
H:
General Motors
y/V '.;'/1
//* '' \
Corp;/ produced
1,498,270 passenger cars and 427,588 trucks, or a total of 1,925,858/
in the United States and
during 1947, which com¬
units,
pares
out
in
the
1946.- In
5600
Bell
vehicles
1,186,057 *
with
turned
December,
calendar- year r,
.'/■
;/'/-///
1947,
the
cor¬
produced a total - of
and- trucks, the
highest monthly production for
the year and 20,443 more units
than were turned out in Novem¬
poration
194,477
ber,
cars
1947, and a gain of 19,988
"December,
1946.
over
..
--
■
1919
Detroit Stock Exchange
Estimated
and
York:
BArclay
Earnings for 1947/
$10.00 per Share
7-3191
Michigan Markets
639
Penobscot
7-3542
System Teletype: HF 365
/
the /expansion
of/ the recently
purchased Koppitz-Melchers, Inc.,
L
Members
Waterbury 3-3166
Danhu-v
through/1
companies
insurance
Glore, Forgan & Co., New York,
and Miller, Kenower & Co., De¬
troit.
Part of the proceeds were
par;
Building
EXCHANGE
New Haven 6-0171
un¬
$600,000
;,
4
*
the
share,
bal¬
but
of
publicly sold in Oc¬
were
tober, 1945.
Airlines, Inc. at $4
Central
$44,000
The
capital.
debentures,
which
net proceeds to;
be used to pay off outstanding
short-term notes, fot purchase/
and conversion of aircraft, for;
additional working capital, etc. ,
per
to
plant -in West Branch, Mich, (es¬
timated at approximately $240,-;
000). The balance will be added
value common stock of Wiscon-,
sin
1952
Canada
^
f > Smith, Hague & Co., Detroit,J
together with other investment
bankers, on Dec. 18 publicly of-;
fered
•
1970, part of the net proceeds of :
the im¬
mediate cost of .the new precision ;
value commot
par
:>
which, will be used to pay
balance
Gerity-Michigan Corp. o
offered publicly a
Co.,. De-"
er
.
,
v
Manufacturing
amount
were
York Curb
Connecticut Securities
'
private placement of $400,000
5%v. sinking 'fund debentures
40,04i
total
a
Primary Markets in
Information
y
troit, it was announced on Jan. 2,
has entered into an agreement for
ance
.
stock
'.
^
-f.r\**y
/ Miller
Exchanges,
,
Associate
STOCK
York
.
' ;'
'
Tifft Brothers
Torrington Company
over-
was
Donahue", and. (Elmer W.,,^/Cr,ej5S,:.V
President and Vice-President, re- r
spectiyelyy These ..shares will "fafe ;
shares of;
capital
value
par
change
and
part¬
York
Co.,
Products Corp. on behalf of ,D. A.
James
Formed
Inc.,
Officers
Godnick, President,
and Berton Godnick, Vice-Presi¬
dent and Secretary, and Henrietta
Godnick, Treasurer. Charles and
of $80,540,290
Bache McEvers Whitlock,
per
had
shares
of
'V
■
Raqiids, orf Dec. 30 filed a regisyj
tration statement with the Se-y
$9
ner
Stock Options, Inc.
Stock
Garnett
Nathan H. Morgan.
Street, New York
The Phoenix State Bank &
,'K-
McClanahan Oil Co. of Grand
for¬
Slayton
of
Bache Whitlock Dies
formerly
O. Lee, Jr. and
are
Co. had total assets
-T
the First Bosto.:
pated in the offering,-
Depart¬
as
was
sociated with the firm
H:
H:
M. Carter Gunn
-
$25.68 as of Dec. 31, 1947.
*
'
.
underwriting
oversubscribed.
nower
& Co. of Detroit
the
& Co. of St.
Louis,
in charge in Oklahoma
City, and Mr. Charles L. Haynes
in charge of the Tulsa office at
207 Simmons Bldg., Tulsa, Okla.
merly
operating
earnings
of - $873,526
or
$2.18
against $977,672 or $2.44 a share
for the preceding year. Indicated
earnings per
share were $1.59
Trust
Power
&
'
v /
was
National
opening
ment with Merlin A. Collier,
ended Dec. 31,1947,
National Bank &
which
isciue,
Commission /covering
"of $1 ^ par value
commonv$tock of Buchanan Steel
y.;V.-j"/;
5»*.(
'
Co.
Traction
.
the
■
which was part of a total o ;
1,418,125
outstanding
s h a r erj
owned
by" American
Light
&
it*
Trust
Investment
an
of
com¬
SIC, at $27
par
The
15.000
sue;
sion
the
announces
shares
Exchange
:
Co.' at $20.50 per share.
OKLA.—
CITY,
C. Edgar Honnold, First
;
v;
•
stock
ital
Edgar Honnold
OKLAHOMA
&
De-f
Dec. 26 with the Securities and
on
Corporation offered publicly 450,:
000 shares of $20 par value cap-1
Opens Inv. Trust Dept.
business,
is still working
and
These shares
this year. .Oh
the company
expected
contract
710,560
curities and Exchange Commis¬
further
A
$39,222,359).
Corp.
acquire
to
used
and
dicate headed by
1947 sales were
approximately 60% greater than
net sales of 1946 (which aggre¬
gated
Light
\
On Jan. 7, an
v<;
//
/
of
been owiied by North American
be
•
Laurence F. Whittemore, Presi¬
Vice-President of Bigelow-Sanford Carpet Co.,
share.
•
day."/'V':.'//y
■
;.
of Boston, was
Manley
Co.,
&
inventories
necessary
to increase its t at-; sold at market. There will be no
put of automobiles to 1,500 per: underwriting//,'M./>/ *.•
.
Denebrink,
of
stock,
mon
registration
Co, and Allen & Co.
equipment
dent of the Federal Reserve Bank
According to G. C.
nuoltc
price to be filed by amend-
a
funds
change.
Inc., Law
Roney
Northern Natural Gas Co.
of
investment
bankers
by Otis &
Co., First
!; group
the
Statler Hotel Jan. 14. Several other
C.
Jroit, participated, together with '
in the offering to the
feasible/'
Kaiser-Eraser
the
6
A.
fibthers,
General
by
seem
M.
subscribed.
|}
were
Wm.
to
added to Kaiser-Fraser's general
members- at the
Exchange
s
'/»{:".■
-
17
Dec.
;'v/'' • "•'v ■/ >
plans to issue and sell 1,590,090
additional-shares of Its $1 par ! r.;{--m. ;»!*•\
/.' J.ti
value common stock through a
letter of notification was filed
Exchange
officers
Reserve
eral
On
Co., McDonald-Moore & Co. and
statement filed with the SEC oh
at
Guests at Dinner of
&
Scott, Horner & Mason,
H:L
"come
has
;
/According 'to 'a
:
T
a
that such acquisL
operation
■'
••
or
com¬
Bendix
wholly-
ment.' The net proceeds will
Scott, Horner Go.
21,398,000 for November of 1946.
This constitutes an increase
of
it
that
and
Motors does not
Jr..
D. R. Atherton,
L. Heffeli1/
finger,-Samuel K. Phillips & Co..|
was elected Secretary.
./■ -J
M. Garter Gunn V-P. of
1947, the Connecticut Power Co.
reported sales of kilowatt-hours
totaling 26,725,757 compared with
24.9%,
was
ry
by
//
■
Co.,
elected Treas¬
the
subsidiary. General Moto*
the; conclusion
tion
the
to
of
division
a
announces
Kid¬
Peabody
Jr.,
der,
time
to
acquisition
President;
Trust
/
•
time
from
elected
\'j;
month
the
For
Street
B. Brainerd
Insurance
ufacturing Co., and Bush Manu¬
facturing Co.
Paul W. Bo-
guests of honor at the Fortieth
Anniversary Dinner of the Detroit
the
of
American Box Board Co: of Grand
1929.
During the period of its owner¬ Rapids, which intends to use the
net proceeds for improvements to
ship of the Bendix stock, Gere-a
Motors
has1 given
consideraf ior. • property, etc. ■'i-
dine cf Drexel
&
.
atonk continuously/since
d
o o
,
■
fering on Deo. 18 of 50,000 shares
of $1 par value common stock of-.
Co. of
Hartford proposes to increase its
capital from $100,000 to $200,000
DETROIT, .* MICH. —Corporate
through issuance of new shares* of
executives, city bankers and Fed¬
$25 par value at $25 on a share-
the Greist Man¬
Acme Wire Co.,
surplus would be $200,000.
Park
The
of New;
director
a
oadw
r
remaining.balance of the stock
.
interest it has held in Bendix Avi-
the
Torrington
of the
trustee
a
Savings Bank
National
Bank & Trust Co.
for-share basis.
Mr.
Haven.
New
B
the
held
at
Detroit Stock
in ^
of Chas. W.
Scranton & Co., has been elected
the brokerage firm
a
Brooks
tal and
record Jan. 6.
to stock of
15
; r'
'•
,
8
Jan.
To membership on the Board of
is contemplating
$50,000 new capital to Governors to serve for three years,
bring the total to $200,000 by the the following were elected: Dudley
issuance of 2,000 new shares of R. Atherton, Jr., Paul W. Bodine,
$25 par value stock at $37.50. This Harry L. Heffelfinger, and Sewell,
will raise $25,000 to be added to W. Hodge of. Provident Mutual
of
decline of approxi-t
!
•
\*
dinner
annual
adding
1,238,113 revenue freight cars han¬
dled. This compares with 1,302,606
for
the
corresponding period a
••
add
c'.-J':.
This will
share.
$125'a
The
1947, the New York, New Haven
Hartford
Railroad
reported
mately 5%. •'
on
Trust Co. will like¬
an
increase from
$25,000 to surplus.
&
year ago, or a
a
$100,000 to $200,000 by the issu¬
ance of 1,000 new $100 par stock
* '
For the 52 weeks
vote
wise
19, 1948.
*
on
Securities",
filed with the
was
—
vis,
The Shelton
Jan.
on
act
to $25.
of such
The Court has ordered a
plan.
hearing at New Haven
will
Co.
Man¬
proposal.to increase their capital
$100,000 to $200,000, and re¬
duce current par value from $100
necticut to enforce and carry out
the terms and provisions
Trust
-
from
of Con¬
District
the
chester
request, the
the
of
registration statement
a
and Exchange Commission covering 399,990 shared of Bendix Aviation \PA—Dudley
Corp. common stock,, par $5 ■ which are- now-owned by/the General vR. Atnerion, Jr., of S. F. Mcseley
The stock will be oublicly offered through Morgatth-/
& Co., was elected President of. ;Motors Corp.
Sfpnlpv Rr
r^n
at
a
nri-r»p tn1—
lL ;
l..'-..
- ■
the Philadelphia Securities; Acsor.^f.^^^?^
Co.,-at-a price to-he^ First of
filed by; amendment.
When this
Michigan Corporation,
ciation at the
sale has been .consummated, Gen¬ Detroit, participated to the fxlent
Association's
eral Motors will have disposed of of 4,000 shares in 'the public of- v'
Hotel.
"
stockholders
The
/
plans
considering
are
for capital increases.
applied to the
of
the
United
has
banks and trust
Four Connecticut
ment Co., was
Commission
deposits
and
$1,327,457;
OrrJan. 8
PHILADELPHIA,
meeting
of
with the company's
to
totaling $74,773,556 were up 1.3%.
of
Co., and the release
liability
.
Phila. Sees. Association
DETROIT 26, MICH.
Telephone
Teletype
Randolph 5625
DE 206
Moreland & Co.
Member Detroit
Stock Exchange
1051 Penobscot
■/.
Building
DETROIT 26, MICH.
Bay City
...—
Lansing
—
Muskegon
.
/
Volume
167
Number 4664
r
,
THE COMMERCIAL
•
Lists Steps lor Retailers
In Inflation Fight
Beardsley Ruml tells retailers
,■
avoid
to
&
FINANCIAL
CHRONICLE
(211)
J1
Revival of Old "New Deal"
vVw.;;WV
'
?;;■
By HON. ROBERT
A. TAFT*
,
'
U.
S.
Senator
from
Ohio
^Republican party spokesman,
in criticizing President Truman's State of the
Union message, accuses
playing politics by having the Federal Government act as
Santa Claus for all
Speaking before the American Retail Federation meeting in i .*•' special groups. Says President's social security
proposals are revival of New Deal,
which, he conWashington, Jan. 9, Beardsley Ruml, Chairman of R. H. Macy & Co.;
Tends, did not live up to its promises. Says new
proposals will lead to national
Inc., listed the two principal problems facing
bankruptcy and
retailing as uncer¬ ; ,attacks President for neglect of Government
tainty as to continued peace and control of inflation and deflation.
economy.
Scores President's tax proposals as
stifling
Re g a rdin
investment, and predicts Republican Cong ess will reduce both
g
spending and taxes.
steps that re¬
speculative.
This will help the
f ■" I listened yesterday with great interest to the President of
tailers should
the
fight on inflation and
and
exercise
caution
in
building
speculative commitments J
and
maintenance
i
expansion.'^:
Chief Executive of
v
.
in
take to
the
aid
in
fight —to*"
inflation,
curb
Mr,
V
"Fourth,
..
satisfy
can
deemed
ourselves that
inflation
is
'
a
not
thing for sthe country, a
bad thing for
retailing, that
we
already'
inflation
see
lower prices and
do
what
we
to
can
we can avoid
commitments that
scope of running
are
-"One
lhat
speculative
beyond the
our
will make
will, and
we
bear
and
"Third
-
ticularly
savings
calle J
reduced.
ire
be cautious about
such
for
thereby take all
unnecessary pressure off the cap¬
ital goods markets. This does not
he
not make many capital improve¬
that are called for in the
efficient conduct of our business.
restrained
and
be
cautious
above
will
distasteful
their immediate
But I think
convince
voluntary
may
that
that
bonds
you
purchase of
than the involun¬
of
payment
equivalent
an
Unount in taxes. It is to be
hoped
'hat retailers will support
.any call
for savings bond sales in the in-
and
all,
taxes
tary
should not and will
should
to
's better today
ments
we
when
program
a
inalysis
But
bonds
Many retailers
ind contrary to
selfish interests.
and
cooperation
probably 1: be
This is a strong meas¬
against inflation, and is par¬
ure
;'nd
we
lation crisis just-as they .did the
war bond sales in time of war."
not
later
No
fail
great
~. of
the
ideals
No
plished.
general desire
,
with the
which he seeks.
Germany
*
:
H.
Pink, former Insurance Superintendent of New -York, T
presents recommendations of Citizens Conference
•■■■:
-
10
happier
years,
A
report, prepared by its Chairman, Louis H. Pink, formerly
Superintendent of Insurance of the State of New York, for the Citi¬
zens Conference on International Economic
Union, composed largely
of economists, writers, and
university people, contains a nine-point
program*
which he
;; But when the
siders
neces-
sary
if
the
support
Western
many
course
of
us
Ger¬
and
Europe.;- But the important
thing is that the job be done as
lifted from the
States
taxpayer,
sible.
and
The
essential
peaceful and
a
much suspicion and many criti¬
involvements both in Greece
cal
is to be
United
of action would have saved
self."
prosp erous
Marshall
to
'
us
as
"
do
H.
Pink
Germany
except
to
with Russia but would benefit all
of Germany's
see
to it that Ger¬
scored
does not rearm and again
become a danger to her neigh¬
bors," said Mr. Pink. "But we are
today as responsible for the wel¬
many
fare of
part
any
States,
Alaska,
porarily,
United
our
or
zone
of
the
in
that
say
shall
their
"It
the
not
is
ridiculous
people
be
standard
in
a
Tem¬
ard
emphasis on a customs
which would lead to an
Britain, and France promptly in¬
corporate their
in the Bene¬
zones
lux Customs
Union, now composed
of
Holland, Belgium, and Luxem¬
bourg, as a practical example of
our
for
desire to rebuild
our
for the
own
common
■'"Many of
Mr.
Pink
struction
carried
of
the
Europe not
selfish advantage but
us
said,
of
out
good.
are
disappointed,"
"that
Europe
the
recon¬
is not to be
through the agencies
United
Nations
with
ade¬
raise
of
to increase its stand¬
living to the utmost.
.
A
economic United States of
Europe,
and urged that the United
States,
to
of
encouraged
Germany is
States territory."
greatest
union,
area
permitted
.
President
old
in
New
a
Deal
away
from,
and
a
before.
has
In this
been revived
picture, the Fed*
fofWard
comes
Claus
States,., arid for
else who
every one
may not be included
cial group.
in any spe¬
The
those
of
contributed
to
old
lives
cannot
but. feel
Wallace
stantial ' effect
thing
this
to
in
this
The
of
had
the
on
As
to
that
receive
system
less
in
the
State
of
into
the
no
Wallace
all
the
any*
people
tributed nothing.
of
people
the
cannot : afford
to
they need."
This is a
exaggeration, but what has
gross
the
New
Deal
been
doing
me
is
that
this
point
been
youth live in city slums, and
try shacks.
Surely, this is
has
can
made, for that Adminis¬
more
power and more
accomplish its purposes;
widely advertised for political ef¬
fect, than any administration in
history of the United States.
course, the problem is not
simple -as that. An improve¬
Those
government
:;:A
radio
broadcast
for
address
over
Broadcasting
1948.
we
have
not
truly interested in
ernment.
The
by
than
good,
principle of
was
the
Yet;
strangely
message
proposes
expenditures,,
far.
$40,0GO,000,00.0
New
be
included
in
enough,
additional
which
beyond
the
is
the
said
budget
adopt those
bring
the
measures
•
(Continued
Central
on
Illinois
28)
page
Elec.
&
Gas
Common & Preferred
»
Curtiss
Companies, Inc., Corn.
Delhi Oil
Ft.
•
Corp. Com
Wayne Corrugated Paper Co.
-
\
Common
~
J^ssop Steel Co. Com.
Mr,
greatest
good
to
the
number
of
people and
then alleviate the condition of the
few
to
not
admin¬
years.
Sen.
of
Gas
& Pfd.
Co.
Cora.
Members New
York
Stock
Exchange
2p8 SOUTH LA SALLE
STREET
CHICAGO 4, ILLINOIS
Tele. CG 730
Tel.:
State 0400
,
who, through misfortune, may
benefit from that
prosperity.
There
few, indeed, in public
are
porations
ARTKRAFT
make
profits
or
MANUFACTURING CORP.
LIMA,
don't
make profits,- except as their sta¬
tus may affect the people of the
8,
Union
DAVID A. NOYES & COMPANY
;
life who have the slightest interest
in whether a few rich men
prosper
or
do not prosper, whether cor¬
If
Taft
Jan.
Southern
and
which will
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contract,
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-
on
schools,
request.
COMSTOCK & CO.
Chicago Stock Exchange
(2)
Teletype MI 488
to
still
'
under
Staff; (2) currency stabiliza¬
the
the
millions-of
people.
party
as,
to
even
spending of money.
message, in tax recommen¬
dations, admits that taxation is
already too heavy on
Company is one of the
sign v-manufacturers.
dustry with curbs against rearma¬
as proposed
by U. S. Gen¬
workman
in the end do-
This
the
great
economic
machine which creates
prosperity
for
this
country. - It wishes to
...
ment
the
Amer¬
Deal
gov¬
up
American
Network,
the
stabilizing
old
control
the
Republican
job,
harm
had.
of any one
and
own
government.
The first
tion of the people in the United
States] That can be the only aim
has
occurs
15
his
ican
more
severe indictment of the Roosevelt
administration Than any Republi¬
destroy
tion.
coun¬
a
is just-as muw2h;concerhed
Truman
with
speeding
Deal
in
prosperity;
du.ee
quate; school Rouses ur enough
teachers, and that millions of our
He
of
that
the New
has
are
can
operate, re-r
both freedom and
produc¬
Measures which
ignore jus¬
tice for social ends
destroy the
fundamental purpose of the
He says that mil¬
lions of children do not have ade¬
parties—and Henry Wallace—wish to improve The condi¬
Attacks New Deal
istration
phi-,
plans
private enterprise
with
all our money?
greatest
first
effect
and
supposed to be benefited.
Measures which reduce
the field
in which the
free competition of
care
the
camp.
whieh
the
farm
own
do
more
for
pay
to stray
excuse
ghosts
his
Both
js
for:
necessary
those
work.
prom*
new trappings that
Tugwell and Harry Hopkins never
thought of.
V,-;
their
run
tb
-
not
New Deal with
The
of
individual, free¬
dom, of states and local
communi¬
ties, freedom of the farmer to
intelligent plan¬
ning, wise leadership, sound prin¬
ciples
and
souhd;; constructive
will
apparently
determined that.the Left-wing of
the American Labor
party and its
labor, union friends throughout
the country shall be bound to him
raised
measures
Most
i
Measures
freedom of
ment in social and economic wel¬
fare depends on
message.
President
; The other eight steps which Mr.
Pink urged are:
(1) revival of in¬
(5)
a
supply of
goods; (6) education fop
democracy; (7) a federated cen¬
tral government; and
(8) cutting
of red
tape between zones and
surrounding nations.
all
their
The President
says there is still
"lack of provision for the
nation's
health," and '"that most of our
so
sub¬
a
find
which is
and shall have
Failures
the
.
matter
a
Of
Mr.
himself
time
promise
country
ised
has
Henry
hard
a
Deal
'
piples
than many receive from
old-age assistance who have con¬
that .the
announcement
Union.
Deal
question
second-,
because
they
promise
something for nothing, and,
third,
because they ignore the
vital ne¬
cessity of maintaining the
princi¬
ples of freedom and
justice to
which they give
a
general
Hp
service.
w;/
age
the
the
New
do
,
their
filled.'
have'
New
more
old-age insurance sys¬
utterly and completely in¬
adequate. Today, many who have
money to
One
for
we
losophy.
tem is
toward,
'
the
President admits it.
is only half finished.
of fact, the
has expressed a der
to Santa Claus,
that desire is to be
promptly ful¬
a" letter
r e c e n t
of
security system
gaps and inconsistencies and
tration had
any one
,
eral
ever
himself,
with
a
rich " present for
every
special. /group
in
the
United
in
in
long step
rather* than
security and peace."
discon¬
comes
global form than
more
.
limitation of production would
'Of the nine points necessary for keep Germans poor
revived Germany, Mr. Pink laid tented
and would be
Y
any
15
.
to
living by their
foresight, industry, and ability.
Every part of Europe should be
United
Hawaii.
neighbors," Mr. Pink
Morgenthau Plan as
the
unworkable.
Germany and her people
for
as
Europeiit-
strong and self-sustaining Western
Germany would not only have a
-salutary effect on o.ur relations
not
intend to stay
in
Louis
as
Stressing that "an economically
ed.
"We
to
is
'
,
Europe creat¬
Plan
the
to fill out the methods by which
he hopes to accomplish this hap¬
piness and these great purposes,
while he still speaks in general
terpis, we can see that under
the guise of
American ideals;the
Henry
quate technical and financial help
from the United States.
Such a
con¬
than
of New Deal administration.
-years
,If
-
goals
wishing the country a
happy New Year and a happy new
sire
Economic Union.
;
■-v.,-
*■
International
on
five
We all join with
in
government
again
as J Santa
Has 9-Point Program for
has
ditions 'in
this
country and
•throughout the world. No one can
agree
only be safe in his
not
But
J
He says our social
Robert A. Taft
bring about
Improved con-
fail' to
and
Reason
Roosevelt
likely to
interfere
with
received
prosperity than they are to
bring
Plenty of that money was spent,' it about,
first, because they ignore
but apparently little
was accom¬
the fundamental
economic prin-
to
him
who don't equal the New
Dealeri
Dealerstheir sincere
and earnest desire
for uplift and
progress in America
They demanded and
huge sums of money.
fail to
one can
President
actions
some
in
Republicans.
pressed by the
•
would
it
hands
ex¬
President.
that
said
for
country and the welfare of their
employees. There are few, indeed
doing for 15 ye.ars?
They demanded and obtained
from Congress infinite
power—so
:jto .agree with
most
specifications
and every other
field, what has
the New Deal administration
been
filled
can
detailed
country is crying for all these
improvements in social • welfare
measures
the
on
principals and,
the
proposed,
o r
3 re sum
ably
>ne
The
3>-
er.al
Louis
Administration.
agree with his
.
maintenance,
that
the present
United States
general terms the ideals and
message states in
messages.
have,,
Th?; the sale ' of
States
,o y
•jT by
lead¬
the public.
money than
will have to grin
we can
will
all expenditures for
building and
mean
for
must
called to participate in is a vastly
it.
,
of
measure
retailers
United
more
we
calls
leader
a
viicjceased
businesses
efficiently. We will recognize that
in doing so, some of the
specula¬
tors
problem
cooperation in times of danger.
restrain price advances and where
possible to bring them down,
"Next,
The
ready filled in
will" be
ma^
we
tions to do whatever they please.
This is a free country and one
way
f exercising freedom is through
Beardsley Ruml
that
t.
these
of
"ollowers who
will
subordinate
for the time being their inclina¬
we
will
inflafiph
some
may seem
silly?
unnecessarily harsh. But the
ership/and
would like to
we
"for
necessary
like,.
some
have too much
it, that
we
control. J Some
bad
of
State of the Union.
should; cooperate
with the government in the
meas¬
ures
and
policies ' thatv -mayr'be'
--''First of all
we
enc
:
Ruml
stated:
the
will be able to have what
-w€,
need when we need if and" at t" ^program
of
lower cost.
,.iave been al:
we
'
>
CHICAGO 4. ILL.
231 So. La Salle St.
Dearborn
Teletype CG
955
1501
12
THE COMMERCIAL
(212)
New York Stock
FINANCIAL
&
Exchange
Bank and Insurance Stocks
Weekly Firm Changes
The New York Stock Exchange
By
the
of
will
act
individual
an
as
floor broker.
late
the
&
Norris
in
Andrew
Kenly
ceased Jan. 8.
Joseph F.
late
the
of
Interest
Fire Insurance
(Crowley in Thomson & McKinnon
peased Dec. 31.
officer of Markley &
Co., Inc., and prior thereto con¬
ducted his own investment busi¬
ness in Poughkeepsie.
an
7,
-
CONDITION OF
OF
at
ASSETS
Aetna
-
cash
of -collection
$7,544,017.75
and
National
14,389,688.63
premises
owned,
furniture and fix¬
33,865.59
——
92,215.67
assets
ASSETS
TOTAL
of North
America
Fire
North
River__
Phoenix
—
Providence Washington
36%
$36,630,194.78
——
67
Security
Springfield Fire & Marine
30%
42%
U. S. Fire
50 ;
Insurance
in
country
to
get
of
this
off repairs
result
today
out
us
should
f
d
r a n
Indeed, it is
experiences
k
position.
—11.5%
—15.8
and wild
+ 3.1
+ 8.3.,.
tisan
+ 2.7
—13-7
— 9.1
— 2.6
— 1.0
+ 2.6
ly do grave
,
of
.
States
United
of
Deposits
Government
po¬
6,024,813.74
——
insti¬
banking
of
Deposits
■
64,182.95
•
—
of States and
litical subdivisions
Deposits
—
322,308.14
(certified and
checks, etc.)_—
929,050.80
tutions
Other deposits
officers'
Total
;
; <
'
■C DEPOSITS $33,867,015.04
Sir Stafford
the year was
4.3%.
to
tions
—18.0
-f 2.6
— 2.0
country have to face.
irresponsible and misleading
make even more diffi-
cult the already
ous
Capital t
counts
61%
stock
common
f;.
i"
total
other purposes—^—
WILLIAM D.
that
the
best' of
$4,005,811.10
PIKE, Secretary
institution,
above
hereby
statement is true
and belief.
of the
certify
to
the
49%
6.6
—
4.8
;>+
69
:
—17.9
—5.6%
%
WILLIAM D. PIKE
well as did the fire
well as on the indi¬
casualty stocks did not fare auite so
on Standard & Poor's indices, as
selected for comparison.
'
•
casualty groups wrote a record volume of
business
1947, and the prospects are that 1948 will be another year of high
volume of total business. "It is not anticipated, however, that the
increase over last year's volume
1946 volume.
will be as great as was
1947's increase over the
'
fcorrect—Attest:'-
f-'-t%
CHRISTIAN W. KORELL
V''/
SUMNER
I
J. B.
>
]%>*:?■
} Directors
FORD
__t_—
'
Our
Year-End Comparison
of
Operating Earnings
and
Correction :,7. 7: V '1V'
published in the issue of
Jan. 8, page 20, there was included a discussion of the considerable
change which occurred in the earnings assets of New York City banks
during 1947, and two tables, illustrating the nature of the revision,
were given.
Owing to a mechanical error, the comparative dates were
Editor's Note:
j
V. TAMNEY
Ratios
j 20 New York City
Bank Stocks
the
peting
with
the
In the "Bank Stocks"
result
that
on
Request
Laird, Bissell & Meeds
31, 1946—
the
Dec.
31, 1947
'
Members New York Stock Exchange
10 BROADWAY,
-
Bell
NEW YORK 5, N. Y.
Teletype—NY 1-1248-49
(L. A. Glbbs, Manager Trading Dept.)
' •
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13,014
9,574
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—LOANS ($000,000)
Commercial
Total Loans &
& Agrie. Total Investments
Brokers
Telephone: BArclay 7-3500
f.
9.993
3,021
—-
Date—
& Dealers Securities Misc.-.
12-31-46—'
12-31-47—
11,096
-
388
544
262
•
,
753
934
'
4,043'"
6,280 "* ^20.440*
5,336
7,076
.
It
was
any
vital
should assert the priority
we
We had
not
were
maintaining the capital equip¬
of the country in a state of
efficiency in which it could con¬
with the invest¬
tinue to provide for our needs.
White Paper, and
subject mat¬
me make
what is the real significance
of
Stricter
Let
debate.
our
of this term "investment."
not
It does
of various
the
our
expenditure by the country of its
resources'of productive capacity,
materials and manpower in the
construction
of
or
maintenance of its
such
goods,
capital
as
Controls
these ends it
to have
of control.
in enterprises
It signifies the
kinds.
secure
essary
of course, the buying
mean,
of stocks and shares
stock
To
the origin of
was
White Paper.,
programs
was nec¬
stricter measure
a
That
We had to fix
of investment at
a
which would maintain and,
where
necessary,
improve
the
level
capital equipment of the country*
but
at
the
same
which
would
factories, houses, transport, rodds,
machinery and so on.
+ '+
claim
on
The
essence
twofold.
First,
problem is
the
of
is
it
a
were
our
not
time
at
make
resources
20,002
able to sustain.
essary,
I
the great
a
a
level
greater
than
It is not
we
nec¬
for me to stress
complication of detail in
am sure,
matter of this matter, but there are two most
important general considerations
capacity, materials and labor, and
it is in terms of these that we
which
I
would
ask
the
House
to
bear
in
mind in reviewing the
ability to main¬
tain our investment program. Sec¬ subject. First, we are dealing with,
a shortage of men, materials and
ondly, it involves using resources
must consider our
which can¬
not be consumed today.
It involves
postponing and limiting consump¬
tion in order to make available
these resources. They are
resources
that
we
the same
require for the
of our living stand¬
capacity, but not of money; and
secondly, we must look at the
problem
as
a
whole.
Everyone, I have no doubt, will
have his own choice as to the
things to which he would like to
see
an
overriding priority given.
I can assure the House that every
ards, whether in the form of goods
one
of those priorities has been
produced for home consumption
most vigorously pressed upon us
or for export in exchange for es¬
sential import's. In earlier times by the Department concerned. But
we must so balance the use of out
we were accustomed to allow the
resources as to get the best over-f
forces of supply and demand to
all result, and it is that which
regulate the flow of our resources
the plan in the White Paper
into capital investment, but the
ha^
attempted.
We< have postpone^
war has left us in an entirely new
nothing for the sake of postpone¬
position.
%
; ,
,
ment, but only in order to meet
the hard and inescapable facts of
only have we suffered the
destruction of many capital goods
—four million houses destroyed or
Not
the
supply position.. We have to
within the limits of the
work
carried under Dec. 31, 1946, and
Dec.
Our prob-
ment
manpower,
ber
which
and the steel and tim¬
we
have
available.
These limits of our resources have
forced us to reduce both consump¬
tion and investment.
.
Circular
invest-
export,
of
laissez-faire method.
that
figures for Dec. 31, 1947 were
vice versa. We regret this mistake damaged by enemy action, and
and. in order to clarify the situation, are reproducing herewith the much industrial plant as well—
related tables as they should have appeared:
1 %
but, what is even more significant,
we have run down the productive
U. S. GOVERNMENTS
'
"
'
•
;
value of our capital equipment by
($000 000)
'
;
deliberately deferring all but the
Date—
Bills, Ctfs. & Notes
Bonds
Total most vital maintenance and re¬
reversed
claims
ment and consumption.
which is the primary
urgent purpose
in
percent
knowledge
my
49%
—10.1
•
'
Both fire and
.
31
stocks, based
vidual stocks
the
by
urgent and increased necessity for
only sending out the exports, but
fdr 1948, which is
today to make things
The
it:.
pledged or
assigned
liabilities
and
abpve-naraed
+ 20.7
AVERAGE
MEMORANDA
I,
.
—22.0
13%
'••Adjusted for 2% for 1 stock split.
secure
for
32%%M<
84
of
of
,
to
—10.7
47%
consists
par
value
in
1.0
—
53
$2,643,774.83
$1,000,000.00.
Assets
52
150
34%
capital
with
—11.4
11%
ac¬
accompanied
and
—
41
accounts— $36,630,194.78
institution's
54% V
52%
750,000.00
893,774.83
——-
capital
tThis
85
168
Total liabilities and
'■
Change
1.7%
86%
$1,000,000.00
——-
capital
%.<:
12-31-47
12-31-46
ACCOUNTS
Surplus fund
Undivided profits
total
^
Surety stocks, as measured by Standard & Poor's
weekly index, moved from 161.0 on Dec. 31, 1946 to 153.2 on Dec. 30,
1947, a decline of 4.8%. On Jan. 7, 1948, the index had moved up to
155.0.
The record of 10 representative stocks in this group over
Casualty &
American Surety
CAPITAL
Security of New Haven,
program
out
set
clear
$33,986,419.95
—
ment
ance
119,404.91
TOTAL LIABILITIES
4.3%
appreciated,
,
de¬
range
services
also
ter
,
the whole
industrial
sufficiently oner-! 0f the national interest.
of this to make certain that we
Investment Program
being 8.3% by Continental. One stock, Home Insur¬
showed no change, while 13 stocks depreciated in price, the
follows:
and
calcu¬
accentuated
covering
our
task which the people
the maximum
the year was as
people
helpful; viems could not be solved by
and
welcome
are
but
assertions
the average decline of the 21 stocks over
greatest loss being the 18.0% sustained by
and the minimum loss 1.0% by Hanover.
people.
own
our
9.6
— 8.9
+ 6.0
However, the price of seven stocks
Cripps
Criticism and constructive sugges■
+ 7.8
—Asked Prices—
liabilities
Other
It will be noticed that
in¬
further
much
gone
buildings,
our
confusion
—12.6
—
common
every
exports of every kind in our strug¬
position
threatening the stability gle to balance our overseas pay¬
of sterl:ng and embarrassing.us in ments, made it necessary that we
should attempt some allocation of
our bilateral deals, but they act as
our
resources
between the com¬
a discouragement and a source of
—
43%
excep¬
abroad,
1.5
—17.0
49
almost
greatly
mand,
on¬
to
of the
one
of
than-most
V;% ^
This
par¬
state-
harm
—
AVERAGE
individ¬
uals,
partnerships,
and
corporations
$20,959,889.06
Time deposits of individuals,
partnerships, and corpora¬
tions
5,566,770.35
of
deposits
has
was
lated.
ments not
in the
us
the
vividly
was
dustrial country in the world that
the overwork of plant during the
statement of
our
which
tional circumstances of last spring.;
be given a full
a n
arrears
maintenance,
and
of
'
with vast
up
brought home to
diffi¬
our
—
they ended
I will first deal
LIABILITIES
Demand
<•:——-—
g so
tation of facts
45
24%
80%
33%
71
25
89
—
Insurance
hard
n
deeper
47 %
18%
27%
25%
109
24%
98%
44
.
51%
22%
Hampshire
New
St. Paul Fire & Marine
——
tures and vaults
Other
Home Insurance
work i
Misrepresen¬
57 %
55
20%
28%
25%
106Y4
24%
100
53
Fire
%
It is of the utmost importance that all
...
Change
55%
56
—
.
Fire
Insurance Co.
Government
ing $191.93 overdrafts)—
pane;
—
Fire Association
for anxiety."
will
61 %
•'•
65
51%
-
—
Hartford ..Fire
guaranteed ____—9,059,161.69
Obligations
of
States
and
political subdivisions--—
5,511,245.45
Loans and discounts (includ¬
Banking
Fidelity-Phenix
Hanover
process
direct
obligations,
Insurance
Great American
___——■—
States
United
in
items
Continental
House
67
73
Boston Insurance
-
the
50
56 %
Insurance
'*
12-31-47
12-31-46
Insurance
Agricultural
Franklin
'
.
balances with other
banking
institutions,
in¬
cluding
reserve
balances,
Cash,
and
the accompanying tabulation
leading companies.
sure
investment program for 1948.
those who are
culties
—Asked Prices—.
••
1947; published in accordance with a call
ma^ie by the Superintendent of Banks pur¬
suant to the provisions of the Banking Law
of the State of New York.
,
individual stocks varied con¬
1
'
am
forgive me if I use this occasion for
giving them a short review of our general economic situation as it
appears at the end of the year, in addition to dealing with the capital
to 120.1.
of many
\
Company
N
cludes "there is great cause
may
the index had moved up
1948
Sterling Area at £3,550 million and recounts steady drain of
dollars in meeting export deficits. Sees some hope in resumption
of coal exports and in increased industrial production, but con¬
I
indicate that at last, after some five years
of relatively poorer market performance than the Dow Jones Indus¬
trials, the relative trend is reversing.
+-•+'*•%.
Over the full year 1947, from Dec. 31, 1946 to Dec. 30, 1947, the
Dow Jones Industrials appreciated 1.9%, from 177.20 to 180.56, while
fire insurance stocks declined 1.0%, from 119.5 to 118.3. By Jan.: 7,
This steadying
siderably from the index, as shown in
of the price changes of the stocks of 21
$0 Broadway, New York 4, New York,
the close of business on December 31,
102.0;
1948
179.83
120.1
Wednesday of each month.
Underwriters Trust
of
100.2
100.2
100.5
*Last
The market performance
REPORT
99.9
99.0
98.6
'
settled world¬
more
Estimates blocked balances
in
100
98.1
97.2
98.2
117.9
117.9
118.3
controls, and contends equilibrium of Britain's
wide economic and political conditions.
Fire Ins.
100
97.6
97.2
117.7
115.5
114.4
,
183.06
181.35
180.56
October
November
Jan.
is openmg offices al
25 Cannon Street to engage in the
securities business.
He was for¬
merly
183.18
178.85
178.10
September
POUGHKEEPSIe, N. Y.—Sam¬
uel Pedolsky
Forecasts stricter
balance of payments cannot be reached without
Relatives
Industrials
Fire Ins.
Industrials
*Date—
July
August
December
Pedolsky Opens Office
weekly-
stocks, as measured by Standard & Poor's
index, Have been moving up the past few months. Relative to the
general market, as measured by the Dow Jones Industrial Average,
they have been doing better since the end of July, 1947, to wit:
''>■
of
Interest
Hazlehurst
"hard and unpleasant facts," arising from Britain's dollar shortage.
Says dollar problem is basic and cannot be solved without aid.
This Week—Insurance Stocks
J.
Jerome
late
Danzig to Edward R. Byer will be
considered by the Exchange on
Jan. 22. It is understood that Mr.
S.
of Great Britain
Reviewing Britain's economic position, Sir Stafford Cripps stresses
Transfer of the Exchange mem¬
bership
■
CRIPPS*
By E. A. VAN DEUSEN
changes:
.
SIR STAFFORD
Chancellor of the Exchequer
firm
has announced the following
Byef
Thursday, January 15, 1948
CHRONICLE
Consumption has already been
severely squeezed by the cuts on
pairs. The railways afford a good
imported food, and by the diver¬
example of this. They did a mag¬
sion of goods to export in order
nificent job during the war, but
to balance our trade. Further cuts
on
consumption have. been im¬
1 *A speech by Sir Stafford Cripps
posed both by the autumn Budget
in the House of Commons, London,
'
(Continued on page 35)"- •*. *
Dec. 18,,1947.;
; ,
-
Volume
167
Number 4664
THE COMMERCIAL
million.
Dewey Says New Deal Policy
Aggravates Inflation
FINANCIAL
&
For the next fiscal year,
purchased foods is esti¬
mated
to eliminate this fire trap.
tinue
and School
rise
to
that
figure may
.
number of persons
lic assistance has increased.
dress,
Gov.
Dewey stated:
80%
that
I
annual
its
"The
my
the
everything
danger
inflation
war
let started, the entire structure of
wartime inflation control was un¬
laid
its
dermined
us
Oct.
the
30,
by Executive Order
1945, relaxing wage
State.
Each
with
I
looked
Thomas
£.
of you did too,
to
the
next
.946.
Dewey
tranquility
of
have returned to
wish
to
would
family in
see
balanced
in
production.
cut
"Just
prove
our
history.
be unprecedented
to
Its like has been
ment,
And
in
of
out
dislocations
jf
of
kinds
all
the
to
came
national
to
us
debt
almost
real
values
ended
war
was
cost."
■
with private
indi¬
'
'
A::';".
adjustment in their
pay.
find the
we
in
costs]
the
great
-increases
familiar
Now
all
appropri¬
with
Harry
■
Ellman
LOS
firm
Co.,
Marache, Sims Co.
ANGELES,
name
specializing
securities.
$300
N. James Elliott
a
at 50 Broad
us
is
STATEMENT OF CONDITION, DECEMBER 31, 1947
surely
prophesy
RESOURCES
Stock of the Federal Reserve Bank
...»
demand
in
the
the
government
utmost
manage¬
throughout
In every possible direc¬
must use our foresight
we
weigh
the
to
.which
economic
afflict
along
us
T,
(
j"Let
me briefly state some ex¬
amples of how this inflation has
•
affected
'The
of
the
so
610,253,444.05
1,500,000.00
Loans:
Loans and Discounts
Real Estate
Branch
•
.
»
•
•
•
,
»
Buildings and Leasehold Improvements
^Accrued Iacomft Receivable
Customers'
Liability
on
•.
,
172,345,358.56
I
»
.
«
.
Mortgages
..
.
1
.
50,718,858.07
food
year,
the
has
in¬
needed
make
to
as
223,064,216.63
1,454,687.77
2,985,355.79
1
Acceptances and Letters of Credit
1,919,705.62
nearly 122,000
necessary'
deficiency appropriation of $4.1
a
345,674,825.38
f
55,907,722.73
LIABILITIES
in its various institutions.
creased
»
.
1,242,759,957.97
During the current fiscal
cost
.
.
State.
State feeds
persons
the
our
,
Other Securities
im¬
with the rest of the nation.
Hand and Due from Other Banks
on
decision with
our every
regard
Deposits:
Commercial, Bank and Savings
United States Government
Other Public
1,125,630,951.31
r
.
13,330,608.76
38,159,142.73
Deposits
[,177,120,702.80
Expenses and Taxes Payable
1,294,532.71
jl SL§L&&\T
Statement
as
Payable February 2, 1948
Other
Bonds
* Loans
,
and
'
and
Banking
:
_
Securities
___L_v;
Undivided
Profits
Total
Reserve
!
>
for
Payable
1
i
for
Interest, etc__L;__;_-__^
Acceptances,:
Liability
; ; DEPOSITS:
U
~
u
r
and
Savings
__i_
____
standing
**This
in
the
this
item
_________
amount
as
of
shown
we
ROBERT J. BOWMAN.
JAMES INGLIS
NATE S. SHAPERO
PRENTISS M. BROWN
WILLIAM S. KNUDSEN
R. PERRY SHORTS
4 589 OT&M
___
to
JAMES S. IIOLDEN
have
unused
Loan
CHARLES T. FISHER
233.394 611 94
H- S. Government!..—
addition
DIRECTORS.
HENRY E. BODMAN
118,320.33
.
.Liabilities
TOTAL
*In
'
421,110.98
$257,552,875.26
Commitments
of
Member
'
'■
,
i
;
•»_
Federal Deposit Insurance
Member Federal Reserve
Corporation
System
,.fci
the
GEORGE A. STAPLES
WALTER S. McLUCAS
R. R. WILLIAMS
JOHN B. FORD, JR.
C. E. WILSON
Tills bank acts
as
DEPARTMENT
Trustee, Executor and Corporate Agent
bank.
Member Federal Deposit Insurance
*
Corporation
4
£''*
■
ALVAN MACAULEY
'
CHARLES T. FISHER, JR.
TRUST
$3,368,359.27 of trust moneys on
deposit in the Banking.
'V " Department, which, under the provisions of the Banking Law, Section
710-165
V'- o/ the State of Ohio, is a preferred claim
against the 'assdts
.
W. DEAN ROBINSON
out-
$5,249,250.32.
includes
i
required by law.
161 223.91
.
__________
M><
state-
'
105 000 00
—
""Commercial, Bank
:
156,751,605.72 in the foregoing
_
,
*
"
rrV;U
Other
,
;
at
public deposits, including deposits of $17,459,183.06 of the
751,719.45
683',73L86
Under
to secure
16,328,077.70
taxes__________:
for
pledged
Treasurer-State of Michigan, and for other purposes
■
$
1
Reserve
are
7,000,000.00
Funds___r.^______________
Reserve
T\'
54,952,987.51
7,000,000.00
■
-
Dividends
4,952,987.51
United States Government Securities carried
ment
"$257,552,875.26
2,328,077.70
Capital
Reserve
,
.
$
_
General
.
15,000,000.00
35,000,000.00
[,242,759,957.97
546*,118]92
.
^
»
3,636,644.98
LIABILITIES
>
*
•
Undivided Profits
*118,320.33
*
Capital Stock
'H
.
.
,
420,000.00
Occupied
Liability Under Acceptances
Surplus
,
274*172.29
14
Resources
'L':h
,
.
74]355]557]l7
:i,
,
86,556,104.52
77 645 957.05
_____
•
$
Discounts__
TOTAL
t
5,338,873.84
..
.
.
Capital Funds:
_!
Premises
Customers'
Other
.
♦
Surplus
1947
Federal Reserve Stock
(.ii
1,919,705.62
Common Stock
of December
31,
Banks
975,000.00
,
Reserves
O H ! O
.
Acceptances and Letters of Credit
___
RESOURCES
from
Bonds
1,158,155.49
Common Stock Dividend No. 27,
mi KM union iimxi co.
CINCiN N AT I,
Due
Street, N. Y. City.
Complete Banking and Trust Service
the end of the pres¬
caution
of
balances
billion,
three times
was
before
j,
.'i;'tw
.
c
Opens K
State, al¬
our
.?.•
&
estate
N. James Elliott is engaging in
securities business from offices
DETROIT, MICHIGAN
.
due
were
we-HFTh
I' JL& M. MM-
States
real
OF DETROIT
its
and
CALIF.—The
Marache, Sims &
Speer, 458 South Spring Street,
members of the Los Angeles Stock
Exchange, has been changed to
Marache, Sims & Co. There has
been no change in personnel.
Income Collected—Unearned
and
in
H-.-.m''
*
NATIONAL BANK
Accrued
United
Co.,
of
United Slates Government Securities
and
in¬
was
can
or
times
and
tion
con¬
money as before in the
pockets of the people and in bank
Cash
&
a
we
has
Cantqr
Fitzgerald &
Co., Birnbaum
Luckhurst
employees I
an
viousljf
associated
with
viduals, has similarly increased in
Cash
ment
during
that when
was
there
the
thousandfold.
a
problem
man
the State.
much
as
as
bond
department.
Mr. Ellman
p r e
that
as
the firm's real
estate
costs
everything
These
lent of printing press inflation.
result
In
I discuss with you to¬
as
course
skill
being
heavily a id inevitably destroyed.
A large part of this
huge debt was
financed by expanding bank de¬
posit money—the modern equiva¬
"The
-
Ex¬
manager of
more
1940
the
period of mounting inflation.
One
thing,
however,
is
clear.
dis¬
was
In this weakened
war
Stock
appropriation.
buys,
com¬
costs.
the State
drastic
times
of
change, f
The low bid
or
City,
members
readvertised for
we
&:
the New York
the
ent
In the 1930's the dol¬
of
couraged.
creased
food
recommended
are
on
goods and services.
the
devalued, the national
continuously increased and
production
while
You
the
"Almost
the house of govern¬
on
every
"No
was-
which
in
"In all construction
"°me
York
No
especially because
iggravated by this inflation in the
of high costs and
shortages
greatly aggravated by other fac¬
tors, notably the vacillations of
economic policy in the national
ditioned.
justice to
take
to
Linburn
form
but the condition has been
government.
and
home, it also has
every
multiplied
so,
most
present inflation
the
inflation
day the condition of
seen
disastrous results.
"Primarily, the
on
its effects
may
in other countries in the
past with
debt
hardly
everything
on
this
as
mpact
loose
damage of which
yet
lar
rise
project.
>
asso¬
Co., 25 Broad
Street,
New
State in which hus¬
our
withering effect
inflationary whirlwind, the
war
the
Simons,
ad¬
do.
soon.
so
has been
economy
arises
of
incomes,
with
expressing
not to be
extent and
the
real
ciated
received
the general
$2,300,000
was
three
State
their scale of
hope, that in 1947,
peacetime
was
an
overall
hazards
"Instead, throughout the nation
our
in
than
pensation since 1946 and they are
being seriously curtailed in their
ate
the
and
is
justments
no
Recently
received
State employ¬
our
Harry Ellman has become
we
for
the
this public project.
than $50 million.
more
bids,
bid
of
7
Simons, Unburn Co.
bids, stressing the urgent need for
continu-
and
which
the last vestiges of
control
of "-living costs..
"I
suppose
there
re¬
my
spiral
job.
as
of this policy will mean that
have received
ees
of
summer
launched
costs
for
single
a
contractor wanted
This
much
as
the band and wife, bread-winner and
home-maker, have not suffered
ahead, we "rem the shrinking value of the
the completion of re¬ dollar. The
high cost of living, the
and the resumption of
N.igh cost of everything, has its
the
the
conversion
But it
the
these
"Meanwhile,
shall
brougnt
about the present exorbitant scale
and to all the
us
by
you
and
despite
by
of
not
He aDnrnoriation for this purpose
alone will be increased in the next
of
effectiveness
was
wrecked
inflation
war
would
peace
Last year I opened
marks
Thus
soon
when the dislocations of
land.
the
wage-price-profit
would be over and the abundance
and
bad
price controls
I dare say each
con¬
action/together
enforcement* generally,
destroyed
longingly and,
on
This fatal
trols.
contributes
now
price- budget by
runaway
However, in¬
stead of controls being maintained
until peacetime production could
ex¬
upon
year
of
tnce
clear.
was
upon
year
to
imme¬
math
and
wanted
after¬
diate
pall
shortage
was a
people
ouy.
mes¬
istence of
or
of
have
delivered
sage,
<$>-
ate
asked
construction
Moreover, the
receiving pub¬
the nation and took the occasion to
lay much of the blame on
"New Deal" Democratic
policies. In the opening portion of his ad-
upon
first
has likewise in¬
markedly.
appropriated money
The es¬
Building based on 1940
prices was $713,000 and this was
appropriated in 1945.
When we
particularly the food
cost, of maintenance of persons on
jubiic assistance
have
timate for the new Administration
be
"The cost,
Governor Thomas E. Dewey of New York, in his message to the
Legislature on Jan. 7, stressed the evils of inflation now pressing
accounts; but there
Bodies
far exceeded.
creased
13
Harry Ellman Joins
for the Blind and your Honorable
at
$19.2 million, compared
with
$14.8 million in the 1947
budget estimates.
If prices con¬
-
year
(213)
need to rebuild the Batavia School
the cost of
Says Roosevelt prewar monetary policy combined with deficit
spending and economic vacillations have destroyed real values.
Cites higher costs of State Government due to inflation.
"Each
CHRONICLE
f
THE COMMERCIAL
FINANCIAL
&
CHRONICLE
Thursday, January 15, 1948
Railroads in Our National
:
■7."7
It
of the finan¬
announced that the Delaware,
a substantial interest in the
New York, Chicago & St. Louis. It had been obvious for some time
that there were important inter7
■ 77..7
..
' 7
ests competing for the stock in the of good earnings this could be acopen market ever since the large complished in time, but not soon;
came
as
Lackawanna & Western
when it
had
block
has
distributed
been
November
in
as
on
the size of the debt
its
structure
complexity
would
militate
against the possibility of
Chesapeake & Ohio common. Nor¬
mally such a distribution would working out any feasible exchange
have been followed by a fairly of securities. In recent years Lack¬
protracted period of market pres¬ awanna has done a comprehensive
sure.
In the present instance, and job of eliminating its many leased
even
though the general market line- guaranteed stocks. These
stagnant,
was
dence
of
there
no evi¬
liquidating
was
such
any
stocks
The strength in the stock, which
pushed it from the below 30 whei-i
Some of these
entirely
are
pressure.
exchanged
were
bonds.
bearing,
.
.
Aside from
earl-y
dividend
a
As
doing tonight, it is traditional with Americans to face each new year with
new hope, new
courage, and new confidence.
Ever since the landing of the Pilgrims over
three hundred years ago, the hope; for a better tomorrow has
inspired in the people of our
we
are
courage to»
seek new and'
that
lead
neW
bonds
4
ever
i
to
-
find
finance
bly weaken the
of
foundations
very
our
democracy, our economic
security, and our national defense.
,
land
in
As
which to work
railroad
a
I
man,
of
am,
the Chesapeake & Ohio distribuj
lion was first announced to 50 be-i
in just such a
fore the end of the year, naturally*
all of the bonds do not rate equally.
spirit that
of
brought about considerable specu¬
lation as to where the buying wa^
The air was full oi
that one or another group
coming from.
rumors
was
seeking control.
well established
It
that
pretty
Cleveland
was
a
contingent
ahead
other
of
contingent
lines.
In
ranks
interest
all
interest
there
ing. excluding equipments and
bank loan.
a
complicating the
closely affiliated with Mr.
situation is that New York Central
John
Davin,
President of
the
Nickel Plate, was one of the inter¬ has a substantial stock interest
ested parties. This has been borne (about 7% or 8%) in the Lacka¬
out by
As
subsequent announcements.
matter of
a
fact, it is indicated
that this group,
along with other
interests friendly to it, pretty well
has working Control even though
Lackawanna,
may be the
in the finan¬
any,
cial community had considered the
possibility that Lackawanna was
buying into the Nickel Plate if is
certainly a logical purchase. Nickel
Plate is
one
could
hardly
Lackawanna
fic at Buffalo.
When control was
"thrown wide open by distribution
tact,,, it
is
-
Chesapeake & Ohio's holdings,
Chesapeake & Ohio now
having a substantial interest: in
and with
York
Central
some
which
areas
com¬
with Lacka¬
if
Nickel Plate
As
entirely
matter
a
possible
a
of
that
when Lackawanna tries to get
ICC
be
turned
trustee
and
down.1
the
the
stock
An
is
order,
to
not
unlikely
Commission might even
you
T
and
us
OKLAHOMA
CITY,
behind
not
The
specific
us.
goal
.;
main-,
strong, self-:
a
national
of
the
unity
the
of
sent
gangs
vital
rail¬
prosperity
ice.
In
efforts to achieve that
our
that we can count
the continued support and en¬
the
Chamber
Lorain
Com¬
of
civic
and
traffic
industry in general,and city, state and federal gov¬
ernments.
Without that support
your
associations,
and
^encouragement,
linked
is
know
these
ened.
today
revenues
to
vive
Moreover,
merely on an investment basis the
purchase should prove to be a
happy
one,
ducing
one once
and
an
income-pro¬
the Nickel Plate
is merged with the
Wheeling &
Lake Erie and the preferred divi¬
dend arrears
are
Cliasr B. .Stuart, of
eliminated in the
process.
./ 7
J.
Bank, Secretary7Treasurer.
:
Dozier
Lowndes, Dead
LoWndes,
pioneer in
a
Atlanta, died
illness.
Louis route.p Such
project
a
may ultimately come to
but it certainly does not ap¬
pear to be within the realm of
Jan. 9 after
on
a
Mr.
President of that cqnipany. He had
been with Courts & Co.'since 1935.
P
*
•
•
pass
possibility for
at
least.
wanna's
would
any
For
some years
to come
present
thing, Lacka¬
eapitalization
lend
readily
not
merger
one
itself
proposal.
to
P™ide the railroads with
Its aggre¬
gate debt is quite high and would
certainly have to be pared consid¬
erably
such
a
before
it
would
combination
as
fit
into
the
pro¬
'
*
•
■
John P. Lavin Has Joined
Staff of Bear, Stearns *
to'The
Financial "Chronicle)
CHICAGO, ILL.—John P. Lavin
has become associated with
Bear.
StearnS, 135 South La Salle, Street,
members of the leading national
exchanges.
IVfr. Lavin was for¬
merly witlf Rdwsoh Llzars & 'Co.
and Riter & Co.
Lake Erie. Given
a
Gfeenawalt Adds
Special Securities
(Special
to
The
Financial
Chronicle)
CRAND RAPIDS,
MICEL—O.
Cary Russell is now with MacNaughton-Greenawalt & Co.,
Michigan Trust Building, mem¬
bers
of
the
Detroit
Stock
Ex¬
change.
8.W>
With Clement A. Evans Co.
(Special
GUARANTEED RAILROAD STOCKS-BONDS
25 Broad Street
nation
of
has
its
_
established by men who
Telephone BOwling Green 9-6400
Teletype NY
1-1063
7.
held it
are
we
sacred
a
as
gained
trust.
it,
road
Today,:'
to
The
Financial
Chronicle)
Building. *7
cerns," private sources have sup-
account for
rvf
of
ommin+
amount
PHed the capital needs of the rail-
tre-
a
mrmov
money,
m
ttrapt
catvital
„urh
^eTliowed
onlv
Srosoer
to
allowed o pr spe
can
if thev
'
.
approximated
$4x/2
This fact was fully recognized
over thirty years ago, when Com-
the New York
Cen-
' missioner Daniels ofThe Interstate
payroll
On
But railroads
road industry.
in
ac-
Commerce Commission stated that
forefathers have passed
count
of
''A living wage is as necessary for
dollar. And I am
happy to say that many of your
citizens «re among the 1,360,000
employes who each month look to
the railroads of the country for
a railroad as for an individual.,
As the productivity of labor must
go hand in hand with the wages
of labor, so the wages of corporate
investment must go hand in hand
we
our
the torch
are
tral, wages and payroll taxes
trustees to
the
liberty. It is for us
to hold it high, that its brilliant
rays may brighten a world dark¬
ened by fear and distrust; that to
those who are losing faith it may
be a beacon of new hope, new
and
new
for
every
than
more
60
cents
revenue
i
their livelihood
with the productivity of that in-
confidence.
The great challenge to America,
we enter into this new year; is
remain
to
strong.
Indeed, ; the
which you manutocture. In fact.
purchases
are
made
in
every
county in the United States. Last
year railroad purchases amounted
to approximately $1V2 billions.
I
think it may safely be said that
great challenge to each one of us
to
be
more
zealous
than
ever
helping to preserve our na¬
strength
and j economic
liberties. By virtue of our world
leadership, the future peace ! and
security of the worldy' in liarge
measure, depend upon the Main¬
tenance of a strong Americst. r"7
strength of our hatlon
greater thapyfrthe;
strength of its free institutions;.
And only those can remain strong
which
are
allowed, to prosper4;
QriJy. as we Strengthen ourf pld;
concept of liberty, and justice, for
But. the
can
be
no
.
all
ean
we
contribute 7to
[-.the
ATLANTA, GAv—Waldo W. MalI'An address by Mr. Metzmifrt at
lory, Jr. and John. H. Buckley
have
become
associated - with the 65th Anniversary Dinner of
Clement A. Evans & Co., First the
Lorain
Chamber
of7f Com¬
•National Bank-
our
of
freedom;
as
of
doubt that
doing much to
are
too
billions.
the rich inheritors of that
courage
stations, constantly improve
their right-of-way^ and do - the
countless .other things that the
public demands and rightly expects without having u steady
Row of capital funds. Ever since
railroads -became "going con-
new
were
fact, the annual wage bill is the
largest
single item of railroad
expense.
In 1947, the total rail- "
self.. Men who did not fear free¬
once
76%
over
incle
The railroads cannot expect
t(> buy new equipment, construct
those sinew*9
Wages
m.
mendous
held their
freedom more, sacred- than life it-;
dom, but having
year
net
UP-
anyone
railroads
nourish
great
institutions,
.
New York 4, N. Y.
the
J
become '
free
Can
State."
the;
of
*
7
to
last
"eave enough
capital.
Unlike most industries, the railroads have no chest of higher
prices to which they can reach
immediately when their costs go
charges.
As Cicero once
said, "Taxes are the sinews of the
tional
MacNaughton-
Bonds
ahead
lies
alone
to
a'net
S^eTts^daS
fixed
in
sustained level
Guaranteed Stocks
This
because
Is
spective Nickel Plate-Wheeling &
that
taxes
sur-
22® fixeTcha^"
and sti11
or
equivalent
principles of free enter-;
public policy can,
horizon of the bright
and
future
whom
•
•
(Special
roll
Only failure to* pursue:
•
American nation.
the investment securities business
brief
live.
darken the
Lowndes, after
awanna's purchase also held forth graduating from the
University of
the prospect of eventual merger of Georgia, entered the employ of
the two roads to form another J. H. Hilsman & Co. in-Atlanta in
through New York-Chicago and 1911 and subsequently became the
New York-St.
and
sound
prise
-
J. Dozier
in
The announcement of the Lack¬
Fidelity Na¬
to
^™^hiial^turn'neceSaiy
the
.
'
sufficient
them
You
&&& *sk,
what do y°u mean
an adequate
5.4%, of your total tax
Okla., in a meeting Jan. 3 elected raihdads would fall
receipts; Yet that is only a small
the following officers for the year:
realizing our objective.: With it,; part of the railroads' aggregate
John
T. * Barry,*, of * C7 Edgar
we can
contribute measurably to; tax
bill, .: which in this nation
Honnold, President:
•
:
amounts to about one-half billion
the attainment of the general goal
dollars
Wiley W. White? of«R. -J. Ed¬ •of us all—an ever-richer
and
annually.
On the New
York Central, for example, paywards, Vice-President.
more stable land in which to worktional
for
properties devoted to the
pUpiic service, can that need be
fully met
.
wanna, it Was natural for the lat¬
ter to take steps to protect its own
traffic relationships.
is
enable
progress.
those
iron.
city and county of Lorain, railroad taxes, in 1946, totaled almost
$3Q0,000,
ancj
Only by assuring the railroads an adequate
return
upon
the investment in
I^Hhl 1 v^fh'we'are
dependen™ upon eae7 other
contribut ion''of raLoads'^ Ihe
for^ o^ taxes Right here in
we
of the1
far short of
national
our
The paramount need of the
railroads
serve
with
of
Threatened
communities
inseparably
segment
a
a
Yet, the financial strength of
your railroads is seriously threat¬
"Zflhe
you
of
It
7, Railroad Financial Strength
to
out
railroads
ft
nation?
our
,
.
economy^
and
extend the railroad bands of
s
.
Can you afford then not to in¬
the financial stability of so
nation
Today, America
share
sure
strength.
improved rail transportation serv¬
merce,
OKLA.—
lifelines
roads, from year to year, is to
provide America with constantly
as
The Bond Club of Oklahoma City,
as
sustaining part of our social; eco¬
nomic- and industrial life. In peace
and : war,
the railroads are the
construction
7'
couragement of such organizations
Oklahoma City Bond
Club Elects Officers
to
revenue
once
railroad transportation lies before
on
——
sufficient
States'
age.
They are the arteries of
carrying the lifeblood
Said," of industry. Upon them, to a large
"The noblest motive is the public
extent, depend the security and
good." That is the basis of rail¬ continued progress of America.
road service today. And I venture
Indeed, years ago, many commuto predict that the golden age of mties had their birth In the small
ancient Roman teacher
goal I
order its sale.
'
economy and your need
that they are permitted to
tain themselves
s
1948.
.
measure
of control over Nickel Plate it will
of
New
and
merge.
of Lackawanna's most
important connections, interchang¬
ing with it a large volume of traf¬
petes in
to
were
be countenanced
permission to exercise
largest single holder.
While few, if
■
has been claimed,
as
Retention of this interest
wanna.-
th i
of
year
see
earn
We are proud
have designated • this'
"Railroad Night." Indeed, we are
proud of the opportunity to per¬
form a vital public service. As an
that
>.
Another factor
group
Gustav Metzman
to
are
starting
II
different types of bonds outstand¬
we
rail¬
the
roads
on
are
It is
enough to
.
European recovery
15 months!
What
program
for
does that mean to
national
Some
.
United
the
entire
total
sums
;
.
road
course,
especially interested in
railroads. Tonight, I want to talk
about the place of railroads in our
and live.
vast
just this
that the railindustry alone is contribut¬
ing directly almost 3%.% of our
entire national income, and in¬
directly, an even larger percent-
What Railroads Do
part fixed and part con¬
tingent. Moreover, even with re¬
spect to their contingent interest
are
some
the
these
means
'7/7 7
sta¬
ble
$6%" billions
deny them to others will inevita¬
of
an
more
that
over
frep institu¬
give them to some and
To
our
richer
and
interest
fully fixed; and!
tions.
confident
they will
zons,
'
'
prosperity of all
hori¬
wider
contingent
some are
the#-——
nation
for
new
;;7::
-
was
acquired
.
:,7; President; New York Central System
7
Leading rail executive reviews accomplishment of our railroads and their important role in our national
economy.
Points out, because oLhiglr wage payments and high material costs, railroad financial
strength is seriously threatened,^ but.sees^encouragement in recent interim, rate increases granted by
ICC. Says return on railroad investment is too low, in view of need of new
equipment and technical
improvement programs. Estimates- $13 billions spsnt for new rail equipment since end of war.
considerable surprise to most sections
a
cial community last week
7.7, 7
\
Economy
By GUSTAV METZMAN*
7
V:
:7 merce,-Lorain, Ohio, Jan. 8,7l94&.1
•
'■&>
JT_
7^^?
or
directly
•
_
7"
;
«1
:
-1
_
railroads buy 1
affect the
indirectly
to
perform in the
years
ahead.
Because, in 1920, Congress, too,
that the. railroads needed &
felt
"living
15a
^ t
+v7
to
wage,"
the
it
added
Interstate
Sectioh
Comihercfe
Let me quote a portion of
M
^
livelihoods of more people of our
"In the exercise of its power
country than do the purchases of
to
reasonable
;7:.7! prescHbfi ' just 7"'and
rates, the Commission shair'give
yl^et ais^ pause for just a moment due Consideration, amon g othet
ahd copsider what these huge exfacts
7. to' the need, insthe pub¬
penditures mean in terms of oiir lic
Interest^ of ad^i^ate.. and effi¬
hatiopal ywsffare. ylf we add the
cient
:iny7other" single industry.
■
,
half billion dollars for, taxes, the
$4 W-billiohs „for7,wages,
and- the
billiohs in " purchases, to¬
gether with .over six-tenths of a
billion
dollars
:
in
interest
and
dividends,; all of which the raih
roads
are
psiying out annually, we
ice
railway transportation seryv
the: lowest cost consistent
at
with the furnishing of Such seryp
ice j and to the need, of: "revenues
sufficient
to
enable
the7cairiefs7
urider honest, ecpnpnpcah ^nd
;
,ef-r
(CPntjnued On 7page" 23) vv
(215)
-
15
Officers of the Economisls'
/National Committee on Monetary Policy for 1848
:
By ARTHUR JANSEN*
'^The
following officers of the Economists'"National Committee
Monetary Policy, office One Madison Avenue, New York.
City,
on
elected for
were
the year
1948:
,
Railroad Specialist and
Partner, E. W. Clucas & Co.
In
!;
.
'•. -\'.' r'Acs-(
v
if#
.'V*
wise
:
'
itv.
Holds Dow-Jones rail averages will not
get beyond 58
more advancement than
any other group.
Sees
<
>-.* -v?2,
)
V(,
N
H
.V
4»
>
;
;
<'•'» '-*4' h «"jjjv
income for
1948 at between
$750 to $890
Foresees continuation of
high traffic
Warns
another
i
+•»*»••
net
heavy expenditures for improvements, and increased
operating efficiency.
round of wage increases, but sees
likelihood of counterbalance
V
«
analyzing situation of rails, Mr. Jansen estimates
millions leaving about $500 million after
payment of taxes.
_
analyzes market prospects of
„
in
against present 53,
level,
probability of
of
further
increases.
rate
which offers percentage-
possibility of operating costs
certain rail stocks and bonds.
;y
levelling off, and
In
.m,
talking to you today, what I am going to do is divide
my discussion into several com¬
ponent parts, consisting of: (1) the current
earnings outlook; (2) a comment on the market
outlook; (3) some of the longer term aspects of the
situation, and (4) specific mention of
individual
~
-
:
W1.U;
-;
!
se-
——
_
curities which
perhaps
may
>fo"*a. ^ tV'' *
would be increased
be of interest.
To
Bcr>j. M. Anderson
aitier**-
W
E.
Spahr
J/-
go
to
first
topic,
?; vYis?
were
back
the
to
the
that
suit
.
a
of
of
net
;
"
\\
rt.'".
10%
week
rate of
Toad
that
earning
current
than
W. W. Cumberland
Leland
Rex Robinson
'
"ing, University of California
Executive
Professor of
First
M. Anderson, ConnelhProfessor
at Los Angeles.
Vice-President
and
Treasurer:
Dr.
Walter
of Bank-
E.
Spahr
Economics, New York University.
Vice-President:
Dr.
James
Washington Bell, Professor of
Economics, Northwestern University.
->
Dr.
William W. Cumberland
Thalmann & Co., New York
City,
'
'
v;
Ladenburg
/'-Y Y .Y ) V
'
^
,
of
The Committee's British
Correspondent is Francis W. Hirst, one¬
editor, "The Economist" (London); its Canadian
Correspondent
is Dr. F. Cyril James,
Chancellor, McGill University.
■>
time
/.Yj"; The Committee, at present composed of 74 members, was organ"^'ized in 1933.' Its first President was Dr. Ray B. Westerfield of Yale
:
*
/.University;
its
Princeton
Leonard
fourth
-in
second
University;
P.
Ayres
member
that
of
to
the
serve
office.
the
late
Dr.
Edwin
third
was
the
late
was
its
*
nent
its
Cleveland
Trust
W.
Dr.
Co.
Kemmerer :of
and
Dr.
t
;Brig.
Gen.
Anderson,
as
President, is beginning his
YfrY
second
has
not
decision
increases
sought
Vice-President and Assistant Treasurer: Dr. Leland
Rex Robinson
of New York
City, and a member of the office staff.
Assistant Treasurer:
Commission
by
/"The
yet
are
are
is
currently
together
crease
produce
of
about
an
seeking,
their
they
gross
.
:;;From special
industry
industry has
need 'for
third
a
way
in
a
anfl
world
were
might get
\ye
at
war
some
think
meeting of the
8, 1948.
some
is
to
earn
the
I also
Brokers,
be reasonably well
let the railroad in¬
can
some
ICC
suspect
and
money,
realizes
very
I
final
rate
In
r a m
Park
e r
c
y "f1 j
Banking before
College in 1929.
North.
Pro f
essor"\.
ics
,
,
.
..
F in
a n
cf"
at
as
I
think
it
Commission did not give
anything
extra
to
the
eastern
railroads.
These roads, in the
petition for
permanent rate
increases, are ask¬
ing for larger increases than the
railroads of the rest of the coun¬
try
are seeking.
I am inclined to
think that when the final
decision
is handed
will
down, the Commission
give something extra to the
Eastern railroads.
cial problems of
special
treatment
some
They have
their
of
them.
will
v^ a -
-
n g
hon-^
inability, for in¬
stance, of the Pennsylvania Rail¬
road to make a
satisfactory living
at the present time.
So long as
the
Pennsylvania Railroad
can
-
not
earn
a
satisfactory living,\ I
a foregone con¬
think it is almost
clusion the Commission will take
into consideration, and be a
little more liberal with the East-'
that
ern
railroads than
of the
that.
with
country.
(Special
A. M. Sakolski
school,
L.
will
Dr.
of
the
college."
Norton,
make
Dr.
cf
Dean
was
income
of
about
(Continued
on
$750
page
Tenth
Street.
:
will
j street,
&
'
Co.,
New York
of the New York
Hopkins
the
to
in «1902
and
re¬
common
Union
American
New
College
Institute of.
principal
the high¬
stocks.
2
amount of all of our
underwriting participations.
Rector
City, members
Curb
Exchange,
77
7
•
OTIS & CO.
(Incorporated)
Established
With J. H. Hilsman & Co.
(Special
University,
a
to
The
Chronicle)
B. Jack¬
Jr. has been added to the staff
of J. H. Hilsman &
Southern
Building.
Co., Citizens &
T7:
7/J/4;7
.
1899
'
:
Y
.
Financial
ATLANTA, GA.—John
son
as
;
Our underwriting business for the
year exceeded that of all other Ohio
houses combined, both in total amount of
issues managed by us and in total
partnership.
He taught at
participated
associated
J. Streicher Co. Admits
Streicher
Co.
$1,800,000,000, and included
Co., 21 West
J.
Baltimore, Dr. Sa¬
University,
at
become
than
grade bonds, investment preferred stocks, and both investment and
specu-
lative
graduated from Syra¬
University in 1905.
and
has
Albrecht,
ceived his PhD at Johns
Hopkins
York
Brown
presenta¬
department,
University
Johns
W.
more
1
"
'
'
CLEVELAND
'
T
New York
t
.
'
^
-
Chicago
Denver
Cincinnati
rest
'
Breaking Year!
The issues of securities in which Otis 8s
have admitted Judson L. Streicher
native of
Another Record
underwriter in 1947 totalled
est
Chronicle)
MO,—Leonard
E.
preside.
cuse
Financial
the
Arthur
Administration
kolski
The
the
Chairman of the school's Business
A
Association;-./:
with A. E. Weltner &
to
welfare
to
KANSAS CITY,
conscientious
tion.
r
the
The current annual level of net
strongly that
of the other powers that be
early member of the
A; E. Weltner & Co: Adfds
-!h is'-'
devotion
the
an
American Economic
{.years
• o f/ v-j
.faithful nnd "
Thomas
was
given
scroll
;>Yr\ari
"c
be
fi-
can
not overlook the
nu¬
on
and
almost
Certainly, the Commission
govern^
books
spe¬
own
seems
econom¬
author of
and
the
is
.
//••Chronicle,"•
The
articles
in
the
least
in
City
the
in
case
in
also interesting to
handing down the
temporary- decisions,: the
that
'
dance and economies/.Dr. • Sakol¬
ski
i ad'v
a n c
work
service.
merous
"Com¬
mercial^
his
was
ment
Editor
the
to
'
,
standing contributions
is" presently
•serving as As¬
sistant
Y.
any
temporary increases
One of Dr. Sakolski's most out¬
Sakolski, who
of
coming
,
increases
authorized
A luncheon
honoring Professor Aaron M. Sakolski, noted econo¬
mist and statistician who retired
recently after 35 years of teaching,
the last 18 of them at the
City College School of Business and Civic
Administration, will be held today at noon at the
Gramercy Park
H o t e i,
5 2
G
deci¬
minimum permanent increases.
tre¬
cars
new
the
that
dustry
been
essential for
motives and freight cars. The
only
are
transcript of talk
a
the
future, some years
hence, we certainly would want
to go in with a strong railroad
system, well equipped with loco¬
4
by Mr. Jansen at
railroad
possibility that
time
revenues
Association of Customers'
New York City Jan.:
the
locomotives and if there
assured
year
United
carry
any
the
Dr. Sakolski Honored
keep
into
in¬
the railroads receive the additional
that
the
to
new
17%%, after al¬
increases
to
The railroad
lowing for certain exceptions. >,If
freight
enabling
am
mendous
which
average
than almost any¬
strong.
within
months
viewed
confident, also recog¬
nizes how absolutely essential it
temporary increases of 10%eaclj
last1-several
be
two-
sion, I
being
that have been authorized
may
through to victory through
wonderful transportation sys¬
tem, carrying war materials and
troops to-the ports. The Commis¬
seeking permanent increases aver¬
aging 29%
as
against the tyvo
the
the
note
in
further
authorized.
of
its
the railroads.
railroads
be
form
world
perma¬
that
some
may
The
States- practically
handed
the
on
that
fac¬
played
when the
upon
sion is handed down.
There is
therefore justification for
feeling
the
body else in the country what an
important part the
railroads
charges. Now, that
tidy income. It has been
only a couple of times
in the entire
history of the rail¬
road industry
and, on the head of
that,
the
Interstate
Commerce
down
count
are several
more
'
Columbus
.
realized it too, and
empha¬
it in talks with
members of
has
suspected
—.
the
Commission.
The
way
the;
Commission
worded
its
latest
temporary increase was sort of to
imply that would be about the
minimum
the
railroads
could
that,-1 believe.important,-1 have felt
recognized
exceeded
YYY} President: Dr. Benjamin
have
sized
what
revenues
had
_—.—_
Washington, in military circles,
that
for some-time, is that the ICC has
up
come, after all
:s a pretty
.*
of
behind
most
to about $750-800
millions net in¬
j
most
tors
additional
in
bet¬
much
a
of the need
people
they might, There
of the rail-
power
theoretically
pleased to say,
very
railroads- for
annual
industry has been brought
am
ter realization
Commerce
the
This
probably-has-shown
\ Commission
10 days ago it is
my
or
opinion
income.
mission, I
granted by the
I nterstate
a
in¬
.
increase
Arthur Jansen
Federal
earning power up
to about $1.2 billion. That
would
be pretty, sizable if it should work
out that way.
YYtt
: '
T The Interstate Commerce
Com¬
re-
temporary
freight
r ate
1
after
would- lift the
the
latest
income
taxes, it would amount to,
roughly, another $500 millions of
current
look. As
■
net
come
earnings-v-out-
.
approximately
$800
millions; if they
able to
carry this through
another
i
Toledo
Buffalo
millions.
22)
16
FINANCIAL
&
THE COMMERCIAL
(216)
Thursday, January 15, 1948
CHRONICLE
'
We
stockholders.
their
fear¬
are
AUTOMOBILE
than
rather
SHARES
Douglas
OF
During the past year, as
Group Securities, inc.
measured by most composite common
■
jpi
ished
The
worst
compiled
table,
following
prospectus on
request
Distributors Group,
Incorporated
63 Wall Street, New
York 5, N. Y,
Industry, 1947Farm Implement
Motors
_
—
_
—
_
-—------
Rails
-—
Chemicals
Packing
Oils
GlaSs);^
..
Motor Accessories
yosr
spon
request from
Golds
CORPORATION
maintain
9.1
9.5
For
the
Communications
-
company
—12.2
-
oil
you
of
stock
Mail Order.
Can Companies--
—13.6
Rubbers
—15.1
Aviation Manufacturing--
—15.5
to
Foods
—15.5
follows:
:_i
Utilities
—19.8
_
.
the
of
common
New
people
many
in part
that
of
or so ago,
decline in busi¬
of
its
of
three
i
of
there has been no
—23.9
—24.1
—27.7
Amusement
prophets of a pend¬
recession
business
numerous
—35.1
—
A year ago
beach
as
were
sitters
as
at
Island on a hot summer
Nearly as prevalent were
analogies between the 1929 crash
and the 1946 break in stock prices
with
the
obvious
inferences in
Coney
1947.
sion
Harking back to the depres¬
days
of
the
early '30s,
the
1947 investor would have recalled
hat in 1930 the amusement indus¬
try made more money than it did
INtC#*O8Alf0
iO>,
in 1929; that stocks of gold mining
companies sold higher in '32 than
.
they did in 1929. On the basis of
this historical precedent, the 1947
investor
might
have
logically
selected
amusement
and
gold
stocks as his "best bets for 1947."
CHICAGO
ANGfU,
"mm
mm
41
II
iTl
& UOa
JQ|||§
D3CnG
(Special
to
The
DETROIT,
Chronicle)
Financial
share
"Each
1946, is now above the 190
Corporate earnings have
been exceedingly good and divi¬
McConnell has become associated
Equity in Humble,
Equity in Creole, at 41% is worth—
.
8.82
$83.23
payments have increased.
dend
Rollin
"One
most
the
of
perplexing
indus¬
oroblems facing American
today
try
is
rising
the
cost
of
doing business. It just takes more
dollars to buy the same amount of
Oil of N.
"Standard
against
77,
no
value is
purposes
McConnell
M.
J. sells at
equity
this indicated
subsidiaries of 83x/4, and
in three
being placed, for the
with
Bache
&
Building. He
ner
was
Co.,
Penobscot
formerly a part¬
in Baker, Weeks & Harden.
of this comparison, on its
^oods now than it did a year ago,
and for this reason we are trying
other vast investments and assets.
investments in com¬
panies which are in a strong fi¬
nancial position. We believe that
companies must be strongly fi¬
nanced if they are to participate
fully in the record volume of
business which is now being done,
stock
to
keep
our
and, at the same time, be in a
position to pay fair dividends to
It
would
We
are
the
opening of an office in
pleased to announce
appear
that the
overvalued
Humble, Creole, and Imperial or
has undervalued
Indoor
.
.
Sports j; 5:;;4;i
We like the
story in the current
"Readers'
the
of
issue
Jersey."
Digest"
about the GI who was taking his
exam
in Ancient
History at
To the question:
sports of
was:
"Name
ancient times" his
"Anthony and Cleo¬
We
also
summer
like the one about the
visitor
young Tady:
yours as
who
said
to
a
"I'm a neighbor of
I have rented the cottage
directly across the lake."
8822
Lord, Abbett Opens
New Orleans Office
NEW
Abbett
Ameiican
Co.
Her re-
Inc.,
Affiliated
Shares,
opening of
a
Inc.,
direction
of
announce
Street, under
Walter
This
R.
new
investing tlieir capital
-
.
.
-
firms in Southern States who dis¬
tribute
shares
companies
of
investment
the
under
Lord,
sponsorship.
SHARES OF CAPITAL
STOCK OF
*
NVvltkr 11
IN;.'
.
under the direction of
•
Scott ;
Vice-President
BONDS
•
,
(Series B1-B2-BS-B4)
PREFERRED STOCKS
(Series K1-K2)
to serve
securities firms in Southern States
who distribute shares of the
COMMON STOCKS
(Series S1-S2-S3-S4)
companies, under
investment
INVESTORS
sponsorship.
our
Prospectus from
your
local investment dealer
or
Tke Keystone Company
of Boston
50
Congress Street
Boston 9,
Lord, Abbett & Co.
!
CHICAGO
v
LOS
;
ANGELES
"•J-.
January 12, 1948
11
,0'•
V'
>
Prospectus may be obtained from
your
63 Wall Street, New York
.Massachusetts
INCORPORATED
•
•''
THE
local investment dealer, or
PARKER
Scott,
regional
headquarters will serve securities
Certificates of Participation in
.
of
Inc.,
New Orleans of¬
fice at 348 Baronne
the
Lord,
and Union
Fund, Inc.,
Fflnds,
—
sponsors
Business
Trusteed
the
LA.
ORLEANS,
&
Vice-President.
patra."
New Orleans
348 Baronne Street—Canal
either
has
market
answer
Funds
at
Equity in Imperial, at 12 Vfe is worth
two
Custodian
an
$36.20
33.41
77 is worth—
ing
college.
.ey stone
has
Jersey
xevel.
first
INVESTMENT FUNDS
M.
MICH.—Rollin
ness
Sunday.
STREET. NEW YORK 5, N, Y
II-
activity during 1947. On the equity in the three subsidiaries
contrary,
the
Federal
Reserve as follows: .47 shares of Humble,
Board's Index of Industrial Pro¬ %92 shares of Creole and .69 shares
; ^
■
duction, which averaged 171 dur¬ of Imperial.
ing
48 WAtl
business.
subsidiaries,
—20.0
____
Liquors
HUGH W. LONG & CO.
better
Humble, Creole, and Imperial,
Airlines
Prospectus from your Investment Dealer or
the
of
sometimes
Drug Companies-
Merchandise
Investors Inc.
salesmen,
.
tion for Standard Oil of N. J. and
as
year
a
young
security
"Herald
as
securities
on
help
KOlllll Mi MCCOIHIGll
stock of Standard Oil
Jersey
to
give rise to questions which are
not readily answered.
A case in
point is the present market quota¬
; Lord, Abbett's American Busi¬
ness Shares in its Annual Report
the. fears
is
which
Club
shortly after the late
a
H
follows:. "The
method, or lack of method, which
the stock market uses to place a
1
formed
understanding
Financial
the New York
of
'
Investment
especially GI's, to obtain
apparent market anomaly of
the
&
Policy of A. B. S.'
"Despite
was
"
Stabler,
Douglas Laird
The princi¬
pal aim of the.
Boston
"Jersey" Underpriced?
invest in
Atlantic
shareholders reads
1
divi¬
,
Norman
Secu¬
Busi¬
ness?"
mouth.
C.
the
to
rity
enjoy a good gag, try
a
handkerchief in your
stuffing
value
—13.4
—
ship Essential
Tribune," recently commented on
of 500 barrels.
reserves
Investment
increase
even
,
be
Salesman¬
war
you
—12.5
Sugars
or
will
talk
"Is
Gag
If
current
at
latter
.''.v
New
levels, the
is said to have proven
Refining
—11.5
Equipment
$100
every
common
the
dends."
Barrel
a
in
we
believed
Editor
Crude Oil for 20c
—10.1
Tobaccos
Y.
UO BROADWAY, NEW YORK 5, N.
4.3
—
_-C j.C:
Mining
&
ably ad¬
3.3
—
'
SECURITIES
Rail
RESEARCH
—
.—
Tuesday,
20,
at
7:30 p.m. The
subject of his
Jan.
paying securities if
they would soon re¬
sume payments.
However, we do
not
favor
non-dividend
paying
securities when business activity
is at a high level and most suc¬
cessful
companies
are
able - to
vised, he is apt to do better in the
long run by relying on the cross
sectional diversification of a mu¬
tual common stock fund than by
—
Building
investment dealer, or from
NATIONAL
is
Were
Club
next
non-dividend
we
investor
jment
of a cyclical decline in
business activity, we might favor
in 1947 while
declined
9x/2% in
an
the
Boston Invest-.
stages
—
Coppers
fro*pacts*
Unless
will
address
our
currently paying divi¬
are
dends.
the
attempting to select
individual
4-26.4
issues or industry groups on his
4-17.9"
own.
4-11.6
The
three
best
performing
4- 9.5
groups last year were farm imple¬
4- 4.6
ment, motors,
and
electrical
+ 2.4
Does anyone think
+ 1-4 equipment.
1.2
they will be the best performers
this year? We'll give you 25 to 1
2.3
that they won't! ?,•
2.5
Electrical Equipment
Steels
were
performers
gold
stocks
price.
can," ; indicates
that the
odds
against an investor's picking a
profitable group a year ago were
better than 2V2 to 1 against him.
investment dealer or
above table shows
stocks
Results"
policy under
present conditions to keep our
stock
investments
in
companies
which
amusement
that
finishing lower.
by Leslie Gould, Financial Editor
of the New York "Journal Ameri¬
from your
"Further, it is
groups
rest
"Getting Sales
'
averages,
tabulated, only eight fin-3>
—
the year with advances, the A glance at the
Research
author of
and
any
the market at the year-end showed virtually no
change.
However among individual stock groups, the market as
usual showed wide selectivity.
Furthermore, of the 29 major stock
stock
'
'
Vice-President
Laird,
Corporation
not be prepared to withstand
marked drop in prices and
resultant inventory losses.
<
Selectivity in the Market
'
Boston
of National Securities &
companies
may
;
a
Moreover such
dends.
Address
To
Securities 'Salesmen
them out to the
pay
time."
some
shareholders in the form of divi¬
By HENRY HUNT
"Hope you'll drop in
sponse was:
companies in weak
financial condition, as a result of
rising costs and consequent higher
valued inventories, are going to
be obliged to retain their earnings
ful that many
J
CORPORATION
ONE COURT STREET. BOSTON 8,
MASS.
'
Abbett
Volume 167"-' Number 4664
THE COMMERCIAL
&
FINANCIAL
CHRONICLE
Mark Sullivan
Our
Reporter
Governments
on
By JOHN T. CHIPPENDALE, JR.
i
Forgets
Bal. in Treasury
Cash
J
=======
In
the
Jan.-
14
issue
of
(217)
Investment Trust Men Meet in
17
Minneapolis
the
"Herald-Tribune," Mr. Mark Sul¬
The government securities market continues under the influence
of
developments that
intended
slow
to
the
inflationary use of
bank credit.... The latest move in the chain of events is the
raising ol
the rediscount rate to 1Vi%, which should increase
slightly the cost of
borrowing.
The government market, however, appears to have
fully anticipated this change... Prices of Treasury obligations firmed
somewhat with the passing of the old
year, and quotations in ceitain
instances advanced as much as a half point above support levels.
This was due to minor buying of intermediates and longs
by investors
and traders, the sold-out condition of the
market, and the small float¬
,
,
are
.
.
ing supply of key issues.
The price recovery has meant very
so far, because purchasers of government securities are too con¬
sizable commitments in the middle- and longerterm obligations.
.
.
.
little
...
Reports that the rediscount rate would be raised took what
boldness there
was in the government market out of it, and prices
slipped back close to the support points.
The mental attitude
.
that make
market is
shore.
the
up
money
.
.
markets and the "government
Jumpy and uncertain that it will likely be
so
before they
<
going to do much more than stay
are
\
.
"Big Reduction in
Held Brignt Fea¬
Budget" and "Mark Sulli¬
Debt
Notes
van
10%
a
'
i
V.?i
..
Since
Wai
Our able contemporary, Mark
Sullivan, develops his reasons for
the "National Debt Declines," viz.:
"On
July
1, 1946, the national
$269,000,000,000.
That
was a year following
the end oi
expenditures for carrying on the
war.
In the two past fiscal years,;
with the one covered by the pres¬
ent budget, ending July
1, 1949
debt
to
close to
.
.
Cut
Cheering Fact at a Time When
U. S. Is Facing Huge Outlays to
Aid European Recovery."
as a
was
the debt will have been
time
some
very
This means cash and shorts, until they are sure that
prices of intermediate and long governments have reached levels
that are going to hold.
■
,
reading,
ture in
.
fused to make any
i
lines
National
.
.
of those
livan's column featured two head¬
the reduction contemplated in the
present budget is not frustrate^
by unforseen conditions, we shall
have
made, in three postwar
reduction of nearly
national debt."
A DIFFICULT JOB
reduced
$246,000,000,000. Assuming thai;
a
years,
in the*
10%
Confusion and uncertainty have always had important places
in
With all respect for the opinion
doubt hope that
of this veteran writer, we believe
they will continue to be effective this time as in the past.
Ad¬
that Mr. Sullivan has overlooked
mittedly the job the monetary authorities have to do is a very difficult
the cash holdings in the Treas¬
one, to say the least.
Playing for time, hoping, as well as credit
restrictive measures within limits of low money rates, is about all that ury's general fund.
What Mr. Sullivan has done is
is to be expected for the time being.
If this pattern of attacking
the inflationary trend should work, then considerable degree of suc¬ first to assume that the $7 V2 bil¬
lion mentioned in President Tru¬
cess will have been attained in debt management.
the repertoire of the money
managers, and
they
.
.
.
.
C.
Bert
Gamble,
no
.
.
Wiesenberger,
>
Director
a
well-known
Companies," the annual Bible
President of Investors
investment
trust
Investors ! Syndicate;
of
author
publisher
and
of
Arthur
"Investment
investment trusts, and E. C. Crabb,
on
Syndicate, snapped at
a
recent
pow-wow
...
Syndicate in Minneapolis.
.
It
seems
man's message would
though the monetary authorities hope to retard
as
terialize
the inflationary loan trend by creating uncertainty and confusion1
in the money markets.
By making it more difficult for mar¬
>
...
ginal
borrowers
to
obtain
credit,
the
of
some
the trend of economic conditions.
upon
municipalities
bond market
.
.
Second, Mr. Sullivan does
conditions in the
unsettled that securities
are so
not readily taken
are
has
expectations.
Corporations, states
.
might defer borrowings if
be applied to debt
From past experience
not been the case even
though receipts had exceeded all
taken off the loan picture and in time this should have an effect
and
ma¬
and
reduction.
this
should be
froth
actually
take
into
consideration- the
not
true
state of the Treasury's condition
by not taking into his calculations
at favorable rates....
the
TEST PERIOD AHEAD
cash
hand in
on
the
general
fund.
A
tighter
picture should result from the redemption of
Federal-held debt and this, along with an uncertain bond market,
could have an influence upon bank and non-bank investors' operations
in the loaning field.
Whether the policy that appears to be evolv¬
ing will work is something that time alone will tell.
The next
three months will be the test period.
While there seems to be
little doubt that the powers that be have the weapons to stop the
inflationary trend, the feeling appears to be that there should not be
an operation if it is going to kill the patient.
money
.
.
.
.
.
It
is
being
out
pointed
there
that
.
.
.
.
are
other
many
forces
If
the
of
could
used
be
instead
Mr.
of
June
in
its
a
why the authorities
reason
are
likely
to feel their way in what action is taken in the money markets,
in the
against inflation.
move
1
has
true
which
debt
the
to
as
This
done.
as
hand—
is
period
Sullivan is covering, as
30, 1946 the Treasury had
general fund
lion, while
ported
...
on
with the gross
Sullivan
on
This is also
large
hand
retire
is,
that
...
to
the gross debt less cash
especially
not monetary and cannot be remedied by pure monetary
has
on
of "reduction in the U. S. debt" to
deal with the net debt—that
that Mr.
are
cash
maturing
issues, it is only right in talking
which must be taken into consideration in the inflational spiral,
measures.
Treasury
amounts
over $14 bil¬
Dec. 31, 1947 it re¬
only about $3
on
hand
on
billion.
TRUST BUYING
n
y
If
the net debt figures are
used,
of their action in the govern¬ we find that the debt (even after
taking on added importance as reg¬ assuming that President Truman's
ulators of the flow of funds for investment purposes.
From March reduction of $7V2 billion will take
to October of last year these accounts were sellers of marketable
place) will be reduced from the
Treasuries, because there was a great demand for securities.
The June 30, 1946 figure of $255,185
funds seeking investment were larger than the supply and the million to $246,302 million on June
agencies put obligations- into the market to satisfy the demand.
SO, 1948, or 3V2%.
Since November of 1947, there has been a great demand for funds,
The actual fact is that the net
and in order to take care of some of this need, government agencies debt at the end of
1947 was $253,have been buyers of Treasury obligations.
This seems to be one 802 million, or an actual reduc¬
phase of " debt management that will be more important in the tion of only y2 of 1%. Even if
the
future as conditions assume more normal proportions as they will
guaranteed debt is brought into
Government agencies, by
ment securities markets, are
reason
.
.
.
...
.
.
day.
some
.
.
during December
which
000
last two
the
Since
•
.
.
.
were
the
with
that about
mean
marketable
of
issues
by
.
.
L'J1 -W^'.
:
.
Purchases
.
.
-7:/,'.',:.
government
agencies
reported to be somewhat under $800,000,bought in November, would
$1 billion
was
approximately
supplied the
year
money
picture the reduction is only
7/10ths of 1%.
What
different
a
picture this is from the 10% Mr.
$220,000,000
months of last
the
Sullivan presents to the public.
markets in
in the great rush of liquidity.
$1,800,000,000 of
securities
sold
were
Joins First Securities Co.
earlier in 1947,
the trust accounts were still sellers on balance
last year.
If funds for loans should continue sizable in 1948,
the agencies could supply a good part of it, as they did last year.
(Special
to
The
Financial
We
Chronicle)
.
This
.
shift
would
savings from the governmenf to
CHICAGO,
Wernecke
private
with
needs, and the debt from the public to the government.
FHLB Notes
An
eral
Market
on
offering of $97,000,000 Fed¬
Home
dated
Loan
Banks
notes, 1%%
series A-1949,
made Jan. 8 by
non-callable,
was
the
Home
Federal
through
agent.
group
consoli¬
Loan
Banks
Everett
Smith,
fiscal
A
nation-wide
selling
of
securities
dealers
will
assist in the offering. The notes,
to be dated Jan. 20, 1948 and to
mature Jan. 20, 1949, were priced
at
100
and
Proceeds
accrued
from
the
interest.
sale
of
notes will be used to retire
700,000 series B-1948, 1%%
$36,-
ILL. —Richard
has
First
become
the
maturing
Co.
of
ford & Co.,
make
Feb.
16,
advances to
1948
and
member
to
trading department of Brails-
issued to supply the tempo¬
CHICAGO,
were
needs, of- the banks pending
the completion of the
present of¬
rary
joint
new
series A notes
With Holley, Dayton
are
the
and several obligations of
the 11 Federal Home Loan
Banks.
A billion dollars
(Special
Kennedy
with
to
The
Financial
ILL.
has
Holley,
,
—
become
Dayton
Chronicle)
Joseph
2,700,000
A.
associated
&
Gernon,
105
change.
He
Cruttenden
was
&
Moran & Co.
formerly with
and Mason,
Co.,
ness,
and
•
was
put into
new
telephones
System—more than 10,000
The
*
South La Salle Street, mem¬
bers of the Chicago
Stock Ex¬
fering.
<
more
record.
& Gernon
large
expansion and improvement of
13,000,000
insti¬
tutions, consisting of savings and
loan associations,
savings banks
and insurance companies, to meet
their home financing and other
requirements. The series B notes
as
program
in
our
as any pre-war year.
A.
affiliated
Securities
Chicago, 134 South La Salle Street,
members
of
the Chicago
Stock
Exchange.
He was formerly in
solidated notes dated Dec. 1, 1947,
The
the
con¬
the
completed the largest construction
history—more than twice
...
on
operations at the headquarters office of Investors
calls
were
every
a
new
your
day
facilities for the
telephone service.
added to the Bell
working day.
were
handled—a
new
.'v
telephone story of 1947 is
extraordinary building of
one
new
of expanding busi¬
facilities, rising costs
higher payrolls.
It is the story
ing demands for
of unceasing effort to meet the continu¬
more
and better telephone service.
BELL
TELEPHONE
SYSTEM
•
18
THE1 COMMERCIAL-' .&' FINANCIAL
(218)
Thursday, January l.l, ,1948
CHRONIGUK
-1.'
Recommendations for Combating
Fifty-three members of Economists' National Committee on
*
Mone¬
By WILLIAM J. McKAY
North"
a
are
south of
well as economic integration of Canada with her great
versy
as
neighbor,
economic^
Canadian
to
nationalism with the industries of
Dominion competing strongly
the
in
this country.
,
sane
cautious
and
ap¬
directed
towards
the emergence of a
Canadian
light automobile that
would have a special market noncompetitive with the U. S. auto¬
mobile, industry.
!
already
are
eignty.
Canada has long passed
the stage of colonial dependency
and as a result of the statesman¬
ship of her leaders and the virility
Of her people, has painstakingly
the
attained
;
of
status
a
world-
sovereign power with¬
offense to the sensibilities of
respected
out
the Mother
Country or her power¬
neighbor.
It is,
southern
ful
in the vital interests of
that
the independence of this dynami¬
cally expanding democracy be pre¬
served and, if possible, strength¬
ened.
Possessing many of the
moreover,
both Britain and this country
best
characteristics of
the people
of both countries, the Dominion is
admirably
to
fitted
preserve
a
healthy balance between the. great
nations
English-speaking
of
the
world.
that the Domin¬
ion might embark on a course of
economic nationalism appears also
The conjecture
In
to be well wide of the mark.
,
for
scope
co-ordinated
a
.integration of the economies of
the two countries, an
objective
which is both logical and desira¬
ble in the; mutual interest. Nevex
before, however, was the Cana?
dian
political
atmosphere' less
'favorable than now for any aban¬
donment of full national sover¬
British
^
immediate purposes,
For
hpw-
evef, i Canada's economic- import
tanee lies, in her enonpous wealth
'
of natural resources
than
cance"
ever
that are he-
greater'signifi¬
ginning 'to assume
before.
continued ex¬
U. S. industry, wise
the
for
prospects
pansion of
statesmanship is now necessary on
both sides of the border.
Future
industrial
dustry
north
S. in4
located
border as well as
for foreign relief.
reserves
the
of
for U.
conveniently
are
How
means
to -reach the
.
stage -where
tively
sympathy with the unusual buoy¬
ancy of free funds.
Among the
stocks, the oil issues still con¬
tinued as market leaders follow¬
tories follows:
retention
without
alty^.;- *.7:-;>7.
and
use
increase, where
an
(2,
L.
William A. Berridge, Metro-*
Insurance Co.;
politan
gart,
pen¬
7/7V
7/(9) The cautious
Washington Bell
4), Northwestern University; Claude
Benner (2), Continental American Life
of credit,
possible,
New
Ladehburg, ^halmann & Co.;.Rev. Bernard
safety against ex¬ 1v. Dempsey, .S.J.; Si Louis- University; \ 7
tensions of credit. 7/: ■ 77 ■;>. i7>7v .: Charles A.Dicei2t3,A,ll,. 18), The Ohio. , ;
Walter
E.
Spahr
since, that the
(10) That sellers make special State Universityr'Bl w; Ellsworth (7, 8, V,
stage was be*
: T: J
10, 15VE//W. AxeL&L-Co.rJnc.; Fred R. •>.>
Efforts to maintain the lowest pos¬
ng set by a variety of govern-,
Fairchildp Yale*. Uniy'ersito;r.. Charles
C. =■ .
mental monetary: and
spending sible prices consistent with a low Fichtner (10), Buffalo, -N;"Y.; Major B.
margin of profit as .a means of Foster (18), Alexander Hamilton Institute
policies for what Is commonly
and
New
York University; - Roy L. Garis
called "inflation"-—more specifi¬ forestalling a possible large price (16), University of Southern California^ ,
..
of
margins, of
cally, a relatively rapid deprecia¬
tion in the purchasing power of
our dollar in terms of goods and
decline and seyere liquidation. 7
''(11) ' Reduction, in tariffs anc
other restrictions to trade, domes- •
services.
tic and foreign.
.
>
policies,
that- these
Now
p. Haney (4, 7, 8,
Lewis
University; E. C. Harwocd,
tute
Economic
for
15), New York - American Instl-. ,:
Research;
B.
Hudson
(2, 4, 11), Yale University; Wtl- , *.
Hauhart, Dean Emeritus, Southerners,
Hastings
liam
F.
Methodist,
Newsweek;
yniversity;: Henry Hazlitt..(2),,.
John
Thorn Holdsworth
(2),
Miami;'Montfort Jones
University ;pf Pittsburgh;,-jt n
(5, 6, 7(. 8, 9, 10,. 11,
12, 14, 15, 16, 18), University of Illinois;
William H. Kiekhofer, The University of
Wisconsin; Fredericr E. Lee, University of .> (13)
Abandonment of Federal Illinois; JiU, Leonard,; University of South- ; ,
subsidies except where matters o:.« ern California; Philipp H. Lohman (2, 4,
17), r University of Vermont;'' A- Wilfred
national protection—-in air, army,
May (18), Executive Editor, The Commerand
naval forces—are involved
cia! and Financial Chronicle; N. Y. P,; Roy
and
also repeal of price-parity W. McDonald (14(/Donovan, Leisure, New¬
it
cannot 4>uy
large
amounts
arrest oi
University
The
of
of
.I*he
J
already relatively scarce supplier
and at the same time, not contrib¬
ute to high or higher prices. 77::/ 7
war, are revealing some of their
logical consequences, there is con¬
siderable concern, in government
circles as well as outside, as to
what should be done to
•
of
those
with
7;
'(12) A recognition on the paroqr Federal Government thai
com¬
related to the
expansion in note and deposit
currency and other economic dis¬
tortions that occurred during the
bined
is
what
minimize
to
now
Donald L. Kemmerer
Alvin S.
efforts to counteract
' ;
...
7
despite
end
(16) That the apparent tend-?
ency to loan too freely and loo;
It was because of the world's much, ..to
foreign
countries be
experiences with results flowing sharply curbed.
from the employment of "infla¬
them.
•<.
.
.
That interest rates be per¬
tionary" procedures that members
of this Committee,' from time to
mitted, to, find their natural levels.'
In,;.:..
.
the
18), Westfield, N. J.; Russell;
Reserve University/Na¬
(10/18), The Procter
and Gamble Co., Cincinnati; Edward Wicst
nf.Kentucky; Max Winkler,
(2,
8.
11,
16.
Weisman, Western
thaniel
Whitney
R.
College of the City of New
^■
■■
'
York:
iLj
>
..
.
r
,
'• ;■ ;
National Association of Securities Dealers
:
way
.
n
.
l:
lU'
Elects L. Raymond Billetf Chairman
L. Raymond
Billett, Chicago, was elected Chairman of the Board
National Association of Securities Dealers, Inc..
of Governors of the
1
apparently,
There, is,
:
f."(;
quences
on
College of
B. Trant (2, 8, .17), Lou¬
University; Rufujs S. Tucker
State
isiana
•
warnings
not
Tostlebe (2, 4/17), The
Wcoster? James
j ' liii
..i'M
time,rhave
manufactured
for
,
Life Insurance Co.; Ernest L. BoYork City; Frederick A. Brad¬
ford (2), .Lehigh;.'vUixiver»M>y;^J. Ray Cable,
Missouri Valley College; Wilbur P.
Cal¬
houn (21, University of Cincinnati; Arthur
W.
Crawford, Chamber pf-.Commerce of
the United. Stakes'? William W. Cumberland,
mit-such
economy.
country
-
16, 18),-Western
Charles C. Arbuthnot (13,
Reserve UnivefSity; James
expansion of their businesses, anc
a revision of our tax laws to per¬
the removal of undue reliance
this
are
(8) The. retention by business
enterprises of a large percentage
of earnings for improvement and
for, and invited, conse¬
that might be seriously
harmful, if not disastrous, to our
does
they
Eugene E. Agger (2, 4, 16; 17), Rutgers
University; Benjamin M. Anderson (10,18)■;
University of California at Los Angeles;
inventories and tb<
hoarding by business
I
of
names
fully or in part.)
opposed,
rela
of
enterprises.
follow, however, that Canada will
not seek a policy that will aim at
It
low
avoidance of
protested and. issued
against the pursuit: of
a
course, when not required by:
the necessities of war, that opened
it
country for foreign markets could
considered.
'
-
maintenance
after
parentheses
in
signers indicate items regarding which
have
reservations or to which they
.
question of competition with this
even
.;K;.77777^7Signatories;7;; Vv'7 ■ V 7,777
:
fo:
*
7'
much" longer must we
fill domestic needs before any
be
done.
The
pay ;
seg-
for the
the first place, although Canadian ing further promising discoveries
in. various parts of the Dominion.
can
relationships in the various
of our economy.
ments
The
7,1
harmonious
more
being
ton, Lumbard and Irvine, N. Y. Cl; David 1
.
»
wait widely recognized as an unhealthy and price-maintenance laws.
H. McKinley (2, 6, 10, 14, 15), The Penn¬
trend of events in our economy.
(14) That the Government not sylvania State College; Frank Parker, Uni- . .
Inspiration of a "Trumanr
•
confuse symptoms with causes and versity of Pennsylvania.
Once so many seeds of "inflation'
King" plan for world-economic
Clyde W. phelps,
Southern
'
that
it not attempt to
rehabilitation and the conserva-t have -been sown and cultivatec
control California; Chester University ofThe State
A. Phillips,
with such persistency, in peace¬ symptoms since • such
tion of U. S. resources?
i
"controls" University of Iowa; Charles L/ Prather
time as well as in war, the prob¬ tend to conceal causes, distort the (2, 4), The University of Texas; Howard
During the week there was a
H.
Preston (2, 4, 16,
17), University of
economic picture, and perpetuate
lems of arresting or counteracting
resumption of activity in the ex¬
Washington; Leland Rex Robinson (2, 161,
the consequences sometimes be¬
accentuate, and foster new, eco-.; 2 West -45th Street, N? 'Y. C.; R. G, Rodternal section of the bond market
key, University of Michigan; Olin Glenn
difficult and nomic maladjustments.
and an important block of high- come exceedingly
Saxon
(10), Yale University;Carlton A.
complicated. Sometimes the con¬
(15) That people not buy. what Shively, The New York Sun; Walter E.
grade provincial ,and municipal
Issues
changed hands at prices sequent forces become so- strong they do not need and:;that they Spahr, New York University; William H.
well above the recent lows.
The that they tend to run their natu¬ not borrow la buy things they can Steiner, Brooklyn College; .Charles S. Tippe'tts (2, 4 16. 17). Mercersburg Academy;
internals ; also
strengthened
in ral course to their unfortunate do without.,
;
I
J
ample
industry has m.a d e
enormous
strides in" the past decade, it still
has
(7)
collecting
and the signa¬
With the
vital shortages in the
foreseeable
future dimming the
spectre- of
not
work
from
"foster
(Numbers
for
devices
The Economerits.;
A first step in this direction has mists'
Na¬
already been taken by the incor¬ tional Com¬
on
poration of
the British Rolls- mittee
Royce engine in a U. S. air-frame Monetary Poli c y
in the production^ the successful
pointed.
"North Star" passenger plane.
In out at its inc e p t i o n
in
view, also, of Canada's eminence
in the field of light metals and
1933, and
at
metal-alloys, there Is tremendous various times
■
efforts
inflation in the United States.
will compete on their own
proach to an intelligent solution
which, when decided upon, will
be implemented with vigor and
ability.
As a result, a workable
and constructive path is likely to
be found which will be far from
either of the extremes previously
mentioned.
V
■i Canadian
benefiting
will ultimately place on the world
markets Canadian products thai
J Discussion along these extreme
lines is certainly highly stimulat¬
ing, but the future direction of
Canadian
economic
policy will
undoubtedly be strictly in char¬
acter—a
recommendations for combating
77,'
of
should
full text of the
both U. Sj the recom¬
technical experience,! mendations
try,
of
those
—
goods and machinery. In addition,; statement, to¬
it is likely that Canadian indus¬
gether with
and
with
markets
world
southern
—
—
Sys¬
administration of our
monetary and credit structure that
type
released by the
statement
a
of the Federal Reserve
give greater attention to the
tem
Economists'; National Committee
probable results of "Austerity to the'
current source of considerable publicity and contro¬ on Monetary Policy, of which Dr. Walter E. Spahr of New York Uni¬
the border. Conjectures range from complete political, versity is Executive Vice-President, 53 economists signed a list of It
In
remedies for and the
The
.f
(18) That the Beard of Gover¬
„
nors
points, foremost of which is reduction ofv*
both government expenditures and taxation. Also urges return to
;
\
"gold standard, with some reservations noted.
,
^
tary Policy lay down 18
Inflation
easy
no
to arrest the ."inflationary"
tide now running with so much
force in this country. The attack
way
on
Economics Series:
"Marketing Problems and Poli¬
cies," Twilex, $2:50—cloth, $3.25;
"Agricultural Problems and Poli¬
cies," Twilex, $2.75—cloth, $3,5.0;
Agricultural
CANADIAN BONDS
GOVERNMENT
ress," Twilex, $4.00—cloth, $5.00;
"Syllabus
to
Accompany
the
Farmer and Economic Progress,®'
PROVINCIAL
MUNICIPAL
,
"The Farmer and Economic Prog¬
?
CORPORATION
Twilex, $1.25—cloth, $2.00—writ¬
ten by Henry F.-White,; Ph.D.,
head of the Division of Social Sci¬
ences
of
—John
INCORPORATED
University
Press,
Springs, Arkansas.
general
theme of Rose Wilder Lane's book
"The
Discovery of Freedom"—
Talbot Books, 6432. Cass Avenue,
Detroit
2,
Mich.—paper
$1.00
vent
A« Ea AMES & CO J
Brown
it—based
on
,
the
(lower price in quantity orders).
5, N. Y.
merous.
•
77:77 7 f::',;l77777/7;'
We, the undersigned, members
of the Economists' National Com¬
mittee
Monetary
on
Policy,
ommend the following:
;
(1) A radical reduction
rec¬
I:
."
in gov¬
expenditures; in particu¬
lar, abandonment of all . public
work projects except those of an
ernment
nature.
emergency
A! vl
■
(2) A reduction in taxes.
(3) A reduction in the
debt. ' 7
•
Nickel
Plate
Road,
The—The
t,
<-
-
elected were:'
Vice Chairman, Joseph L. Ryons,
of Pacific -Company of California,;
Los
Angeles; Robert C. Kirch-
people of the United
States greater control, over the
government's use and abuse of the
public purse and to reverse the
/
pronounced trend in this country
ofer, of
return to the
toward
a
governmentally-managed
economy.
TWO WALL STREET
NEW YORK
it requires action on a variety
fronts since its causes are nu¬
Federal
7
* Mr. Billett is a partner of the investment banking firm of Kebbqn,
(4) A return to a gold-coin mon¬ McCormick & Co. Retiring Chairman of NASD is Herbert F. Bbyntbn,
' .
' V'H
Mainspring—The story of hu¬ etary standard, and a revision of of H. F. Boynton & Co., Inc., New<$
Board:, Philip L., Carret, Carret,
our
man progress and how not to pre¬
monetary laws, .in order to. YorkjCity.; )'■ v,7'.;7'->'?.7;'7%"'7r7:71 '
Siloam
CANADIAN STOCKS
John Brown University
of
(5)
An
.
■
7''77<7
increase
:77 7'~-;
Other
Raleigh,
officers
Kirchofer & Arnold, Inc.,,
and Treasurer, W. Rex.
Cromwell, of Dallas Rupe &
in production,, Dallas. Wallace H. Fulton, Wash¬
,
NY-I-J045
Clement
Clement' A.
Evans
& Co.„. Inc., I'., Atlanta;1 S.5, 7.
Davidson Herron, The Fir^t Bos¬
A.
Evans,
.
ton
Corporation, Pittsb
Francis
Co.,
,
Kernan,
New
York;
John
of
a
Great
;V
urgh;;"
White,;"'Wbld &
IX.
.
Mc-.
Cutcheon, John D. McCutcheon &
Co., Inc., St. Louis; John J.
Sul¬
elected Executive
Railroad— productive effort, and efficiency ington, I was
livan, Bosworth, §ullivan & Co.,
Director.
Taylor
Hampton—The
World of all productive agents.
,■/•"/;
'
./
I , . *
'
Denver; and Eaton Taylor,'1 Dean
Publishing Company, 2231 West
(6)
Abandonment of- make- 7 The following seven new Gov-.110th Street, Cleveland 2, Ohio
Witter & Co., San Francisco. emors
took their( places pp. thq
work, featherbedding, and father
—cloth, illustrated—$3.75.
History
r.
RECTOR 2-7231
Son,
.
Gammons & Co./Inc., New York;
I1
:
Volume 167
Number 4664
THE COMMERCIAL : &
Canadian Credit Agreement Signed
.
Arrangements completed by Export-Import Bank for $300 million
loan to Canada, one-half of which is to be for purchase of goods
in U. S.
FINANCIAL. CHRONICLE
8, Douglas Abbott, Canadian Minister of Finance,
By WILLIAM J. DRAKE
Executive Secretary, National Conference of Commercial
Receivables, Inc.
Asserting good prospects prevail for continued and increasing high demand for business loans on a
secured basis in 1948, Mr- Drake reviews new
specialized techniques for equipment and inventory
financing. Points out working capital demands to be furnished by finance companies are reaching
a new high, and new credit fields are
being explored by them. Sees no threat to finance companies
and
William McC. Martin, Jr., President of the Export-Import Bank, af¬
fixed their signatures to an agreement whereby Canada is to obtain a
line of credit up to $300,000,000, one-half of which is allocated to the
purchase of machinery and equip-'^
ment in the United States.
The port Bank since last November,
credit is to be available until Dec.
when
Canadian
the
in
began to make strenuous efforts
support the declining value-of
Canadian
dollar in
the
U.
S.
'
,
S
The
commercial
tion
diate credit
on
element
an
States
the
of
danger
adequate <§>financing that encouragement
will
barriers
of
be
"illogical."
as
"We
have
31,
is
D. C. Abbott
Wm.
and the interest charge
at 2y2% annually, with
1948
fixed
additional
an
charge of
ments
are
Vz %
of
(to
five
the
that
amounts
over
The
if
borrowed
period
a
of
agreement
pro¬
Canadian
Gov¬
the
borrows
ernment
Repay¬
year.
from
of less than five years,
of such borrowing is
from
ducted
the
the amount
to
be de¬
amount
the
of
ttiust
of
cessity
draw
heavily
more
ne¬
The Canadian credit
consideration
•
in
was
under
by the Export-Im¬
techniques
the
!'
"Canada is first in the world in
the production of
nickel, asbestos,
platinum,. radium and uranium^
all
which
of
greatest
economic
importance.
"In
a
minerals of the
are
*
and
*
*
addition, of
\
strategic
the
course,
there is
particularly
■"
:~"v:
«
\
with respect to
supplying the most pressing need
—adequate working capital funds.
Students of the problem recog¬
.
nize
that
United
States
businessmen
have
billions in Canada, a
great deal of it in branch plants
bank
credit, they note
Says H. Hentz & Co;
improvement
refuting
completely
the
opinions
the
view
of
the
outlook for
at
all
in
sentiment
over-all
1948.
in
favorable
If this change is
pronounced,
the
effect
on
an
perform
supplying
growing
respect
a
stick is used—the Federal Reserve
production index, national income,
disposable income, farm income,
corporate profits or employment,
1947 was a banner year for the
American
people
and
business."
American
jL
•
In
forecasting the business out¬
at this time, the firm finds
that "the key considerations are
two-fold, namely, (a) consumer
purchasing power, and (b) capital
expenditures by industry."
look
In
the
of
case
consumer
pur¬
chasing power, "all the evidence
points to its continuance at a high
level."
In the case of capital ex¬
penditures, "the present programs
of leading companies in the util¬
ity, railroad, chemical, oil and
other industries provide assurance
that capital expenditures will re¬
main at a very high level."
.
The
firm
finds
that
"the
prin¬
handicaps to the security
markets appear to be psychologi¬
cal. Fear of war, fear of depres¬
sion, fear of inflation, fears of an
cipal
indefinite
character—all
of
these
have been present during the past
18 months.
The public has nat¬
corporate earn¬
be dynamic." /
ings, could well
small
ness.
ward
the
careful
investor.
1,000,000 in number)
without experience
highly competitive economy.
are
American
producing at
a
industry
now
rate nearly double
the
1935-1939 average, or around
$235 billions annually, in terms of
dollar totals, and with practically
all
predictions showing a
sus¬
tained high output in the manu¬
facturing, mining and other basic
industries, at least for the first
six
months
of
1948, commercial
company executives see
slackening in the demand for
finance
no
As the
loans
on
a
secured basis.
of commercial
fi¬
companies
do
not
find
their way into speculative chan¬
nels, but are immediately trans¬
favored
groups.
industry
see an
In making
common
any
and
consumer durable
goods, com¬
panies with low labor cost factors,
companies
with
large backlogs
and
companies
with
proven
growth trends. We would be in¬
medium-sized
few
companies
will
that
all
meet
of
which
do
standards
lieve
not
set.
that, | by
conform
However,
and
to
we
,
public confusion,
are signs of a
coming change in public psychol¬
The
ogy.
18
some
capital is
riods
the
in
end
seems
market
months
never
turned
ago
since
idle for long
prosperous
seeks
and
down
pe¬
times but in
employment,
logical to expect
an
it
early
over-all
total
can
man
obtain
the
the
method
cash
industries (and the issues)
do
;
well
The
in
firm
points
out
students
subject for
and
Equipment Financing
A
The
specialized
evolved
by the
companies
years,
mercial and industrial
in
are
sizable
businessmen
cient
V
and
movement in
some'
far greater
scale than in 1947.
A
prediction
of
of
wage
increases
1948
100,000 Shares
Common Stock
(Par Value $1 Per Share)
r
stock
;*v
\
'
•
'•
Copies of the prospectus
•
•
•
are
:■
Share )
0:
K
fc-' 'V. /'
obtainable from the undersigned.
uncertain-
obviously remain, the rail¬
roads, with the aid of modern
equipment and a more cooperative
on
.the
in
on
Corporation
ties
attitude
third
a
(Continued
$25*00 Per Share
-
y
FIRST COLONY CORPORATION
part of the regu¬
latory authorities, are showing in¬
creasing ability to cope with the
rising costs of operation."
January 14,1948
to
Demand
relatively dormant during the
period.
It is contemplated
will be used by manu¬
facturers, distributors or prospec¬
tive purchasers of commercial and
industrial equipment in 1948 on a
(Par Value $25 Per Share)
Price: $10.00 Per
effi¬
war
5% Cumulative Convertible Preferred Stock
../
more
methods
was
appear
the
for
cost
'
'■
equipment
again as
that they
vestment
While
look
lower
36,000 Shares
-
fi¬
demand
meet break-even points.
many
Plus accrued dividends from January 1,
techniques
commercial
over a period of
for the financing of com¬
nance
(A Maryland Corporation)
"se¬
best
get its product to the
the quickest and in the
which
that
securities
the
to
1948."
railroad
will find
finance
of
largest quantities.
has
The first Guardian Securities
Price:
immediate
public,
exceeded
instant
financial
on
into
comes
with
public
billions.
The special tech¬
niques required to make this form
of financing a source of imme¬
diate credit to the businessman,
with a high degree of safety to
the
financial
agency,
has been
worked out completely over the
years by the commercial finance
companies. Through the medium
of this form of financing, the busi¬
nessman
is able to get adequate
working capital to take advantage
of his
trade discounts, increase
his sales, and likewise enlarge his
profit margin, and resultantly, his
net
profits.
The freedom from
red tape with which the business¬
'
considerations will determine the
market.
am¬
form of
favor
circumstances
be¬
sustained
indeterminate and
product
stocks
these
large,
there
but
this
1905.
the
to
an
leadership,
the
tests, and there are un¬
doubtedly many attractive issues
contribution
rather
of
business since
into being in
these
Nevertheless
evidence
concerns—
Obviously
bivalent program is respect to do¬
mestic. issues, with its. attendant
tle
came
NEW ISSUE
provide attractive media for in¬
or speculation at present
prices. A characteristic of rail se¬
curities
with
leverage is their
wide price swings.; Accordingly,
they provide an excellent oppor¬
tunity to capitalize fully on any
icy, however, there has been lit¬
financing, especially for
and
$10
to
Aside
foreign pol¬
of
the compainy that is inadequately
financed or does not have a flexi¬
financing
by all agencies in excess of $2%
billions.
In 1947, it is estimated
clined to avoid companies special¬
izing in luxury items.
form
such
shifts, or in new investment, em¬
phasis should, in our opinion, be
placed on issues in the following
categories: Producers of capital
job¬
their
products to consumers will neces¬
sitate a greater demand for this
to be construed as an offering of these shares of preferred and
for sale, or as an offer to buy, or as a solicitation of an offer to buy,
such securities. The offer is made only by means of the prospectus.
no
among
distributors,
dealers in getting
and
The
This is under
increase
1948
in
prove
to
be a
good time for making
portfolio adjustments, shifting to
more
promising industries and re¬
ducing commitments in the less
lected
clear and firm
evolved
writers
resolve these uncertainties.
a
tool
intrigued
early months of 1948 should
busi¬
receivable
mercantile
looked-for
competition
developed bility of credit to keep pace in
exclusively by the commercial fi¬ this contemplated and highly com¬
Also, the very
nance
companies—has found in¬ petitive market.
creasing favor with small and rapidly growing concern, whose
the
executives of the
urally looked to Washington for
leadership and strong action to
from
for
counts
financing than ever
The
manufacturers,
financing,
financing of open-book ac¬
the
or
to securities will
re¬
in
/.-V
Accounts
lated into the production and dis¬
tribution of goods and services,
(as in 1947)
before.
financing
and medium-sized
"Although the economic out¬
is
excellent,"
the
review
continues, "a selective approach
look
this form of
offered
over
nance
of
of
to
Therefore, in 1948, the commer¬
industry believes that
here will be a greater demand for
of this
a
pro¬
bers
total of
over-all
prior
cial finance
volume
be
their
and
during the war years and the
same
picture was shown in the
immediate postwar period.
this
to
maintain
schedules
figures indicated the total
business
and
businessmen
duction
Prewar
in the year
that a business reces¬
imminent,"
the
firm
points out. "No matter what yard¬
^y
have been established in the past
two and one-half years (estimated
sion
was
Statistics show that only
availing themselves of this
form
of
financing could many
years.
method
business loans
quarters earlier
some
of
of continued high activity.
businesses that
many new
the stock market, considering the
current and prospective levels of
expressed in
.
in
are
to
their traditional role of
and which
subsidiaries."
and
the business outlook appears definitely
favorable and the underlying strength of the business picture would
appear to preclude a sizable recession, such as was so freely predicted
a
year ago," the New York Stock Exchange firm of H. Hentz &
Co., in its annual review and fore-^
"The year 1947 was one of un¬
mistakable
national
prosperity,
banks
position
to
industry.
year opens,
cast for 1948.
while
adian-
American
form
-
conservative attitude with
and
this
■
hancial relationship between Can¬
No Sizable Recession Ahead
new
finance
William J. Drake
With
"As the
of
commer¬
companies,
in
.
.
cial
admirable
.
close geographical and fi^
very
re¬
and
re¬
^v;
.■'/•
.
the
on
added:
found
-
of the
of
inflated prices
coun¬
invested $5
$300 million credit.
-
country.
private
in this country for a term
sources
be
'
,
Four
decades
of
activity in
pioneering with credit devices,
ranging from the financing of ac¬
counts receivable, inventory and
machinery loans, and the financ¬
ing of new commercial and indus¬
trial equipment
on
a
deferred
payment sales plan, have estab¬
lished methods of financing on a
secured basis so firmly that today
they account for a sizable portion
an
economy
was
natural
of
same.
of
needs
business in
United States, and many resources,
which are becoming scarce in that
"commitment"
per
extend
years.
vides
McC.MartinjJr
to
not
sources
Hon.
He
many
year
credit by Government authorities
rather than a curtailment of the
re¬
sources
tries
a
the
to United
both
as
quired to meet
stability and he condemned
tariff
basis, look forward to 1948
The
adverse
exchange situation of Canada
1
.
finance
secured
a
Commenting on the Canadian
dollar problem, Sidney G. Dobson^
President of the largest Canadian
Bank—the Royal Bank of Canada
th^t the
' ;
companies of the nation, performing the important func¬
of making available to small and medium-sized business the
steady flow of imme¬
imports and her exports to U. S.
out
'
u
and to close the gap between her
—pointed
proposed legislative restrictions.
'
Government
to
the
19
Outlook for Commercial Finance Companies
-
Canada's adverse trade balance with U. S. mounts.
On Jan.
(219)
round
1948
page
and
33)
the
Lf)
Philip L. Carrel Heads
11. Y. Security Dealers
dent
of
of
dent
the
Association.
Mr. Carret has
served for the
past six years
f
o
board
the
on
governors
this
of
or¬
ganization and
is
a
of
governor
Na¬
the
Asso¬
tional
ciation of Se¬
curities Deal¬
Carret
L.
He
Inc.
ers,
N.
(Training of Salesmen)
THIRD ARTICLE
r
;
The
'
who
investor
income
seeks
is
usually
a
person
who
A
j
lias'
Most "investors for income"!
of Americans who were able
before the advent of present high income and
passed tho accumulating stage in life.
members of that fast
are
to
their
save
money
vanishing
race
They still think in terms of 4% and better-^-a'
of income return that used to be paid on savings before 1933i
capital gains taxes.
rate
,
people, as a general rule, have the following characteristics.;
(1) They are frank, intelligent and will give their confidence to)
others providing they can find a solid basis for so doing.
(2) They,
resent any attempts at high pressure selling.
(3) You can gain their
good will by discovering a common interest. I have known such
people to have highly specialized" hobbies. Sometimes much more
so
than those who lead more extroverted lives.
For instance, one
These
such
prohibitionist, another a religionist,
interested in music, another botany, and so on. You will
customer
another was
find
that
was
ardent
an
ability; to discuss many topics is a great help in cul¬
also serves as Director of several
tivating the friendship of investors of every type and description.
corporations. Mr.
Carret was Remember, your job is to encourage the other fellow to talk about
'graduated from Harvard Univer¬ his favorite
topic. He will do this if he sees that you are interested
sity in 1917.
! V in what he says. You can show your interest by asking intelligent
Other officers elected were: First
questions.
7 y'r";:V
J
Geyer,
Geyer & Co., Inc.; Vice-President,
Herbert D. Knox, H. D. Knox &
Vice-President,
George
Secretary, Chester E.
de Willers, C. E. de Willers & Co.;
Treasurer, David Morris, David
Inc.;
Co.,
Morris &
V
Co.
Governors
elected
to
serve
a
E.
Kuehner, Joyce, Kuehner &
Co.; Walter Murphy, Jr., Walter
Murphy, Jr. & Co.
*
A
new
nominating committee to
for
of
JEIarry R. Amott, Amott, Baker &
Co., Inc., Chairman; Chester A.
Alberts,
C. A. Alberts & Co.;
Charles H. Dowd, Hodson & Co.,
Inc.; Harry MacCallum, Jr., Peabody, Tyner &
Co., Inc.; and.
Charles D. Pulis, Pulis, DoWling
serve
one
consists
year
The annual dinner of the Asso¬
ciation
scheduled
is
March 5
for
Chas. Warshoff Co. Opens
N. J.~Charles W.
Warshoff is engaging in a securi¬
NEWARK,
ties
offices
business from
at
Broad Street under the firm
1089
name
of Charles W. Warshoff & Co.
H. F. Swift Admits Booth
SAN
CALIF.
FRANCISCO,
—
Henry F. Swift & So., 490 Califor¬
nia Street, members of the San
Francisco
Stock Exchange, have
-admitted John B. Booth to part¬
nership.
Mr. Booth has been with
the firm for
time.
some
Wade, Jr., has retired
Mertin C.
partner
as a
in the firm.
For
Profit
The
Preferred
$5
stock
of
an
England coinhas a dividend
85-year-old New
pany,
which
accumulation
Earnings
years
of
a
share.
the previous ten
over
have
$77
averaged
$21.30
a
share.
While
dividends have been
number of years,
nine of the past
ten years
covered annual divi¬
dend requirements by a wide
paid
Trust
for
earnings
a
in
a
sales
a
will " not
drying
them—go
qualified
as many
over
names as you can
give them—work with
the results of their days work with them—keep them
plugging,' and don't let them become discouraged. Stockholder lists
can be very useful in helping a new salesman get started—especially
if you have an offer of current information that you can supply.
new men is a triple A responsibility of tne
You must spend money wisely, and do this job
well, if you are going to succeed in this effort.
NEXT COMES THE FOLLOW UP OF LEADS: Give your sales¬
Obtaining good leads for
sales
of
department.
Make it
story.
a
that
securities
as
cannot
simple as possible. There are few lists
improved in some respects; either as
be
Always have your
"Some of our customers have
increased their income 25%, and have also improved the.strength
and
over-all safety of their investments,
without investing any
to
safety of principal,
.yield,
marketability.
or
tell what other people are
doing
on
"a before and after basis."
Then have-your
of some hypo¬
Do this up well and
foundation for a complete sales presentation. If a
new salesman a question about some security that
he owns,
as a defaulted bond or a depreciated stock, your new
man comes
back with, "Mr. X, our statistical department is doing
this work day in and day out. My firm spends a great deal of money
obtaining the very latest information on practically every security.
I will be pleased to secure the latest information on this, and you
can be sure there will be no charge or obligation.
In fact, it's a pleas¬
have
you
the
asks
such
prospect
a
this
because
ure,
conscientious
we
give me an opportunity to show you how
in doing our job." Such questions should be
will
are
They represent opportunities for
drawing people to him and making friends. This point should be
driven home.
Nothing is more important in selling than a GOOD
welcome
the
by
new
salesman.
that will bring you
closer to your prospect is GOOD. I once knew a salesman that called
on .two
new prospects within one week.
The second one told the
salesman that he had some foundry capacity that he wished he
could sell, or rent, to someone that could use it. The salesman re¬
membered that the first prospect was an executive.of a firm that had
a
possible need for an additional foundry.- He told the story to his
first'prospect. " He didn't-'sell the foundry but he made two friends
and two new customers. Pull your prospect toward you by' showing
an interest in his welfare.
The sales will come along if you capitalize
contact.
Any
that
thing
you
:apital, in
price 37
average
Common
$4.07
Recent
earnings
a
can
say
or
do
.
ship.
If
when he
it
can
You are there to build confidence and friend¬
devote the time and attention to your
week
we
will discuss the framework of
designed for those who
are
a
sales
banks
:
N. Y. Telephones:
^
:
Teletype BS 259
HAnover 2-7914
and WHitehall 3-9030
the
cooperation
of
our
of
every
includ¬
economy,
ing government, industry, agricul¬
reduction
some
1
banking and labor."
ture,
Edward J. W. Proffitt,
of Manufacturers and Traders Trust Co. of 7
Buffalo, offers resolution calling upon Congress to repeal New Deal
statutes so as to reestablish coinage of gold and silver.
%
•
W. Proffitt, of the
J.
Edward
campaign
of
a
return to the old gold
ard, -at
in
stand-&-
meeting of the Chamber
York on
Jan. 8, again
a
New
his
renewed
troduced
proposal
in¬
and
resolution calling upon
a
the New
S.
the
status
currency
ante
quo
it
as
existed
In his address to the
Mr. Proffitt stated:
Chamber,
"May I be permitted to submit
for the consideration of the Cham¬
Bell Teletype DN 157
com¬
of
invested
their
capital
entrusted
Action
care.
by
them
to
was
asked, in the belief that this in¬
stitution, nationally recognized for
its leadership in economic mat¬
ters, would, by its example, arouse
further
and
more
widespread
resolution which has been study of the subject in other like
bodies
throughout
the
Nation.
delayed by me in its
presentation. But, after consulta- '■ Such a movement unquestionably
ber,
a
with
tion
and
Finance
on
the
of
Chairman
the
Committee
Cur-
decided to present it
rency, I am
to you now,
world
The
in
increased
has
events
tempo.
spectre
of
danger,
maybe. disaster, appears to lurk in
the mists of the evidently con¬
fused
thinking
prevailing in
now
"Do you
a
t°n"Perhaps I am impatient.
haps a
enough
not sense, as I do, with
suspicion, at least, of forebod¬
ing, that the unparalleled rise in
the
prices of necessities of life
has been occasioned, not wholly
by the scarcity in materials,
nor
ever,
of
from the labor
flashes
•
system.
yesterday, in his message to the
situation is
that
remarked
Legislature,
'the
perilous/ which I un¬
peril.
derstand to mean, full of
"Twelve months ago, I
took the
liberty of rising before this august
assembly and, influenced by my
of experience in the Treas¬
Department,
of
industry
thunder
of
organizations, with
threatened
strikes
•
would not trespass upon the
"I
limited time at the disposal of this
the
until
the
Committee
with its views
us
on
matter,
but,
again in session,
urgent. Most of
with
paid
with Congress
action appears
us are familiar
inevitable price to be
the
for the excesses
printing press
trolled
is
well
being
told.
But
are
conditions
be
do
you
will
that the
believe;
grow
uncon¬
are
situation
as
can
it is, or
I do, that it
inevitably, un¬
as
worse,
less effective action is taken
now.
"I would repeat to you thp
banking field here, I
introduced a resolution asking for
rible lessons
the study of our monetary
It
we
satisfied with
Have you any
in hand, bad
held
of
money.
managed,
you
today?
confidence
Washington,
at
and
lighting the industrial horizon, to
ask action, soon.
Chamber,
monetary
darkening the
rumblings
had favored
with our
Our Governor
impelled, how-
are
commerce
the
by the increase of wages, but that,
underlying it • all, is something
than any one
not
upon
by the onrushing clouds of
inflation which
skies
decision
am
P«r-
is
more
reach
to
by the shortage in production, nor
more
and
year
this problem. I
and
Nation's capital.
our
would have its influence upon
thinking and action in Washing-
for the reasons which
The march of threatening
follow.
hor¬
learned in school
moneys.
the
in
Finance
Committee
system.
the
of
comprises several of
and
bankers
our
industrialists,
for
mitted
I
whom
have
rather' lengthy
the
lessons
taught in the
past, I urged
of
re¬
history of the
managedThe century-ago schemes
of the John Law,
Cambon and
St. Just of French ill-fame, the
generation
Schacht's
cent
nese—and
experience of the
definite program
action, which app'eared impera¬
hiight avoid
prev.ent ultimate disaster.
,
-
bid
German
British
collapse
plan—the
examples—the
the
now
But,
as
of
tc-
Chi¬
French—all
managed-money fiascos.
drawn
history, as
a
we
days
brief,
of
tive, in order that we
or
great
Later, that Committee per¬
me to appear before it.' In
.
7
be
somewhat
from
Denver^, Colorado
to
servatism—the responsibilities for
before 1932.
spect.
Simpson <£k Company
is
the care and at¬
tention which they have given the
subject.
I appreciate their con¬
upon
the stewardship of the vast funds
restore
U.
of
Committee
pres¬
petition the
session of Congress to
and
"The
plimented
repeal
Deal legislation on gold
the Chamber to
ent
and
/
Manufacturers and Traders Trust
Company of Buffalo, N. Y., who on March 6 of last year proposed that
the Committee on Finance and Currency of the Chamber of Com¬
merce of New
York State consider and report upon the advisability
ablest
DRILLING COMPANY
California Building,
r
»
.
,
in whom I have much confidence
KINNEY-COASTAL OIL COMPANY
MACKINNIE OIL &,
7
Revival of Gold Standard
Chamber
BROKERS, DEALERS and BANKS
Telephone KEystone 3101
fullest
segment
Jackson
Baxter
N.
!Afanls N. Y, Ghamber of Commerce to Support
The
FOR
Established IQ2g
Tel. CAP. 0425
its inevitable and
course," he said, "re¬
quires the most' sincere effort and
3
ury,
B. E.
our
problem
"To check inflation and prevent
as
should be," he
declared.
"
a
St., Boston 9, Mass.
added
with
country is confronted."
serious
disastrous
they
as
propor-
it from running
are
direauy
high
boom
"It has become," he
most
which
M
71
in
which
believe
years
interested in "capital gains."
IN
148 State
w
^
proposition that
'■
deserves.
Next
■
make people like.you the battle is 75% won. Remember
your prospect under favorable conditions.
This means,
you
in
request
be
b y
loans
term
"the
#
There's something wrong
the opportunities you will make for yourself by opening doors,
keeping them open, TO YOU.
;.v ' :'7
j7;'7;
All first calls should have the objective'of'building confidence.
First call sales should be made if possible—but they are rare in
Descriptive analysis of this
on
r
and
share.
special situation mailed
j
upon
PRIMARY TRADING-MARKETS
price 7
not
provided
t.ons."
?§£
opinion,
should
reached
already
our
sinister, more threatening
of these facts, or the
combination
of
all
of
them.
the security business,
referring to rising prices, Mr.
Jackson stated that "inflation has
.
additional funds, and this is how it was'done Mr. X-"
new
salesman show the prospect several portfolios
thetical accounts
In
"This needed
we
obla.ned," he added.
been
capi¬
tal.
-
become
leads with
a
of
taxes, equity capital
available from the
be
from which it has always
sources
Many of the replies will neces¬
from curiosity seekers and 'small investors. New men
discouraged following such leads—supplement their
come
up
needed
and direct mail advertising. Use
particular security with a good name
double return cards to special lists.
sarily
for
source
and
Recent
Ten-year
in
taxation
and
often
"unsound trend," and
income
high income
newspaper
offerings,
margin.
the
banks instead of issuing stocks represented an
<«>b 1 a m e a
he
compaign that is' designed for new
long dividend record, an offer of a list of investments that pays
better, or a blind ad suggesting a prime investment paying
5%—the main idea is to find an advertisement that pulls.
Use it on
5%
Baxter
Jackson, Chairman of the Chemical Bank and Trust
Co., told shareholders at their annual meeting on Jan. 13, that the
practice of industrial concerns in using term-loans obtained from
and
—try to see
no
of both
consist
should
men
at the Waldorf-Astoria.
of
men, who are going out to solicit business from investors interested
mainly in "income," should start off with:.
'
.
■ yi
■ I
'A ' GOOD ■ ADVERTISING
CAMPAIGN
THAT
BRINGS ;• IN
LEADS FROM "INCOME CONSCIOUS" SECURITY BUYERS.. This
man
& Co.
-
framework
The
y
an
Investment
three-year term were, Mr. Carret;
Frank Dunne, Dunne & Co:; Hans
'
Blames high income taxes.
trend.
By JOHN DUTTON
New York Se¬
curity Dealers
debt financ-'
ing by industry, in lieu of obtaining equity capital, is unsound
Presi¬
elected
Philip
N. Baxter Jackson, Chairman of Chemical Bank, says
„
Carret,
L.
Thursday, January 15,4948
CHRONICLE
Securities Salesman's Corner
Vice-Presi¬
Carret, Gammons & Co.,
Inc., has been
Philip
FINANCIAL
THE COMMERCIAL
(220)
r
,7i/.
.•
I said, the time is not
yet for discussion here. We should
benefit of the Commit¬
have
the
tee's
report first.
I
offer
is
a
The resolution
simple
(Continued
on
one—may
page
30)
sit
Volume1 167
THE COMMERCIAL
Number 4664
CHRONICLE
FINANCIAL
&
Says Self-Restraint byjBanks Can
Prevent Unsound Loan Expansion
S. Sloan
Colt, President of Bankers Trust Company of New York,
'
Report to the stockholders of the Bankers Trust
Company of New York, just released, S. Sloan Colt, the President,
reviewing the institution's operations in 1947, made some per¬
tinent remarks regarding proposals to restrict commercial bank credit.
have
heard
read
•>——
and
much
recent months
about
infla-j
tion, its
and
16%
causes
cures,"
Mr.
in
result
stated, adding:
"A variety of
than
opinions
for
the
on
Chairman
the
Board
the
inventories
operations.
solution
serious
'
>
>-
of
New *York
I-, shall- not
..
its
on
does
which
which
ures
Colt
Sloan
S.
Sys-
Bank
serve
present
lie
not
do
not
in
permit
perform the
to- maintain
restate
and
their
the
create
risk
of
a
deflationary
movement.
other hand,, the exercise of
On the
self-restraint
by
banks in
the
granting of loans which increase
deposits without increasing pro¬
duction
banks
will
Sheerin
C.
tjs
13
Jan.
the
Chairman
Public
Arts
big.expansion
in
the
supply, -started
through
gold imports and deficit financing
before
the
war,
and continued
through deficit financing during
necessary
if the
to
the
in
-The .postwar expansion
loans has been largely offset
the
retirement, of
bank-held
the
have.-
,
v
there*
securities.
1
During
on
Jan.- 26,
be
can
with
Committee
fered
as
1942,
in
pany
the
He
!
Di
Pur¬
States
in Brazil
in
lected W.
at
the
Conference
for
-
Organization in San
*
*
stpck-
Trust s(Com¬
N
of
of
the
from
1948
year
Federal
the
New
to
the
se¬
York
announcement
City
dur¬
serve
the member
as
Advisory
District,,
serve
National
New York
ing the
8,
Federal
York
Council
Federal
expired
of
terms:
M.
Lewis
Anderson,
A.
"
McLaughlin, Herbert E. Smithy
William J. Tracy. Harold P.
New' York
Re¬
r 1
\
^Secretaries
A,
associated
Trust
to
Presidents.
Assistant
Mr.
Colbert
with- the
has
the
of
selected
been
bank's
Eighth
With the
to
Vicebecame
in
Board
of
Trustees
of
on
and
office
and "26th
at:
Street.
opening of that office
74th Street
on
where he
was
Officer-in-Charge. Mr. Pinto, who
joined Manufacturers Trust Com¬
pany in 1939, is in the Foreign
Department at the bank's head of¬
fice.
* '
been
Trustees.
connected
of
the
the
Executive
of
Trustee
a
Carl
of
G.
Preis
is
Jan.
Goess;.
13 at
White
Prudential
the
announced
by
President.
Vice-President
has
in
in the United States.
\
Bank
111th
Mr.
Street
Acker
since
the
with
;T:
-
'r
'
from
to
Si
$200,According to the "Bulletin"
of the Comptroller of. the Cur¬
rency the enlarged capital became
effective Dec. 29.
real
estate, insurance and construction
sjs
business.
Arthur S.
Colonial
Kleeman, President of
Trust Company,
of
New
York, has announced on Jan. 12
the change in name of the Foreign
Department
of
the
institution,
which
conducts
the
operations, to
Division."
"We
bank's
over¬
"International
have
come
*'
Her¬
man
A Acker Corp. in 1921 and
has been largely responsible for
the
development
of
Fordham
Road and surrounding territory in
the Bronx. During the 1930's, Mr.
Acker served
organized the
as
a
An
ing it from $700,000 to $1,000,000,
effective Dec. 26, was reported in
the
weekly
"Bulletin"
of
the
Director of the
State
is
a
Under the supervision of the
Insurance
Department.
member of the
He
Appraisal So¬
*
of
Bank, of Atlantic City, N. J., rais¬
Comptroller- of the
reorganized New York Title Com¬
pany
*
increase
$300,000 in the
capital of the Boardwalk National
Jan.
to
realize," said Mr. Kleeman, "that
the world has grown too small to
permit the use of the words 'for¬
He
'
Currency
5.
*-•<-.
.
#
£
According to
made Jan.
an
of Santiago, and
Loan
Municipal
,
.'
A-a
so
stamped
on
24, 1938, other than bonds of the Re¬
case
of bonds of the above issues which have
Plan, said payment will be made
presentation of the. bonds, with all unpaid
attached for stamping to evidence their assent
Plan
more
on
before December 31, 1948.
or
detailed
,
notice concerning the presently
will be furnished with form letters
*
.
'
Presentation of
the
:
stamped coupons in order to receive
presently announced payment at the rate of $10,296
$1,000 bond, and presentation of bonds with appurcoupons for stamping, should be made at the
office of the correspondent of the undersigned in New
York City, Schroder Trust Company, Trust Depart¬
ment, 48 Wall Street, New York 5, N. Y.* together
with an appropriate letter of- transmittal. Letters of
transmittal, and in the case of dollar bonds of the City
-per
;
"tenant
Santiago and the Consolidated Municipal Loan
copies of the Prospectus, may be obtained at the office
of said correspondent.
»
'
of
stock to the amount of
'
:{s
.
Republic
of
000.
identified
the
.
$600,000
new
branch
Broadway.
been
1910
A*
$800,000 through the issuance
new
and
has
about
'
increased
been
Irving Savings
Trustee' to" rep resent the
by
\
■A The capital of the First Nation¬
al Bank of Binghamton, N. Y., has
the
served
area
at
as
A
of
Center, Inc., sponsored by the in¬
stitutions in the community.
Mr.
joins
3,353,197
27)
page
on
Bank of Chile, Water Com-
of bonds which'have been
case
announced payment
of transmittaL
Frederick V.
Mr. Preis is
charge of En¬
of
a
subsidiary,,1 the
Manager
Arnertorp Corp. which was the
largest manufacturer of torpedoes
the/Union
'Committee
A
Savings Bank, of Brooklyn, N. Y.,
of the
the Irving
Manhaftanville Neighborhood
White
coupons
to the
election
The
*
A
seas
Mr.
with
2,328,078
(Continued
assented to the
against
change
115 Chambers Street, New York,
Charles T. White, Comptroller of
elected
71,839,121
dis¬
public of Chile Twenty-year 7% External Loan SinkTrig Fund Bonds, the presently announced payment will
be made against presentation and surrender for can¬
cellation of the coupons corresponding to said payment
under the Plan and the bonds need not be presented.
In the case of Bonds of the Republic of Chile Twentyyear 7% Eternal Loan Sinking Fund Bonds, it will
be necessary .to present the Bo'nds so that supplementary
coupons may be attached. a VV"• :"C" y
■ VA/T
not
Company during the year
1947. ""
'
meeting
Savings Bank held
74,355,557
profits.
Undivided
Consolidated
after October
In the
th6
of his department."
annual
re-elected for
The President,
terms,
to
Theological Seminary for about 25
years, first as Bursar and now as
charge •Comptroller. He, is also Chairman
5, Mr. Colbert moved from
his former location at First Aven¬
ue
'
the
-
V. McLaughlin, reported
the meeting on the operations
of
1916
Jam
•
At
who
George
promotion
take
newest
Avenue
-
bank
and coincident with his
;
this
Burt,
board during
to the
gineering. for the American Can
Company, the Union
Theological Seminary,, Company withrwhich he has been
of New York, announces the
pro- at 120th Street and
During
Broadway, and associated for1 41 years.
motion of, Edward J.v Colbert and: Herman '
A. Acker, - President: of
the recent world war, Mr. Preis
Charles J. Pinto from Assistant
Herman
A.
Acker
Corp.,. < were was."Vice-President and General
.Manufacturers
'
of
Wilbur' F.
and
elected
In the
or
the past year, were
as
according to an
by Allan Sproul,
the
Bank.'
serve
abroad
84,550,036'
—
bills
'
-c
re¬
were
three-year
for
one-year
Re¬
'
President
and 'foreigner' in describ¬
ing those who do not live_ within
own
borders.
Therefore,
Mario
Diez,
Vice-President
in
charge of our international busi¬
ness, is advising- ail of our corre¬
name
&
,
;
•
our
in the
77,645,957
will be made only in respect of
stamped with appropriate legend
to indicate that they have assented £o the provisions of
the aforesaid Law and Decree^ (hereinafter referred to
Nas the "Plan").
*
>
♦;;*
•
Montague Street,
following trustees
177
the
terms
whose
eign'
spondents
Loans
61,465,442
secur¬
holdings-
The above payment
bonds which have been
of Brooklyn, N. Y., on Jan
the principal office of the
at
were
Randolph Burgess, Vice-
chairman; .ofthe
Bank
the
record
in letter of transmittal.
consultant
a
Brooklyn
of
Brooklyn,
V;
of
Govt,
r
Gibb, Edwin P. Maynard, George
New
S.
ity
218,639,398
.V
86,556,105
—
February 1, 1948, in accordance with
provisions of Law No. 5580 of January 31, 1935
as regulated
by Decree No. 1730 of May 17, 1938 and
Decree No. 37 of January 4,-1936 of the Republic of
Chile
(which decrees are1 now consolidated .into
Decree No. 3837 of October 24, 1938) and decrees
issued pursuant thereto, holders of assenrted bonds of
any of the above loans will be entitled to a payment
at the rate of $10,296 per $1,000 bond against
presentation and surrender. for cancellation of the
coupons corresponding to said payment as set forth
States
Department
Nations
George
directors
U.
237,983,691
i___
On and after
was
Executive
named
%
"
of
__$257,552,875 $238,988,455
the
the Director
United
was
company,
'i
ETC.
Reserve,. Bank, of
banks
of Valparaiso, City
Chilean
and
board
resources
,
on
A
ij«
announcement
by Thomas C: Bou-
When requesting letters of transmittal,
kindly indicate
whether the letter of transmittal is to be used in
connec¬
tion with the
presentation for payment of coupons which
have already been stamped, or in connection with the
presentation of bonds and coupons which have not
been so stamped.
In the latter case, kindly indicate
whether
or
not
the letter of transmittal is to be used
in
tendering bonds of the City of
Consolidated Municipal Loan, A
CAJA
AUTONOMA
DE
AMORTIZACION
DE
Santiago
or
the
^
LA
DEUDA
PUBLICA
(Autonomous Institute for the Amortization of the Public Debt)
AUGUSTO
MERINO S.
Manager
Santiago, Chile, January 15, 1948
CO.,
Oct. 6, '47
1947
At the annual meeting of
Borer
-
of
of Chile, Mortgage
Francisco in 1945.
..
Jan.
Total
Holders of Dollar Bonds of the
Notice
Fund
United
the
of
Commission
elected
on
of¬
TRUST
OHIO
Republic of Chile
this
>
meeting
will be
stock
stockholders
to
Retail Advisory
the
State
the
United
on
CAPITALIZATIONS
a
*
UNION
Di¬
for
1941.
became
of
chasing
to
NEW BRANCHES
At
*
THIRD
FIFTH
Doc. 31, '47
of Jan. 31 and warrants to pur¬
;the Office of Civilian Defense
ih
I"
-
*
THE
counted
Major Namm
Namm is a
Special Assistant to
12
NBW.J3FFICERS,
additional
This
Treasury in 1941, was appointed a
pany,
REVISED
of
Chairman
nroblem."
News About Banks
$500,000 by the sale of
15,000 shares of additional stock.
organization's Gold
Award
Medal
substantial
dealing
capital and surplus of the bank.
Cash and due from
will be
which on
$40.37.
$16%
This brings to $3,000,000 the total
Deposits
of the bank
of the
share of
book value of
a
tal structure
past President of the National Re¬
tail Dry
Goods Association and
...
for
per
CINCINNATI,
presenting his annual report,
New
1948
Major
winner of the
holders
CONSOLIDATIONS
In
Chairman
and
will be presented to
-
Government
i
of
from
price
$33.33
Mr. Boushall stated that the capi¬
Applied
Medal
Gold
International
which
value
Co. in 1920.
Downtown Brooklyn As¬
sociation's
dan-'
program
par
open
New
the
of
Cross
Red
of
agreement
the
of
Institute
1943 and
some
After
Chesapeake & Potomac Telephone
It has also been announced
mat the
of
arriving at
day.
Sale
due.
will be
Dec. 31 had
be
'
the
Drive.
;.
>
common
a
that
in World
War I,
Mr.
Lambdin joined the staff of The
be
stock
a
will
He is also
of
Trustees
inflation, and > those in
positions of responsibility, both
public and private, share the duty
war,
by
do-
.
"We all face
meeting'
■
be
managements
gers
of
of
Board
Sciences
and
its
serving
will
rights
He is Chairman of the
State
rector
"The
the
at
Exchange and a mem¬
Exchange's Executive
of
Board
York
sponsibilities..
-
Bank,
announced
was
Governor
the
of
ber
of
money
of
York Curb
must
con¬
a
National
rectors of Namm's, Inc.
a
Feb. 2 to Feb. 28 when settlement
Vir¬
ginia, was elected to membership
on the
bank's board of directors
increased
on
Director of
by Walter Jeffreys Carlin, Pres¬
ident 'of the bank. Major Namm is
responsibility which can not be
avoided
by
pointing
out "that
others have equal or larger re¬
than
elected
was
Brooklyn, N. Y., it
Bank
takenplace elsewhere
E.
*
#
Lafayette
York
in the field of-general- credit
trol. >.
*.
■
William
and
were
promoted from
Executive Assistants.
principal
discharge fully their
share of the common responsibil¬
ity in the period that lies ahead.
when he says that the real
fight with .the forces of inflation
Montague T.
Smith
Mr.
Views here, but your management
agrees with the President of the
Federal"Reserve
Bank of " New
are
Hall and
Committee.
necessary
and increase production, or meas¬
of
President of the Federal Re¬
others.
build
functions
of/
tem, the Federal Advisory Coun¬
cil, the Secretary of the Treasury,
the
to
commercial banks to
Federal
Reserve
carry
measures
of
Governors
The
year.
the
business
"The
ex¬
pressed by the%
of
a
and
subject
have been
that
largely
inflation, rather
primary cause. At these
high prices it takes more money
3
the
New
Major Benjamin H. Namm,
volume of business loans is
.
Colt
M.
of
of
12 appointed Ken¬
Jan.
on
E.
Bank,
were appointed principal
executive assistants. Mr. Hall and
—
1947, for example, the increase in
he money supply was only about
2.5%, certainly not a major cause
jf the price rise of approximately
in
Trustees
of
Savings
Doepel
after
"You
Board
Smith, Assistant Secretaries. Wi1-
discharge their functions properly.
In the Annual
.A
The
liam
chase
L.
& Potomac Telephone Co. of
Bowery
neth
of
Manager of The Chesapeake
![t
!|c
Bank
The
Lambdin, Vice-President and Gen¬
eral
:;i
of
21
Richmond, Arthur
at
Virginia
of
Real Estate Appraisers.
York,
tells shareholders solution does not lie in restricting loans to main¬
tain and increase prod action, but responsibility lies with bankers to
Institute
American
the
President
shall,
ciety of the State of New York
and'
(221)
PEDRO CASTELBLANCO A<
President
22
THE COMMERCIAL
(222)
CHRONICLE
FINANCIAL
&
Thursday; January 15, 1948
industrials from their low of last
(Continued from page 15) •
with wmy estimate of
about $450 millions for the year
compares
couple
a
of
months
several
that
ago
saying
of
billions
dollars
would
Now
be
be expended in the next
couple of years. In addition, the
public utility industry - contem¬
plates expenditures of around a
JuSt
with about $287 millions, I think
it; was, for 1946, which income in
1046
billion dollars
'than
1047
which,: in
turn,: compared
Was
pretty largely repre¬
sented by tax carrybacks; any¬
way it wasn't real earnings.
In
other words, the level of earnings
o& the railroad industry seems to
be
moving .upwards which gen¬
erally might be construed to be
providing a pretty satisfactory
background.
One important aspect to * con¬
sider about this possible $750-800
millions
current
net income
dollars.
is
annual
As I
level
said
before, it is
level that has been exceeded
a?
couple
times
of
in
the
a
only
entire
history of the railroad industry.
It is good in dollars, but it isn't
too good in relation to gross rev¬
It
enues.
looks
as
if the gross
the curent year will
in
revenues
around
run
$10
billions,
net
income would
8%
on
so
about
be
the $10 billions gross.
for instance; with about
compares,
1.7-18%
the
7J/2That
in
1929.- That
smaller—
what you might call—profit mar¬
gin is something that: has had an
important influence, I believe, in
making the railroads less popu¬
lar.
Another
factor
that you have
while the current
consider is,
to
indicated annual level of earnings
be $750-$800 millions, will it
actually be realized in the year
1948?
There are plenty of ele¬
ments of uncertainty in the pic¬
ture and I; personally, believe you
are going to have to keep a pretty
may
mind
open
the
in
the possible changes
on
rate
of earnings.
You are
sort of take a
going to have to
"new look" every
month, I think,
just to be on the safe side?
One
favorable
aspect of the
situation is the possibility of some
further
increase
in
rates.
The
chances
further
if
that
are
is
there
any
increase
in freight rates,
effective, of course,
somewhere around July 1, since
the temporary increases expire on
June 30.
Naturally the railroads
aren't
going to get too much
benefit from any additional in¬
creases
in the current year be¬
cause they would be in effect only
it will become
the
for
Also
the
half
second
the
on
prospect
lot
of
weren't
the
side
there -will
full
is
plants
operation
in
that
during
1947 which will be in
operation
throughout
the
year
full
year 1948. In
constructed
addition, other newly
going
service,
into
mean
still
a
traffic.
facilities
will
be
which
further
will
increase
in
I think there may even be
moderate
improvement in
the passenger business despite the
testimony of the Association of
some
American
Railroads
probably will
in the
are
that
have
service
,
to
the
good
clean
attract
they
there
decrease
I think the
alert
very
with
tractive,
cai
that
some
current year.
railroads
fact
be
modern, at¬
equipment, they
business.
installed
Wherever
modern
real
we'b
they have done pretty
They have had crowded
tea"
on
is
a
number
of
railroads
off the country where such trains
h^ve been used for the first time,
and
new
traffic
which
lated
has been stimu¬
had
not
previously
impor¬
tant factor as the railroads get
larger deliveries of modern pas¬
This
existed.
senger
will
be
equipment,
an
which
they
will in the current year.
The most important supporting
influence
level, in
for
my
the
present
traffic
opinion, is that
we
are in a great capital goods boom.
That, I think, is the most impor¬
tant aspect of the whole rail pic¬
ture.
The oil industry is spending
money right and left, and some
of you may have read the article
in the "Lamp," published by the
Standard Oil
Co.
of New
Jersey,
The
years.
$750 millions to
a
year
bill.
roadway
work
in¬
an
mean
total wage
in the
could not get sufficient
additional employees to work the
extra hours.
As a result, they
would have to
the
use
same
em¬
first
quarter of 1948, they have already
indicated, they are going to make
generally, which would mean that
those eight hours would be paid
several
In
years.
expenditures
of
the
mil-
$300
over
Automobile
that it is
going to be reduced in
he immediate future.
of
and haven't received it
years
Maybe I will get it as the
in the boom, but I don't
yet.
.ast
I think
so.
behind
more
.'or
them.
there will be
have
Farm
equipment
de-
a high level,
consideration to
hospitals, roads
other
public
construction
simply has to be done, that
lelp but continue at
md
.hat
can not
wait until construction
costs go lower, if they are ever
For certain of
joing to be lower.
.hose, facilities, there .is no
.wait-;
Residential construction has
ng.
confounded all the
pessimists, who
saying that the indus¬
try priced itself out of the market,
fn spite of that, we have the larg¬
been
lave
est number of
In many,
homes started
new
All these activities I have
men¬
tioned add up to the kind of traf¬
r^il^oads:;carry/rThat,
heavy traffic, which is where
'he
railroads
their
at
are
best.
Granted that maybe there will be
?ome
moderate
contraction
in
goods, where pipelines
up pretty well, but
supplies the big
consumer
filled
lave
hat is not what
traffic for the railroads.
heavy
It is the
goods that arise from a
capital goods boom, and I
*reat
can't
see what is going to stop the
capital goods boom for some time
Moreover,
come.
commitments that
many
of the
being made
are
motive
that have
"We
by industry are of a long-term
variety and not likely to be cur¬
tailed simply by temporary in¬
week.
that
point to the steel, auto¬
other big industries
-,
that the railroads: may have to
grant in the current year will be
pretty largely counterbalanced by
additional rate increases that
the ICC very likely will authorize
by July 1.
On balance, I think
likely to see the level of
earnings maintained at the figure
I have mentioned, around $750are
million.
bearish
look.
|
Accordingly, it isn't
the
on
earnings out¬
of course, there is also
prospect that there may be
the
other increased costs for material
and
supplies.
They have been
rising pretty rapidly and in this
inflationary situation in which
we are, there is no indication that
those rising costs are immediately
going to stop. The pessimists will
also add, "Maybe there will be
some business setback."
That is
entirely possible, but I think the
capital
before,
boom is,
potent that
goods
as
so
even
said
I
•
any
business setback would be limited
mainly
the
to
goods
consumer
field and would not hurt the rail¬
roads too much.
*^
-
^ ;
',
**
'*!
'
steadily achieving increased oper¬
ating efficiency. New equipment
—freight
other influences.
Another very important consid¬
eration is that the railroads 'are
cars, passenger cars
and
diesel locomotives—are helping to
bring down unit costs of opera¬
tion. In fact, I have talked with
a
number
who
of
have
railroad
told
me
executives
that
large
a
part
of
their
maintenance
of
equipment expense at the present
time consists of uneconomical
penditure
the
to
turn
situation
outlook
—
next
the
which
most
of
than
the
you
let's
of the
so
aspect
market
current
probably interests
a
good deal more
number
dollars
of
and
cents that the railroads will earn.
be
disposed, of, and that is
going to bring down the operat¬
ing costs. In my opinion, there is
no quicker way of
bringing down
operating costs than through new
equipment, so just watch the rail¬
roads that are buying the new
equipment and you will have a
good idea of which ones stand to
bring
their
costs
down
most
quickly.
'
money
make
think
the
In
my
opinion,
phase in the railroad
get beyond 58 in the
vancing
stocks
will
Dow-Jones
are
.
I doubt very
this current ad¬
whether
much
Rail
Averages.
They
First of all,
around 53 today.
thei^e are some technical reasons
why I think they will no't get be¬
yond 58.
In the Dow-Jones Aver¬
ages there is a
very wide gap
from
the
about
break
54
to
took
58
made
The average
advantage of
tunities.
little
bit,
only
about
time
the
making money in the rails for
time to come will be to take
of
some
the. trading oppor¬
Percentagewise, the rails
consistently offer a better oppor¬
tunity
than- almost
any
other
group. ■ They run up and down
pretty fast.
I think there is a
good chance maybe you might get
a double-top along about the time
of
.
hands
the
its
down
decision
crease,
is
creases
at
are,
are
brotherhoods
are
alert to
getting wage in¬
at the drop of a hat. They
the
present
consideration
wage
probability
to
time,
what
giving
kind
of
benefits they want and they
leaning, I believe, toward ask¬
ing for a 40-hour work week to
replace the present 48-hour week.
about
pretty
40%.
That
would
be
substantial and may
some
profit-taking on
one
and
I
think
most
of
those
people who are bullish, on
the outlook for industrial securi¬
the
to
need
for
in
securities.
rail
When
leveling-out of the
costs and the prospect that busi¬
ness is going to continue at a high
level, then you will have the kind
of a setting that might make for
Now, looking ahead to longerterm market possibilities, here I
have said that maybe
the rails
of
few
such
been
feeling
at
risk
qualify
at the
or
whether it occurred
substantially higher level of
costs
long
so
the stabilization
as
place; in fact, if the stabiliza¬
occurred
at a substantially
tion
higher level - of prices than cur¬
rently prevailing, I think the rails
probably would be in a very
strong position to get large enough
doing
into
level
a
took
increase
rate
from
the Interstate
Commerce
the rails can't do
I think there is a seri¬
Commission
would
the
that
likewise.
ous
lulled
be
occurred
stabilization
this
They have been remaining in an
awfully narrow band, relatively,
don't
great deal
a
I believe, whether
difference,
that
for the last 16 or 18 months or so.
so
make
current level or somewhere around
If you people don't think they can
do such a thing, just look at what
have
in the late 1920's.
as was seen
wouldn't
It
fairly decent trading rallies,
a great deal.
industrials
a
tremendous rise in rail securities
a
but otherwise not do
the
see
can
you
might get pretty dull during most
of the rest of the year, after they
have seen their initial peak, have
able
be
that they
realize
to
their
long-sought goal of 6% on their
net investment in property.
The
they might.
I want to
that, to this one extent,
the inflation cycle the
it is going to be for them
obtain rates that may produce
higher
easier
that
second-grade
rail bonds will behave infinitely
better than rail stocks are likely
to
will find that
second-grade rail bonds will gen¬
tioned before, about some sort of
that
think
I
think
erally
and
any
think
the
somewhat
down
likely to
rail
too
result
come up.
bonds
in
are
in
stabilization
rently prevails.
have
looking ahead
of
costs at
somewhat lower level than cur¬
a
a
favorable position
more
than the stocks are,
being perhaps
favorable to the rails,
from a long-term point of view,
the probability is that it would
basically
time the pressure is
lifted they are
I
them
back to the point I men¬
business setback
a
upward course.
in
them I don't
take
will
think
far
To go
an
reactions
The
their 6%.
you
follow
I
an
Hence, you would
for substantial
outlook
earnings thereafter.
to the full year.
Market
expressed the thought
rail stocks might get
of a tight range.
Well,
have
I
Outlook
in
sort
topic in, which I think,
be interested, is a dis¬
cussion of some of the securities
you
,
have any serious
ness.
Even so, I
stocks
badly if
much
as
to
used
right now for a 40%
severe
we
15%
be
a
in
are,
decline in busi¬
don't think the
would
had
behave
recession of
business
considered
:
a
decline in activity.
too
years
as
too
which
pretty
Those
better1 than
I think, some rather interest¬
ing opportunities, especially for
people that have a long-range
point of view and feel that they
might want to go in for capital
appreciation over the next several
business
in
have
attraction and will behave
exceptionally well on rallies and
resist declining tendencies fairly
well.
In the intermediate grade
of
dividend-paying stocks there
thing that could put them
downward more easily than any¬
thing else would be a pretty con¬
decline
believe
I
average
The
siderable
may
that
they do get out of that range
that I foresee, will it be upward
if
downward?
Individual
The next
exactly what could get them out
of that range and when, as and
or
for
Stocks
that maybe
ties would be very happy
to settle
rise in the
alert
not
fidence
down
rail
pretty
the
into
causing them to run up
a
bit and
providing
splendid
trading
opportunities.
However, probably these trading
opportunities wobld be limited to
people who couldn't be too in¬
fluenced by tax considerations and
the six months' holding period.
and
sizable
railroad
is
rate increases
effect.
The rails
temporary
been
really conducive to genuine con¬
•
There will be several influences
at work,
which, personally, I don't see.
I
don't see that we are going to
of them
worst
The
either.
lag of;
a
cycle of rising costs and rates
the kind of thing that is
ary
in¬
duce
the
part of those who picked up rail
stocks cheaply.
A 40% rise is a
overlooked
was
weeks from the
increases became
keeping ahead, but this inflation¬
be
be
six
wage
put
was
on
freight rate in¬
•«..y.v:/:V- •.
permanent
the
have
the Interstate Commerce Commis¬
sion
there
so
effective to the time that the first
,
again for another round of wages.
there
couple of aspects that should
are a
not
unfavorable side,
rate
taneously with
The
the
has^ been a good deal smarter
their
successful vmeans
most
that railroad labor will be around
On
always seem to be
lag.
Rail manage¬
this past year than it usually has
been on rate matters.
They filed
are
well go back to where the
drop started and that probably
would' effectively stop them for
quite some time to come.
An¬
other thing is,
at 58 the DowJones rail average would be up 17
points from the May low of about
41.
Percentagewise, that would
may
a
petition almost simul¬
the prospect that
they were going to be subject to
increased wages.
They even got
the jump on the wage increase a
when
place, in August-
September of 1946.
There
sort of
ment
anxious to make
for your clients so you can
money for yourselves.
1
to.
Current Market Outlook
very
and locomotives become available,
some of this high-cost
equipment
can
Now, that is pretty good,
ex¬
old equipment,
which simply has to be kept in
service because of the desperate
need for it.
Hence, as new cars
on
somewhere
say
you
and
;
spiralling costs it is a
for people to de¬
velop too much confidence in the
some
■
In
summing up the earning
situation, I'll pretty much stick to
my
thought that the level of
earnings will run just the way I
said, somewhere around $750-800
million, almost, regardless of these
fluences.
difficult
rails.
a
.
the
little
...
Then,
move
have
between,
that
think, however, that whatever
increase in wages or equivalent
800
a
oh, maybe 48 and 53 or 54. If you
are all customers' brokers, I know
range,
I
you
they
likely spend most of the rest
the year in a relatively narrow
of
want
it, too," and if they
stick to that, without mentioning
wages,
they will be on pretty
safe ground, so that is one thing
you have to watch.
-
the
58
a narrow
the
could
high for the year. I think
the rails
get up to
have
rail stocks
move
range?
I
thing that most likely
them upward,
and
maybe quite substantially so, over
the longer term, would be some
indication that the spiralling costs
were leveling out.
So long as you
think
very
40-hour week and say,
a
But what could
upward out of
after
would
They will
sort of a setback in business.
some
I'll explain that later.
almost certainly
pretty good tech¬
nical correction and I think they'd
not
and
too
many years.
fic thdtkj;he
40-hour
a
be able to
a
i you only give
;he new schools,
to
around
still waiting
me
nqnds are going to remain high;
The
construction
industry can't
s
the
does
it might even be beneficial to the
railroads in the long run to have
am
be the
that
disposed
would continue to
move
in fairly decent volume and
move
also willing to make the
that if the rails get up to
around
58, as I think they are
likely to, that may well prove to
I
it, because the railroad industry
is the only important .industry in
States
railroads
guess
idea of asking for a 40-hour week,
I'm afraid they'll get away with
United
ing.
supply of rail stocks.
30% increase in wages.
a
would be
they
con¬
better than average show¬
The kind of traffic that the
much
They have been sort of
am
the
capital goods indus-i
would continue to make a
tries
to be sellers, so you would likely
have an increase in the floating
If the railroad unions stick to that
one
think
ot
I have had
order for a couple
.ny own car on
closer to
not see
can
in.
think
I
and a half rates; in
would have something
you
vinced
rails too much because I
locked up for quite some time and
time
effect,
remains
demand
substantial and I
very
at
for
dons, just for the quarter.
back I don't think would hurt the
come
ployees they now have and have
them work the extra eight hours
next
50%'
extremely stable long interest. Big
holders of stock are a good deal
more anxious to get out on a good
advance than they are willing to
railroads
the
because
the
saw
decline
angle in the rails, probably more
than in most other groups, is an
Actually it would be worse
that
thereto
.
business
So you
simply
and
the
new
to
of
1932, so, perhaps to
15% setback doesn't look
It would be a
have this barrier of a large quite so serious.
enough advance to invite profit- serious contraction by prior
taking. Another pretty important standards, but even such a set¬
the railroads.
40-hour
a
seem
of 20%
crease
billion dollars
a
equipment
improvements
in
on
be
There have been
industrial
in
year.
improvement
the traffic level.
a
the
favorable
that
moderate
some
of
for the next
railroads them¬
year
offhand,
week would
selves are going to spend probably
of
it is good in
that
five
a
on
prior
or
1929 to
v
40-hour work week would
a
pretty tough
of us who have been around since
May; which would get the indus¬ 1929
trials up somewhere around 226 level
to
225. •
l'.v think
most people from
would settle for that right now. us, a
•
.
and don't want to be hurt
much in the meanwhile.
Tops on
my
list would be the
I think South-
Southern Pacific.
Volume 167 '.'Number 4664
THE COMMERCIAL
Pacific stands the best chance
of
becoming a real blue chip over
ern
and paying dividends, are Chicago
and North Western and
Gulf, Mo¬
the next several
years.
The road
has done a
magnificent job both
in operations and
financially and
its
dividends
well
be
to
seem
protected.
be
Earnings should
in 1948. : It has all
necessary background for fu¬
ture
all
ratio
list of quite a number
of stocks that I think
are attrac¬
tive.
If you are not
them
as,
dividend-paying
a
stocks
as
the
can
In
just
mentioned),
and
Atlantic
growth
war
issue.
railroad
a
Even
its traffic
level, which
in
the
first
even
half
that
is
not
the
The decision to take
New
Railroad
Improvements
Two
railroad
improvements
and that
at
B.
cause
and
good
when the railroads
Ohio,
paying
O.
and
refundings, at current
pretty well deflated,
of the income bonds
some
are
fairly
sound,
like
the
North
Wests, the Seaboards, the Rock
Islands,
the
Gulf,
Mobile
and
Ohios and St. Paul, series As.
In
the defaulted group there aren't
many left, of course, but the Mis¬
of
1947, it has
generally shown the attributes of
growth characteristics in its traf¬
fic-"'.k *
souri Pacific 1st and
still
are
refunding 5s
sound in the
basically
Then, in the—I feel a little bit
perplexed how to explain the next
couple. However, let's put it this
way: Of a somewhat more
specu¬
ter grade
lative
4s
middle 70s.
In the somewhat bet¬
issues, the B. & O. first
mortgage bonds, Boston & Maine
character, offering interest¬
and 'Frisco 4s
ing price appreciation possibilities value.
the
country actually paid the
Government $4V4 billions in taxes,
nearly $4 millions
represented
ment's
are
pretty good
over the previous
billions,... a tidy
in these days of as¬
$5%
even
tronomical figures.
This is not a plea for the con¬
tinued operation of railroads un¬
der
private, public-spirited
agement.
record!
It
what
is only mute
mistakes.
Let
other costly mistake.
certain, in
our
us
learn
Let
us
an¬
make
self-interest,
own
that the railroads
maintained
are
strong, healthy condition.
a
a
make
we
experience and avoid
our
in
man¬
neces¬
evidence
happens when
economic
by
is
in the face of that kind of
sary
of
No such plea
If
the "Iron Horse" is well nourished
with rates which produce
ade¬
quate revenues,
healthier animal
better
job
it
will
to
do
a
even
load.
to
Railroads in Our
(Continued from page 14)
And
to
provide
as
recently as last October,
the
Commission, in one of its deci¬
sions, reiterated the substance of
that
section.
In
addition, it
em¬
phasized that:
"Increasing
now
pose
continue
to
the
of
operation
unchecked,
pose
of
.
service;
whole, and many
of the most important railroads of
the
country in particular, are
definitely facing such a threat at
a
the present
time; that the public
vitally needs an efficient trans¬
portation service, and imperative¬
ly demands a transportation sys¬
tem that is adequate for the
tional defense in
any
na¬
emergency."
Thus, we have the law-making
foody of the government and a
highly
respected
government
agency both fully recognizing the
need
for
adequate railroad
to provide
ficient
railroad
nues
reve¬
adequate and ef¬
service
in
the
public interest. Yet what has been
the
record
the
over
years?
ing the past quarter of
a
a
on
their
rate
a
of
averaging only about 3.6%
And well
year.
period
Dur¬
century
the railroads have earned
depreciated investment
return
was
half
over
during the
that
prosperous
twenties, and the
years
of
time
when
railroad
peak
revenues
In
the
traffic
were
at their
war¬
highest.
heaviest
traffic
peacetime
history.
in
Yet their return of
only
a little more than 3% was
far below that
necessary to assure
the quality and
quantity of rail
transportation
for industrial
service
required
expansion, national
growth, and wartime defense.
During the first World War,
under government
operation, rail
rates were increased about
80%
based
ton
the average revenue
per
mile. But during the second
on
World War, rates
at the end of the
were
at
the
the
war
no
railroads
they
Only the
traffic
the
higher
than
beginning.
large volume of
during and since
abled
were
war
Revenue
Cent
v
We
must
Per
In
every
railroad
of
to
en¬
absorb, in
part, their tremendously increased
Than
at
this problem
dispassionately.
from 1932 to
year
One
Ton-Mile
and
for
revenue
1946
hauling
a
ton
freight has averaged less than
one cent a mile.
During this same
period, the rate of return earned
by Class One railroads fluctuated
from
a
6.3 %
low
of 1.4% to a
high of
their net property invest¬
But during those 15
on
ment.
years
there
and
were
1943)
return
only two years (1942
in which the rate of
equalled
or
Indeed, for that
exceeded
entire
5%.
period
it
averaged only 3.2%.
For
a
moment,
let
the rate of return
railroads with the
age
contrast
us
earned
for
example,
worth
for
12.1%
the
all
and
by the
national
fo^ all industries.
aver¬
In
return
1946,
on
manufacturing
for
all
net
was
industry, in¬
cluding the railroads, 9.5%,
But
for all Class One railroads it
was
only 2.8% and is estimated at only
3.3% for 1947.
You
men
v•
Despite
industry, who are
responsible for, the prosperity of
enterprises, would con¬
your own
such
return, year after
year,
entirely
inadequate
for
piaintaining the financial stability
of
your
a
industries.
own
You
would likewise consider it inade¬
quate
to
to
meet
nation.
for
permit
the
It is
the
you
to progress
needs of a growing
certainly inadequate
industry.
The
railroad
cheapest expenditure that Amer¬
ica can make is to
give this coun¬
try a prosperous railroad system,
assuming always that the manageof your railroads is
admonitions
state
found
Commerce
these .railroads
efficiently; I
is
in
observing the
in
Act
the
to
Inter¬
operate
economically and
assure you
that this
being done.. To pinch pennies
the
case
of
the
transportation
.
the -meager
return
which the railroads have had dur¬
ing the past quarter of a century,
they have invested more than $13
billions in new equipment, heav¬
ier rails, better
right-of-way, neW
stations, * new
signals,
modern
shops, and in many other im¬
provements, all to provide Amer¬
with
the
highest
possible
Yes, railroad
with all its short
standard of service.
service which,
comings
or
occasional
failures,
today is,
and even in prewar
times was, the envy of
the world.
This vast improvement program
was
started
just following the
friends,
the
our
Baltimore
&
the
we are
Black
River, and others at
Maumee Bay. The coal
docks at Lorain are
exclusively a
Toledo
B.
&
and
on
O.
ore
project, while the coal
facilities at Toledo are a
joint project between the B. & O.
and the New York Central.
These
two
undertakings involve a total
expenditure of $22 V2 millions and
will be capable of
accommodating
largest coal boats on the lake.
the
All
these
docks,
it
is
first
World War.
At that .time,
short-sighted people said the
railroads' were being
overbuilt;
that they would have idle
plant
and equipment which would be
unproductive. Yet, what happened
when
the
overtook
second
World
War
Every part of plant
and structures and every piece
of equipment were
pressed into
service, were strained to meet the
us.
demands
an
of
nation engaged
a
in
large-scale
unprecedentedly
It
war.
because the railroads
was
in
These
facilities
new
sea¬
are
merely
typical of the extensive improve¬
ment program now going on at
countless points of America's vast
rail transportation system.
The
railroads
such
.
.
.
for the enemy of freedom. It has
often been said that it was Hitler's
highway transporta¬
the
"Achilles'
of
expense
which
proved
heel"
to
in
the
rail¬
be
the
Germany's
transportation system.
During
the
must
continue
to
make
enormous
railroads
home of the
in the world
largest
im¬
...
provements
such
were
their
The pace of technological devel¬
opments is such that the "new" of
yesterday and today all too
becomes
Your
the
"old"
railroads
of
soon
tomorrow.
continue
can
to
make these
improvements for you
only if they are permitted earn¬
ings sufficient to provide
the
"Iron Horse" with
a "living wage."
done, we all shall profit;
railroad and investor alike earn¬
ing fair returns; railroads con¬
If that is
tinuing their improvements; and
the
public
enjoying ever-finer
transportation service.
Encouragement From ICC New
Rates
As
we
enter into this
new
year,
the railroads find encouragement
in the Interstate Commerce Com¬
mission's
prompt
consideration
rendering of the decision on
and
modern
new
Gratifying
part
of
10%
in freight
this is, it is
as
that
to
necessary
insure
the
continuing financial
stability of the railroad industry.
is
to
hoped that the Commission
give favorable consideration
the
railroads'
request
for
the
rest of the increase needed to re¬
store
a
reasonable
balance be¬
tween income and outgo.
'
In the
dark days of the middle
early thirties, there were those
all but relegated the rail¬
or
who
roads
to
the
those
heap. There
said they were
scrap
who
laid
were
being
the plains of our great
Middle West to link the industrial
across
with
the
make America.
Golden
West—to
How wrong
one
they
invention
sturdier
roadbeds, increased
telephones, and a
multitude of other improvements
that has been proved practical or
of
would be useful to make railroad¬
of
nomicaPfor
most
New
modern
York
design. On
Central, our im¬
provement .program calls for a
total
expenditure of over $225
millions.
than
$175
Of
this
millions
ing
safer,
faster,
or
you—our
our
of
serv¬
you
that
of
none
the
our
problems
con¬
fronting
us is impossible of solu¬
tion: confident that the
intelligent
self-interest of the American peo¬
ple
will
require
public
a
policy
which will permit all of our free
and efficient institutions to
pros¬
per.
Only in such a way can we
hope to maintain a strong Amer¬
ica
as
-
a
mighty force for the
preservation of peace and
security
throughout the world.
Kidder, Peabody Admit
Sfuebner
Partner
as
PHILADELPHIA, PA.—Kidder,
Peabody
Co.
Erwin
Stuebner
announce
has
been admitted
as
general
a
in
the
123
Phila¬
South
Street.
Formerly
dent
a
of. the
Steubner,
June
of
became
i
Erwin A. Stuebner
n
1947,
associated
with
Kidder,
Peabody in charge of the statis¬
tical
and
research
department in
Philadelphia.
Previously he had
Kidder, Pea¬
body when he helped organize
the Philadelphia office of the firm
been connected with
in
1934.
Graduated
from
School of the
the
Wharton
University of Penn¬
sylvania in 1927, Mr. Stuebner be¬
gan his career in financial and in¬
vestment banking when he en¬
tered the employ of the
Guaranty
Trust Co. of New
York, to be¬
Assistant Treasurer of
come
institution
two
1929,
he
were
instrumental
and
Orus
J.
in
that
later.
years
In
Matthews
the
forma¬
tion of the
Philadelphia National
investment banking affili¬
spend
more
about
the
for
new
roads
and
to
be
now
in
adopted.
Vice-President
of
With the formation of
Kidder,
Peabody's Philadelphia office in
1934, Mr. Stuebner became Assist¬
ant
Manager of that office in
charge of its investment advisory
and
statistical research
activities.
Joining the Fidelity-Philadel¬
phia Trust Co. in 1938 as VicePresident
in
investment
charge
of'the trust
department,
Mr.
Steubner continued in that posi¬
tion until May,
1942, at which
time he was commissioned a first
lieutenant in the U. S. Army Air
Corps. During his 3% years serv¬
ice, he was in charge of develop¬
ing and installing an inventory
control system for aircraft
spare
parts which was adopted and in¬
stalled in Army Air Forces depots
the United States and in all
in
overseas
theaters.
He
held
the
of Lieutenant-Colonel when
placed
inactive
on
November,
I
trustee
nance
hours
telling you
pioneering that rail¬
railroad
a
company.
status
in
1945.
Mr. Stuebner is chairman of the
or
soon
elected
Hospital Council of Philadelphia;
shippers—which is not
is
that
eco-
use
could
was
an
men
are
still
and
chairman
of
the
Fi¬
Committee of the Lankenau
Hospital,
and
Commissioner
Lower Merion Township.
■
that*'
A.
passengers
more
and
amount,"
are
benefit
customers: firm in the conviction
rank
I do not know of
use
the
plant and
our
the
re¬
efforts to
ate of the Philadelphia National
Bank, and in 1931, Mr. Stuebner
rates.
only
and
radio
year,
our
Co.,
increase of
were!
the
for
new
continue
Dec. 30 last to grant a further in¬
panded
of
improve
the
terim
East
locomotives,
solved to
ice
of the railroad in¬
we
face
Fidelity-Phil¬
adelphia Trust
Co.,
Mr.
lined passenger cars, new freight
equipment of the latest type, ex¬
utilization
so,
private management with private
capital. * ■;
7'''> •
when ribbons of steel
electric
And
dustry
Vice-Presi-
.
postwar improvement pro¬
gram. Today, those blueprints are
being translated into new stream¬
diesel
The
men.
neering.
which, like those of
railroads, are made under
the
thought the railroads had ceased
to pioneer as they did in the
days
limited improvements as
have both kinds of
Broad
Lorain,
pipe mill
di¬
only
hard-
delphia office,
rectly related to war needs. But
they did not neglect to blueprint
make
of
firm,
with
headquarters
were
the
war
to
lot
a
railroads, like our great steel an<|
other
industries, are still pio¬
ing public. Yes, to meet the needs
of the vast expansion
program of
industry now going on right here
destined to go the way of the
canal boats and the stage coaches.
There were likewise those who
able
were
and
practical men who will
take those dreams and make them
come true.
We are thankful that
partner of the
It
at
tomorrow
tion service required to meet the
needs of the shipping and travel¬
will
concededly magnificent job
during the second World War
a
job which helped spell defeat
a
tion
of
fisted,
expenditures for
modernization if they are to con¬
tinue to provide the transporta¬
do
roads
industry who dream of the trains
expected,
beginning of the navigation
son this
spring.
prior years had provided ade¬
quate tools that they were able to
on
never
will
be—so
have dreamers in the
as we
will be placed in operation at the
some
emphasis
of
handled
has
Less
look
realistically
sider
1947, the railroads handled
their
Freight
will
adequate
that the
transportation
as
definitely low compared with the
general price level.
serious threat
a
maintenance
railroads
fares, which, until the last year
or
so, have remained practically
unchanged.
Even now they are
even
$13 Billions in New Equipment
ica
costs
and,
to
in the face of rates and
expenses
a
starvation diet
to work for us all! v.."
National Economy
management
such service."
fight for enough oats
get
know, with
you
[ long
23
The railroad plant is not
in
be
an
your
of hauling
But it is most
discouraging and
disconcerting, too, when that horse
•••:>:^y••
.
a
revenues
of
sum,
day! That
gain in the Govern¬
a
As
just completing new
coal and ore
handling facilities
on Lake
Erie, some right here at
Lorain adjacent to the mouth of
weiie
is forced to
ficient
Lorain.
.
or
are
especially, be¬
are of particular in¬
importance to you of
they
terest
a
doing.
finished—it
we
I
mention
time when the
.
war
&
to
purchasing power.
How does that compare with the
experience during World War II
.
.
of
prices,
though the
want
dollar had real
Chicago, Rock
and Pacific, when
issued,
to have considerably more
unreasonably depressed. The Illi¬
nois Central joint refunding
4s,
4V2S and 5s are good value; the
the
over
Government—meaning you,
taxpayer—almost $1xk billions
the
enormous on the small
non-dividend
$50 millions
1945-'48 period.
the railroads during that war cost
for
undervalued, the New York
Central issues, I think, have been
the
for
whole
around
the
the
look
rather bad start
a
left
that
For those of you who are inter¬
in intermediate bonds that
quite unusual for
and
road got off to
I
so
ested
real
before
balance
stock,
than average attraction.
above the 1929
was
is
the
the
appear
Coafct
a
in
But
Island
Western
.characteristics of
operating
group, Kansas City Southern, Sea¬
progranv Rehabilitation is what
it really is and over the
long-term
there should be substantial
bene¬
fits from that.
Western Pacific
the
story.
into
(223)
mitments of
about
board Air Line and
Pacific.
Just
to comment on them
briefly, At¬
lantic Coast Line has been
engag¬
ing in a tremendous maintenance
has
that
look
increased
were
privately
operated? Instead of costing the
Government money, the railroads
are.
In the attractive
dividend group
are Southern Pacific
(that I have
Line
80%.
very
common
rates
that
so
number of shares.
make it clear what
kind of stocks
they
is
rail
earn¬
The
carefully.
leverage is
against
non-dividend paying
stocks, I
should
you
ference
to my
attractive
say,
charac¬
the
cause
high ordinarily and
minor change makes a big dif¬
a
averse
•listing
of
pretty
quality.
I have
unusual
can
ings to fluctuate violently
excellent
the
rather
some
teristics that
CHRONICLE
system of the United States is to' ihotive powei* and passenger and
V~
freight cars received or ordered
A moment ago I referred to the
since the start of 1945, and roadfact that during the first World way and structures
improvements
War, under government operation, involving expenditures or com¬
Chicago and North
Western, I should make it clear,
has
FINANCIAL
invite disaster4.
bile and Ohio.
fairly
&
of
24
THE COMMERCIAL
(224)
FINANCIAL' CHRONICLE
&
As We See It
(Continued from first page)
future.
It
,
and
by year, beginning now, we must-make a
part of this progress."
*
that
no
time
a
is
left for
a
so
promises and the failures littering the past years.
rate it
any
of
must advance
us
stable foundation of
a
busy looking ahead
backward glance at broken
promised Utopia,
"Business, labor,
buying power to maintain prosperity.
agriculture and government, working
together, rriust develop the policies which will make possible
Jhe realization of the full benefits of our economic system."
At
fairly clear that the Russian Soviets
seems
tionary factor
A
Question
Pointed
familiar with ;
will recog- >
industrial accounting
would not be true*
nize that this
There is such a
expense
15, 1948'
instead of a defla- *
•;ionary one. Anyone
large body of
fixed
(including *
interest, insurance, {
in production
such things as
practice of keeping the rank and file constantly look¬
ing ahead to
*
together. One-fifth of our
families now have average mimiaHncomes of less than $850.
We must see that our gains in" national income are made
more largely
available to those with low incomes, whose
need is greatest. This will benefit us all through providing
"All
this "ten-year plan"
technique was even original with President Roosevelt.
It may or may not in its essence have been original
with the Russian Communists—that is the political
be doubted whether
may
and consequent high employment.,
well that the weltare of industry
agriculture .depends on high incomes for our workers,- '
*
on high production
We have learned equally
pends
Year
substantial
well-being of workers de¬
that the
"We have learned
Thursday, January
property taxes, ;
Others) that the total •;
percentage of increase in cost of
production due to the higher
wages from longer hours would
be less than the percentage of the {
increase of production itself, and here would result more goods for ■
a
given purchasing power, which ;
in turn means that there could be
a
higher standard of living at a *
executive salaries,
and
hosts of
lower
price.
.
„
,
shortest, ;
As to all this let us ask ourselves just one question: most
effective
tion
How long will it be before Stalin and his associates will be way to lower the ceiling of infla- of the New Deal strategy.
tion. The question as to whether .
obliged to look to their laurels as world champions in acting or not it should be undertaken is r
We Hope They Are Wrong
^
as if all their people were children not yet out of the kinder¬
a fundamental one.
It leads us to ;
We most ardently hope that the President and his ad¬
consider the! extent to which we *
visers are wrong in supposing that the scales have not yet garten— in need of a paternal hand to provide them with
;he good things of this world and to guide them along the prefer to take our improved living ;
fallen from the eyes of the people of this country.
standards in the form of leisure •
troubled paths of life! y Have the American people,,really
as
It was inevitable—and perhaps excusable in an election
against increased goods and
ost all their boasted self^eManee? We do not for a- moment services.
/■> >'■
./v'year—that the President should list high among his "goals" relieve so.' If so their doomis^sealedA'r^'AV,;.H';'' '■
such age-old political ambition as that of securing "fully
Controlling Machinery of Inflation
Then, too, of course, we ourselves now enjoythe essential human rights of our citizens," and protecting
When it comes to the problem of;;
ing unheard-of prosperity, must see that recovery takes
controlling the machinery of in- ;
and developing "our human resources." No political speech
flation as distinguished from itsplace in Europe. Somehow the managers in Washing- ,
—and this is a political document presented in a political
structure, we find ourselves faceton have found how to induce recovery abroad although
year—would be complete without some such balderdash
to face with a very serious prob- ;
the previous regime in that Capital tried in vain for
lem which may be stated thus:
conspicuously displayed in its columns.
years to induce one in this country; •; At any rate, they
Can we maintain full employment *
The observer familiar with the practices and the
now have the solution for world iHs—and we must take
without inflation? Except for the^
history of politics, particularly in this country, may
so-called frietional : employment;
it as is. And the cost per ^^if jis^calculated to be two
well be inclined to pass by such twaddle as this with a
which is largely temporary .and.,
or three times the entire anuual Coolidge budgets.
voluntary for the individuals in-,
shrug of the shoulders, but as much can not be said of
And then the President fmally *gets around to inflation eluded, we have had full employ- *
the steps which the President (following closely the
•
which, according to officialdom and virtually all the -pol¬ ment for many months. We are"
example and the models of his predecessor) suggests
also having a dangerous inflation^..
iticians, is the number-Kme problem of the day. Here again
for attaining such goals. Not much harm is done by"
Full employment and inflation are
the. President has a ready answer despite the fact that
going < together: Is the inflation
being against sin, but a great deal of damage may be '
virtually everything else in his program makes, or; would merely a happenstance or" is in¬
done by half-baked schemes to abolish sin. Th<* best v
flation the normal result of full
make,, the problem the more difficult of solution.
.
thing the politician in Congress can do (if they are in¬
The solution,.it hardly need be added, is controls and employment? These are the ques-4
took
early lead in the development and full exploita¬
of,the technique, and that it was a vital part in all
an
This
evidently the
direct, and most
is
—
terested
in
the
of their
real welfare
country,
as
we
more
hope they are) is to applaud the President's
aspirations (if they must) but pass quickly by his pater¬
nalistic programs in the name of Federalized health,
education, housing, and veterans' welfare. «
must
"
■
't
But
to
some
'
even
worse
i
'
•
*•.
*
'
'
.
-
.
is found when the President
of his other
zeal to "conserve and
1,f
.
j
gets down
He is fired, for example, with
our natural resources so that they
on
'Hhem are temporarily .deferred, but even so total ex¬
penditures5 proposed; for tte coming fiscaL; year exceed J
by nearly $2 billion the outlays of the current year
when they were $10 billion or more higher than they
:
should
contribute most
subsidies to
<
Monday last we were given a concrete*
illustration of what some of these things cost. Many of -.
goals.
use
•
Finally
effectively to the welfare of our people."
If we did not have the example of years of the New Deal
managers before us, it would be astounding to observe the
breadth and extent of statism which is proposed and de¬
fended in the name of this vague aspiration.
It not only
includes vastly enlarged reclamation projects costing many
hundreds of millions of dollars, and a continuation of past
can
tions
controls.
have
Somehow,
sdnietime;hnd that before very long, we
end to this sort of thing if we wish
shall have to put an
to survive.;
In
we
must face.
wartime
we
had
over-full
employment without inflation. We*
accomplished this by means of.
rationing: -price control^ and wage
control.
loath to reimpose
controls in peace-.
We are
these-wartime
time.
.
<
peacetime there is a quite
evident relationship between full
In
employment arid inflation.-"With-out' discussing, at this time
the*
question as to which comes first—
wage a"dV£ricfe< 'or price advances;
is quite clear that with full,
—it
purchas-*
bhdihaj^dimits rin;
employment and heavy
ing; power
the
and price ad->
the worker,
can leave one-job without; doubt
in his mind as to whether he can
get another, he will be much more
confident and persistent - in mak¬
ing wave demands than he will beotherwise.
If the manufacturer
finds himself in a seller's market,
both wage advances
(Continued from page 4)
agriculture and more of the same sort, but all
TVA's which the New Dealers thought
vances
disappears If
needs
to
be
followed probably Tiaonths^and even years to show
their full effectiveness. The prdr
slowly, and certainly with a greatdeal of caution, especially on the -vision of labor-saving machinery
up during their decade and more in the saddle in
and-better- business management
money-supply side. The other ap->
ington.
.'*•
I.''.is
the - fundamental
means
by
proach is to slow up the-maehinery
It grows worse as we proceed.
We also must "lift of inflation by applying brakes di¬ which our present high standard
the standard of living for all our people by strengthening rectly to the too rapid movement of living has been Attained and
which has made possible the short¬ the ordinary restraints on raisingour economic system and sharing more broadly among our of
prices, wages, and resulting
the price of his product disappears
ening of work hours concurrently
profits.
people the goods we produce." Here it is,
with this increased standard 403 ■ This describes in simple terms the
We will spend the lesser part of
the President draws most heavily upon that rather strange
living. That has been a sloW-but malady we are -suffering from
our time this evening on the fun¬
today.
:
medley of economic advisers he has gathered about him. damental control of the structure steady process and it can continue
Whether
the
initial- impetus
as a slow ;but. steady Process. Since
of inflation. This will be for the
Take this passage:
it is the4fundamental:) means of comes from high wages or, high
the
"river
basin"
Wash¬
apparently, that
"Although the average farmer is now better off than
before, farm families as a whole have only begun to
reason
highly tech¬
considerations are
that it is more
improving the wage^earner's lot prices, they react on each other
with deadly precision. High wages
this;, group must clearly, -uhderincrease :: costs
and
purchasing'
catch up with the standards of living enjoyed in the cities. only reiterate my convictiow ■ that: tstahd -its nature arid be willing to
The increased costs are
make - such provisiorisin the way power.
In 1946 the average income of farm people was $779, con¬ to depend entirely on th®? respd«ted
of^rofits applicable to capital in- reflected in increased prices,-whichtrasted with an average income of $1,288 for non-farm monetary and fiscal policies, for
.find the high purchasing power
reducing the money supply
and. other available to move into consump¬
people. Within the next decade we should eliminate elements too slow a process if it is done governmental expedients as -will
tion and enjoyment of the goods
of inequality in these living standards.
safely, and too unsafe a'-process, permit the continuation of 4he imand services produced.
Finding'•fjrovemenL* h**-•> &&&*$
"To this end our farm program should enable the leading to unemployment
actions which may be that this results in no net increase
pression, if it is done qmekty^We;
farmer to market his varied crops at fair price levels and
in
consumption, the desire, for
thefore cannot afford to depend quickly- applied are the improved
high -wages: again expresses itself,
to improve his standards of living.
on
monetary and fiscal policies output, of the worker attained by
and a with another profitless revolution'
"We need to continue price supports for major farm alone for we will either permit his -personal^,diligence,
>
moderate increase in the number of the machinery of inflation.
commodities on a basis which will afford reasonable protec¬ inflation to continue too long and
of hours worked without applying
go too far, or we will face depres¬
Increasing Production
tion against fluctuations in the levels of production and
the penalty of overtime pay.
sion and unemployment.
It is already clear to us that no
As
to
demand.
The present price support program must be re
personal diligence and
The other factor, the increase
actual improvement in consump¬
examined and modernized.
,
of production of goods and serv¬ efficiency, "feather bedding" must
tion is possible without an in¬
ices is, in turn, not easily man¬ be discarded. It may be a natural
"Crop insurance should be strengthened and its
human impulse to stretch work crease in production. Without that
aged. Increase in production can
extended in order to protect the farmer against the specia
out in the face of unemployment, increase, a rise in wages or profits
come from better management by
but is is inexcusable to do so un¬ simply makes the goods produced
hazards to which he is subject.
business, more faithful work by
cost
more.
On the other hand
"We also need to improve the means for getting farm wage earners, new products more der conditions of full employment.
There has been some question there is on the part of some work*
economically
made,
new
labor
products into the markets and into the
consumers
with regard to increased working ers a feeling that profits can be
saving equipment or a longer work
hours as to whether the increased dipped into and thus shared in
Cooperatives which directly or indirectly serve
purpose week without overtime pay.
equitably, but there are limits to
must be encouraged—not discouraged.
The school
As we look at this list of cor¬ wages resulting from it would not
this process. Net profits of around
rectives it at once appears that in the long run be proportional to
program should be continued and
the increased production, so that $17 billion are resulting from our
"Another basic element of a strong economic system is only two of them can be immedi¬
it would be in effect an infla¬ present net national income runately
applied.
The rest take
ever
benefits
■
hands of
this
lunch
adequately financed.
the
well-being of the wage-earner.
nical and moral
not
so
clearly
involved.
Let; me
Volume 167& Number 4664"
ning at
a rate
ofbillion.
This
is about 8 %v
Profits >• amount to
about 13% of labor cost. The
wage
increases being asked, if obtained
by all those engaged in productive
work,
would
far beyond
go
this
maximum of 13% available for
distribution. Furthermore, we can¬
not, of course, do away with prof¬
its without stopping the
machinery
employment and production. -
of
1
What is
that
a
happening, of
is
course,
temporary-advantage of
THE COMMERCIAL
'
the
graphical location.
to
those
organized groups
which get the first advances'in a
round of increases.
new
-gain
the
at
groups who
This they
of
expense
other
slower in making
-'and gaining their demands.
They
have
to
are
hurry to catch
Some
up.
groups never catch up. This con¬
siderable body of those left behind
is
growing and constitutes' our
•most serious internal social
prob¬
lem at the present time. •
!
living, and which are in a finan¬
probability is that cial position to do so, should at
remain for another year least refrain- from further
price
under some terms upon which a.
risos-and should, if at all possible,
decision has not yet been made. make
soqie contribution to lower¬
The cost of clothing has been in¬
it will
so
ing their prices and thus bring to
creasing
but
at
slow
a
with
compared
other
rate
as
food..
Coal
prices
were
increased following Lewis'
successful
negotiations ,.last- fall
fuel
oil
prices
have
If, in turn,
itself
in it that
is
Among them is milk
serious
its
of
items
difficult for the fam¬
are
ily budget.
point
of
number
a
he
from
stand¬
being -the
necessary
food for the children of the
family.
But even that is
completely over¬
shadowed, so far as percentage
of cost increase is concerned, when
we
it with the advances
compare
which have been registered in the
price
We
of
.find
satisfied to have that
not
are
body
unemployed.
must
other way to avoid in¬
some
flation.
We
How
can
do
we
and
[
Management
I regret that I can
'or
easy
In
way.
is
sible for
Meat
the
normally be around
to
cases
family budget but
40
and
50%, and in
higher. We will
even
have to* place upon food and upon
simple
no
fact,
the only
way is a hard way. That hard way
est
of
measure
/There
is the
' ; ;
further
complica¬
is a matter of
self-discipline'for tion.;.that meat prices are going
organized labor and for business far higher than
they, are at pres¬
'
It involves first the
management.
'
understanding of the simple truth
'
that
we
and enjoy only
produce, and that there
is no use trying to raise the stand¬
ard of living by raising
wages and
profits if, in the process, we do
^ what
-
consume
we
not produce more.
The
be
second
deeply
graven
which
on
must
our
con¬
mined with the public interest
as
major-element in the decision.In
<
reality this public interest
serves the private interest as well.
,
There
is
private
no
This
interest
of
number
is
served
by
only
group which makes money under
those conditions are the scaven¬
gers and vultures of the social
der
who
fatten
the
or¬
of
animals
meat
will continue to
drive
price far above anything
in
the
we
have
If government
known.
ever
is to
make any
ciety.
concentrate
which
on
its
it should
is
attention
meat.
the
same,
Favors
Meat
Rationing
Believing this strongly, I am
preparing legislation which will
authorize setting up the
machin¬
ery, the necessary rationing docu¬
ments. et cetera, for the adminis¬
of
rationing pro¬
by the Department of Agri¬
gram
execu¬
problems and de¬
alike
be
view of the social and
which will not and should
taken
by
under
made
in
long-range
able
not be
it. until the demand of
those
conditions
will
ra¬
mediate
short-range advantage. V;
There is
to
even
hard way to slow up
a
reverse
of inflation.
It
the
machinery
depends
on
coop¬
erative action of
government, bus¬
iness and organized
labor, each
playing their parts in their respec¬
fields
depends
on
of
responsibility.
It
governmental and bus¬
effecting a reversal
action
the
movement
prices
and
increased
an
living. It requires
action
the
on
toward
high
cost
of
corresponding
a
part
of
organized
labor to withdraw its demands for
further
useless
wage
increases.
examine the details of this
few minutes.
program for a
The; continued
increase
in
tification
for
further
a
wage
the
jus¬
in¬
creases, which it is hard to refute.
We all know that those increases
add fuel to the pressure under the
rise of prices^
But -we do .know
that there is
of
a
temporary allevia¬
the. pressure
groups fortunate
cessful
in
their
demands.-
be done about
justification
as
for
those
enough to be
suc¬
What
removing such
arises
from
a
higher living cost?
The principal elements in these
costs are food, rent,
clothing and
_
.
fuel. .The importance of the latter
element
is
determined
by
geo¬
a
black
proportion.
The
such
a'
for
reason
demand
certain
months
preparing
that
is
it
number
of
prepare
will
for
to
for
take
weeks
or
rationing.
It is necessary to start now if we
are
to be ready when the; time
Note
comes.
that
the
proposal is
for rationing alone. If this is prop¬
erly administered, it will control
the price
to the
consumer
by
ar¬
tificially controlling
consumer
mand.
administered,
If
properly
de¬
it will provide the stockraiser and
stockfeeder
with
prices
high
enough
to insure full
production
of meat animals.
A price high
enough for that will be well be¬
low present prices but will, never¬
theless,
of-living does furnish
Only under those
But many of us
believe that the demand will come.
interests rather than of their im¬
can
there is
In
urging this action
of business I
well
am
the part
that
on
aware
increased reserves for
deprecia¬
tion and increased profits for
pro¬
viding those
the
on
reserves are
basis of
justified
increased cost
of
replacements arising from the in¬
flation.
Yet
we
that
faced with the
are
this, too, is
a
part of
On
the
to be
been
bility
for the
prosperity of the American
people. This is the way in which
the
standard
raised in the
than
now
further
of
ducing
prices
additions to
and
slowing
up
depreciation and re¬
with the reasonable
have
action will make
real contribution toward
a
reducing
the
necessity for such added funds.
There
cessity
is, furthermore, the
which
both
ne¬
organized labor must recog¬
nize for earnings sufficient to be
plowed back into the business for
efficient
more
equipment,
that
so
the wage earner's labor hours will
produce
more
goods and services
distribution; for this is the
improved and,
we
are
We
get
Nevertheless, when all is said
done, opportunity yet remains
industry to make
its contribution to stopping the
at this time for
continuing increase in living costs.
Responsibility of Organized Labor
and
Government
increase
no
the
be
perfectly
fair
all
to
concerned.
Meat
rationing is, therefore, the
contribution
Government
which :'the
bilization.
.
as.
merely
charged
has
was
a
by
contribution
stated earlier.
to
Not
the
prices
basic industries
but
wages
wage
clear to the
It must be
leadership and it must
become clear to the rank and file
that
be
only temporary benefits
derived
further
from
can
pressing
these
this
time.
demands
at
There
is no possibility of perma¬
nently increasing anything except
money wages. There is no possi¬
bility by this means of increasing
the amount of things which
may
be
bought with that money except
as these higher paid wage earners
spearheading
the
demands : for
higher wages get benefits which
are
taken away from the lower
earning groups left behind in this
wave
of wage increases.
Surely
organized labor wants no benefits
gained on those immoral terms.
We have examined the
ties
of
possibili¬
long-range control of the
structure of inflation by monetary
and fiscal means
at the
money
supply end, and of the production
of goods and services at the prod¬
uct end.
for slowing
gram
ery
We have described
up
a
pro¬
the machin¬
of inflation-by bringing into
portant element in the cost of liv¬
ing, by asking for
increases
tion
and
an
some
end to price
price reduc¬
increased
ment makes to
putting the brakes
the machinery of inflation has
just been discussed. It lies in the
control by rationing of the most
important element in the cost of
living. It is, however, no more
on
If the electorate is not convinced
of
the
this limited
rationing, it cannot be accom¬
plished by any government which,
like ours, depends for its existence
on
the will of the people. There
necessity
furthermore, personal respon¬
sibilities which have already been
mentioned in connection with dili¬
of
The
its
We
the
area
of
strictly
business determination.
The business contribution is this
—that
those
industries
producing
and distributing goods which en¬
ter importantly into the cost of
proposals in the light
this
talk.
in
those
can
be done
by gov¬
it is
of
responsibility of citizens in
their private capacities? To what
a
conspir¬
or
accordance
with
its
self-interests, it is
different thing in kind as well
in size than when the
corner
a
as
gro¬
cers
of the United States so act.
When nationwide organized labor
in a given industry acts in accord¬
ance with its short-range self-in¬
terests, there is no decision of the
Supreme Court relieving them of
charges of conspiracy, which can
relieve them of the responsibility
effects of their action on
for the
the
of
course
trade
and
the
on
general well-being of the nation—
of which they are such an impor¬
tant and determining a part. Moral
responsibility is inherent in the
because
they
cisions of
our
economy.
In the face of these
sibilities
new
resulting from
and influence of
bor
simply
and be¬
great
are
they deal with the vital de¬
cause
respon¬
the
size
business and la¬
organizations,
faced
problems.
prob¬
be solved by asking bus¬
we
are
lems
I
am
sure,
have
been discussing lie within the field
of economics. When, however, we
come to
an
analysis of the non¬
governmental requirements they
present themselves to us fully as
much in the guise of moral ques¬
tions as of economic problems.
Take-the
we
question of "feather-
bedding," for instance; Aside from
its economic effect in reducing the
standard of
living, there certainly
old-fashioned moral questions
are
involved in not doing a full
work
for
a
full
day's
day's
pay.
Are
there not also moral
questions in¬
volved in appealing
to business
to forego at this time profits which
can
be justified on conventional
economic grounds and grounds of
business prudence, but which are
asked
as
contribution to general
a
welfare in
a
critical situation?
Certainly there
are
can
of
on
the
on
serious
and
new
moral basis instead
a
basis
rates and railroad wages on
fusions.
It would lead to
in
down
service
bankruptcy.
the
useful
I
in
What is the clue to
effective accept¬
moral responsibilities
described?
have
we
would
f
the
and
self-inter¬
self
range
-
short-
between
long-range
Short
lies
it
that
suggest
difference
range
ests.
break¬
a
financial
and
and
of the
ance
which
interest
-
looks to the immediate advantage
of
the
small
It
group.
assumes
that such advantages are worth
fighting for even though they re¬
sult in slowing up the progress of
the whole society of which this
small group is a part. May I sug¬
gest that such a viewpoint is both
morally and intellectually inde¬
bad
It is both bad morals and
economy.
On
.
other
the
hand, if
■
we
can
revise the old notions of the ulti¬
mate beneficence of the
selfish
of
decisions,
sum
to
total
as being in
long-range self-interests as dis¬
tinguished from short-range selfinterests/;-then do we not have a
theory
of
economics
which
is
adapted to our modern conditions
of powerful business and power¬
ful labor?
These
are
not
are
brave words but they
easily
translated
brave and useful action.
volve
moral
of
and
tion.
They
habits
of
action
of
humble
all
They in¬
thoroughgoing
a
to
thought
people
of
of
modes
of
exalted '
activities
educa¬
affect .the
and
millions
and
process
intellectual
have
into
I
in
positions1 in
labor
business,
and government.
moral ques¬
higher
If
society is to survive, we
our
paid groups in organized labor not
higher wages when
of
to demand still
solve
this
avoiding
critical
destructive
their
while maintaining
any
employment.
only possibility of gaining
advantage from such high
wages lies in getting it at the ex¬
pense of lower paid groups who
that
survive
if
continuing high
We
problem
and
we
problem
inflation
can
can
we
only solve
only
can
translate
our
less effective or less fortunate
getting their incomes increased.
What
One
is
the
relation
between
and
morals
anyway?
gets the impression that con¬
economics
conviction
the
private interests
that
beneficently
based
on
to
the part of all
on
elements of the
sults
is
attention
economy
and
re¬
automati¬
.
define
those selfish decisions
must
the
purely
moral grounds. The attempt to do
so would lead to inextricable con¬
tions involved in asking the
are
self-interests.
of
It is not at all clear, for instance,
that one
can
determine freight
fensible.
Question
conclude,
policies which
ventional
How much
ernment action and how much
in
immediate
that the various policies and steps
economics
out of
con¬
and by a
Moral
must
review these
private
A
on
:
high prices.
of the first few paragraphs of
matters of public concern.
for
are,
siderable part of price policy has
conditions
acts
decisions
The contribution which govern¬
moved
present
acy,
iness and labor to make all of its
in
our
under
oil
without collusion
predominately through
capital investment.
products by industry,
withdrawal of wage de¬
mands by organized labor. Let us
become
the
or
even
with
demands, particu¬
should be withdrawn.
labor.
It is doubtful whether those
on
control the price of the most im¬
,
Business
make
Federal
make toward sta¬
can
larly
organized
industry as a whole,
industry as a whole,
industry as a whole,
higher production and increased
enjoyment of goods and services is
creasing output, raising the living
standard, and halting the advance
defined
and
steel
months full employment. The road
govern¬
have
the
or
decisions of the greater industries
responsibility and indus¬
try's responsibility. What is the
responsibility of organized labor?
We
industry
When the coal
and the great labor unions
gent work and avoidance of featherbedding as one means for in¬
ment's
by the immense
influence of large-scale
that
standard
one
and
modified
power and
to retain the 40-hour
can
so no
true
the
in
true, it appears
longer. It certainly has
been
has
ever
advances
way
-•
^
were ever
been
important than the responsibilities
living is which lie upon business and which
have seen, it lie upon labor.
as we
more
has
to
government
and
was
more
additional employment.
We
and
have
had
for
many
from
placement,
hope that such
it
living
It is
living lie in the direction of
capital investment, pro¬
week.
re¬
of
past.
further
chance
on
increasing
and services
governmental responsi¬
see
to it that our tax
a
to
vided
little
of
in¬
or
system is such that necessary prof¬
its are permitted for channeling
into the capital requirements for
expanded and improved produc¬
tion. This is a major requirement
It will be bet¬
a
question
volume of goods
the inflation cycle.
take
ineffective
are
If this
is
the
the
The bill will not author¬
ize rationing. That would be left
to a second action by the Congress
of
tion
with
made, for instance, by the oil in-dustry in fuel oil for house heat¬
ing which has been moving up
meat
a
manage¬
Their
must
the
It
credit that
responding contribution should be
of the ways in which infla¬
tion can be arrested.
-
markets be reduced to
cisions
or
inflation.
a
control of the kind and volume of
expansion
companies involved.
of the general
position
less definitely stated by Adam
Smith.
of
large measure for
fiscal and monetary policies. It is
largely responsible for monetary
policy although in the question of
the part of those already
in the upper wage income groups,
are
of
control
sufficient.
Further
tive desk.
cost
structure
po¬
is
conditions will the evils
us
the
sition concerned makes it possible.
It would seem clear that a cor¬
continuously in spite of very"satisfactory earning records by the
This
or
has very defi¬
responsibilities in
of the Federal Government if
pri¬
vate policies with regard to credit
materials, wherever the profit
cally in the service
interest.
25
,
The government
nite
lowed by others in such important
lines as textiles, clothing, building
the people of the country for con¬
elements
question of
a
morals?
in which the standard of
tioning operate.
Let
Co.
trol of meat prices is so strong as
to be politically irresistible. Only
on
our prob¬
question of economics and
a
That announcement should be fol¬
for
item
bench, the counter
of
Electric
that the
whether their place is at the work
iness
the General
announce¬
distresses
ductive
tive
I refer to the
productive elements of so¬
The interests of those pro¬
of the
and
company
contribution to stabiliz¬
ing the cost of living, it is evident
culture.
which
testi¬
country is decreasing and the
demand, based upon in¬
creasing money incomes of the
group which is receiving increases,
and
services
universal
money
tration
unrestrained inflation. The
the
lem
responsibility lies first
banking system. It lies
secondarily with the instruments
the
those engaged in the physical
pro¬
duction and distribution of goods
an
is
of those who ought to know.
mony
The
is and
thing
sciousness is that, under full em¬
ployment, decisions of important
groups of labor and industry as to
wages, prices, and profits are no
longer private matters. They are
'public matters and must be deter¬
a
ent.
extent is the solution of
to what extent is it
ter to
responsibility for
increased living costs.
one
(225)
responsible in
to its price reductions on house¬
hold equipment and similar goods.
its^ most unruly element the larg¬ dilemma
see
upward
-
as
bad
respon¬
increase in food costs
an
risen
is
largely
very
one-third of the
some
Self-Discipline for Labor
meat.
It
which should
has
it?
of
actor.
of
ment
.
look at food by
we
find
we
which
done this.
been
costs, however, is food.
the
reverse
which has
notably and in the public interest
up,
By far the largest
in the increased. living
element
There is
.
_
creeping
and
movement.,
particularly
and
halt
a
elements,
body of unemployed would slow
this inflationary machinery.
a
CHRONICLE
Kent is under
It is clear that the existence of
-up
FINANCIAL
control and the
expense of the rest of the workers
goes
&
ideas
of
self-interest
into
the
longer range and wider sphere in
which
those
T6 this
undertaking of translating
our
springs
larger terms
selves
energy
with
if
interest
really
into
of
action
we
must address
determination
we are
to survive.
lie,
these
our¬
and-
.
1948
Thursday;'January 15,
FINANCIAL CHRONICLE
&
THE COMMERCIAL
(226)
26
TABLE A
industry,
American
throughout
of advances in wage
artificial restrictions
being
now
alone, corporate expenditures will
total $16 billion—two and a half
times the normal pre-war replace¬
Write-offs
against tech¬
Standard-Calif.
man-power
balance with de¬
essential
ments, both at home and abroad.
It is no secret that meeting these
cannot be delayed
economic and po¬
requirements
without serious
litical repercussions.
One of the main reasons
for the
unprecented capital expenditures
the current peak in construc¬
tion
this
and
World
the
reached
almost
are
of
Furthermore,
construction costs
double those
the chart shows
are now
their
reached
39.5
64.2
23.4
40.1
92.5
55.8
46.6
33.4
31.2
33.4
51.6
,
58.3
25i3
93.5
60.5
71.1
v.
41.9 ;■
84.4
55.1
33.7
47.4
80.4
33.7
39.9
28.6
86.2
56.5
22.7
38.9
79.4
25.0
29.0
25.1
55.7
16.3
20.2
6.1
4.1
200 -f
4.0
26.3
142.9
12.0
30.8
47.8
-
3.4
20.3
2.8
15.2
—2.7
9.6
"
.
31.2
,,
4.0
.
41.7
■
'
61.2
44.2
13.8
38.9
25.1
12.0
43.5
24.1
17.0
5.0
29.2
50.5
6.0
24.9
35.3
9.9
8.2
73.2
11.5
39.0
46.9
14.2
44.8
331.0
43.4
86.6
406.6
35.8
52.2
29.5
11.2
18.3
22.4
7
679
1137.0
382
763
716.0
§30 Oils
Facilities written off for book purposes.
tExcludes
estimates: Standard & Poor's Corp.
§Chase National Bank, 1946.
*War
Emergency
NOTE—Adjustment is
essary
for 50%
tEarnings and dividend
intangible development expense,
increase in write-offs.
proceed with nec¬
ating
expansion of plant facilities.
tored
of cash as they
costs are completely disunless they are adjusted to
With
the oil industry.
to
means
i
adjustment of 50% in depre¬
ciation
charges,
oil
companies'
an
costs
earnings, instead of representing
The man¬ an estimated 15% return on in¬
his costs, vested
Besides coping with the prob¬
capital for 1947, are actu¬
lems
we
have just mentioned, profitabilities and price structure
ally
reduced
to
approximately j
on prewar capital costs is living in
management today is under con¬
9%.
(No adjustment for invested (
siderable pressure because of the a fool's paradise just as dangerous
capital base.), Charts No. 2 and
as that occupied by the business¬
simple fact that earnings do not
No. 3 show how a similar adjust¬
reflect
replacement costs. This man who budgets 1948 profits on
reflect
Pressures on
Management
prewar
is bearing down from
directions—from employees,
stockholders and from in¬
from
Organized labor
as well as
stockholders,, are "reluctant" to
understand why management can¬
not increase wages and dividends.
The
reason
for
management's
stands is graphically illustrated in
Table A.
After allowing for a
50%
increase
in
depreciation
charges during 1946—to provide
for increased replacement costs—
30 leading oil companies paid out
almost
90%
of. their
adjusted
earnings in dividends. If the in¬
dustry.: continues
to
distribute
earnings at this rate, it will even¬
tually be forced to finance almost
all new expansion, as well as in¬
creases in
dividends out of new
capital—probably borrowed.
Internally, of course, all oper¬
are
other
employees,
INVESTED CAPITAL
s.
SIX
CENT
labor rates.
Oil Industry
With
ternal operations.
and
current replacement
plan and equipment.
ager
who calculates
of
pressure
three
for additional
Consequently—and in
RATE OF RETURN ON
30.6
\
17.1
the borrowing.
first World War.
It is doubtful spite of a high profit level—these
circumstances are forcing many
that there will be any major de¬
cline from today's level, because companies into a rapid depletion
PER
26.7
27.6
levels and equally rising faster than they have at any
time during the past nine years
above
the peak levels
and are naturally dampening cor¬
in 1920. The graph also
only slightly following
29.9
65.7
15.1
shows that construction costs re¬ porate enthusiasm
ceded
74.5
91.7
44.1
27.6
pre-war
far
as
94.3
41.6
65.0%,
55.8
40.0
41.6
■
87.0
capital
rates
Interest
declining.
is
47.2
67.6
24.7,
Atlantic
than stock, but even
market.for borrowed
the
approximately 70% above
67.0
10.9
of lukewarm
better market
the pre-war years.
63.3
44.6
49.9%
109.3
81.8
46.2
51.9
t9.6
management
in the face
!
58.3
commodity prices have now
sale
61.4%
$26.9
39.6
_
59.4
demand.
Borrowed capital, although finan¬
War I peak
cially less attractive, enjoys a
Statistics, whole¬
Labor
of
reau
% Earns.
99.0%
Ohio
so
words,
Earns.
£2.0
58.5
is reluctant
to propose new issues of common
costs. Chart No. 4 shows what
stock at today's price levels and
means. According to the Bu¬
is
Adj. Est.
mated
Pure
issues.
unfortunately, financing
simple. Tax rates are
designed to
discourage private
capital accumulation and invest¬
ment. The market for stocks suf¬
fered a severe setback in 1946,
and investor enthusiasm has yet
to recover from this blow. In other
not
is
Est. %
Earns.
$20.2
195.9
"■Sinclair
Today,
require¬
consumer
$41.4
273.3
Sun
generous
pay
$53.9
100.2
66.0
41
Esti¬
Earnings
Actual
$20.4
Gulf
through new stock
expansion to take care
ment and
of
to
able
and
Adjusted
Adj. %
% of
177.6
Texas
dividends
and at the same time expand plant
are
in better
facilities through the medium of
mand. In fact, the capital budgets
additional
capital—capital
that
of most companies provide only
was
either
borrowed or raised
for,urgently needed plant replace¬
materials
until
Reported
Socony
against real—as opposed to ap¬
expenditure rate of parent—earnings, it is only nat¬
ural that industry should find its
$6.6 billion. The petroleum indus¬
cash depleted.
During previous
try spent one-eighth of this sum.
booms, when capital expenditures
But like others, the petroleum in¬
and
earnings
were
at record
dustry would much prefer to post¬
levels, corporate , enterprise was
pone present rates of expenditure
Adjusted
Estim.
1947—
1946
*
$32.9
""Standard-Ind.
capital
ment
1947 Est.
154.8
J.
Standard-N.
the
J1947
t$25.0
i*
•Shell
forces working
these
all
With
-Dividends'f
Earnings
rates and the
in
of Dollars)
1946
1946
1946
spent in the
nological improvements
United States for replacement and
construction industry.
expansion of plant and equipment
is at an all-time high.
In 1947
Cash Depleted
Money
Adjusted
1947 Estimated and
;
(Millions
2)
(Continued from page
Actual and Adjusted
1946
,
COMPANIES—EARNINGS
OIL
TWELVE
Current Replacement Costs
And Corporate Earnings
Problem Unique
few exceptions, such as
agencies, the; ^ problems
in accounting for re¬
a
service
involved
at large.
With the petroleum
dustry, however,
special one—and
reason.
The greater the
of
amount
equipment required
plant and
the more acute is
problem inherent in exagger¬
by an industry,
the
earnings attributable to pre¬
charges
for
capital.
As
shown in Table B, industries re¬
ated
quire a widely varied proportion
of investment in plant and equip¬
ment
with
regard
to sales.
than $1 of
investment per dollar of annual
sales, is close to the top of the
list.
Chart No. 1 shows what this
Petroleum, with more
NET INCOME
%
,
'
STEEL COMPANIES
steel
and
oil
There
is
fact
the
escaping
no
per*
a
problem of accounting
for replacement costs is of indus¬
try-wide scope and defnitely se¬
rious character. It can be summed
follows: with no changes in
levels of prices, wages,
costs, dividends, capital
expenditures, construction costs,
or
any other factors, under
ac¬
cepted accounting methods, profit
and
loss
results, will gradually
up
as
today's
material
year after year until all
plant and equipment haye
replaced.
If management'
dividend rate equivalent to
decline
prewar
been
sets a
earnings
today's
the rate unchanged
and maintains K
for the next 10
it will have paid stockholders
largely out of capital rather
than out of earnings—obviously
an
unhealthy situation.
years,
Views
|V
„
Replacement Costs
on
Arguments most commonly pre¬
sented on the subject of replace¬
ment
costs
have so far repre¬
distinct viewpoints:
public accountants,
three
the
those
of
those
225
as
' V.
the
that
sented
OF DOLLARS
250
earnings
centage of sales.
war
(5
MILLIONS
industry
in¬
the problem is a
for an important
placement costs apply to
drastic reduction in
ment causes a
of
economists,
the
and—
finally, those of management.
First, the public accountant who
thrives on principles of consis¬
—
thoroughly tested
staunchly
defends reported earnings with¬
out any adjustment for replace¬
ment costs.
He prefers to let the
chips fall where they may and to
and
tency
standards of procedure,
200
explana¬
verbal
whatever
offer
be required for retain¬
ing earnings rather than distrib¬
uting them. He is convinced that
whatever
goes
up
must come
down and he argues convincingly
that any sound procedure for re¬
tions may
'37
'36
*35
19 34
T
*Af'er 50%
'41
'40
;
'39
*38
\
v
increase
'43
'42
■
porting excessive replacement
costs
should
apply with equal
force to declines in construction
'47
'46
'45
'44
(EST.)
•
costs.
in Write-offs
Second,
** SOURCE.
19 }4
-
1946
CHASC NATIONAL SANK •
t
WHOLESALE
•
economists
recognize the
the
who
present as a time of
COMMODITY PRICES
unprecedented
who
maintain that
inflation
100
and
prices, profits and values should
all reflect the new postwar price
COSTS
BUILDING
come
others
and
AND
INDEX, 1926
>
200
plateau as quickly as possible in
order to avoid deceiving anyone
180
130
as
AU<5
I
.
a
to
With
-
a
160
160
argue
•auo
J
earnings,
justification,
they
that corporate capital recorporate
actual
much
Investment in Plant
A
t
Cement
WHO LESj L£ PfttC ES
and Equip¬
Dollar Sales—1945
ment per
120
0
120
f
TABLE B
140
140
—-——-
.
■
$1.89
t
100
Paper
Chemicals
t
f
M
•
*'
f
ft
'
80
M
y
\/"
•
/
•
Iron and
60
60
BU fLD/ttG C OSTi
'
Railway
*
SCjffCES
•n
iUHCAU OF
76
'81
91
86
"96
LA90H $t4Ti<ST»CV
*tco«Q tofcviRtea
t
to
rmjwsc'
1901
06
li
"16
21
26
ji
36
41
46
After
adjustment for
50% Increase in Write-offs
19
SOURCE:
1939
-
1946
S.E.C.
'
f
-1.12
.95
>
Steel—J
Equipment— —
—
Machinery-Plant Equip
Electrical* Equipment
20
20
:
—*
Autos-Trucks
•
*66
_.Jf )
Textiles
40
40
O
1.49
Copper Mining
PETROLEUM
80
VT 1
'100
Locomotives
Tires-Rubber
Food-Meat
Packing _u_—
r
.87
.63
.58
.55
.38
.34
.32
.30
.29
.21
Volume
167,;
THE,.COMMERCIAL
pienishment will
span the
norm,ai
b^usinessr cyele without
tortion.
Today,
The
case,
American
Institute
great dis¬ Accountants
will/apparently
however, Amer¬
that
ommend
has
/experienced
a
major
downward shift in the value
of,its
currency that has penetrated the
agement, stressing the
immediate,
to state earnings in
such a way that it can
finance as
much of its capital expenditure as
possible without outside help.' In
this
connection,
seasoned
ob¬
write off estimated
servers know that
prices for cer¬
tain products cannot
long remain
at
present high levels,
these same prices are
forming
by
but
that
now
per¬
vital economic function
a
diverting capital
to
the
con¬
struction of sorely needed
plants—
plants which sometimes pay for
themselves in a year in spite of
outrageous construction costs.
what
will
tions
happen
return
to
when
what
normal—say in 1950?
be
down,
business
self
demand
and
the
living with fantastic depre¬
'/a
on
plant
plant
od
HA&BIS
TRUST
reserves
which /will
^//''"i •';/ /'1
Probable Choice of Methods
in actual practice/-the method of
-accounting for replacement
/will probably
vary
from
costs
to
case
accumulated
so
transferred
to
may
Still
banks
U.
145,414,558
Govt,
S.
of
accounting
will,
costs
from
industry
and,'perhaps,
plant.On
even
the
figures
to
have
of the
try.
-
From
be
OIL
U.
S.
Govt,
Loans
&
June 30, '47
23,683,536
67,760,808
■' 65,858,070
secur¬
bills
7,263,757
6,421,685
600,121
600,035
profits-
re¬
industry
of facts
reviewed
seriousness,/of
that the problem demands intens¬
J3irdsall was elected
President of the Continental IlliNational
nols
Bank
Trust
and
Company, of Chicago, at a meet¬
ing of directors on Jan. 9. The
Chicago ^"Daily Tribune" notes
that Mr.
Birdsall succeeds James
R.
Leavell, who is retiring after a
career of 42
years, the last 17 of
which
has
been President
of the
Continental.
The change was an¬
by Walter J. Cummings,
Chairman, after a meeting of di¬
nounced
*
troit
bankers
has
board
tional
of
of
He
will
semi-active
continue
Executive Committee.
in
served
First
various
National
of
years
Later
cial
National
Bank.
in
that
of
one
Bank
In
the
sored
of
1932
he
paper from which we quote which
states that Mr. Leavell is
advance
of
quitting
customary re¬
the
where'
he
has
had
home
a
for
years.
Mr. Leavell began
banking career in 1905 with
the Mechanics American National
many
Bank
in
St.
President
Louis.
of
the
He
became
Continental
1930; he has been active for
in
years
the
American
in
many
Bankers'
Association, and, said the "Daily
Tribune," he was one of the foun¬
ders of the Reserve
Association.
City Bankers'
From the
same
paper
also quote in part;
we
"Mr. Birdsall has been
President
and
of
the
bank
director for
a
Vice-
a
since
the
last
Nearly all his business
1930
year.
career
has
1933,
turn, as
Chairman
of
the
the
promotions
Executive
announced
were
directors.
named
Mr.
meeting
which
other
announced
Vice-President
discharge from the United States
Army in which he served as Cap¬
Assistant
War I,
Air
|
Corps in
World
.
"A number of other
changes in
executive personnel were made at
the
meeting of the bank's di¬
rectors.
were
Two
new
Vice-Presidents
elected, Leland S. Ford and
Kanter,
and
Twelve
changes in the official staff
were
by
Charles A.
They follow:
President.
C.
Wandel
Secretary
from
of
the
Cashier
board
to
Secretary
and
of
the.Board; John C. Calhoun from
Cashier
Alexander
to
Cashier-
N.'
Gardner, Foreign
Banking Department, and Thomas
A. Kenny, Ray W. Ladendorf, Ro¬
land
A.
Wilt,
from
Second
Mewhort
and
Assistant
John
R.
Cashiers
to
Vice-Presidents; Walter C.
were
Leonhardt from Credit Manager to
Second
Vice-President
in
the
formerly Second Vice-Presidents.
New,, Second, Vice-Presidents
Commercial Banking Department;
Clarence J. Kenney from Assist¬
Edward
elected
J.
McGrath.
Homer
are
William
Both
H.
A.
Burnell,
Greenfield,
gene W. Sloan.
'
and
/
,
,
Eu¬
.'/••
ant
Credit
Manager
to
Credit
Alfred A. Zahrn from
Manager;
Trust
and
Officer
from
Assistant
Rutz
Trust Officer.
new
staff
mem¬
ber, was also elected Second VicePresident. Formerly, an executive
assistant to the Chairman of the
Federal Reserve Board he is now
a member
of the bank's govern¬
ment
bond
department.
In the
trust
department William M.
Funck was named Trust Officer
and Assistant
Secretary..
•
7
P. S.
of
j. - ■<., i
11 -
fa
g
.
-, 9 3 7
, 9 4 6- -C H A S £
N A T IO N A L
Trust
Chicago,
and
Savings
announced
Bank,
to
the
stockholders in his annual report
that three members of the board
8A NX
of directors would retire effective
Yugoslavia Wants $¥2
of
Yugoslavia.
The. Bank has
acknowledged receipt of this letter
-
and is
Billion from World Bank
\ /
*
•
.
,
I
The International Bank for Re-
/> construction and Development
nounced
received
on
a
Jan.
7
that
it
as
an¬
has
letter from the Yugo-
/ Slav Ambassador, Mr. Sava N.
/ Kosanovic, requesting a loan of
$500 millions to the Government
,
advising what data will be W. Harris & Co., predecessor of
required before consideration can* .the /bank, and a Director of the
be given to the request.
• /
bank since its organization in 1907
Robt. Huff
to
well as
Visit N. Y. C. President,
man
Robert
ler
Huff, of Dempsey-Tege& Co., Lqs
Angeles, will be a
visitor
week
of
in
New
Jan.
19.
York
City
the
of
having served
President
the
Assistant
W.
with
bank
the
Vice-
and
its
predeces¬
50 years, 20 years as
President and four years as Chair¬
sor
over
to
Trust
Co., of
Association;
&
director of
a
branch
the
of
Reserve Bank.
of Chauncey W.
Vice-President of
as
Union
Planters
Trust
Co.,
National
of
Memphis,
Tenn., was announced on Dec. 31
by President Vance J. Alexander,
it
made
was
known in
the Mem¬
phis "Commercial Appeal" of Jan.
1 which stated that Mr. Butler
tered
the
banking
field
in
en¬
1930
with the First National
Bank, and
the position
worked his way up to
of
Vice-President.
He
held
this
post until he accepted the Presi¬
dency of the State Savings Bank
in January, 1946, serving with that
bank
he
until
became
with Union Planters./
associated
'
■
}./_/
.
..
'•*
•'
}./',/
Frank H. Neely was, on Jan.
1,
appointed Federal Reserve Agent
and Chairman of the Board of Di¬
rectors
of
the
Federal
Reserve
Bank of Atlanta for 1948 and re¬
appointed
class
a
C
another
three-year
began
director
for
Jan. 1.
on
Atlantic
term
which
According to the
"Constitution," the an¬
nouncement
in
made
was
Wash¬
ington by the Board of Governors
the
of
The
Federal
same
Reserve
paper
'
Vice-President
Officer
in
the
Marine
and
Na¬
tional
Exchange Bank, of Mil¬
waukee, Wis., was announced on
Jan.
2, it is learned from the Mil¬
"Journal," by President
waukee
the
firm
of
V
J
'
stated
System.
that the
of
Columbia, Tenn., President of the
Burley Tobacco Growers' Associa¬
tion, as Deputy Chairman of the
Atlanta bank's directors for 1948.
Mr. Neely announced the reap¬
pointment of J. T. Brown of Jack¬
practiced law with
*
Geilfuss, Nicolaus &
Herrick, Smith Donald, Farley
& Ketchum.
Miss., as a member of the
Advisory Council for a
son,
Federal
one-year term.
Geilfuss before entering the Navy
and after leaving service he prac¬
ticed law in Boston with the firm
Carl H.
Red
Grand
by
a
River
Forks,
creased
*
Lewis, after
National
N,
Dak.,
*
was
in¬
than
on Dec. 30
Vice-President of the Citizens
& Southern National Bank of At¬
Harvey, President of the
announced
on
of
Jan.
Omaha,
6
the
election of Howard W. Nielsen and
Mr. Lewis, one of the
oldest
officers
from
the
point of service, began his career
an
employee of the Central
as
Bank
&
Tnust
Co.
of
Atlanta
in
1906, said .the Atlanta "Constitu¬
tion."
Co.
*
Douglas County Bank
Neb.,
capital of
Bank, of
$125,000 to $250,000
stock dividend of $125,000. "
G.
more
ing institutions, retired
as
bank's
from
*
K.
;»*
40 years' service in Atlanta bank¬
lanta, Ga.
*
Effective Dec. 31 the
the
*
*
v
*
Chair¬
board, would retire;
Fenton,
associated
Howard
for
as
and
Cashier
'
Appointment of John C. Geilfuss
as
Trust
Jan.
14./; Albert W. Harris, who
began-his service in 1888 with N,
W.
Fed¬
Governors named J. F. Porter of
Eliot G.1 Fitch./
Russell, President of the
Harris
George
•
Mr. Geilfuss
*
Vice-President
Officer;
Kennedy, another
otfs
to
Trust
"Thomas W. Evans was elected
Second Vice-President. David M.
election
Bank
directors named him Chairman of
for
the
Continental
and
Com¬
mercial National in 1919 after his
the
the
preceded the board meeting. Mr.
Sanger will remain on the board;
the Executive Committee.
Rock
Butler, Jr.,
annual
stockholders
of
the
Robert
in
at
&
Bankers'
Little
The
Jan
meeting of the
Mayberry
was
director
a
Bank
St. Louis Federal
13 after the annual
been spent with the bank and its
predecessors.
He went to work
tain
the
Vice-
on
formerly
the
Co., of Little
he has likewise been
President and George R. Tait from
Vice-President
to
Senior
VicePresident
V.
of
Trust
&
American
of
to
Vice-President
director
a
St. Louis, has also been identified
with other interests, including the
Mayberry from Vice-
President
is
Bank
Commerce
Manufacturers
and
Smith
Rock, the Bankers Trust Company
of that city and the Mercantile -
as
William A.
Mr,
eral
the
late
John Ballantyne—and Chairman.
National
district
In 1930,
Vice-President,
was
President—succeeding
Sanger
elected
of variqus companies.
Mr. McDonnell, who
Mr. Sanger served, in
Senior Vice-President
The retirement of Mr.
Reserve
Advisory Council.
"was
years.
As,
National
Bank, spon¬
by the late Edsel B. Ford
in
of
in
1931, President of the
Council, to which position he was
re-elected
annually
for
eight
Manu¬
of
O.
Mr.
and
be¬
Commerce.
organizers
1946.
member of the orig¬
Directors of the
a
Federal
the
he
Vice-Chairman of Guardian
National
was
Board
Eighth
helped
1907, eventually heading
institution.
came
in
Bank of St. Louis to represent the
organized National Bank of Com¬
merce
November,
on
He
va¬
In 1928, Mr. Smith was elected by
the Board of the Federal Reserve
officer in the Commer¬
an
been
and formerly Vice-Chairman and
Deputy Federal Reserve Agent.
capacities with
uation from Cornell in 1891.
had
Federal Reserve Bank of St. Louis,
the
Mr. Sanger
Bank,
Board
the death of Frank
inal
be
of
the
of
Smith
grad¬
was
Janu¬
Watts
Na¬
after
he
since
cant since
of
to
Chairman
as
President of the
Bank
Vice-President
s j n c e
April, 1947. The position of Chair¬
Detroit, Mich.,
banking, all in
of
years
been
National
man
81
Chairman
Manufacturers
Bank,
56
is
as
Chairman
ecutive
&
who
retired
to
1928, and Mr. McDonnell Ex¬
ary,
4,839,070
facturers
his
•'"*After adj-usfpienf for 50% incric'st in Write
;•/:?// •/•..//
- ]•. -/•/. ,v
/"
Smith had
Henry H. Sanger, dean of De¬
age
advanced
was
First
4,952,988
National
Board, and William A. Mc¬
Donnell,
Executive
Vice-Presi¬
dent, was elected President.
Mr.
171,136,978
*
First
of the
611,311,424
172,345,359
„
the
13, Walter W. Smith, Presi¬
dent,
259,825,530
610,253,444
profits-
meeting of stockholders, said the
tirement age; he expects to spend
his time at Ocean Springs, Miss.,
COMPANIES
Undivided
rectors which followed the annual
in
\V//'■'/•
A.
Jan.
$
bills
&
Detroit.
Carl
Oct. 6,'47
se¬
discounted
after
;
31,'47
of
Bank, in St. Louis, following the
annual
stockholders meeting
on
DETROIT/MICH.
345,674,825
——
curity holdings
the
dis¬
counted
Undivided
OF
1,242,759,958 1,150,852,057
1,177,120,703 1,086,373,179
——_
Govt,
S.
Assistant
as
At the meeting of the Board of
on
Cash & due from
Loans
31, '47
directors
>!<
'* $
'
*
resources-
deposits
Watts
retire
Directors
BANK
'
CO.,
24,017,850
ity holdings
course,
INCOME
30
banks
those requirements, it is apparent
ive study.
TRUST
at¬
.
NATIONAL
Cash and due from
petroleum indus¬
the
BANK
resources—$108,248,240 $103,528,862
Deposits
105,218,848
100,493,952
from plant to
strength
we
for
of
AND
Total
problem is fully stated in
-case
6,065,916
Dec.
here, however, it appears,-that the
the
6,lp6,682
of
s|s
Dec.
170,529,052
would
'
:!<
Total
CHICAGO, ILL.
Adjustments needed to solve
placement
CITY
also
•
board
14.
oanKs
its
board, would retire,] Charles W.
Woods, a Director Cashiers,
H.
years,
the
Jan.
U.
levels.
without
from
186,677,130 ' 179,926,548
dis¬
profits..
CHICAGO
companies will prob¬
ably refer in reports to stock¬
holders to the estimated potential
problems
128,394,15,7
167,470,845
Undivided
other
involved
15
secur¬
& :bills
counted
if
tend to remain
tempting to adjust earnings..."
Frank
Cash and due from
ity holdings——
surplus
capital
costs
indefinitely at present
over-all
/ ./Whatever the theories that' may
be advanced to meet the problem^
over
and
for
BANK,
Dec. 31, '47
Sept. 29, '47
$545,810,368 $520,517,319
508,355,778
482,375,144
Total resources
Deposits
the
of
man
21)
page
SAVINGS
CHICAGO
Loans
a
This meth¬
flexibility, in that
construction
AND
required to replace
equipment
and
provides
and
/another 20 years..,
-
reserves
will find him¬
manager
/produce^
<
all
for
to provide system¬
for estimated addi¬
tional amounts
call
Prices will
low,
atic
vary
ciation
/
/'/. (Continued from
"excess" costs
expenditures
year, or
But' amount
condi¬
we
single
in
27
News About Banks and Bankers
remaining useful life.
incurred
(227)
J-I'vr:,
no
„
practical need
CHRONICLE-
of
rec¬
profit and loss
charges be ^ established . .to^-cover
replacement costs, but- that/ some
sort
of
surplus adjustment b£
wage and price
level so deeply made as an "appropriation" of
that a complete correction is nob
-earnings after het income has been
only unlikely but highly unde¬ calculated in the
ordinary manner;
sirable.
Other concerns may set up direct
And
to
third, there is top man¬ charges
income,- eitherto
ica
& ;FINANCIAL
The
was
Citizens
Central
Bank
consolidated
&
Southern
& Trust
with
in
the
1922, at
which time Mr. Lewis-was named
Vice-President.
He twice has been
President of the Atlanta
House Association.
Clearing
V»»
28'
>'t
**
f'
1 v
J'I V. \K,«
..Ut>
.
*,.»•
f
.Thursday, January 15, 1948
&i FINANCIAL. CHRONICLE
THE COMMERCIAL
■
'l
•■■'
We must stay
Universal Military Training
■
(Continued from first page)
ment.
Only an aroused public
opinion can force that speed.
Within a country, violence
force
is
i
Fascist Italy
international
required to check the
when
Similarly,
was
of
invasion
of
member
a
the
| League. But except for the United
ual
States,' the other countries were
state.
Only the guardians of the, unwilling to use economic force
peace may bear arms and shoot. I in the form of oil sanctions. And
Others may not. In international Ethiopia
fell. Similarly, when
affairs, violence should similarly Nazi Germany violated treaties
the
prerogative not of the individmembers of society, but of the
prerogative
states, but
the
struggle
the
be
-
When
of. the
not
of the UN,
is between
member
of
Great Britain signed a
treaty with 51 nations to facilitate
the immigration of Jews to Pales¬
tine and to encourage land pur¬
chases. In the 1939 White Paper,
Again,
evolution of a West¬
pioneer days.
Everybody
was
Britain
until
armed
courts, sheriffs and jails were in¬
stituted. When men were lawless,
•
effective,
becomes
,
our,
country
prohibited the immigra¬
prohibited land
tion of Jews and
The Jews of
purchases.
Palestine
of the 51 sig¬
natories was willing to use force
to have Great Britain live up to
were
:©nly fools relied on conscience.
Similarly, until international law
'
force,
Hitler.
border town in
ern
force, or a show
might
have checked
But force was not applied.
the League,
of
might and right, it is important
that organized might be on the
side of right.
International affairs are now at
the stage of
territory of members
and invaded
weak.
than
strength,
soldier's
a
None
not
imply
did
many
service
True, Ger¬
universal military
instrument of ag¬
an
as
gression.
But there is nones¬
sential relationship between pre¬
paredness and aggression. In the
past there have been. aggressors
without universal military serv¬
to
peacetime to pledge our lives in
adequate defense and as a result
support of this we may have actually lost lives
Declaration, with a firm reliance needlessly during two world wars.
Unless in time of peace, we pledge
on the protection of Divine Prov¬
idence, we mutually pledge to our lives in defense, we may lose
each other our Lives, our For¬ both our life and our sacred honor,
as a great nation.
tunes and our Sacred Honor."
•
Rich in resources, we must de¬
Our declaration of survival as
Independ¬
of
,
free
a
thus
have
The
are
a
and
our
lien
es¬
an
on
peacetime
large-scale
compulsory
made
taxes
only
first
pledged
annual income
tate.
countries that
have had universal military serv¬
ice and never aggressed. Switzer¬
far
possible
the
against
any even¬
was
and then by
aggressor
her
the oldest republic in Endates back to 1291. It main¬
tained its independence for almost
They gave us a
land.
rope,
seven
At
centuries.
the Zurich World's
I
1939
Fair of
deeply impressed
was
"When you
held
breathing °n
your
social freedom, we
them. Such policy
requires Universal Military Train¬
ing, not irresponsible fantasies
liberty
by
taxation
take
to
that
hand-outs
all- The
care
are
oi
my
cheerfully
Only he is free who dares to
die.
smiles,
after the
battle,
we
dream
the
nobler
dream—to increase happiness in
When
peace
Force
pro¬
more
fending this country and attack¬
ing Russia than universal military
training. And its surveillance cer¬
tainly has a prior claim.
almost
brandish
broken
tough
and
reed."
Our ends and, means
a
are
incongruous.
Defense and dis¬
armament are incompatible.
A
timid State
Department grows out
Soviet bluffs
because backed by
defenselessness.
several
mostly to be collected from em¬
000,000 from the personal income
tax. If we want to get the money
and
employees
ployers,
genera,
health
national
The
insurance
war, I saw Swiss guards patrol¬
the rights
ling bridges and manning pill
of
minorities
were
signed by
boxes, from Schaffhausen to Basle
Romania in 1878 and by Poland
along the Rhine, prepared to de¬
in 1919. The history of the Jews
fend their country against Nazi
respect
to
countries is
aggression. The Swiss were not
sound
real
one of regularly recurring pillage
only militarily prepared, but they
adequate force.
and
massacre.
Since 1939 the
were
spiritually
prepared.
At
The pacifists argue against uni¬
Nazis, lacking conscience, ignor¬
Basle, "Wilhelm Tell" was played
versal military service. What has
ing justice ancf devoid of mercy, six times out of
eight weekly per¬
been the experience with their killed 6 million unarmed Jews in
formances. I inquired of a Swiss
fantasy? The British pacifists in Europe.
friend why "Wilhelm Tell" was
the 1920's gathered over ten mil¬
Unarmed ' and unprepared, the
played so frequently. He replied,
lion signatures on a petition never
Jews of Europe fled and ultimate¬
"We
just want to show those
to fight again "for King and coun¬
ly died in gas chambers and were Nazis that we licked them once,
try."
That was the cue to the burnt alive in fiery furnaces. But
and will do so again, if they at¬
German militarists. Hitler feared
a
handful
of physically armed tack
us."
America needs
such
no longer to attack.
But the Rus¬
and spiritually prepared Jews of
spiritual preparedness.
sians were not pacifists.
They
Palestine fought an Empire which
The whole concept of volun¬
armed to the teeth.
So Hitler
broke its treaty pledges, until it
made a peace pact with them.
teering is futile and puerile. The
threw the issue to the United Na¬
plea to volunteers is, "See the
Perhaps the best way to preserve
tions.
This international organi¬
World,"
"Get
an
Education,"
peace is to be prepared for war.
zation, observing treaties, respect¬ "Learn a
What alternatives have the pac¬
Trade," "Enjoy Good
ing law and executing justice,
ifists? Are they willing to assume
Health," and "Get a Pension After
voted for a Jewish State by an
the responsibility when their un¬
Twenty Years."
Will these in¬
overwhelming vote.
Justice was
ducements attract the best types
realistic plans fail? Indeed, have
achieved by force, not by pleas.
of citizen?
\
they a positive policy? War and
A great British statesman stated
the preparation for war is a mat*the case clearly. Lord Wedgwood,
Taxation Is Compulsory
ter
for
professionals, not ama¬
in a letter dated July 16, 1938,
Suppose we had no compulsory,
teurs; for doers not talkers. Can
wrote to the Jewish Veterans of
the pacifists do anything at all
taxation, but only voluntary con¬
the Palestine Campaign of World
tributions to support the Govern¬
when the crisis comes?
If not,
War I, who were resident in Tel
ment.
Suppose we gave similar
they are irresponsible meddlers.
Aviv: "I am afraid that mere ask¬
arguments citing the benefits to
There was a species of grouse
ing for help is useless. Demands, the citizen of making such volun¬
called the fool-hen.
It was the backed
by nothing but a sense of
pacifist of the bird world. It was justice, play little part in modern tary contributions?. We would tax
not on ability to pay but on wil¬
of
in these two unhappy
and therefore
Will our country
fool-hen among the na¬
and trusting,
tame
be
the
without
Must Be Backed
jails,
the
law
would
fell
It is for the Jews
orders.
Of course, the
would
arguments
become
Government
ridiculous.
Our
would
depend on
examples prove that
Until an inter¬
the United
States must have its own poten¬
tial force to defend its interests.
backed by force.
national force is set up,
The Time
War
not
a
'
mind.
is
Factor
getting complex. It is
of muscle but of
matter
Science is more
important
national
average.
Citizens
have
not
only, rights
not only privileges but
obligations. The British in 1914
tried a volunteer army and killed
off the socially sensitive and re¬
but duties,
sponsive elements of the commu¬
nity. The slackers survived. De¬
fense of the country is a counter¬
part for benefits received.
Until the UN can defend
Beveridge plan for
which would
countries
each
against
an
aggressor,
country must defend itself.
Unitec
the
take
about
about $20 bil¬
(including health insurance
and present levies for old-age in¬
surance and unemployment com¬
18% of payroll, or
lion
pensation). Of course, it would
be taxation, not insurance.
for aid
to education are vaguely stated
but I
would guess
they mighv
amount to a billion dollars a year
various
The
proposals
housing program might cos'
The
$200 million. From the message
we
cannot judge the estimate o'
the additional public works, but
the reclamation program is to be
expanded/ although the Republi¬
can Congress in 1947 appropriated
more
money than has ever beer
before
appropriated
in
a
single
year.
In
defined
not
.manner
some
of farmers if
be raised well above that which
the average income
to
Any such agri¬
exists at present/
cultural program as
envision
to
seems
take cash from the
ury
the President
will certainly
Federal treas¬
in large hunks. More money
school-lunch pro¬
is asked for the
gram,
Estimate
the electrification program,
and
of Taxes
today about $20,000,-
raise
We
come.
coming from?
that
tax we will
about 50%.
personal
have to increase it by
Since
can't increase by 50%
who pay
you
the taxes of the wealthy,
already, most of the burden
have to fall on the lower
80%
will
and middle income groups.
pay-roll
fall
on
If the
collected from more
taxes it will certainly
is
money
If more
the lower incomes.
business taxes and taxes on corpo¬
rations
they
levied
are
are
paid
analysis by individuals
in the last
through higher prices or other¬
wise. So, in one way or another,
60,000,000 workers in this
are going to pay those
the
country
directly or
increases in
additional taxes, either
further
through
prices. •
In short, the President is simply
following the old New Deal prin¬
ciple of promising the people
something for nothing.
No one
has ever found out how that can
be
not
do
I
done.
mean
that all the features of the
dent's
program
I
demned.
to
say
Presi¬
to be con¬
point out that
add up to
are
only
taken
together they
national bankruptcy.
parts of
the condi¬
tion of our people favorably with
1938, incidentally in the midst of
a New Deal depression.
At other
points he pictures the condition of
our people as about equal to what
prevails in Russia. What have we
got for all the New Deal spending
of the past 15 years, except taxes
and rising prices and war?
The President in some
his
compares
message
President's "10-Year Plan"
Now
the President talks about
10-year plan, doubling Joe
Stalin's bid.
What reason have
a, new
we
think
to
that
the social wel¬
the soil-conservation program
fare of our
adequate diets for every Ameri¬
can family.
/
•
than it has in the last 15 years?
Cost
affairs
we
Marshall
of
the
in
Then,
come
field
to
the Marshall
involving about $3 billion
a
year more than we
are now
spending but apparently included
in the new budget. The President
states
that
we
must
maintain
Strong
armed forces, and must
present system at least
add to our
compulsory
universal
military
training. The cost of that is esti¬
anywhere from $2 billion
mated
to
$4
is
President's air commission
crease
to
sage
recommend
our
in¬
in the
Air Force.
of $2 billion a year
expenditures for
an
people would improve
in
more
the
next
10 years
of the
other feature
mes¬
which stands out is the New
Deal request for more power
lives of the
asks
and
interference with the
more
people.
daily
The message
again for rationing, for price
control, for wage control and for
complete power to allocate the
products of industry.
«
It asks
again the power to draft
1,200,000 boys a year out of their
homes and schools and trades and
professions into military training.
It
billion.
about
any
The
Plan
of foreign
Plan,
The
all
says,
States
stop that sort of
argument of the pacifists is
Treaty obligations, honor
and conscience play no role unless
strongest
in
the
plea to main¬
this multilateral treaty, prob¬
before the Japanese.
Jews
false.
made a vigorous
ever written.
But the guaranteeing powers were
reluctant to use force. So China
Palestine to
The above
guaranteed by nine powers. When
the
...
450,000
this."
be
Japan invaded Manchuria in 1931,
China was weak. Secretary Stim-
ably
the
are
lingness to pay. The Government
would
issue
supplications,
not
philanthropy and social conscience.
But though the law allows con¬
thing. The same applies to Jews tributions
up to 15% of the tax¬
arrested for carrying arms.
The
payers' income, the amount actu¬
Bastile was put down for less than
ally donated was only 0.7% on a
and justice per¬
verted. In the international field
a similar situation holds.
The ter¬
ritorial integrity of China was
tain
and
gaol
charge, and no
or
by
in
mocked by some
son
sent to
are
camps
demonstrations
Palestine.
justice must be backed
by force. Law is obeyed even by
potential violators because of fear
of arrest and imprisonment. With¬
out
or
made
by Force
Law and
trial
protest
tions?
Law and Justice
Jews
history.
Now
concentration
became extinct.
"Our ulti¬
mate aim must be a comprehen¬
sive insurance system to proted
all our people equally against in¬
security
and. ill
health.": Thi:
seems
to be a kind of catch-al"
President
The
later
from
taxation.
before the
novelist.
Treaties
to
increases
employment compensation, oldage benefits and survivors' bene¬
fits. In years to come this woulc
amount
to
billions
of
dollars
Where is this money
anthem, unlike the
months
we
would spend
we
$10 billion a year
are now spending,
with
German, there is not a
For
once
than
more
systematic blood-baiting,
was'"SpeatProffly
at
estimate
the President's
follow
we
recommendations
.1
.
if
would
I
Altogether,
that
benefits is to be raised for all un¬
homeland."
In the Swiss
then certainly the Air
is going to play a much
effective part both in de¬
concern,
The level of
intelligent guess.
an
to
present
If war with Russia is our
word of
system, which is not insurance a.
conquest, or of power, or of supe¬ all but the
providing of free medi¬
riority. For generations Switzer¬ cal care to all the people of the
m
-n
point of utter exhaustion of the land has proved that universal
United
States,
would
require
military service is fully compati¬
was
and
bpeaK sottiy ana carry a big victims>
Dig m^igated by no scruples whattaxes, probably pay-roll taxes, ir
ble with ideals of individual lib¬
the neghborhood of four or five
stick." But before and after World ever, orgies of greed and cruelty."
erty, democracy and peace.
billion dollars a year.
War II our motto was and is "Talk So wrote Jakob Wasserman, the
.
idle chatter.
and
Nothing is said of addi¬
come.
tional
defend you.
Eternal liberty is our battle cry.
our
and
must preserve
(Continued from page 11)
to
Fatherland,
with heart and
call,
vow
sons
hand
no
respon¬
individual
of
A Revival of Old "New Deal"
land,
Eng-'sal Military Training, would rely
justice, on international law
spell. Their space gave us time . *>n<l °" the conscience of mankind,
for preparation.
But space has But the history of the Jews of
shrunk.
Bombing planes and, Europe is tragic witness to the
rocket bombs cross borders. There , futility of such reliance. Unarmed
is
defense line now.' Russia 1 and without defense the Jews for
collapsed in the First World War i centuries have been the victims of
because she had no intervening1 "accumulated criminal fury, ruthspace before the aggressor. Only | less massacre and malicious slanher thorough preparedness saved der, spiritual and bodily ravishher in the Second World War. i
, ment, fanatical persecution to the
first by France
Heirs
them.
face
And there are
ice.
treaty obligations.
new
sibilities for world peace, we must
like pledge.
a
Taxes
fortunes.
on
people
But,
independent
national peacetime policy, we
a
as
and
requires
now
Great in
fend them.
Though the
posed. " The people are to get
the section of the exhibit devoted
original area covered by the Bal¬
something for nothing from deai
tuality. ■ \ _.
.
'■
.•
four
declarations
was
40,000 to extolling universal military old Santa Claus.
U. S. Saved by Miracle
training. The Swiss have had a
square
miles,
Great Britain.
Cost
of
Social Security
The United States was saved by wrested
therefrom
30,000 in citizens' army for generations and
are proud of it.
Preparedness was
Proposals
a miracle twice, in the world wars
Trans-Jordan and in several par¬
the essential basis of the Republic
of 1914 and 1939. Let us not rely tition proposals would have whit¬
What are these proposals likelj
permanently on the inevitability tled the area to 1.200 square miles. and its continued existence. The to cost?
They are so vague it is
Swiss National Anthem reads:
of miracles.
The defense line
The pacifists, opposing Univerimpossible to do more than make
prepared for
be
must
1942, which brought us victory.
have
thus
far
refused
in
We
the
for
"And
i
tyranny.
use
industrial mobilization from 1939
concludes with the words:
ence
years to
train men in military
chemistry, mechanics and elec¬
tricity.
The more complex our
civilization, the longer is the time
necessary to prepare for defense.
Universal Military Training does
the two
of
dead
Declaration
Our
and
armed until all dis¬
our
will have died in vain.
wars
technology than individual tough¬
ness. It takes months and perhaps
Ethiopia,
invaded
else
arm,
asks
cialize
again for power to so¬
and
nationalize
medicine.
Under the President's health pro¬
gram,
would
$3
billions or $4 billions
into Washington in
pour
Volume v167
pay-roll
taxes
be used
to
Number 4664
by
all
pay
or-
to
taxes
to
the
Washington bureau
a
the
United States to
service
other
THE COMMERCIAL
all
doctors
-
people
in
That
means, in effect, that all
doctors would
become em¬
ployees of
It
ment.
the
Federal
means
Govern¬
methods
He
Certainly,
come.
could
intrude into the free¬
is
this
vious
housing.
in Washington bureaus. If
destroy the independence of
we
of
the
the
methods
price
retain
dom in
1
free-|
popular
any
-1
he has had
The
he
prices.
starts
ens
President
said that
Truman
himself
rationing and price
low-income
trol;
are
Such
methods won't work
police-state
zen
to
methods.
his
and
groups
an
obligation to his
contribute
we
States
saw
in
under
tax
time, as
They can't
peace
OPA.
up
over
If
night.
these
forced
tion
.
; ■
;
.
controls
could
be
i
en¬
they would stifle produc¬
they have in Europe and
as
did here—and
more
the
solution.
ultimate
the
The
the
of
real
causes
no
The
ultimate
solution ; of
prevented.
Then,
while
you
The
doesn't
I
of
the
need for
$50
'
expand
billions
in
and
to
that
the
.
should
productive
President
corporate
profits
economic
in that; In 1948
ing. four times what
spentl before the war.
,
still spend¬
was
ever
of
the
of
a
for
first
in¬
facilities
In
report
said:
have
"High
provided
1947."
business
vestment
spending.
That Will set an ex¬
ample and enable it to get some
it
cooperation
go
from
the
people
.
so
that' they can spend less and save
more, r The
biggest inflationary
element
has
goods and
been
the
services in
export
1947
up
President expect
course, prices have gone up.
Of course, wheat is at S3 a bushel.
The President had full
power
to
exports, but he hasn't used
of
make
$50
and
makes
new
money to
It is
estimated
investment to create
If
we
employment
vestment
must
one
want
going,
continue.
new
new
job
to keep
that in¬
I
$40
doubt
.
a
head,
whether
.;
but
sometimes
smart
politics
I
is
smart.,
Twice last year, President Tru¬
man vetoed tax reduction
bills on
■
:
,-v.
-V-
Monetary Fund Summarizes ^
Transactions to Nov. 28
I
for other currencies in first nine months of 1947.
h;
We will work out
lines,
the
and
have
made
on
currencies
Nov. 28, 1947, just released, the
of member countries for U. S. dol¬
lars to the amount of
$433,445,000 and bought pounds
amount of £1,500.000 or the equivalent of
program
.
principles
of the following
money
seven
Currency Bought
Chilean
we
this country the hap¬
232,500,000.00
16,316,599.99
14,888,375,000.00
109,237,500.00
95,622,001.94
14,000,000.00
Kroner
French Francs
Pesos
Liras
Pounds Sterling 1
$7,500,000.00
$439,445,000.00.
In
addition, the Fund sold $24,164.52 of U. S. dollars against gold.
The Balance Sheet of the. International Monetary Fund as of Nov.
26, 1947 stood as follows (expressed in U. S. dollars):—
ASSETS
1
Financial
38,742,962.156 fine ounces
$35 per fine ounce)--:.
Balances with
Chronicle)
CHICAGO, ILL.—Carl X. Blom¬
berg has become associated with
Thomson &
La
McKinnon, 231 South
Salle
Street.
In the past he
Manager of the trading de¬
partment for E. W. Thomas & Co.
was
and
of
prior thereto was an officer
Taylor, Duryea & Co., Inc.
-(Special
to
The
Financial
CHICAGO,
O'Brien
has
West
Adams
been
Other
established
not
to
values
Assets
DETROIT,
has
Financial
1,309,352,613.63231,421.52
$7,921,738,436.84
subscrip¬
$7,921,500,000.00
,
Excess of
income
Chronicle)
MICH.—Howard
joined the staff
Building,
-
from
expenditures
over,
inception to Nov.
28, 1947
Net
—
\
96,910.72
~
capital
7,921,403,089.28
Other liabilities
335,347.56
Exchange.
Campbell, McCarthy &
Buhl
,
LIABILITIES
authorized
tions
Less:
Total
Palmer
estab¬
•
;
Chronicle)
With Campbell, McCarthy
The
been
Capital—
staff of Charles A. Parcells &
Co.,
Penobscot Building, members of
to
.
'
DETROIT,
MICH. —Peter
M.
Macpherson has been added to the
.'(Special
.
184,465,113.63t
members'
i
Nongard, 105
Financial
the Detroit Stock
have
4,375,097,266.25
*
$
until
.
_
1,124,887,500.00
Total
the
Street.
The
due
Assets
D.
to
With Charles A. Parcells
(Special
$1,356,003,675.46
881,053,459.98
Balances due and payable—mem¬
bers
whose
par
values have
Members'
5
,
Depositories*.
demand, in members'currencies
Subscriptions Receivable—
par
Chronicle)
added
S.
lished
I L L.—Roy
been
(U.
Non-negotiable, noninterest bear¬
ing, payable at face value on
Ketcham & Nongard
Adds to Staff
*
Dollars
S.
Securities of Members—
Balances
:
U.
Gold With Deoositories*—
Carl X. Blomberg With
Thomson & McKinnon
The
3,400,000.00
125,000,000.00:
22,500,000.00
36,045,000.00
5,000,000.00
240,000,000.00
59,553,349-17-8
the face of the globe.
to
was
Equiv. Dollars
Pesos
Mexican
The total
countries:
of
justice; which
sterling to the
$6,045,000.
exchanged for the
Mon¬
ended
Netherlands Guilders
followed for 150 years, and which
piest
quarter
organization bought
Turkish
our
the
along those American
within
freedom
Fund for
:
>
According to the financial statement of the International
etary
it
money
at
Boys' Club Alumni, sponsors of the charity
Exchanges $433,445,000 of United States dollars and £1,500,000
sup¬
is smart politics to take
out of corporation profits
and divide it out
among the voters
pose
the
International
Danish
great in¬
billions if taxes
'away the profits
industry.
is J. Rankin O'Rourke of Ira Haupt & Cck,
on
of
.
ma¬
this
into business?
in
Of
to
today that it costs $6,000 of
full
compete with
our
citizens
for
goods and services produced here.
cannot
basis.
on a permanent
staff of Ketcham &
unprofitable for
to
billions, against only $8 bil¬
lions of imports. Ten billions came
in here, mostly loaned
by us, to
limit
take
of
$18
communities
his
last
heavy volume of business
during the first half
Now does the
step to stop spending
Government to stop
the
and
of progress
win,
substantial proportion
.
The
is
ity
put
investment
are
those fields where the
running at full speed to
provide employment and prosper¬
any
be
few years."
mid-year
July, the
funds for
bouts.
state and local admin¬
on
chine
50%
industrial capacity
growing future! At
next
Looking
enterprises fail
who start them
billion
our
the
over
a
Side.
who is President
pro¬
policies to keep the economic
cor¬
to
Handing the ticket to Mr. Schram is
member of the charitable, non-sectarian organiza¬
a
tion which caters to the wants and needs of 6,200 boys of New York's
way.
lower.
industry to improve and
$38 billions two years later when
we are at peace.
Not much credit
we
a
We will insist upon sound fiscal
the
place in his message the
President says: "We are
today- far
least
1946, when we were
engaged in war against Japan, to
with
adequately do the job which ought
one
vested by
$63
States
is
Stifling Investment
In
short
year
proceed
limited to
(Special
!
budget from
ex¬
istration and control, and Federal
aid in reasonable sums will be
lose."
a
fiscal
be based
which
discouragement to
people
word about the need for
economy.
He claims credit for cutting the
say
every
Club of New York.
Schnup,
to
tax- East
the
of social welfare in health,
housing and social
security.
But our program will
are
Economy Neglected
President
the
tails
always encouraged.
for
burden
lose all the money
they have
in.
It would be "heads you
we
Need
and
scrutinize
will
course, many new
increasing production — which
takes time—you have to cut down
spending, and that is what price
control has
tax
the Boys'
gram
the
and
tion is to increase production, and
that is what controls have
always
effort
every
expenditures, and
Golden
Gloves Bouts to be held at the St. Nicholas Arena for the benefit o£
James
taxes
(right), President of the New York Stock Exchange,
education and
Government is going to
take half the possible
profits. Of
infla¬
starts
the price.
up
make
will
We
infla¬
the increase in
course,
another
that
dollars.
and
sary.
full
emnloyment and to lower
prices. New enterprises are less
likely to he started if persons feel
to buy things than there
things to buy. We are pro¬
ducing more today than ever be¬
fore,
but the
Government has
paper
be
will
We
/ V..
his proposal
Emil Schram
purchases the first ticket to the elimination contests of the
penditure, including the Marshall
plan, so that it may include noth¬
ing which is not absolutely neces¬
increase in production needed for
;of inflation.
there is more
in
burden, and cut them for good.
straight
poration taxes from 38%
are
more
total
refuses
Of
money
still
the
President
sense
some government
steps
really cut all
according
a
would
so
prices,
| is
shows
Prices go up when
created
is
greatest
President
says
increases
Freedom
to help Europe.
us
down,
cut government
in
in corporation taxes won't
paid until 1949. In any event,
it
production is
reduce
threat¬
or even
equally inflationary at this cru-» to be done for the benefit of those
cial time, because it takes effect
of our population who cannot earn
at once, whereas the
proposed in¬ their own
be
producer in the
world, and have made it possible
for
reduction
to go
crease
and free competition made Amer¬
ica
President
tionary, but if
be enforced. Black markets
spring
to
Whenever any food price
going down,
We
gov¬
,
United
wanted
buying to keep
less
means.
The
in the
he
department
$200 addi¬
persons
to
owes
ernment
con¬
used
if
as
since the war, but
them.
It doesn't
ever
hasn't
look
proj- | than $50 additional exemption for
ects.
I only point out
that, taken those in the higher groups. It is
together, they will add up to a 1 about as discriminatory a proposal
totalitarian state.
*
I as could be made, and if follwed
The fOryear Truman plan
wpuld:f. to .its logical conclusion will ulti¬
leave about as much freedom in !
mately exempt a large proportion
this country as Stalin's
five-year j of all income and shift all taxes
plan has left in Russia. Not only ; on to a very small
proportion of
do control measures
destroy free¬ the population. Up to now we have
dom; but they don't get the re¬ gone on the theory that each citi¬
sults.
pro¬
ods.
We have given him every¬
thing except the OPA and wage
fixing and rationing, police state
methods. All the important powers
to condemn all of the
mean
Congress
with its program.
on
■
It is equivalent to a
tional exemption for
the
to go
consistently given the Presi¬
dent all the powers he needs to
stop inflation by American meth¬
dealing
.,
the
It has
11,000,000 taxpayers off the rolls
a
country the size of the
States.; Again, I do not
United
of
situation.
vetoed
Program
Republican
poses
by
recognizes that taxes
are unbearably
high and proposes
a credit of $40 to each
individual
taxpayer plus $40 for each de¬
pendent.
This will take
about
communities, I don't, believe f altogether.
can
paid
President
power
our,
prices
The
President's Tax Proposals
with
The message follows the standard
New
Deal
line
that places
all
we
higher
Truman
Republican
The tax
is passed on for the most
into
that
with your money.
of
Less Government spending and
Jess taxation
are
the most
ob¬
preserving
or
Government
70%
said
—election year—for cutting taxes.
It looks to me like playing
politics
productive workers.
The
word
the power of the State and local
communities to improve their own
affairs or direct their own educa¬
welfare
of
the other
of
publican sponsorship and that he
would try to get credit this year
national in¬
cost
on
member
every
newspaper correspond¬
radio commentator. They
tax bills last year because of Re¬
the
our
of
Congress,
ent and
taxes, it amounts
of
he asks for tax reduction.
prediction
every
consumer
for
the
food,
clothing and shoes that he buys.
Throughout the message all the
emphasis is on action by the
health,
This
ourden
oart
a
30%
Emil Schram Purchases Golden Gloves Ticket
The President has followed the
all
With
mes¬
and didn't get?
year
inflation.
billions.
local
burden
a
the
family than
$40
and
about
is
Too Mucluon Federal Government
tion,
about
state
nothing
Federal Government. Not
is said anywhere of
creating
preventing
a
29
you will get tax reduc¬
tion now, but what about the re¬
duction you were entitled to last
only wants control.
treatment.
of
of
in
inflation is
says
(229)
Probably
Outside
to
medicine
billions,
Now
in which he
worse,
in
of
controls, his only
suggestion is that taxes must re¬
main high. Our tax burden
today
they could have X-ray treatment.
government
kind.
increase
ways had to restrict bank credit.
The President doesn't
say a word
about
any -of
these
American
Two or three hundred thousand
Federal employees would
regulate
every
detail
of
their
medical
dom of the American
Administra¬
loans
many
more
paper
dollars,
and failed to use the
powers it al¬
ment by regulation would deter¬
mine when any family could have
a doctor come to their home and
when they would have to
go to
the clinic or the
hospital, whether
more
the
bank
by $5
CHRONICLE
they would in¬
inflation.
crease
that
Govern¬
that the
let
year
FINANCIAL
the pretense that
a
mes¬
sage
Furthermore,
a
say
•
tion
the
'
the
about
sage.
'■
-
,
and he doesn't
using it in his
power,
word
the
give free medical
the
United States.
in
&
«The
of
by
Co.,
of
Inc.,
the
not
include
been
received
by
$7,921,738,436.84
—
10,728,550
fine
ounces
held
in
suspense
in
the
a
latter.
o*
proportionate increase of its subscription in the Bank ha:;
This certification has not yet been received from the
Bank.
Furthermore, an amount of 3,476,250.00 Guaranties
cluded in the Fund's holdings of currencies for the same reason.
tInclude-3
respect
to increase its quota. This gold has been accepted subject to
International
Bank
for
Reconstruction
and
Development
that
the
Paraguay's application for
International
members
Detroit Stock Exchange.
Liabilities
does
Paraguay's request
tification
L.
gold
$171,516,799.99
due
from
a
new
Member, Australia,
payment
is
not
for
in¬
which
30
Federal
Prices-Profits-Productivity—Three Peas in
(Continued from page 2)>
ward once the war was over. The
realistic solution for this problem,
troleum.
then and now,
our
is correction of the
and fiscal pol¬
unsound monetary
Price
caused it.
icies which
con¬
ceed
of
reserves
our
crude
these
pe¬
To meet the demands of
customers,
have
must
we
trols, as was amply demonstrated,
supply
this
of
development
price.'
Pod
a
are
Profits
system/
the facilities when
Of course,
are
been
is
-
•
.
.
the illusion that industry
secret reservoir of profits
ing of
has
a
and
Foreign Commerce
Commit¬
this
Chairman
and
National
of
Pe¬
its managers troleum Council, very ably illus¬
'
were
not
malevolent, either to, trated this point.
Recalling the conditions existing
raise wages further without price
increases, or to reduce current immediately after the first World
War, he proved convincingly that
prices. •"Y:/!/.' Yy'Y'/ ■ //:• /'•'.■
Such has been the preparation a price rise of $1.40 per barrel
from 1919 to
1920, bringing the
of the American mind for the
pro-^
posal that came in November for price of crude oil to $3.50 a barrel,
gradual
sufficient
governmental authority to control
was
prices and distribution through a
system of allocation and rationing
of commodities
in short supply.
crease
be devoutly
should
that the
Congress
these
sisted
thapkful
far has
so
re¬
But Con¬
proposals.
-
would be irr the. grips of $trangula-
1947,
Ijp^fei^iminary
for
estimates indicate*B:8% Return for
of $1.77 per
search
decline of 37
barrel than the
or
a
per
industry,
Even
price reduction
barrel during the fol¬
year,
more
the
a
cause
to
Federal
before
be
can
them
upon
of
objective
the
and
tionship which had occurred dur¬
ing the decade through 1931.
Several
Not. only
have large masses of
people been confused and fooled
but surprisingly, many business¬
have become indoctrinated by
men
eries
choice.
rather than apologetic for
choose
the
choose
those
fiscal
inflation.
.
title
the
distortions
first
came
'
tivists.
(...
the
The collectivist
-Y
w
.
untruths
and
from
collec-
important
discov¬
new
have been made within the
last
few
the
recent
v Y/,:
•
...
manipulators of
this propaganda campaign to dis¬
tort
the
truth
meaning
real
the
about
prices
of
profits
and
know
precisely ; what they are
doing. They know that they are
striking in a flank attack at the
vitals of American competi¬
very
tive
enterprise, which is invulner¬
able
to
any
frontal
...'.
They know,
even
if
ly functioning prices
enterprise.
They
price mechanism
of
our
some
are
of American
essence
.
have forgotten, that
nessmen
by
assault
them.
busi¬
free¬
the very
competitive
that the
know
is the
governor
enterprise system—that it
controls the volume of
and
demand;
shifts
expanding fields;
production is
greatest demand and gives
consumers
.
workers
moves
and materials where
in the
production
savings into
full
months," the
war
effect
eries
first since
when the
years
When
prices are subject to con¬
administration, by the
government, or for that matter by
However,
these
the
discov¬
new
supply-de¬
present
mand situation will be
or
approximately 8 cents
on
taxes
fect
corporate income, the ef¬
on
would,
cost
consumer
on
the
at
of
living
best, be relatively
insignificant. ";
of
-.All
;
realize only
us
that the dollars
have
we
*'
well
receive1 toda^
greatly shrunk
in -value in
little
some
not
that
so
the
more
generally: recognized
peasdfTa, pod
dollar of
an
power
'than the
individual. Now while
these
earnings in dollars ha<Vey generally
This develop¬
greatly influenced by the
tubular goods available to the in¬
corporate
profits' "or
net
their pur¬
dustry.
Today,
all
indications chasing power has very substan¬
point to exploratory and develop¬ tially decreased. In other words;
ment programs being undertaken when industry today undertakes
at a record rate and essentially to spend these inflated net earning
dollars it finds they will buy onlyv
because price presents an incen¬
tive compensating this financially about one-half as much of the
things needed as was possible a
hazardous operation.
few years
ago.
Viewed in that
Coupled with this retardatory
light we get these profits in proper
action respecting the price struc¬
perspective.
ture of petroleum have been sub¬
Corporate profits or net earn¬
stantial increases in the prices of
competitive
commodities.
Even ings are utilized generally in a
two-fold manner—they are either
with the recent price increases in
petroleum, that commodity
has
the
shown
smallest
rise
when
compared with other raw
materials included in the Bureau
of
Statistics
Labor
price
index.
Since the base period of 1926, the
average
of all
materials, in¬
oil, has shown an
raw
increase
82%
of
compared
with
increased,
speaking,
distributed
the
to
owners
of
the
business in the form of dividends
or
plowed back in the busi¬
for its expansion or to replace
equipment and facilities that have
worn out or become obsolete.
A
,
study of the record for the same
years
I mentioned before—1929,
1941
and
surpluses
facilities
develop,
become
productive
over-expanded,
as the case may be, are left
undeveloped. When a price for
one
commodity is artificially re¬
or,
.
pressed, while prices for competi¬
tive commodities are permitted to
consumer demand shifts. This
has happened in the case of oil.
rise,
Oil
Prices
Today,
are
crude
faced
we
in
with
the oil industry
a
tight supplywhich
only
can
be solved in the long range
increased
moval
of
through
production and the re¬
the barriers hindering
effective
zation
of
the
and
economic
utili¬
industry's vast
petroleum.
develop
ing
desire
an
the
on
Now,
ever
part
of
con¬
including industry gen¬
erally, to enjoy the benefits in
heating and energy creation of
high quality and comparatively
low cost petroleum products.
sumers,
Thus
arbitrary
tinkering with
prices, whether it is in the direc¬
tion of putting false bottoms un¬
der them or
artificially holding
gas
tive
enterprise
ward
in
trend
the
system
and
pre¬
worn
out, and to expand the busserve the
irttss in order betteV to
demands of the consuming
sterling
bonds
fund
ing
1961
and
of
1911
due
consumer
of
his
economic
fran¬
wants.
Irrevocably tied to price in our
:
,
These bonds
crue
from Jan. 1. 1947 and
able in cash
Of
the
further
ance
two
two
years
years,
Holders
of the new
turity
Peruvian
has
investors'
Protective
accept
the
"Council"
The
since
certain
its
New
York
The
interests.
Peruvian,
and
Republic
is
ex¬
tending the terms of its June 2-3,
have
bondhold¬
1947 offer to American
June
of
auxil¬
Dec.,/3fY 1948
until
ers
aforesaid
unofficial
an
for the third
to the ma-:
bonds in 1997.
opposed the plan
promulgation by
vigorously
ever
bondholders not to
plan"
is
Council
2%
and 2V2%
Berkeley! Williams of Richmond,
Va., who is holder of Peru's bonds,
American
recommended
years
bondholders
ond
be pay¬
only $5,350,000 had ac¬
cepted Peru's June 26, 1947 offer
up to Dec. 10.
The Foreign Bond
1948
30,
as,;,
instead
originally!
■''Y.:Y
olanned.
iary of the State/Department for¬
Wanls N. Y. Chamber of Commerce to
..
Support
Revival of Cold Standard
i*.
'
i- •"«
'
(Continued,from page 20)
please the Chamber to refer it to
the Committee on Finance." resolution
Proffitt's
Mr.
follows:
is
.s
i-
its recommendations
March 6,
"RESOLVED,
of
the
as
soon
>
! '
' /
(the Silver Purchase Law of
7/6/-1939, if not now en¬
tirely repealed)
as
the resolution
31 USCA Sec 734
(Gold
said Committee
Reserve
Sec.
1947/ to wit—
the Congress
States, now in
that
United
6/19/1934)
316c, 821, 822a;
%
};
Silver Purchase Act of
Sec
314, ' 316,
(the
Y
as
RESOLVED, that the Committee
on Finance and Currency report
and
session, be petioned to restore
the
status-quo-ante,
1932,
in
respect to those currency and
banking acts, -rewritten upon
the accession to* power of the
31
Sec.
Pub
Y
1934,
-Y
733
Reserve
9)
No
Res
of
■
USCA Sec.
(Gold
Act
8)
Act
of
1934/
';
10, 6/5/1933
(the 'legal tender' act, which
apparently
is
in
conflict1
*
New
Deal, in that year,, which
would
require the repeal of
those sections of laws indicated
Y
below:
complication in this
is the depreciation allow¬
on facilities permitted by the
16
past
hands,
corporations retained 55%. These
figures reflect the need of corpo¬
rate endeavor to retain increasing
A
£1
$81,850,000
in
interest due for
unoaid
all
andto paya
reduced
interest return of only 1% for the
first two years, l Vz% for the sec¬
the
American
Market.
on
regard
skip
'is; made. The new issues are now
Issued on the New York Curt
bonds
this-,
ils external issues sold in
on
country, the Republic proposes to
the day exchange
on
itself to pay
originally obligated
principal; amount of outstanding
sterling/bonds. Interest will ac¬
of
45%.
in
>,
.-
amount of new bonds for each
the
only
as¬
Peru
dated Jan. 1, 1947
referred to
received
were
administra¬
the State Department,
Treasury Department and Federal
Trade Commission. Instead of the
6% and 7% return which Peru
tion: by
maturing Jan. 1, 1997, are ex¬
changeable for new external sink¬
ing fund dollar bonds o* 1947
series E at the rate of $4 pr'neipal
upon
holders
late F. D. Roosevelt's
Municipal Loan
1965, which
Republic of
,
1.
and
of
chise to buy what he
by
mulated by ex-President HerbertHoover and organized during the.
series,
Provincial
Honorable
"Council of Lima
for
profits after taxes and retained
33%. In 1941, 46% was paid out,
and 54% retained. In 1916, stock¬
interest for 16 years, the Republic of Peru
on Dec. 10, 1947, to resume service with
on two issues of its external loans.
The
which service will be' resumed are: Peruvian
pay
second
bonds
practicable
1929,
^ i
external sink-^
6%
example, corpora¬
tions paid out to stockholders 67%
In
Republic of Peru
New York Ourb
on
dated Oct. 1. 1928 and due Oct.
it from
objective
on
National Loan
public.
achieving its true proportions of net profits to meet
serving the public the constantly higher cost of re¬
welfare.
After all, controlling or placing old facilities and installing
administering prices denies the new ones.
vents
to
reduced 'interest payment
proportion
increas¬
them down, disrupts the competi¬
and Production
demand situation
the
for
or
is thrown out of kilter—shortages
or
33%
principles,
these ' economic
ahnburicedVIts / intehiion
1946—indicates^ down¬
of
lest I be misunderstood, I am not net earnings distributed to stock¬
attacking the prices of the other holders, and a correspondingly
any influence except that of the
commodities included in the price higher proportion retained by cor¬
market place, the functioning of
index.
However, the effect has porations to replace equipment
a
competitive enterprise economy been to
and facilities that have become
trol,
Now Listed
^»^
are
ness
each sep-
are
7'^YAfter failure to
dollar has no
corporate
purchasing
is
ment is
still
responsibility and
with regard!
safeguard their free.play in order
that we may: continue to: eihjoy; an;
ever increasing standard of living;
Pod.
a
Issues of
each
e
will
time in developing.
cluding crude
what they want.
frozgn by gov¬
was
of
the
on
crude
accordingly.
.your
being
1919.
that
is
to
as
is
ing
It
So they are,
as
replacement costs.
echo¬
him
treats
remarks
these
of
of goods we buy.
system which
mine to be informed
Profits-Prbductivity
for
sumed
are
kinds
one
•
«
Three Peas in
the market pi ice." What, however
of them
us/
choose the
understand their functions and to
ernment order at less than current
many
govern
will'.recall I indicated Prices-
you
price structure
wittingly
worship,
we
who
choose where we work
is the solution for
policies
all of
have been subjected. Un¬
way
It is the
recognizes and'
productivity; respects the dignity of man, and
the poisonous propaganda to which
us
It includes the freedom to
We should be proud of our
.These
of
Freedom
ations.
the
combined
corporate
earnings in 1946 were only 7.9%:
our
this insidious campaign.
'
profits
taxes,
successfull
only if
American
the
know; as
we
way.
en-
state
and
in that original price increase. He further dollar of sales. I am sure you
people can cited five additional instances il¬ agree from this comparison that
be brought to realize the decep¬ lustrating the effective function¬ were
corporations to forego all
tion which has been perpetrated
ing of the price and supply rela¬ profits and the government all
gress
resistance
ofrpyr free, competitive
the first nine months of this year.
to
lowing
pleted figures fojy the year
for all
Results proved so abun¬
oil.
as
com¬
is. private en^
the market
tetprise'^fySWrn^W^: must resist place—economic freedom—is in¬
£ these attacks on profits. We have separably a part of the greater
nothing to conceal about our oper¬ American freedom: freedom of
Lruits
In. the
no
which they rest
.life
Americans ..enjoying the
.
a
tefprise, the basis for the way of
Professional-and businessmen
; as
side, too, for the pads
moral
is
in
.:v'fe/Y;.y-• 7Y
■
and to 5.6%
have
we
in¬
radically
new
dant
cents
incentive
in 1941
1946."; While
in¬
,
constantly* Ys 7)6:; works: toward y thetotali-. I
jobs, until eventually there, tarian state by distorting and di.-i
would be none.; Productive' ca¬ crediting the fundamentals of suc¬
pacity,?,, instead of expanding to cessful private enterprise.
,
meet the constantly, increasing^de¬
But Prices-Prof its-Productivity
mands: ^\oL* the; American people, are not
only economics.
There
fewer
productivity.
And
coupled with sound monetary and
figures covering our own in¬
dustry declined from 10.8% in
1929 to 6 6%
uliminaie
stead of expansion, and
and in ,1948
periods
same
the
in
retrenchment
,
free market prices and;
strangle production.
profit incentives; and
pr"ductive capacity is throttled.. :•
This is the aim of the collectivism
up,
worry on
was
sales dollar show remarkable con¬
5.4%; in 1941 5.2%,
4.7%. During these
no
profits
/the im¬
perative of enterprise. They, are
the mainspringnf? creative effort.
They are the incentive leading to
sistency^ In y1929 the figure
of them influence
any one
ixs uoy
But liquidation would
score.
mean
using
we are
would have
we
them.
tee, Mr. Walter S. Hallanan, PresY Stales Department of Commerce,
iclent of Plymouth Oil Company net profis as a proportion of the
which it could use, if
We
the official releases of the United
Factors af->
other.
the
to
in
ecling
you
then
•
canard. 'Even
this
fact has not deterred the spread¬
tied
intended to liqui¬
activities—not re¬
the others.
•
flammatory
prices, profits, productivity, each
a distmcc"role to perform m
our economic sys .em, but each is
has
out.
wear
coveries, the oil
about the profits of
Y
we
they
is
place our facilities nor, in our in¬
dustry, to replenish, J>y mew dis¬
industry, One
a
Time and again in our industry hears
plethora^ of adjectives
it has been demonstrated that a ascribing to profits the significant
Wages and Prices
substantial price increase for crude blame for the risip'g. prices all
Even while this struggle over oil nas always been followed by consumers pay. -Consumers have
the continuation of price control important new discoveries and by been led to believe thaf a sUbs.tantial and increasing proportion of
was
going on, the country was increased production from exist¬
told
that
industry
could
raise ing fieids tnrough tne application the dollars theyjfvSpswd: is being
realized as
wages across the board as much as of other means of recovery. Tnese,
profits,.J^g^brRorate
ncreases
in: production, as a re¬ endeavor.
£ *7 Yv/!Y
25%
without
any
increase
in
' Much of this
errqr. stems /from
prices. We were told that industry sult of price increases, have d,e.v.
could absorb this additional labor veloped into crude oil surpluses!- the statement of 'prdfit$^^''pe^
cost out of profits. The fact that with very definite effects upon the; centage of net worth or original
Profits, when con¬
such
profits did not exist; was price structure, tne historical ulti-| investment.
the proper economic
brushed aside as irrelevant. Price mate being substantial price re¬ sidered in
ductions.
light as a percentage of the dollar:
t-: •
rises necessarily followed fast on
Speaking recently in his appear¬ of corporate activity, are indicated
the heels of each round of the
ance
before the House Interstate at sharply lower levels.
Taking
wage increases set off by this in-,
>••••
•-
v.
-,
if
date corporate
In recent months there has
a
great deal rof discussion
ity.
each
themselves, none-the-less
joined' to the other.,/ So;
arate in
price
today's
levels, these allowances are insuf¬
to provide .replacement of
by price and, in turn;
the mainspring of productiv¬
are
Rev¬
of.
view
ficient
profits,;; for
controlled
a
of Internal
Bureau
enue..
the lifeblood of our free
are
enterprise
larger supply of crude petroleum.
And the essential element in the
only made the problem worse by
strangling production.
system1
economic
which, incidentally, ex¬
reserves,
Thursday, January 15, 1948
CHRONICLE
&. FINANCIAL
THE COMMERCIAL
(230)
31
USCA
'
'
413; and
>
would reestablish the coin-,
age
:: r
Sec A 311a, 316a, 316b,
'405a,: 448-448e,~734a, 734b;
with 12 USCA Sec.
of gold and silver, (ex-1
cept'ng change, however, in.
the
present prices thereof)."
/Volume 167
Number 4664
THE COMMERCIAL
&
FINANCIAL
The Business
been passed
or
(Continued from first
page)
you are undecided as
to how
some'special
The
business will' act in
during*taose
1938 to
years
business
prospered
it will prob¬
years,
ably show increased
activity dur¬
ing 1948.
if it
suffered, it may
•show
for
it.
<
■
preparation
-"
■
worthy Of
■
,?urin=,19,43 there
-talk
in
Washington
inflation," but
■ing
The
;
he
any
;^Lbeand
15rs,ely °f
variety
not
ft
attempts
the eyeWash
fundamental cures
sound legislation to
allocate
is
jJKaterials
to
;Mdustries.
the
more
:faxes
.the
during
also would help to
reduce
as to force
people to leave
so
government
employ
produce.
and
to
The only solution
for
inflation, however, is to
discour¬
age
consumption
-production.
■
and
encourage
Unfortunately
•the
when
Government attempts'to
crease
consumption,
de¬
people
get
panicky and increase
the'r pur¬
chases; while controls tend
to
reduce
•
production.-
All
government attempts to
in¬
terfere with the
basic laws of sup¬
ply and demand fail in their
pur¬
pose.
The
only cure for rising
;prices
is to let them
rise to a
•point where production
will be so
•profitable that it will
amount
of
cess
which will
demand.
abrupt
decline
employment
unpopular
not
•
be
This
in
also.
cures
in
is
embargo
on
1948.
-
ret
politically,
we
"
shall
•Want
(1) putting
exports,.. (2)
sus¬
are
selfish.
must
good
of
of
the
of
Krug.
Output
in
1946
amounted
output
produced
recorded
•'.
: ';J.
v.
was
in
■
approximately
5%
1944, and about 13%
':
wi.h the rapidly rising
output.
'
••
.
ahead of
own
the
fearful
are
'
leaders.
They
are
vigorous attempt to keep scrap prices down, the industry this
will produce steel at a new peacetime
high, the "Iron Age,"
national metal working weekly,
currently reports. If the rate this
a
week
were
amount to
computed
on
yearly
a
basis,/yearly production
than
89 W million tons of steel
ingots,
reached since the all-time high in!
1944, the
more
V
openhearths are shut down: throughout the country but
question remains whether they are idle because of the
scrap
shortage or because of normal repair cycles. There is no doubt that
major steel firms are still boycotting the free scrap market and are
well on their way in the second! round of a
buyer's strike against
current scrap prices.1 This
action, plus propaganda to the effect that
scrap prices are too high, has not caused significant decline in
scrap
prices, the trade paper states.
•
of
in the
the
open
:
.■
but
extra
charges
on
cold-rolled sheets have been
cases.
'"'V'
v
consumers
may
an
:
They
on
housing
fearful
are
in fact,
all
of
of
>' :;'Vv-;."'.■ '/■
definitely look for higher base prices
do.
situation, the above trade authority relates
The American Iron and Steel Institute announced on
Monday
the operating rate of steel companies having
94%
the
one
and
week
97.8%
ago,
represents
an
one month ago and
increase of 0.8 point, or
a
month ago and 1,607,300 tons
of American Railroads.
,
to
cure
diseases,
many
to
bring people
and to
to
their knees,
-
their
v"'••
senses
'*V" .;.'
■
a
postwar high of 304.62
on
on
\
,
trading
generally
hedging
pressure
caused
and
some
favorable
more
•
although
at
was
reports
easiness at times but
a
j
the
as
t.
to
market
to
the
winter wheat crop
new
against sudden changes in tempera¬
prices made moderate advances in the week, reflecting
offerings, coupled with reports of severe weather
conditions over a large part of the country which will tend to increase
farm consumption. Oats displayed independent firmness as
offerings
in the cash market remained very tight. " "
Corn
tures.
lack
a
of country
'r< Livestock markets closed the old year at peak levels, with
cattle reaching an aH-time record high and lambs
selling at the
best prices in nearly six months*.
•
Cotton prices
displayed
a firm tone during the greater part of
somewhat easier tendency at the close of the
period. Early strength was imparted to the market by short coverings
as well as mill price-fixing
against sales of goods in textile markets.
Another factor was buying induced
by the expectation of a rise in
the mid-December parity and the
subsequent announcement by the
Department of Agriculture of an upward adjustment of 50 points over
the revised November figure to 30.38 cents
per pound.
last week but showed
a
This represented a new record
high and was more than
4 cents above the parity price of 26.29 cents
for December 1946.
Tradirfg
restricted to
large extent by holiday influences and
closing of the New
Offerings by farmer's fell off
while offerings of merchants and shippers remained limited
in vol¬
severe
York
was
a
weather conditions which necessitated
the
Cotton Exchange on Saturday.
ume.
■ -■
i-->'■
v;.-;,;:;-..
AND
■■■/:'• ;..VV:
\.
.
RETAIL AND WHOLESALE TRADE
SHOW GAINS FOR WEEK
YEAR AGO
Post-holiday
promotional and clearance sales stimulated con¬
interest in many types of soft goods; retail dollar
volume the
sumer
past week
week
moderately above the levels
was
and the
corresponding week
year
a
of
ago,
both
the
preceding
states Dun
&
Brad-
street, Inc., in its current survey of trade; Unit volume was some¬
what below that of a year ago. Clearance sales
generally were not
as
widespread as a year ago and price reductions were not
Consumers continued
Expensive
well
but
to insist upon
name-brand
cheaper
models
quality
radios
were
attracted
little
at moderate
reported
to
large.
prices.
be
attention.
selling
The
heavy
demand for high quality furniture and branded
major appliances
continued to exceed the supply. Hardware, small electrical
and automobile supplies and accessories
were
•
also heavily
Snow and
freeziiig weather in many areas encouraged consumers
heavy clothing and footwear. Overshoes, rubbers and woolen
coats were sought. Rain-repellent coats and woolen accessories were
also popular. Promotions of women's formal and
print dresses at¬
to seek
13.8% ABOVE PREVIOUS WEEK
This
was
an
tracted
the similar
'*'"
attention
and fancy blouses and ballerina skirts
Some decline occurred ip the demand fdr
jewelry, furs and millinery.
Grocery volume was steady and at the high level of the
preceding
nearly all types of foods in large demand.
Department store sales on a country-wide basis, as taken from
week with
the Federal Reserve Board's index for the week ended Jan.
3, 1948,
increased by 9% from the like
period of last year. This compared
with an increase of 27%* in the
preceding week. For the four weeks
ended Jan. 3,
1948, sales increased by 12% and for the
Following the recent setback
in the U, S. and 2,683 cars
cars
arid
and-4,69y trucks in
in
retail
trade
here
in
to date
New1
York induced by stormy
weather, sales volume the past week
again found its stride with gains for department stores register¬
ing advances of about' 10%.
.
According
store sales in
to
the
Federal
Reserve
„
Board's
index, department
New York City for the weekly period to Jan.
3, 1948,
decreased 5% below the
same period last year.
This compared with
(revised) in the preceding week.. For the four
Weeks ended Jan. 3, 1948, sales increased 7% and for the year to
date rose by 9%.
an
increase of 13%*
'
<*The large increases shown
total'
year
increased by 9%.
ended
Reports'" state's.> Tl^is speared ^
a revised figure of 65,573 units
in Ihe preeeding 'W^k,
;^«^^iilerTike week of 1947, and 115,935
in
favorable
continued to be purchased.
.
.8.8%
>
new
a
at the close, aided by firmer cash markets and
report's of a
slowing down i'n farmer liquidation of wheat. Recent heavy snows
in parts of the Southwest were said to have furnished
good protection
week,
distributed by the electric light
industry for the week ended Jan. 10,-1948 was 5,277,680,000
kwh.v seconding to the Edison Electric Institute. This was a gain of
409,660 000 kwh. over the 4,868,011,000 kwh. produced in the
preced¬
ing week which in turn, was 38,432,000 kwh. higher than in the week
Last weeks
compiled by Dun
throughout*
purchased.
last
year ago.
The amount of electrical
energy
;
price index,
stronger last week
in both futures and cash markets
were
wheat crop
tons
one
and power
so
new
ances
that economic1 conditions »will -AUTOMOTIVE
PRODUCTION RISES SHARPLY IN LATEST WEEK
,continue about as at
present dur-Estimated^ .output of cars and trucks-in
the United States and
ing 1948; but as a fever'is neces¬ Canada the past week«afnounted to 112,219
units, "Ward's- Automotive
sary
of
1,723,200 tons of
ELECTRIC PRODUCTION SPURTS AFTER LULL
economic distress seems
necessary
general
rallied
ize
.
the
appli-
increase of 82,681 cars or 13.8%
cbove the preceding week, and a decrease of 5 390 cars or
0.8% below
the corresponding week in 1947 but an increase of
29,060 cars, or
4.5% above the same week in 1946.
pressure!
Washington..f Hence,,
show
to
ago.
prices
Increased
jyi"
Dec. 27, 1947..,.The • current
figure, which also exceeded by
the, 4.852.513,000 kwh.. turned out iri the week ended Jan.
11,
.1948 will witness more
or less
6f eJ947y.was"the ninth week dmtbiq;;history Of the industry in which
electric production exceeded
a
5,000,000,1)00 kwh;
do-nothing Congress. I visual¬
.groups % in
volume
91.8% one year
0.9%, from the
Loadings for the week ended Jan. 3, 1948, which included the
holiday totaled 682,038 cars, according to the Association
the
is
January 6.
This com¬
week earlier, and with 243.75 on the correspond¬
a
New Year
and
rnaijor
a
comparatively low level, mainly due to holiday influences.
advanced
increase in wages—as it is expected to
scrap
The index touched
a year
Grain
the
Some
FREIGHT LOADINGS
thus, unwilling to take
courageous stand
ing date
would
the
1,711,400 tons
of
week.
pared with 301.48
figure not
a
magazine adds.
This week's operating rate is equivalent to
ingots and castings as,,against 1,708,600
la-
of
fearful
a
failed with losses of
32
a narrow range at peak levels
the final day of 1947 and closed at 303.73
scrap and mak¬
ing
The daily wholesale commodity
Bradstreet, Inc.. moved in
week
steel
good.
and
WHOLESALE COMMODITY INDEX AT NEW POSTWAR HIGH
the past
*
97.9%
selfish de¬
nation's
comprised
or more
concerns
week
price trends were mixed for the week with declines in pork
dairy products exerting a downward influence on the Dun &
Eradstreet wholesale food price index which dropped 3 cents to
$7.21
on January 6, from the all-time
high of $7.24 recorded a week earlier.
The current figure compares with $6.20 on the
corresponding date a
&
steel-making capacity of the industry will be 98.7% of
capacity for the week beginning Jan. 12, 1948. This compares with
in
last
52
year ago.
The chief function of the index
=' trend of food prices at the wholesale level.
STEEL OUTPUT EXCEEDS ALL RECORDS SINCE
MAY, 1944
With steelmakers highly vocal about the lack of
;
2-3.
Seventy-five
with
and
over
Federal
Nov;
involving liabilities of $5,000
compared
above
.■
preceding week...
reported
400
Food
of this week
Congress
as
almost
WHOLESALE FOOD INDEX OFF SLIGHTLY FROM PEAR
to
Secretary cautioned,, however, that the nation should not
sight, of the fact that mineral deposits are
exhaustible,- and1
that the rate of discovery in the United States is not
keeping pace!
ago,
as
putting their
bankers,
minerals
higher than in
Toe
of
recommendations, however,
rents.
all-time peak
ours
would
he
nation as a
papers' of
Congressmen
a
an
shop and neighborhood, but some of the smart ones went into the
open market and purchased scrap,-■»in some cases at a
figure much
higher than the current quotations. When the company heard
this,
attempts were made to keep their dealers out of the scrap market.
unpopular. Even Congressmen
.veterans,
reached
was
record by 40%t according to Sec¬
"
support,—even
advice,
morning
bor
1947
in
large motor car maker who last week was embar¬
by his plan of adding one new car to each dealer's quota for
every ton of scrap which that'dealer supplied.- The
original plan
anticipated that the dealer would do his own collecting around his
things
Chairman Eccles of the
Reserve Board has given
sires
in
produced
failing
year ago.
Small
failures under $5,000 doubled the previous week's
total, rising from
6 to 12.
This compared with 5 failures of small size
occurring in
the same week a year ago.
1947
products
rassed
Lack Courage
Members of Congress and the
..Administration know what to do.
are
of
peak
production.''
the incident of
-Political Leaders
are
quantity
previous
946'
if steel labor wins
Hence, I again say,—"only
spiritual awakening can
prevent
.These
A.
Failures
:
Reverting to the
We don't
relative
these
excellent
the
ota'l
the
Steel
another severe bust."
.
J.
in
Peak
mineral
businesses
reported.
were
part of the week's total.
'•;
also
was
in .many
■whole.
a
Alaska
failures
noted, the Secretary reports that a new high in
±e physical volume of production
accompanied the increase in dollar
/fclue.
Based on preliminary estimates of the Bureau of
Mines, the
These
be unpopular
I doubt whether
them in 1948.
some
we
■although
New
number of
"
in
$5,000
Output at
the
1939,
check
to
was
,
859,000,000.
week
the Federal
-for the
.
7%
was
raised the price of nails between $9
and $10 a ton and also raised some other wire
products. It is esti¬
mated that on the basis of
production expected this year wire and
nail consumers will pay about"
$15 million more than they did in
1947.
No important •; base prices were increased within
the past
Government to
shut off the
exports of our goods
to suspend
price support of our
products, to freeze our
wages or
-profits, to raise the rate of inter¬
est which we are
paying,—or to
whom
high rate at that time
minerals and
Inferior
..reached
■'•'/•••''■ •."•'>•*•
would
us
•discharge
the
1937, and it
August,
ever
and
see
AH of
of
ry
since
Steel producers this week
govern¬
expense s:
•movements
States and
effect
foundries and other channels. A reflection of this
activity, the
"Iron Age" observes, is the average
price of No; 1 cast iron scrap
this week at Pittsburgh,
Philadelphia and Chicago which amounts
to $60.83 a gross ton or almost
$20 a ton more than the average price
of pig iron/': ."
pending
the
agricultural
price
supports, (3) freezing
wages and
profits, (4)
causing interest rates
to rise
sharply, and (5) reducing
government
value of
in
highest it has
a
While
the corresponding week of any year since
1943, it was far below
the prewar level, since in the same week of
to
will
we
the
ment can
provide are:
•an
been
scrap which- steel companies have failed to
pur¬
market in the past several months has found its
into steel foundries. Faced with a lack of scrap business from
big steel firms, scrap dealers have been forced to turn their effort
an
cure
and
which
had
when 37 failures occurred.
,
way
Beyond allocating materials
and
reducing taxes, the only funda¬
mental
United
chase
ex¬
and
it before Nov.
2,
see
in
causes
prices
This
politically,
total
Much
increase to
an
it .was
teat "the
,
represents the first upward
increased to 3V*% from
The
important Sose
Doubtless certain allo-
ia?o n? wil1 be instituted
it
194a.
1%
note
...
Bradstreet) Inc., reports. Up from 58 in the preceding week concerns
failing were twice as numerous as in the comparable week last year
capital
new
rate
12,400-,000,000, surpassing its 1946
It
will be much
about "check-
when
discount
:!;!;• U.- S. "Mineral
8
What About
Inflation?
the
.820.
The purpose of such
.-peculation in commodities.
a
decline in 1948. There
will
be no World
War III in
1948, but
there wJi be
marked
1933
•
.
in
previous rate of
is
S %in
1940.
If
the
revision
.like sl.ee
<1948, jusc consider how that
busi-
•
Corporate needs.
31
Rising sharply for the second consecutive week, commercial and
industrial failures totaled 87 in the week ending January
8, Dun &
(Continued from page 5)
If
;
Industry
by banks to business enterprises seeking
on
(231)
BUSINESS FAILURES AGAIN RISE SHARPLY
The State of Trade and
Outlook
CHRONICLE
25,568 trucks built
Canada.
for this week reflect' in part the fact that in 1947
Thursday and the week therefore included three days of heavy
shopping as compared with two* days last year when Christmas
Wednesday.
•
'
-
Christmas
fell
on
pre-Christmas
fell
on
.
THE
Tomorrow's
Markets
zoom,
Method would stop
Whyte
inflation¬
and, as I agricultural exports over a fourproducers of a year period. I don't think it would
number of important crops are in give us much, if any,' extra time
to bring our agricultural program.
trouble now. This program would,
high level production,
fear and the indecision
caused
large part by the political
shenanigans, took their toll
in
a
during the last few days of
such
as
those of soil conservation.
direct
for
expect; for as sure as you're
reading this there'll be more
and it's almost a
same
certainty that
Repub¬
even a
lican
Congress will pass some
legislation that will adversely
affect business and industry.
if
latest
the
is
Truman
The amount
for is no surprise; nor
breakdown mysterious.
budget message.
asked
But how in the
mon
name
such
sense
fully understand what
to
to
if shaved, can be
even
of
people are suffering from
Actually, when you start
cold.
talking to the people over there
it's
a
question
which problem
mention first — their
hunger or their lack of fuel.
In
some areas the total fuel ration is
so
small that families can only
will
they
and keep one
heated to about 60 or 65 de¬
room
grees.
houses
granted
be¬
yond mathematical reasoning.
The
big thing is the Marshall
Plenty has been written
Plan.
and
and
said,
will
same
of
more
come
and
the
Marshall
the
Plan
(or
.
stock market.
From
the
action of the market it is ap¬
parent there is
no
hard and
fast belief in either the merits
the
or
demerits
At least
ment is
no
of
the
plan.
discernable excite¬
generated marketwise
we
In
homes.
of
me
similar plan) will affect
any
It
testimony given by the Depart¬
it would help ment of Agriculture and the vari¬
domestic market ous farm organizations—including
for farm products.
Still more im- the Council of Farmer Cooperaportant to our farmers is what this tives—it is very interesting to note
our
recommendations all follow
program might mean to our long
time foreign markets by helping about the same line.' There were
restore healthy, democratic econ¬ differences in detail—none of us
in
economy—industry
entire
our
and
agriculture
sustain a good
—
omies in Western Europe.
be
the
farm
farmers pay are
one
Other ferti¬
machinery, work
.
them
an¬
up—but our basic
close together,
high degree
their organiza¬
program
ministration
development and ad¬
and
we
the
drew
conclusions
general
same
from
those experiences.
In
preliminary report summar-
a
the first round of hearings
izing
,
held
which
were
House
committee
"witnesses
were
in April, the
reported that
almost unanimous
in
agreeing .., that our longrange policy must be one of abundance."
.
•••
Policy of Abundance Is Basic
pening again.
Ceriainly
the
Department of
session of
stock; and manpower have also Congress took some action on this Agriculture feels that our basic
been hit hard.
•
subject.
Here is what Congress policy must be a policy of abun¬
dance.- And
I judge from Mr,
Furthermore, the bread basket did: It authorized the continuation
Davis' testimony that you feel the
of Europe — Poland, the Danube of export controls, the continued
same
way.
The Department be¬
Basin, the Ukraine—are in the So¬ allocation of railroad shipping
lieves I that this is the only practi¬
viet zone of influence and very facilities, and—until the end of
cal policy—that we have no alter-*
the regulation of
little food is moving over
into this month
lizers, as well as
bed
special
recent
The
—
Nor are the in¬
Western
Europe.
dustrial
products of Western Eu¬
moving to the eastern coun¬
tries as they have normally done.
rope
start Dislocations of population further
in the intensify the food problem.; This
morning? She had decided on the is particularly true in Western
former.
Germany where Germans, have
One day
in Germany on this poured in from Poland, Czecho¬
last trip we decided to eat in slovakia and other areas to the
restaurants to see what sort of East..
i
V-v't*-v.
food you could buy there.
Since we can't continue to give
Here's what we had for break¬ these people emergency aid in¬
fast—and
there was no choice, definitely, the only sensible course
everyone took this menu or noth¬ is to attempt to help than get on a
ing:
self-supporting basis. That is what
One slice of black bread, a patty we now propose to do.
of margarine about half the size
Though this program has wide¬
of the patties of butter you get
spread approval among those who
next
in
convinced of the dangers of
fertilizer.
final
tions, and their government have
worked together in the past.
We
have shared the same experiences
rising fast.
have to be
infla¬
in addition must come
from outside. A 1,000 calories, you tion.
They remember too well the
will recall, is less than one-third situation after the last war when,
what we get in this country and in the 13 months .between May,
1920 and June, 1921, prices farmnot enough to keep a person alive
ers received fell 52%.
Prices of
very long.
,
The farmers of Europe need fer¬ things they bought dropped only
tilizer, they need equipment, and 18% from 1920 to 1921. Yes, we
know the danger, but I wonder if
many of them need better seed.
One of the first things Hitler did we are going to take action soon
when he started making munitions enough and strong enough to pre¬
was
to stop the manufacture of vent this sort of thing from hap¬
the
every program
very
ran
which farmers,
to
I don't think farmers
Anything
with a warm meal
let them eat cold bread the
to
this year to supply an
of 1 000 calories per per¬
those who live in cities.
how
set
I think it reflects the
of the danger signs in
picture and that prices
average
for
thinking
problem which farm¬
ers must face
this year is rising
inflation.
I mentioned a moment
Germany
have
we
to just
should
second
some
son
that
feels
;
,
swer as
ago
nitrogen
just how people
visited a number
such visit the
mother told me of one of the ques¬
tions she faced:
She had only
enough fuel to give her children
one hot meal a day and they had
to sleep in a cold room without
sufficient cover. Should she cook
their porridge at night and put
living
were
them
getting, involved in it.
My
interest, however, is how and
when
The other rooms of their
remain icy cold through¬
In order to see
the
without
day
a
out the winter.
com¬
in the face of tax cuts is
it does
self respecting human being.
We haven't heard as much about
a
how the
request,
a
7)
(Continued from page
questions facing
might cultural programs which the House
help the demand for cotton and and Senate committees on agricultobacco some, but would not pre- | ture
have been conducing for
vent surpluses of these items.
By some months.
lncidentally, as you study the
encouraging high-level production
Now?
Way Do We Go
Which
coolv once
is the
fresh
as
Most of the big
agriculture have been raised in
the hearings on long-range agri¬
Rising Inflation
hope that the Presiden¬
and their replies
politicians has
cleared the air, is too much
The
items such
vegetables.
and
fruits
A
of the
prevented.
expensive and more
more
our
perishable
pass
To
the
of
some
foreign demand has in major part
probably not have much
effect on foreign demand
It would
common
tial messages
from
other
make
to
us
our
the week.
to
enable
"
legislation is
But it would
New
problems—such as the pos¬ step-by-step adjustments which
the Steagall legislation envisioned,
sibility of a grain surplus; but it
would intensify other problems— but which the continuing heavy
of
space
—it is possible that long side seems to have the
stocks would soar. most advantages.
But having seen all kinds of
More next Thursday.
>
markets I
would prefer to
—Walter Whyte
make profits on ability and
[The views expressed in thit
knowledge rather than on
article do not necessarily at an%
somebody else's misery.
time coincide with those of thi
Chronicle. They are presented a*
those of the author only.I
Last week I warned to be
to
possibility I warned
against last week became an
actuality before the week was
over.
The dullness, the latent
The
particularly-
date.
to
up
needed immediately.
It would help solve some
of grain.
to go into now. The
warning is repeated. Yet de¬
continued
for
call
nevertheless,
=
for immediate future.
years,
out; the
pointed
bring about a repetition
Says—
two
last
the
It would : also
of the spite this I still think that
retention of
common stock
collapse of 1929-32.
*
/ * •'
*
1 .,
positions is warranted. There
By WALTER WHYTE=
All this may not have any¬ will be days, not too far off,
Washington news will con¬
when this stand will be open
thing to do with the immedi¬
tinue dominating market pic¬
But until other
ate future of the stock market to question.
ture.
Expect more dullness —in fact if the above comes conditions come into play the
lending.
ary
Thursday, January 15, 1948
FINANCIAL CHRONICLE
In
marketable U. S. prepared, for surprises.
most cases you can expect that
bonds would break and hardly
these surprises will be in the
a bank with U. S. bond port¬
folios
could
go
through it direction of decline. There's
without substantial losses. a reason for this I haven't the
would
Walter
COMMERCIAL &
morning, or should she
off with a hot meal
.
amounts
carrying
in
used
on
an
in
ex¬
The revolution in produc¬
which
tion
It authorized a
lers.
be
native.
grain used by distil¬
$1,000,000 to
of
we
recent years
have
experienced
leads
us
to ques--
tion whether a policy of scarcity
panded food and feed conserva¬
tion campaign, and they author¬ could be worked effectively today*
ed the Commodity Credit Cor¬ We can shift productive resources
poration to carry out projects to as demand changes, but it would
stimulate and increase
be
production
day's
and
procedure
proval
on
of to¬
agriculture.
level of
that such a
policy is unnecessary. With highlevel employment in this coun¬
try. and even with conservative
amounts of agricultural products
for export and industrial use we
he did
time-consuming
of Congressional ap¬
each project.
Unless
Secretary Anderson, though
the
suggest
high-geared
slow
to
machinery
consumption show
within 60 days.
not
difficult
get from the present high
not S disapproved
This last author¬
ization has been strongly urged by
Congress ;
total
the
Furthermore, the facts which we
project is first submitted to
each
extremely
down
agricultural, commodities r in
non-European countries; provided
of
us
requirement slows down will have a market for the abun¬
much, this author¬ dance which our farmers can pro¬
duce. Back in the depression many
tation
ization should help in lightening
V
if
s*:
$
poor imitation of coffee.
It was It is a very far-reaching program. the strain which European aid of us contended that the so-called
farm problem was not a problem
What is perhaps of more made out of rye and neither tasted
It will cost a lot of money and
places on. our agricultural econof over-production but one of unimmediate importance is the or looked like coffee.
■">/.
;
it will call for some sacrifice by omy. •
der-consumptibn. What was then
That was our breakfast.
There our
talk -of having the Govern¬
people.
There will be those ^ Congress put its greatest hope
merely a theory is now a proven
was no cream or sugar for the cof¬
who oppose it.
I suspect that its in1 voluntary price controls and
ment
reality demonstrated every day at
stop bank lending fee—not even milk to put in it.
greatest foe may be lethargy and allocations of scarce materials by
the dinner tables of America.
For lunch we went to one of the
through
allowing
interest
group
action of producers, and
a lack of widespread understand¬
Another reason why we should
made provisions for relaxing anti¬
rates to seek their own level. best looking places we could find.
ing of what the program is all
choose no other policy is that our
There we got: four small potatoes
about.
One farm paper recently trust laws as a means of encour¬
If that occurs interest rates
present position of world leader¬
about the size of walnuts; a pat of
reported a cross-section pool of aging such voluntary group ac¬
ship demands that we lead toward
meat about two inches square—
'
' -.vf"'"" ' : '
American farmers which showed tion. V
world abundance. Should this na¬
about two good bites, and a bowl
that 52% of our farmers had never
As
President Truman has
tion turn to a policy of < controlled
of flour soup — made of flour,
heard of the Marshall Plan and
pointed out, this legislation is to¬
scarcity it would be followed by
water and salt, with no meat base
that of the 48% who had heard of tally inadequate to cope with the
similar policies in other nations,
at all;
the Plan, only 11% had a correct present inflation.
I think it is up with increasing tariffs,; import
For dinner in the third town we idea of what it is.... I don't know to farmers and farm organizations
quotas, blocked currencies) and alt
got: one slice of black bread; a whether these figures are right or to give immediate study to these
the other economic barriers wbich
still
smaller
pat of
margarine; not, but certainly they should be problems and decide what govern¬
contributed to the depression of
cereal
consisting of a coarsely
sufficient to make us take a seri¬ ment action they think is peeded
Orders Executed on
the '30s and eventually to World
ground mixture of barley, wheat ous look at our educational work and what sacrifices we should be
when the Plan
comes
for
up
here,
discussion.
and one cup of black imi¬
coffee.
The latter was a
it, I don't think we
should take its passage for granted.
know
about
the latter
such action too
Pacific Coast
Securities
—
Pacific Coast Exchanges
and
oats.
The
without milk
Schwabacher & Co.
York
New
Stock
Francisco
Chicago
.
any
(Associate)
Stock. Exchange
Board of
Teletype NY
7-4150
Francisco
San
.
:
—
»'
.
—
Santa
Oakland
—
Fresno
we
got for
to
see
how
farmers
a
full
well
we
informed
more
regardless of
we had to spend.
legally,
1-928
Barbara
Sacramento
Germany than it is in many other
are
the
on
keeping
ready to make to halt
and preserve a
impor¬
tion
If
sound
have
racy
approved, this program will
a marked effect on American
agriculture.
I
' ■'
-
don't
s
anyone
to
«'
merits Jthan we-have exported
i,r
■.
counting
and
bust"
heavily on a
cycle
this
in
country.
Long-Range Agricultural Program
feel
that it would • bring a
parts of Europe, it's bad all over.
I was told that if the crops in 1947 guaranteed market for all we pro¬
duce.- ^President. Truman's ~pro¬
were equal to those in 1946, there
would be enough food in France, posals call for ho higher food Ship:
are
"boom
agricultural
the
great values of the European aid
pl&n to 'bur 'farmers would come
Moving
however,
Italy and the U. S.-British zone of
economy.
's.;
.
want
this infla¬
long-range
We should re¬
member that the foes,of democ¬
the day. This is
which cooperatives can
tant questions of
in Germany.
That was the a field in
We couldn't have gotten do a lot.
Though the situation is worse in
Private Wires to Principal Offices
Monterey
all
how much money
Trade
New York 5, N. Y.
14 Wall Street
COrtlandt
.
Exchange
York Curb Exchange
San
day
was
served
ration.
Members
New
That
cereal was
or sugar.
i:>
hi.a
Jin
program,
i
on
to
our
I think that one of
from^fs Effects in tapering
t
i-dii :•
::
off Our
.
n ••
•
War II.
If
we
>■
are
V-4/.
to follow suchna
pol*
icy of abundance, what; programs
are
needed
to
carry) '/it £but?
Should
a
Recession
develop! and
and consumer pur¬
chasing power fall off, how are
we
to
prevent abundance from
turning into surplus? Will we be
forced by economic necessity to
attempt an over-all cutun farm
production, even though it might
be contrary to .our best judgment?
Your organization, along with th§
employment
Volume
167
Department
gested that
of
Agriculture,
first
our
under
fense
Number 4664
such
line
THE COMMERCIAL
terms of the hundreds of years in
which soil abuse has been going
sug¬
of
de¬
circumstances
should be to try to keep consump¬
up.
We have some valuable
school
still
commodities;
lunch
only
which
school children, and
our
had experience with
the
of
would
low
attempt to put
food
such
a
soon
on
families?
ready
on
grams
are
and
bad.
threatens.
We
membership
we
-to
en¬
adj ustments
price drops.
adjust
new
de¬
farmers
many of our to¬
might have been
seriously hurt. That sort of change
in the market picture can disrupt
the best possible planning.
Un¬
expected variations in the weather
also create this sort of situa¬
witness
potato experi¬
our
we
there
which
detail
At
this general need,
important questions of
agree on
are
must
level
what
be
answered.
should
price sup¬
Should they be
merely high enough to cover av¬
erage
costs
of
production,
or
should they be up around 80 or
90%?
Should support levels be
fairly rigid as they are now, or
should they be made flexible so
ports
that
be
set?
they
can
situation?
this
If
should be
steps
There
•
are
raised
be
by all farmers which need
attention—rural health - facilities,
rural schools, social security for
farm
people, and other factors
which
make -for
good
living.
Should we take steps to bring such
facilities
areas
only part of the ques¬
which
need
answering if
tions
are
farm
program is to
maximum
contribution
our
rural
to parity with
by city people?
enjoyed
These
:
nearer
up
those
in
services
and
make
to
a
an
of abundance. The need
right answer within
next
few
months
places a
economy
the
find
to
the
responsibility on our farm
organizations and the people they
serve.
We are proud of our rec¬
great
ord
formulation
democratic
of
and administration of
agricultural
The needs of 1948 will
the best thinking of all
call
of
for
US.
repeat that now, while
conditions are still relatively good,
is the
time to bring
our
farm
up-to-date. It is much
easier to continue prosperity as a
program
concern than to revive it out
depression. But neither can
be accomplished without planning
going
of
a
and work/
/./:/
So far I have
spqken primarily
do
can
we
through gov¬
for
supports
raise
tives
perishable
particu¬
some
larly tough questions.
forced
If the gov¬
to
buy large
quantities of such things as fresh
fruits
or
vegetables to support
prices at a mandatory level it gen¬
erally leads to unavoidable waste.
people
have
important tool. Your coopera¬
one
Commodities
Our
well
demon¬
strated that they don't like to see
food wasted as long as there are
people who would like to consume
Rather than have mandatory
the
I'll
should
such
those
prices through aids to
consumption. : That's" one of the
suggestions which we raised for
Concession
consideration.
Practically
all
that'-the
agree
of
us
to
seem
parity
should be maintained
v.
concept
as
a
meas¬
We
likewise} seem -agreed that it
needs'.'some overhauling.
But
uring stick'for farm prices/
how?'.T Shall
moving
'we
average
recommended?
use
as
a
10-year
have
some
Should
the
costs
of hired labor be included in
fig¬
uring parity? Should we include
family labor? Different commod¬
ity groups i vary rather widely on
some
of these
questions.
Since
your
organization
rather broad
cross
represents
a
section of these
recommendations on
points should be exception¬
ally valuable. •
*
,ry(
\
.
Conservation
Program
-
-
Our conservation - program ? also
peeds some serious rethinking.- In
why:
to
action,
Govern¬
come
only
the processes of discussion
study have crystallized pub¬
lic opinion; Government can move
no
faster
than
public
opinion
moves.
Cooperatives, on the other
hand, can pioneer. When a group
of farmers decide something needs
after
to
Congress, and suggested legis¬
better
or
lative steps to further strengthen
expand
cooperatives.
a
new
a
new
I have tried to out¬
briefly three of the big
problems
ple
in
which
1948—the
our
question
farmers
and
the
peo¬
of
aid
agricultural
our
that it
program so
before
are
best
can
our
serve
consumers
world
And
era.
a
new
year, presents a
point.
We
must
world today
challenges and its
ities.
That
must
era,
new
with
be
coin machines.
the
like
start¬
our
starting
an
The
to the peace and
world.
prosperity of the
'
be
done
to
they frequently don;t
a majority of
wait until
nation's
voters
or
its
that
market.
I
have
marketing," in
seen
getting
in
im¬
proved seed or livestock breeds, in
a dozen
other fields. Farmer co¬
operatives also can, and do, press
for
needed
legislative
changes,
thus moving into the forefront of
those who crystallize public opin¬
ion.
Our cooperatives have pio¬
neered for years, and they must
have
been
successful," or they
wouldn't be subject to such a biggunned attack today.
I
assure
you
that the needs for
cooperative farmer action are just
great today as they were back
in the 1800's when they began or¬
as
ganizing
and
fire
cooperative
insurance
marketing
enterprises.
Maybe the needs today are
even
five
Mer¬
years
$500
millions and $600 millions.
By, 1952, it is predicted gross sales,
the industry will be running
:'
at about $2 billions a
year.
These
stress th£ importance of
this industry in the stiff competi¬
tive fields of soft drinks, candy
(Continued
Business
concerns,
the
unless
appraising
picture, know
competitive
that
ments
they
and
make
have
the
replace¬
newest
and
best
machinery and equipment
they will find themselves severely
handicapped
contest.
find
At
in
the
the
that the
competitive
time, they
same
securities
market is
presently unattractive for obtain¬
ing equity funds. Also, they can¬
not afford to cut
working
and
and
will
ments
deeply into their
capital
chinery
for large ma¬
equipment outlays
to budget pay¬
period of months,
prefer
over
a
avoiding too deep a drain on
working capital. The plan of the
commercial
finance
companies,
which enables the individual
pur¬
chaser to pay for machinery on a
scheduled
that
the
duce,
basis,
out
machine
will
of
itself
meet
with
pro¬
ready
re¬
hoists,
ery,
cranes and
and
sound
ment,
reproducing
tension
/
permit
all
find
substantial
of equip¬
they cannot
amounts
1948
range.
the
only
'•••<•
In
inventory
by
commercial
fi¬
companies of purchasing in¬
paper
will appeal to
large numbers of them.
stallment
The services of the commercial
finance companies, which are in
to
supplying funds, will
be
availed of to
in
1948
than
a
greater extent
previously.
Manu¬
facturers and distributors are not
in a position economically to
per¬
form the functions of credit in¬
companies have made loans in the
following diversified fields:
Automotive equipment, amuse¬
ment
equipment, bakers' and con¬
fectionery equipment, barber and
beauty parlor equipment, boilers
and tanks, book-binding machin¬
ery, bottling and glass machinery,
butchers' equipment, canning
chinery, cigar and cigarette
to
staples
moved
was
They
the
bars
It is
a rare
or
raw
material,
or
to
the
war
recourse,
retail
open-
book accounts
budget
taken
on
long-term
enterprises.
of
the
notes
of
commercial
finance
industry do not feel that
proposed
legislative restrictions
extension of credit in 1948
on
pertinent to their activities.
ing field warehousing companies
as
stock
Executives
at
by the National Bureau
Research, it was re¬
vealed that the principal types of
product warehoused by five lead¬
were
of the so-called
or
installment variety.
or
In many cases,
also, these com¬
panies are financing corporate re¬
organizations and the acquisition
commodity,
finished state
that does not
or
and
without
accounts, whether they be
of Economic
of
follows:
their
loans
purposes
in
is
the
for
are
None
speculative
stock
or
com¬
for
time
bagging; books; canned
products; coal, coke; cotton;
cheese; cameras;, dolls; household
machinery and equipment; iron,
modity
steel and products/ fuel
oil, gaso¬
line, ' petroleum products; furni¬
ture,
finished
wood
products;
hides, leather, leather products;
iron ore; lumber,
timber, building
sunplies; industrial and commer¬
immediately into workingcapital funds and makes possible
exchanges or
payment purchases of
Bags,
food
its way
agricultural
.
chemicals,
pulp;
rous
non-ferrous
metals
and
electric
feed;
grain,
belief
rubber
and
loans
products;
paper,
ores;
wood
non-fer¬
rubber
seeds,
tires,
sugar, syrups; shoes,
toys;
are
tionary
•
The
goods,
in
commercial
their
finance
counteracting
infla¬
pressures.
commercial finance indus¬
legitimate credit needs of industry
paints,
products; stone, clay, glass
slippers;
that
of
justified
products;
products;
flour;
are
try faces 1948 with optimism. The
hardware;
drugs;
production
they
miscel¬
groceries;
miscellaneous
greater
a
that
cial
machinery and equipment;
powders;
musical
instru¬
ments; meat and meat packing;
consumers
goods. They feel that since their
extension of business credit finds
milk
laneous
furnaces,-, electric motors,
waxing machinery, gas and
oil b
engines,
filing - machinery,
foundry and steel machinery hotel
equipment, hat blocking machin¬
with
other
ma¬
equipment,
mixing machinery, con¬
tractors' equipment, dairy
equip¬
ment, Diesel engines,
dental
equipment, electrical appliances,
making loans secured by
liens on existing
machinery and
equipment. Some are purchasing,
of
miscellaneous
combustion
into greater prominence in
now
unnecessarily
therefore
re¬
In the last available statistics
prior
financing, there are several
specialized techniques
Most of these companies are
ing.
mid-1941
/
1948.
lend itself to this form of financ¬
ma¬
concrete
a
Financial
by commercial finance
companies in the past }that,will
to
product
Specialized
the
come
financing
indeed, either in
fully by
industry.
evolved
commer¬
this
ready
through the
application of the security devices
of trust receipts, factors' liens or
lield warehousing
arrangements.
of
means
met
addition to the above meth¬
other
companies proved to
restricted.
finance
Techniques
ods of
those secured by
listed on the Com¬
modity Exchanges.' The
commercial
be
'■/"'*•
were
cial finance
ing
will
Additional
history of this form of fi¬
nancing shows
that
for
many
about
large number of
commercial finance
The
loans made
a
company credit. Every indication
is to the effect that their needs in
Inventory Financing
.
past,
with
grams
the business world that the prac¬
nance
floor
In the
concerns in this field have
been
able to meet their expansion
pro¬
tice of limiting inventory financ¬
distributors
chinery,
wide
of
be
plan offered to manufacturers and
addition
this
tied up in cus¬
installment paper.
The
their funds to
tomers'
forms
that
of
even
stuff—hot
fruit
ery and wood-working machinery.
>, The year 1948 will see an ex¬
years
of
selling different types
coffee, ice cream,
juices, hot sandwiches, gro¬
ceries and nylons.
of
stoves and ranges, textile machin¬
commodities
will
machines
equip¬
compressors,
ing and repairing machinery, soda
fountains, fumigating and spray¬
ing
equipment,
store
fixtures,
Looking at it from another
angle,
manufacturers
and
dis¬
tributors
and
pumps
refrigerators, road
machinery,
rubber specialty
machinery, sew¬
ing machinery, shoe manufactur¬
sponse.
ment
conveyors,
excavating machinery, flour mill
equipment, heating systems, ice chines and about 350,000 service
machinery, irrigating equipment, machines, including scales, parcel
laundry machinery, machine tools, lockers, toilet locks,
etc. v The
marine equipment, mill
supplies, Automatic Merchandising Associa¬
mining equipment, oil burners, oil tion's head predicts that within
well
equipment, package wrap¬ five
years
machines
peddling"
ping equipment, paper mill ma¬ standard items will total 3,100,000
chinery,
musicians'
equipment, —about double the present num¬
printing
machinery,
projecting ber. On top of this will be new
income
will
and cigarettes/ In use
today are
200,000 cigarette machines, 750,00GF
penny gum and peanut machines,
300,000
nickel
candy
vendors,
many thousands of soft-drink riia-
from page 19)
resulting increased material costs
must be offset by more efficient
production and larger volume.
Con¬
it
Automatic
Association
within
figures
vestigations and collections. The
decide such action. They commercial > finance
companies
go
ahead and do jt have evolved techniques and de¬
through a cooperative, r I have veloped staffs to whom this work
seen
this happen many times in is
largely second nature.
This
my own experience.
Farmers of know-how certainly cannot be
a local area start putting in some
duplicated
by
each
individual
dairy cattle and need a market for manufacturer and distributor ex¬
the products. They organize a co¬ cept at prohibitive
expense.
operative and go out and build
In the past, commercial finance
grain
National
for
often
can
a
predicts
coin ma¬
chines will do a $2 billion busi¬
ness. -In 1947, gross sales
through
vending machines ran between
people and
contribution
'
played
that
our
increasing
o£
such growth
to
even
a
chandising
have continued
abundance for all
end
greater activity in 1948.
begin there and face our
problems realistically, I feel con¬
can
the
have
considerable part in
look
forward
and
we
we
Since
companies
new
potential¬
point.
If
of
merchandising via coin
war,
nance
its
many
machines has experienced a phe¬
nomenal growth.
Commercial fi¬
understand
new
Vending
the commercial finance
companies
is the
financing of all forms of
in
live, have changed. For
for worse we are
living
our
In summary,
line very
in
ing
Summary
gressmen
groups your
these
you
tends
and
price supports, maybe
set "price objectives"
for
Government
completely take
cooperative
of
tell
action
ment
have
we
never
can
place
and
the
commodities and attempt to main¬
another.
are
action
it.
tain
we
thus
I
And
tained abundance.- Government is
is
which
the
Machine
comparatively recent form of
financing engaged in by
Our agriculture,
and
shared
low¬
or
Price Supports for Perishable
ernment
recommendations
and
A
even
other problems
many
ernment action to further this sus^
commodities
much
our
Coin
'
of what
Price
as
in
undoubtedly expand in 1943
the demand for working
capital
funds reaches new heights.
as
go
what
taken?
shifts in production?
>
nation,
inventory financing'
will
knew
we
cannot
conditions
wanted to.
we
our
We
not,
ered in order to encourage needed
t
by
said
This field of
re¬
these
cor¬
programs.
ence.
If
have
never
agriculture as
situation continues.
,
to the
crop
situation,
4
we
specific
defense
programs
can
this
doing enough to help
as
rect
allotments to
bacco
as
long
Are
we
name
healthy
really
a
have
to
needed in good times
Recently, for example,
mand
tion,
We
make
country. Britain normally takes a
big portion of our < production.
Without immediate price support
can
activity
more.
strengthening
it
all of the testimony
that point.
Such pro¬
year's
less
conviction that
have
British cut out all their pur¬
chase of flue-cured tobacco in this
next
not
consider
war.,
prewar
fident that
ruinous
acreage
if
is
ques¬
far-reaching
we
33
products, wearing apparel; wines,
liquors, beers.
•
European recovery, the need
to stop inflation, and the need for
the
and
problems
the
to
they could eke out of their
inadequate farms. It is my firm
production
agrees
and
before
back
to
need
Practically
land
decent liv¬
a
for ag¬
cure
what
very : much
prevent
the
be
decisions
problems, I hope we will keep
constantly in mind that the world
Congress and the American
second line of
courage
that
should
these
of 1948 is not the world
of that 50% were farmers in
reaction of your
to that suggestion.' :
a
believe
as
It
the
on
have
And
to
even
farm fam¬
the
see
riculture's—and for the nation's—
cooperatives, but
many
have
we
cooperative movement as an
factor in the picture.
will
sults.
that
make
only and had outside income, all
too many of them were living on
the
still
prices,
not
agriculture,
fu¬
ahead.
all
us
we
De¬
expansion- whenever
like
do
the
(233)
years
to
which
that
recession
would
be divided?
toward
important
We
clear
tions
look
we
needs of
the
the
The
problemsand
for"
serious
and
our
work out the admin¬
can
What
resources.
According to the 1945 Census
Agriculture, 50% of our farm¬
ers produce only
10% of our na¬
tional farm product. Though some
instituted very
experimental basis so
an
we
our
as
of
program be
we
As
of
on
So
in
recommended
has
istrative'
Vill
a
changed,
their
importance has not
ing.
which
floor un¬
consumption
income
partment
that
ilies
allotment'program
the
der
until
books
equipment to make
sort
some
cost
with good
food stamp
Should we build on the lat¬
of food
the
We must face the fact that
a
plan.
ter experience through
adequate
an
program
balanced
soil and timber
have
we
have
we
techniques should
be
used
to
speed up this work, and how shall
is
one-third
the
have
and
ture
that
conservation
have the
we
program
reaching
problems
number
of
many
CHRONICLE
diminished.
have
using for years, particularly
surpluses of non-
storable
the
of
feel
—
localized
for
seriousness
just
along this line
we
have the direct purchase and dis¬
tribution program which we have
been
the
FINANCIAL
Though
problem, our present program is
a
beginning. We can never
tion
experience
and
on
greater.
&
tobacco, ; textile
and
trade, in
many
instances,
re¬
quired the specialized techniques
of finance
companies in the past.
Every indication points to
extensive
these
any
the
increase
in
the
a more
use
of
techniques in 1948 than in
other period in the history of
industry.
«vv
"
rv
-
*
34
THE COMMERCIAL
(234)
&
FINANCIAL
CHRONICLE
Thursday, January 15, 194.8
of
$2
billion
in
miscellaneous
receipts, most of which is due to a
$40 Billion Budget Asked by Truman
constitute 48%
(Continued from page 6)
the total
of
Bud¬
expenditures get for the fiscal year 1949. The
increases in nat-onal defense and
of
$37.7 billion and receipts of
international aid programs total
$45.2 billion.
This indicates a
almost $1.8 billion, which is close
surplus
of
$7.5
billion which
{to the increase of the entire Bud¬
should be used to reduce the pub¬
get over 1948.
lic debt.
this Budget indicate
which de¬
ing government policies
serve
special attention.
$11
billion for
billion
interest, and nearly $2
refunds, there are a
reductions
resulting
f
declining
from
is
number
a
finance
to
increases
of
and
programs
activitier which should not be de¬
training.
universal
tof
program
total, which includes
fo^
number
less than the
amount needed to inaugurate the
which
ex¬
ferred.
other defense
Durmg the fiscal year 1949,
activities has been held below the
1,948 level.
Increases in the most, fewer veterans will be requesting
essential activities, such as air¬ educational aid and needing un¬
craft procurement and civilian re¬ employment compensation bene¬
serves, will be offset by economies fits than in 1948, but expenditures
and reductions elsewhere.
This for hospital construction will in¬
for
total
The
all
emphasizes
Budget
ward
modern
a
crease, leaving a net reduction of
$530 million for veterans' activi¬
ties.
This reduction contemplates
continuation of existing veterans'
to¬
progress
balanced
and
armed force.
affairs
International
amounting
nance,
18%
for
accounts
the
aid
new
benefits
ex¬
The cost of
will be
programs
largely counterbalanced by compietion or sharp reduction of ex¬
penditures for the British loan,
UNRRA, post-UNRRA relief and
certain
other
programs.
There
will therefore be
New
New
lion.
'.*■■■ The
is
to
aid
our
human
European
of
precious
and
risking
mean
resources—
material.
Failure to
adopt a program of health insur¬
ance would mean that many fam¬
which represents the
of this
expenditure.,
The ilies will continue to go without
requested are vital to the adequate medical care.
Failure
bulk
sums
this
of
success
implications
achieve
failure
to
Europe
and
deserve
additional
Should
result
to
program.
budgetary
The
recovery
other
crucial
ent
of
in
broaden the coverage of pres¬
social insurance and to in¬
basis would
areas
emphasis.
ance
failure of these programs
in a further extension of
would
The costs of added mili¬
stances.
sums
to
that
succumb to to talitarian rule,
in the
use
would far exceed the costs of the
uable
if
economic aid
program of
should
Europe
be¬
now
for national de¬
international activities
and
of
needed
plant would
be
derelict
most val¬
our
Budget
grams
[Fiscal
directly
support
RECEIPTS
in
years
the
two¬
,/v,
Actual 1947
Direct taxes
'•
Est. 1948
Est. 1949
individuals:
on
Individual
f'/'!
millions]
Source—
this
To
income
and
gift
taxes on
tax
$19,629
$21,951
842
816
tax
taxes
income
Corporation
tax
6,055
.'___
tax and other
1
___
9,222
10,000
3,621
158
7,320
,7,476
2,039
2,409
2,493
494
___.
326
7,270
;
:
394
Employment taxes:
legislation
Proposed* legislation
Existing
____
i
350
Customs
;
(appropriations to
Deduct,
legislation
Existing
—
Subtotal,
1,459
__
1,627
Budget
390
receipts
$38,428
$40,837
4,831
AND
$42,155
4,373
$43,259
:
EXPENDITURES
BUDGET
1,672
■
__
2,322
$45,210
APPROPRIATIONS
$44,477
BY
MAJOR
PROGRAMS
[Fiscal years,
,
Actual
Estimate
—
Estimate
..,
—
___—
ations
1949
$14,281
■
1948
$10,746
$11,025
$10,295
5,540
5,533
7,009
2,104
1949
"
affairs
services
and
and
finance,.—;
benefits
—_
7,370
welfare, health, and security——,,
Housing and community facilities _____
Education and general research
Social
6,632
6,102
5.154
1,379
_
..
1,960
2,028
2,077
.___
403
38
292
76
77
387
407
______
1,248
614
906
655
628
agricultural resources
Natural
1,179
1,626
1,581
resource
and
commerce
587
communication-,
and industry
government
the public
General
on
1,646
1,549
372
190
171
97
116
117
1,318
:___
debt
1.563
238
120
Transportation
Finance,
Labor
Interest
113
'
___,
Agriculture and
__
_
1,473
1,157
1,065
4,958
5,200
5,250
5,250
2,897
Reserve
for
2,049
1,990
1,990
120
200
225
$37,728
$39,669
$32,930
contingencies
Adjustment to daily Treasury statement
Total
—
—
these
basis..
—
taxes
based
are
on
ex¬
Between
1947
and
1948, reve¬
corporation and indi¬
from
nues
creased by $5.5 billion, more than
in
profits
excess
tax
reve¬
our
vet¬
insurance benefit
retired Federal employees
social
and other similar groups.
behind
rise
the
in
profits
and
+ 464
$42,505
Expenditures in Relation
fiscal
1949
year
Of the
billion
1949
will
gov-,
to Au¬
exceed
ap¬
by $6.7
year
expenditures,'
be
from
made
in
recommended
this Budget, including $5.4 billion
under permanent appropriations.,
Expenditures of
billion,
more
including
than $19,5
billion for
international
programs,
will be
financed
by
appropriations for;
1948 or earlier years. The remain¬
ing expenditures of about $700
million
expenditures
further rise in 1949.
will
propriations for'that
billion.
collections will
by a
of
thorizations—Expenditures in the
incomes, the 1948 increase in tax
be followed
.expenditures
account expenditures.
appropriations
increases in benefits for
iaries,
net
.accounts
corporations and enter¬
Jt hoes not include trust,
$28.4
cost-of-Lvirfg
increases
in pay ration profits and aggregate per¬
for military and civilian govern-,
sonal incomes,;
Because fhe in¬
ment personnel, nor cost-of-living: crease
in
tax
collections
lags
erans,
the
checking
prises.
vidual income taxes combined in¬
lion
also
and
from
ernment
isting legislation.
corpo¬
dollars.,
$5
principally
net
•
of
government cor-;
porations and credit agencies, will
be made under other types of con¬
Excise tax and employment tax gressional authorizations.
i
receipts are expected to increase ■"b' ;-:'v"
■'
'
;
•"
The
rapid
increase in living
slightly in the fiscal year 1949 as a
Miscellaneous Expenditures
•
costs during
the last 18 months
result of continued high levels of
has placed a serious burden on
The Budget also includes rec¬
these groups.
Yet, to offset the production and income. Receipts ommended hew authority for gov-,
from customs, however, have been
cost-of-living increase since the
ernment agencies to
make con-;
declining in recent months. The
last time
pay or benefit rates were
tracts amounting to $1.9 billion. *
advanced for each group would international trade agreements
Before expenditures are made in *
add at least $2.4 billion to Budget jwhich recently became effective
payment of these contracts, the
expenditures in 1949—apart from may cause a further slight drop in funds must be
provided by appro¬
increases that would be paid from these receipts in 1949. '
priations, but this will not be
the trust funds.
This large ex¬
The expansion of existing social
necessary until later years. Within s
penditure would add greatly tc insurance programs and introduc¬
the $32.9 billion of appropriations,
*be inflationary pressures in our
tion of a health
insurance pro¬ recommended for the fiscal
i..: ,1. p
Living Costs
.
■
year
economy.
The
which
approach,
the
to
proposed
to
enact
a
I
Congress,
comprehensive
to hold
gram
living
costs
pro¬
down.
of that program will
give relief not only to Federal
personnel and annuitants, but to
our
citizens
generally,
in
the
event that the Congress does not
provide controls adequate for this
purpose, I may have to recom¬
mend further adjustments in pay
Enactment
and benefit rates.
The
question
considered
be
of the
of taxation must
in the framework
budgetary
program and the
danger of further inflation. - One
of our most effective weapons in
fighting inflation is a substantial
budget surplus for reduction of
the
under proposed legislation,
an estimated $350 million
gram,
wiser
national
debt.
If
we
make
will add
,V':
mum.
Some
to
a
mini¬
relief
to
many
required
families
suffering great hardship
present tax structure.
But total receipts should not be
reduced
and
the
surpluses for
are
the
1948
and
1949
should
be
to
used
This budget reveals the magni¬
tude of the problems with which
the
Federal
Government
must
deal.
It
demonstrates
alike
the
for
the
maintenance
domestic
of
d:rectly
the
to
without
accounts
trust
in
reflection
Budget totals.
plain fact is that
remain
our
and
high
our
until
international
the
budget must
have met
responsibilities
we
clear to a
peaceful and prosperous world.
Prudence demands that we plan
our
can
see
way
national finances in full
rec¬
Budget
Net tax
5.
-v'7;
'.■■■;■ v,
The
public
.debt
$258
was
by June 30, 1949.
1949
mates
assume
present
high
activity
and
continuation
levels
of
incomes,
of the
business
continued
full employment tand stable prices
close to the present level.
These
assumptions presuppose an effec¬
tive anti-inflation program.
As long
as em¬
decline
cause
of
estimated
reduction
1949
;
.
have al' +
\
expenditures
for social welfare, health and se¬
curity involve increases for the;
Budget
expenditures for benefit payments 1
while inflationary dangers threat¬
community
Completion
must- make
en—we
opportunity
our
the
most
for debt
of
retire¬
considerably greater than the $12
accounts
trust
and
agencies
ment
other govern¬
will
accumulate
during the
billion
about
$6
fiscal
years.
these
accumulations
The
will
securities
since
two
investment
in
of
Federal
permit the Treas¬
to retire securities in the pos¬
session of other holders.
ury
In management of the
public
debt, the major goal will be the
achievement
cf
the 1 maximum
anti-inflationary effect. This has
been our policy
since the debt
held
Debt
and
banks
by the commercial
the Federal Reserve
also increase.
Expenditures
r
bousing
for
housing and curtailment of mortpurchases
gage
thef first-year costs
posed
gram.
long-range
-
of the
housing
•
general
from
result
research
to
the
aid
proposed grants by the
elementary and secondary
The increase in expenditures for
agriculture is accounted for main¬
the conservation and
use program
is recommended for the 1949 crop
year.
•
Natural
resources
public.
the
of, private bank deposits
combats inflationary pres¬
so
expenditures ]
our
same
time,
we
utmost to increase
shall do
voluntary
purchase of savings bonds.
To
curtail
bank
credit
ket.
expan¬
mar¬
This has been reflected in an
adjustment
a
money
better
in
interest rates and
between short-
balance
and long-term rates.
minimized
the
However, by
increase
in
of
atomic
and
the
,
recla¬
'
•
highway and airport construction, '
and direct improvement of rivers "
harbors.
part by lower
These
are
offset in
Maritime Commis¬
sion expenditures.
While
the
anti-inflation
pro-
gram will require
sion, the Federal Reserve System
and the Treasury have progres¬
sively tightened the
because
for
control,
Major increases in,expenditures
are in grants for !
savings in all forms, particularly
the
chiefly
for transportation
and
At the
increase
mation.
the
reduces
,
-
flood
to
.
ly by decreased net receipts of the
Commodity Credit
Corporation.
Proposed revisions in price sup- '*
port will bring some savings in
1949. More adequate provision for
energy,
process
.
Science Foundation.
expenditures
bonds
,
mainly
education, and from the proposed
establishment of the National
,
whole
•
Federal Government to the states
higher
investment
pro¬
•
will
volume
pro¬
The increases for education and
i
'
than offset *
more
Treasury balances, the budget
surplus, trust fund accumulations
and
the
sale
of
savings
and
The
and
facilities
decrease.!
of
veterans'
re-use
banks has been repaid out of ex¬
cess
receipts, however, will refunding long-term securities into
from
1948 to
securities
we
have
1949, be¬ dhort-ferm
an
The
will
—
Budget
-
\
summarized..
en
ployment and income continue at
levels
and
especially
record
for the fiscal
billion
contract
prior
on June
30,
billion. Budget
surpluses of over $7 billion in the public health and public assistance ;
current fiscal year and nearly $5 programs, and initial administra- :
billion next? year should permit
tive costs of the proposed health'
furl her reduction to $246 billion insurance program. Trust account
t
1947,
and
are estimated
at $1.3
higher than the present
estimate for 1948, and $3.7 billion
higher than in 1947.
The esti¬
year
of
veterans' programs
t£c<-)y b
r-
sure.
Receipts
revenues
lor.
are
the national defense, international,'
and
Retirement of the Public Debt
a
The
economy.
the
billion
Changes in Expenditures—The
major reasons for the changes in
heavy responsibilities of our in¬
ternational position and our con¬ reached its peak in February 1946.
cern
$1.7
transferred
employment taxes to gross Bud¬
get receipts, but this will all be
billion reduction in the total
'■
:
readjustment js
afford
who
to
be held
nearly
liquidation
authorizations.
protection less
should
1949,
of
effective, we ment.,;'
shall
have
to
rely much more / The retirement \of public debt
heavily ,on direct price, wage and held by -banks, other private insti¬
rationing controls which we .all tutions and individuals will be
this
Appropri¬
1947
defense
National
Veterans'
cor¬
a
Budget total includes ex¬
penditures from the general and
special accounts of the Treasury
The
ognition of this fact.
-——Expenditures
■
and
The
n
being
*
International
for
:
,
Appropriations
_
pro¬
responding increase in corporation
taxes. The estimates in the budget
in millions]
Program—
am
reduction in
a
nues.
Between
1948 • and
1949,
deferred where revenues from the two types of
expansion of gov-; income taxes will increase
by an
ernment credit and of government added
$1.3
billion.
These
in¬
guarantees of priyate credit is creases are
largely the result of
being restricted. " Further, J am, inflation
during
the
past
18
not recommending at this time
months which has swelled
sound
net tax revenues___
receipts
mean
sup¬
~
Proposed legislation
Miscellaneous
378
trust funds:)
■
adjustment I
$22,506
779
tax
offsetting the 'decline of $3.2 bil¬
pur¬
short
in
decrease the national debt.
corporations:
Excess profits
Excise
pos¬
end, government
of materials
ply are
feasible.
•
Estate
Direct
proposals of this
designed to avoid in¬
revenue
are
chases
from
BUDGET
of the impera-
sible.
agree
resources.
expanded programs has been most
carefully weighed. All these pro¬
Expenditures
fense
devote
would
one
in
stand¬
Each of these proposed new and
;
fore the Congress.
of
na¬
delay
housing
to
we
more
our
program
further
atomic
our
mean
strength,
is
Failure to adopt
decent
Failure
ards.
the
whereas
housing
mean
achieving
much reli¬
insurance
on
long-range
a
circum¬
under
ture and
permanent
too
mean
tional objective.
rule, we would have
to reexamine our security position
and take whatever steps might be
a
oh
relief,
upon
reliance
totalitarian
necessary
benefits
crease
aware
ttive necessity for preventing fur¬
ther inflation.
Both the expendi¬
to
loss
the
all
are
,
eontrol work would
recovery,
tary
Proposals
improve our educa¬
tional system or to expand fldod-
which we nave ex¬
perienced before." I have repeat¬
edly stressed the critical impor¬
of
,
Failure
ent from any
tance
We
is
conditions basically differ¬
under
personal income taxes
have
ditures.
We are undertaking it
challenge.
preparing this nation to discharge
its increased responsibilities in the
the increases in expen¬
count for
international program
answer to an unprecedented
new
our
Legislative
legislative
proposals, to¬
gether with expansions in present
programs necessary to carry out
the intent of existing laws, ac¬
net increase in
a
been
year.
less than in the current year.
less than $1.5 bil¬
this category of
have
as
types of
available
same
The surplus property
disposal program is nearing com¬
pletion and under revised legisla¬
tion should cost about $200 million
this
compared
as
with the
programs
billion,
Budget
of
penditures in 1949
with 15% in 1948.
fi¬
and
$7
to
posing will
family of nations.
market debt.
on
Budget Expenditures and
[health in this nation, and of better
$6.1 billion for veterans, over $5.2
amounting to
billion, accounts for 28% of
it will in 1948.
net increase over 1948 is $279
million,
1948
government
surplus property.
The
interest rate paid by the.
average
receipts from sales of
fold objective of building eco¬
nomic and individual strength and
categories. flationary effects wherever
these
in
this
Within
the
as
same
penditures
the 1949 Budget, as
The
the
about
Costs
Defense
National defense,
other
expenditures of the
government in the
fiscal year
1949 are estimated at $21/3 billion,
decisions involve
ber of important
National
All
reflects a num¬
Our 1949 Budget
-
declines in
higher expendi¬
tures, the total for finance; com¬
merce,
and
industry
will
sharply because the current
total
includes
the
fall
year
nonrecurring
payment of
war damage insurance
profits to the Treasury.
'
The
increase
for
labor
is
re¬
quired to carry out the provisions
of
the
Labor• Managem ent
Relations Act of 1947. to restore
essential
services
in
the
Depart-
.
Volume
jnent
167
of
..
Number 4664
:Labor,
.to
.and
THE
cover
-
litiereased costgVof the public em'■>
ployment offices*
■
*
/, /
government .expend!will: decrease, chiefly be¬
of lower expenditures for
tures
■
cause
■;
the disposal ofv surplus property.
■/ Although the public debt will
.,y>
,
lower,
.be
interest
will
payments
/«/' Increase somewhat,
chiefly
higher accruals on
ings bonds as they approach
as
result of
iurity,
a
sav¬
ma>
>.
...,,
Tax ref unds will decrease main-
.
adjustment of
corporate tax
wartime
liabilities.
in
1948,;,
only
operating levels
Exceptions
where
longer be deferred.
made
were
activities
could
,
no
Many depart¬
a
requests
to
perform
de¬
sirable services have been refused.
program
chieve.
let
us or
mendous
work
to achieve
the
rigid stand¬
ards of operating economy which
amount
in
two
this
the
■/. and
by
taken
v
the
to
(Continued from
measure./
steer
from less essential
all
these
nave
we
manpower
away
industries.
the
ways
claim
essential consumption
In*
less
of
on. our
re-
has been heavily cut back.
.Our next step was to get our insources
.
,
"-/i vestment
the
V :
:coat
cut. according
cloth,
to
available, while still
(1;. maintaining as good and as sound
v-a design as possible, bearing in
-;j-t//mind that certain overseas investa
men
s, such as the developments
hoped.
.
-within the sterling area, were an
itessential part of the,eventual soln
:
lion of our difficulties.
12)
page
///' •' /•'/'••/Physical Assets /// //;/;
•"// The real significance of .the
AVhite Papsr is not in the financial
derms which have had to be used
to
sum
the
up
results
-dissimilar
J'
"
.actuar
?
.assets and
-
of
but
programs,
decisions
as
to
labor which
many
in the
physical
to
are
be
■found in the appendices. The new
will,
program
'
realistic
terms
than
of
hope, be
we
the
the
earlier
If all the various
more
in
ones
available.
resources
projects planned
.for 1948 had proceeded according
t; to their schedules, the volume of
-investment
i
:to
,
manpower
f
physical
i
•=,
certainly
million. /
and
other
of £1,600
excess
«If; the
mounted
large figure,
very
a
far in
have
would
nally expected
resources
;vote to work
had
we
origi-
be able to
to
de-
investment proj¬
ects in 1948 could have been made
/available,
i
.
on
they
would,
we
esti¬
mate, have produced about £1,600
worth of physical invest-
//million
-rmeat;
but
when
had
we
made
*
provision
for
increased
export,
and for the needs to expand agri-
•
'•
culture
other
and
:;:Miome in order to
V was
industries
; vestment.
//reduced
/million
'or
k
at
imports, it
save
clear that this quantity of re-
/ sources could not be
an
must
the
level
of
£1,320
the end of 1948,
the >ear of
year at
average
.; £1 420
found for in-
It has, therefore, been
to
a
over
million.
Moreover,
we
that the number of
see
new
"
projects proceeded with is limited
ensuring that the more impor-
1
1 to
schemes
tant
.;
Y?s rapidly as
* afford at
the
.
-
more
-
of
our
may
be completed
possible. We cannot
present time to have
locked
resources
'
in work in progress
than is
up
essen-
■; tial to the ordinary flow of construction.
/
There
■'/.V-■ ■:://.■/./.'•; f
are
main
two
criticisms
' which have been made.
„
First, that
:>the postponements and reductions
not enough in
are
/f ond.
that
more
total, and, secbe spent
should
re-equipping our industries,
which implies, of course,-still se-
1/ upon
verer
*
! In
cuts
in
other
investments.
this respect/the chief sugges-
i, tiop is that housing should have
r/been further cut. It has been sug¬
gested that my right hon. Friend
//the Minister of Health has man-
//pged by his vigorous
insistence to
./■ toppedo the program.
,
the first
criticism,
we
It develops next year
.
...
As regards
shall see as
how far we
have enabled the export program
to be carried out by what we have
done.
;
are
circumstances -of
economic
disruption as we
faced with, to have
any
final plan.. We must al¬
now
rigid
or
ways
be ready, to adapt
nomic
activities
our
the
to
The present White Paper on investment is not
.
.
i
necessarily
document, in the
sense
a
final
that if the
necessity supervenes we may have
to reconsider it. It would be un-
when
bear
we
circumstances
in
under
..
changing world situation, and to
our
We
internal
own
a
stantial postponements laid down
about the maximum
possible
are
the
mobility
;
iiter-
and
ohangeability, of labor that exists.
The cutting down of projects
which merely keeps people unem¬
of
value.
no
object to waste
our
On
sources.
to.
the
It/ is not
for¬
go
considerable program,
so, mucn
as
had
we
In
overall balance which will
an
the
upon
Balance of Payments
I
turn
now
balance
of
-
to
review
a
of
our
payments
situation,
which, is, of course, closely asso¬
circumstances. ciated
believe, however, that the sub¬
within
intend
We
most
necessary,
without wholly
neglecting the general pattern of
our capital development.
eco¬
rapidly
with
gram;
the
investment
pro¬
Many of the current facts
already
nave
been
We have had
made
public.
fairly recent de¬
a
bate in this House on the matter.
I will attempt to give the House
sort of
a
always be borne in,mind that this
we
's
not
short-term
problem."
It
a transference of ,1ais one which will proceed,
perhaps
'ocr from less essential to more
with varying
emphasis, far into
essential activities.
It is almost the
future, because it arises out
'nevitable that the changeover of
of long-standing and difficult ten¬
a
national;
ew
requirements
will
isturb the present pattern of
ployment.
in
the
to
avoid
* It
will be
of
course
porary
some
plans
changeover
unemployment,
to
as
so
Indeed,
impossible it
incidence of
be careful
must
this
em¬
dencies which have been develop¬
ing over the years in manv other
countries besides our own.
to
tem-
but
we
is
world
a
We
cannot
the
reach
a
equilibrium without
economic
and
adjust our, throughout
minimize
problem.
settled
political conditions
the world. All our
^
waste
deficit
current
on
ac¬
Moreover,
seriously reduced.
things turned out,
as
an annual deficit we felt this ioss particularly, be¬
million, which was made cause a substantial part of it
up by shipping, with earnings of represented the loss of dollar in¬
£ 95 million, and
insurance, bank¬ come from dollar securities.
ing and other commercial services,
JNlor, indeed, did the process of
with
£35
deficit
a
million.
of
_
This
£ 15
still
million
left
which
however, wholly covered by
investment
our
than
£150
income
million
of
more
sterling,
the sale of investments
the end of the war.
public
utilities
in Latin
America including, of course, the
where.
It
that
out of this
was
.developed
surplus that
many
we
in
areas
the
world upon which we could draw
for imports of food and raw ma¬
terials.
That general pattern of
policy, however, had one un¬
our
fortunate
the
result
neglect
ture,
of
in
that
our
mistake which
a
it
led
to
agricul¬
own
must not
we
repeat.
The
of
1914-18
whole structure of
By 1928.
just over
shook
our
-exports
our
84%
of
had
11.2%.
fallen
Between
annual
our
on
aged
£143
closed
of
in
1913,
exports by
from A13.9
and
to
1928,
current
on
million,
which
using the greater part
investment" in¬
and
1938, exports
fell still further by 37%, but im¬
ports were reduced by only 23%.
Fortunately, for us there was,
however, in the 1920's
turn in the terms of
agricultural
vk
prived of
a
favorable
trade, but the
communities
with
our
food
sup-
cur¬
rent income through the fall
prices of primary products.
Immediately before the last
in
increase
nations
his
and
to
but
the
income
faces
a
particularly true of
it is, we can only
As
estimate
£70
return
million for
from
vestments.
situation,
our
our
1948
of
light
this
take
resources
importance,
as
in¬
overseas
the
In
added
on
for
they
alone stand between the sterling
area and possible bankruptcy.
The
In
Sterling Area
parts of the world a
still hangs around the
some
mystery
words
"sterling area."
Indeed, it
a sinister
is by some regarded as
phenomenon.
old
In
fact, it is
a very
system and is the application
to the financial arrangements be¬
tween the members of the sterl¬
ing area of the principles of a
domestic clearing banking system.
For many years past
in the sterling area
tained
practically
in
foreign
calling on
ings,
the countries
have
their
and
paid
re¬
into
exchange earn¬
London in turn
provide such external
as
main¬
all
London
London
on a
against earnings of £496 million
on
physical exports and re-ex¬
bills,
That is equally true of
own.
an
still
assets
to
bad end.
a
realize
pays his current bills
capital while making no
reduce his expenditure
of
out
effort
or
to
overseas
current
who
man
to
war
three years'- average, we were
spending £884 million on imports
our
our
serves
large part of their
a
de¬
were
ought
of
meet
was
overseas
1928
It is sometimes suggested
we
more
ac¬
come,
Diving
sold other lucrative interests else¬
payment Aver¬
overseas
by
our
only
were
1922
deficit
count
the
economy.
those
and our share of world
value
Argentine railways, and we have
our
war
with
cease
We have sold
many
thus
us to enjoy a substantial
surplus for re-investment abroad.
enabling
reasonable
more
trade
count has been
£ 136
Between
It must
re¬
our
£4V^
earned
ible
35
million, leaving
as to our future situation.
labor
production necessary to meet
exports
own
thus leaving little or noth¬
ing for new overseas investment.
hand,
our
other
|
then level of
£610 million. Our
was
physical
rough balance sheet ac¬
companied by sdme observations
desire to get
resources
they required for their current
This
trade.
has
area
bank to
ensure
enabled
like
sterling
the
the
clearing
that all the
I recent
money
plans and activities have
in the sytem was made to do its
by any |been designed to assist in
reducing ports an adverse balance in vis¬ work.
unemployment.
Al¬ the size of the
problem we have ible trade of £395 million. Against
though there may be, therefore, to face.
Through this system we have
First, the cuts in our im¬ this, we had our earnings from
a theoretical case for
been able to finance development
sudden and
ports; second, the forcing up, of shipping, insurance, banking, com¬
drastic
measures > and
overseas,
and we have, in
changes, our exports; then, the capital in¬ mercial services, and so on, and.
our
there is a much stronger practical
turn, received a very substantial
vestment program designed, as I in particular, £203 million from
case for taking time to
making the have said, to free our resources; overseas investments, leaving us contribution to our own foreign
changeover smooth and as little
exchange resources.
Before the
and, finally, the recent Finance with an overall debit balance of
war it was a
disruptive as possible of our pro¬ Bill
completely free sys¬
planned to diminish the in¬ about £45 million. We were then
duction efforts.
/•/•"// /- flationary pressure which might living beyond our current income tem. During the war we obtained
A great deal of the
the agreement of the members of
limitation otherwise disturb our
economy I have given the House these fig¬
on what we can do as
the sterling area that they would
regardsmit and. so/force
ures because it is essential to ap¬
up prices and costs,
own industrial
continue to pay into the system
reconstruction., de¬
making it more difficult to find preciate these long existing ten¬
fends
their
dollar
earnings and they
upon / the availability/ of markets for our exports.
/» dencies towards the worsening of
would limit their dollar expendi¬
steel, which strictly limits lhApps/
Linked with these steps is the our position as regards the bal¬
ture
to
what was essential for
sibilities, in view of the inescaR/,
development of our own internal ance of our. overseas payments.
their own contribution to the war
able fact that we must
export as resources including, of course
ag¬
/'
This voluntary limitation
Impact of War
y
; effort.
many steel goods as we can' in
riculture, and those of the sterling
various
It was upon this precariously was reinforced by the difficulties
forms,
to /balance//out;
area, so as to reduce our dependr
of supplies of shipping,
overseas
but
payments.
So
balanced
far
as
position that the war
ence upon exports from hard cur¬
housing is concerned, timber is
had its tremendous impact. There broadly we left it to the local con¬
rency countries. The final step is
trols to determine in the light of
the
real
were three particular conse¬
limiting material/ bpt the
arrangement
of
bilateral
the
general
here we must bear in mind that
policy their claim
quences affecting our balance o'
agreements which will secure us
in. essential condition of success
the concentration of upon the sterling area resources
the most valuable use of our ex¬ payments:
in achieving our export and im¬
the whole of our productive effori for dollars.
Now, of course, this
ports in acquiring the vital im¬
on
the war; the cutting to the system is under a great strain.
port-saving program is a degree of
ports which we need.
bone of our exports, with all the The current dollar earnings of the
mobility of labor which will allow
These are the main elements
us to move labor from one occu¬
long-term consequences of dis¬ sterling area though significant
making for a reasonable hope that
turbance of prewar trade channelF are much below their current dol¬
pation to another. In securing this
we
can, in time, achieve an ac¬
This would mean, if it
which was necessarily involved, lar needs.
mobility, housing is vital, and the
ceptable standard of living for our
more houses we can get
and
the destruction of half our were to continue, a very heavy
quickly
people, based firmly upon our own Mercantile Marine, together with drain on our reserves.
Tnisbed/ the better chance we
economic independence. The Mar¬
the loss
We
that
would
be
caused
large-scale
.
•
,
shall have
of
achieving
/
duct ion program.
our
Mining and agriculture
two
we
most
vital
pro¬
;
are
industries
the
which
must man-up to help our bal¬
of payments, and neither can
ance
be
manned-up
of
access
is not
an
new
added
without
large
Housing
a
housing.
shall
plan, if it; is put into opera¬
tion, will, we hope, help the car¬
rying out of this program; but it
be
can
no
assistance
substitute for
derive
we
it.
Any
from
that
plan will have to be used for the
rapid
development of our
resources and those of Europe
more
own
or an
the sterling area,
unnecessary and
and not
luxury; it is an essential part, of merely to enable us to enjoy some
capital equipment necessary^ to temporary improvement in our
carry out our plans. .Quite apart living standards We must
always
from the question of comfort and have in mind that such a
plan is
convenience for our people, which temporary, and can
only give us
-
are
in themselves of first class im-
oortance,
dustrial
os a mere matter
efficiency,
the
of in¬
provision
of adequate housing accommoda¬
tion as quickly as possible is a
orimary consideration.
very good reason why
That is
we
a
should
not at this moment cut our hous¬
Mobility of Labor
,
last
surprisingly
a
allow us to concentrate
ouch
»*.i.c
world
/////. .// ployed is
'
/
the
adjusting the plant to
needs, we have tried to main¬
c ur
*
;
in
laboring.
■
tain
,
capital
new
this Budget.
.
prices
tre-. was,
a
which the whole country has been
Britain's Position
,
of
is
amount,
mind
done
country
It
years.
large
else overlook the
have
we
(235)
this country at the
man-; of
our
attempt
to
export task. Do not
anyone
that
ment
made
be
with
our
Throughout the Federal Govern¬
changes in activities will be
will
physical terms, and
hope will not materially
we
interfere
r&ct
which
in
ageab:e
wnich
.
mental
be raised. We have laid down
may
...iu.ougu nox
,
CHRONICLE
deal with any special point which
1949
year
ward with
,,
FINANCIAL
have governed the preparation of
*■.
In the preparation of this Bud¬
i
,.
,
for the fiscal
at or below their
ly because of lower refunds aris¬
ing from
&
get, I directed all departments and hon. Friend the Minister of Health,
agencies to plan to continue: their when he sums up, will be able to
programs
/'-.vGeneral
COMMERCIAL
ing program
compel
us
to
more
than materials
do.
I do not propose to deal
with
the
time
carry
in
out
which
our
own
the arguments and facts set
out in the White Paper. My right
better
long-term
to
ar¬
rangements for securing the supnlies
and
markets
we
need
as
permanent and stable basis for
a
our
economy.
I
now
turn to
a
short historical
review of
our balance of
payments
position, because it is in the light
we
must
much
of
our
income
investments.
overseas
judge
tion. Before 1914
so
disclosed that
present
posi¬
the annual
aver¬
our
age value of retained imports into
We
must
speak
of
remember
our
when
reserves
we
are
we
rebuilt a large part of our speaking of the reserves of all
shipping.
Indeed, we are build¬ countries in the sterljjig area. » As
ing at present in British yards the House knows, we were com¬
tonnage than the rest of the
more
world put together.
But we still
have not enough shins for inter¬
national
pelled to spend the American loan
much
or
more
the
and, therefore, we
are
unable
to
set
free
enough
ships to go out and pick up the
when
lucrative
rapidly than either
Americans
between
trade
countries which
our
prewar
The
was
other
the basis
of
we
foreseen
income
services, such
from
as
commercial
banking and in¬
surance, has stood up well, but it
has not increased proportionately
to
the
On
changed value
our
overseas
ing the
the
war we
of money
investments,
sold
or
we
Dur¬
facilitated
repatriation of overseas in¬
to the total of over
vestments
£1,100
means
single
fore
million
that bv
source
the
war
sterling.
the
available
for
to
negotiated in 1945.
The rate of expenditure was in¬
That
lar^®'
us
be¬
closing the vis¬
was
fluenced
by
factors—
main
two
increasing
dependence
by
practically all countries for essen¬
tial
shipping income.
it
had
the
trade
have suffered most sharply.
of the tendencies
in detail
the
of
from
have
supplies
North
the
upon
American continent and the very
sharp rise of prices in those
tries.
The
sterling
sist of
lar
final
our
we
stand
at
million
$100
about
into
million
United
At
expect
-
a
sterling;
bringing
coun¬
of the
therefore,
con¬
existing gold and dol¬
reserves.
year
reserves
area now,
States
the end
our
figure of
that
is,
the
account
of
the
mainder of the gold
this
to
£500
after
first
remaining
credit and
(Continued
of
reserves
the
that
we
on page
36)
re¬
shall
36
THE COMMERCIAL
(236)
(Continued from page 35)
from
South
Africa under
in
countries
the
expressed
sterling
area
is
concerned,
and
we
must
try to keep a balanced outlook on
the results.
They are bound to
U. S.
Britain's Position
dbtain
tion
intention of the
Administration that, if pos¬
sible, we should not. be called
upon to convert more than
£10
million
in
1948.
Among other
countries with whom talks are
the
Thursday,'January 15, 1948
FINANCIAL .CHRONICLE
&
with
vary
the
conditions and
should
we
not
seasons, weather
other factors, and
be
wildly excited
import
pur
restrictions
imposed
on
goods by other countries who
are
as
as
short
of foreign exchange
Here, we can only do
them to ad¬
are.
we
our
best to persuade
mit
as
large
range of our
a
goods
as
have now announced their policies
possible, and that is the con¬
proceeding at the present time at every increase or inordinately
contract.
of further restrictions in dollar are the Argentine, Egypt, Holland cast down by every decrease.
If stant preoccupation of my right
At the beginning of
1948 we
we
can
maintain
the
present hon. Friend the President of the
imports.
and Yugoslavia.
Agreement has
shall have available to us in addi¬
These policies which have been been reached with Sweden, L am
tempo, and gradually improve it, Board of Trade in all the; bilateral
tion £$75 million sterling, repre¬
imposed by the governments of very glad to say, and an announce¬ we shall be able to get a really negotiations he is carrying out.
senting the rest of the .United
In spite of these difficulties, we
the countries in the sterling area ment will be made in the course satisfactory export program next
States credit and
£70 million,
mean inconvenience, and perhaps
year.
I can assure the House that must not relax for a moment our
of the next day or two.being the approximate amount of
efforts' to develop ; the 7 types of
even worse, for their peoples, but
For
1948,
we
shall
require nothing will help our acquisition
the undrawn part of the Canadian
£1,600 million worth of of foodstuffs and raw materials manufactures which have assured
credit.
We also hope to see in they are accepted as part of the about
combined
policy of the whole imports on the reduced scale of more than our having coal with markets and to switch our exports
January £80 million in gold un¬
sterling area, and we are grateful living, but allowing for some in¬ which to purchase them. We shall as much as possible from soft to
der
the
gold loan from South
to
them for
their generous co¬ creases in prices, and we shall not waste a ton of that coal by hard currency markets.' We must
Africa.
We have not in sight any
operation.
We, ourselves, will have an invisible import of about allowing it to go for anything sell everything we cap-,for hard
other accruals to those reserves
the
existing gold
of 1948. We can
forward in the latter part of
for the first part
look
care
to
watch
with
very
great
cent of our dollar ex¬
every
another
ment
£100
million
that is not of real and vital value
-
For
currency
to
of govern¬
expenditure overseas.
our
us.
and
we
must not allow
preference for.-habitual meth¬
In steel, too, we have been do¬ ods
and -traditional markets
to
There will have to be exports and re-exports, if we ful¬
of gold to pay for fill the export program we should ing exceedingly well; and I have deflect' us ' from7: this paramount
no
doubt that we shall continue objective.
dollar imports and we shall not obtain £1,550 million; and from
This is particularly
true of textiles where the condi-*
be able to avoid some drawing
shipping, oil
and services, to¬ to do so provided we can keep up
full operation.
>'.
the flow of scrap and pig iron. tions
down of the total figure of our
of
the
industry—surplus
On Oct. 23 I commented on the
gether with income from overseas
reserves during 1948., ,.
In both, of these vwe are running plant/a plentiful supply of raw
■
investments, we should get an¬
momentous con s e q u e n c e s for
v
While the policies for the re¬ other
£130
million net.
Th;s on a very narrow margin and I materials and a market, particu¬
democratic
civilization all over
duction
of
dollar
imports
are would
cannot emphasize too strongly the larly in North America—are' fa¬
give us substantially an
the world of the discussions then
being brought into effect, these over-all'balance, but even if we most urgent need for every fac¬ vorable to an even more intensi-*
proceeding at Washington. Since
basic reserves of the sterling area do all
7
;
that, there is still within tory and workshop to mobilize its fied export drive.
then,
the
U. 7 S... Government
have
immediately to carry the this total balance a deficit with scrap without delay.
The whole
have taken matters further.
In¬
Further Struggle Ahead
whole shock of, the present diffi¬ the Western
Hemisphere of nearly output of our great engineering
terim aid for France and Italy
I have attempted to give a rapid
cult world
situation.
We must £300 million
sterling which, of industry depends on the flow of
has
been voted and we expect
and rough sketch of our present
remember all
the contingencies
steel, and that, in its; turn, de¬
course, cannot be set off against
very shortly to see the text of the
position, with its prospects, be^
for, which these reserves must our surplus from the other areas. pends on the flow of scrap.
U.,S. Government bill giving a
cause I believe that the House and
In
textiles, we can report a'
clear
outline of the form and provide, not only in the immediate That can only be tackled by cut¬
the country would wish to know
■nonths ahead of us but as part cf
For
ting off imports from br extend¬ really encouraging increase.
scope
of
Mr.
Marshall's great
what
these
prospects. were.
I
the whole stability of the sterling
a
long time output remained al¬
ing exports to the Western Hemi¬
project.
As I have already said,
area system.
No one is in greater
most stationary, but now, at last, might, perhaps, sum up the posiwe must in the first place use the
sphere.^^; ;
.. V' ■ \
'■7
t'on in this way: So far as our
danger of losing his independence
There is absolutely no chance wb have a quickening response to
help that comes to us, if it comes,
internal efforts are concerned, we
of action than the man who has of
our
situation, both in the num¬
our
arriving anywhere near a
to strengthen the foundations of
no
reserves
upon
which to fall balance of visible exports with the bers in the industry and in out¬ can face next year with quiet con¬
our economic position rather than
back.
v
'
•
The fidence, based on the experience
United States of America.
We put, as the figures show.
have any immediate alleviations
A few
The maintenance and strength¬ never have
number of persons employed in of the last few months.
done so since the days
of our consumption standards.
weeks ago, I said that Britain was
ening
of these
reserves must, when we supplied the capital our textile industries in June of
Against the reserves which I
on
the move.
Now we can see
this year was 756,000.
therefore, be a major preoccupa¬
By No¬
goods to develop America, and
have just described, we have ex¬
clearly the steps forward that our
tion of our external economic pol¬
our available
exports are not, in vember, the figure had risen to
ternal liabilities Lof
£5,300 mil¬
country has already taken.
Our
lion
of - which
£3,550
million icy and we shall have to postpone the ma n, such as the! United 784,000. The weekly average out¬
people- have responded magnifi¬
alleviation of our own internal
States of America wants or can put of cotton yarns was 12,560,00f
represents the sterling balances
cently, on all sides, to the de¬
position until we have done our take.
We
have
always
relied yards at the end of June and had
accumulated by our creditors dur¬
mands
which
have been made
risen to 14,730,000 by November
best to make this policy secure.
upon three-cornered trade for the
ing the war and as a direct result
uoon them.
I see no reason, short
It is because of our own act-on
balance.
We
must,
therefore, The output cf woven wool fabrics
of the war; £855 million repre¬
of a
catastrophic or unforeseen
rose from 20 million yards in June
and policy that we, in our turn, continue to
encourage that threesents the existing liability in re¬
not
are entitled to ask other members
to 23,870,000 by the end of No¬ happen'ng, why we should
cornered trade and hope that the
spect of the United States credit
steadily
to
an
everof the sterling area to help us in
vember.
Nonetheless, to meet our progress
sterling area as a whole will be
and
£235 million the liabilities
this primary task, even at the cost able to increase its exports into ultimate targets, we have still a increasing volume of production
on
the Canadian credit.
Honor¬
in all our main lines of output—
of personal sacrifice.
But we can¬ the United States of America, or long way to go. -fV'I1;7'7 ;•
•■•I,7;;y
able members will be interested
steel, agricultural machin¬
In: engineering,
not build a healthy economy upon
we have had coal,
that
Europe
may
do so, with
perhaps to have a few' figures
But we
restrictions on imports or a jeal¬ whom as a result of the Marshall our ris'ng output checked, unfor¬ ery, textiles and the rest.
about the rate of the drain on our
must remember that we are by no
ous care for our reserves; we must
Plan
we
may
be
even
more tunately, from time to time by
gold and dollar reserves since the
means at the end of the road.
The
ncrease our foreign exchange in¬
closely linked than before.
We material shortages, but we hope
suspension of convertibility on
come and retain the confidence of
that the revision of the investment progress I have mentioned, satis¬
are, indeed, now actively studying
Aug. 20. "In the four weeks end¬
factory as it is, is no more than an
Dther countries in the stability of how
that
closer
integration of program will bring relief in that
ing Sept. 20 the weekly drain our own economy, not by credit
respect.
Let me give the House aoproach to the level of produc¬
our economy with Europe may be
averaged more than $90 million.
tion that we must achieve.
from abroad but by our own ef¬
a few figures: In June, this year
brought about.
( '
In the following four weeks end¬
1048
to
reduction
some
in
the
for dollars if the
Marshall aid scheme is by then in
drain
on
r us
penditures.
.
sales
further
-
.
„
.
have
-
.
,
,
.
-
18, it fell to the
ing Oct.
figure
$65 million.
Since then
run at the rate of rather
forts in
it has
less than
$55 million a
week.
nroduction.
While
Export-Import Plans
of about
T therefore turn to see
how we
progressing with our exportimport plans.
There are sc many
are
of
these
developing
long-term
other
policies
of
sources
supply for ourselves, and a greater
volume of exports to the Western
Hemisphere from this and other
we
turned out 56
main-line loco¬
motives; in October, 76.
put
stood
of
at
railway
2.962
in
The out¬
wagons,
June,
which
rose
tc
4,119 in October. The value of the
June production of internal com¬
incalculables countries, are being put into oper¬
we
must secure that the bustion engines was £1,618,000.
that it is not possible to make any ation,
have had to make considerable
accurate forecast.
Who will say drain on our reserves is reduced By October, that figure had risen
sales of gold and these will have
to the lowest possible point.
We to £2,177,000. The corresponding
to continue, we hope in rapidly what the terms of trade will be,
for
hosiery
machinery
or
what will be the outcome of must make every effort we can figures
diminishing quantities, despite the
show an increase Horn
£235,000
the many
bilateral negotiations to maintain our reserves for the
release of the $400 million credit
to £363,000.
reasons I have already given to
upon which we'are now, or shortly
for which we are so grateful to
the House.
Agricultural machinery, ir
Apart from economies
our
American friends.
During shall be, engaged? Here, let me
a
word
as
to; the on imports, which we have al¬ which we have the foundation of
October, we sold £35 million of interpolate
a most important new export in¬
ready imposed almost to the limit
gold, of which £30 million was progress of these 1 various nego¬
being turned out in
tiations.
As the House knows, of our capacity, we must rely on dustry, is
in the United States, and we re¬
a
I will take
greater volume of exports,, and increasing quantities.
ceived
£ 12.2
million worth of we are having talks with those
Produc¬
countries with whom we have im¬ that means an over-all increase tractors as one example.
gold, of which a little over £10
in
production. * Here, there are tion: amounted in the first quarter
portant trade or financial arrange¬
million was from South Africa,
of this year to 8,308, and by the
ments.
I will not give details of some encouraging signs.
showing a net loss of gold of
third quarter had risen to 14,318
£22.8 million.
In November, we all of those, but perhaps I may
Industrial Output
I have mentioned only some of the
a
few.
The
special
sold £47.8 million, of which £40 mention
The resumption of coal exports main industries on which our ex¬
agreement as to food grains which
million was in the United States,
was
announced yesterday by my
ports are largely based.
Other
we hope to
conclude with Russia
and nearly t£ 5 million to Belgium
right hon. Friend the Minister industries, too, are contributing te
towards clearing up the balance will be most helpful in spreading
of Fuel and Power.
That is in¬ our increased production, so that
>ur
area of supply.
We have, I
under the then existing payment
deed an important step forward,
the over-all picture shows an en¬
agreement.
During November, am very glad to say, reached an not because of the benefit it
couraging revival of our internal
we
purchased £11.3 million of agreement with Canada, and an
brings to us alonfc, but because it industrial activities.
gold, of which £10 million was agreed announcement of its terms will be of
great help to our Eu¬
is to be made later this evening.
from South Africa, showing a net
Export Problems
ropean friends and decrease their
With regard
to Germany, an
loss of gold of £36.5 million.
When we come to examine the
dependence on the United States
agreement with the United States
for dollar coal.
It is only a small export position, that is more diffi¬
rolicies of Other Sterling
af America as to the finances of
beginning, but even 10 million cult and not quite so encouraging.
Countries
the
joint ) zone was announced
tons of coal per annum is some¬ There are two important factors:
yesterday.
We no ^longer have
It is a matter of convenience to
One is within our control and the
direct dollar liability for German thing well worth-while ' and we
some extent whether on any par¬
hope that when the winter diffi¬ other is not within our control.
'.mportation.
ticular occasion we draw on our
We have either
culties are ever we shall be able The first is cost.
We no longer have direct dollar
gold or on the dollars which are
to increase that figure.
reached, or are reaching, a buy¬
liability for German requirements.
available
to
us.
'The figures
ers'
market condition in
many
The rising output so fur is, of
We shall be paying in sterling for
which I quoted a few moments
lines of goods.
This means that
sterling imports into Germany to course, almost entirely the result
ago to illustrate the rate of drain
the
price factor becomes more
of the efforts of the miners them¬
■he extent laid down, and our only
on our total reserves of gold and
and
more
important.
We are
liability to pay dollars arises if selves. We have in hand, as well,
dollars show that this total drain
a very
big program of reconstruc¬ already losing sales overseas in
the balance of the current trade
is being reduced, but we must
some of the most desirable mar¬
with
the combined zone moves tion and mechanization, the effects
reduce it still further if we are
of which have scarcely begun to kets, because of our price level,
to
keep
within the margin of substantially against us. We have show.
But, while there are good and we must, therefore, do every¬
reasonable safety.
Mere arithme¬ undertaken to convert the joint
thing in our power to prevent it
agency's sterling balance into dol¬ grounds for optimism in the long
tic will show that it is impossible
urig we are by no means out "of rising and*• indeed, to bring it
lars if necessary—it now stands
for us to continue at that rate.
down.
The second factor is the
the wood, so far as coal produc¬
at £24 million sterling—but it is
These figures
all
our
take into account
We
transactions in gold.
uncertainties
and
t)
.
.
„
,
,
When
turn
we
to
the
told
have
I
anxiety.
various
governments
of tne
the House
that
the extent of our reserves and
allow much margin
they do not
for
The dollar unbal¬
maneuver.
proving most stubborn to
reduce, despite the efforts of our¬
selves and our fellow members of
is
ance
the sterling group.
Search as we
there are still large quanti¬
ties of foodstuffs and raw mate¬
rials for which there is no other
source
than the Western Hemi¬
may,
sphere, where prices are still ris¬
ing, thus worsening the terms of
trade
against us.
The growing
difficulties of international com¬
merce
are
tending to narrow our
opportunities of getting our ex¬
ports into the markets where we
need to sell them, though we hope
situation .will
this
that
lieved as
result of
a
agreements.
■.
We are indeed
the means at
our
our
be
re¬
bilateral
i
fighting with all
disposal,- includ¬
ing ..a reduction in our standard
living—most unwillingly, but
courageously
accepted
by
our
people—against the dollar deficit,
are still
We need to
circumstances
but
.
The
external
still have great cause for
scene we
weighted against us.
employ every
and
to
make
resource
every
available
economy
in
use'of our own material.
We shall continue our immediate
our
own
struggle, which cannot be a short
one,
and we shall, at the same
time, lay plans and put them into
execution
to provide
a
longerterm
solution
upon
the
of
lines
our
that I
difficulties
indicated
There is no need for pes¬
simism so long as we each do our
earlier.
best, but we must
"s a long, uphill1
with
seas.
realize that this
struggle which,,
the help of our friends over¬
we
can
and shall win
through.
Volume
167
Number 4664
THE COMMERCIAL
following statistical tabulations
shown in first column
Equivalent to—•'
Bteel Ingots and castings
produced
Latest
Jan.
tons)
Month
Year
Ago
97.9
Latest
BUILDING
91.8
CONSTRUCTION
1,723,200
1,708,600
1,711,400
IN
—U.
1,607,300
URBAN
S.
output—dally average (bbls. of 42 gallons each)
to stills—daily
average (bbls.)
output
5,291,237
5,285,440
Jan.
5,637,000
5,543,000
Jan.
17,163,000
17,013,000
Jan.
2346,000
2,334,000
!
refineries, at bulk terminals, in transit
(bbls.) at
oil
and
distillate
fuel
(bbls.)
oil
Jan.
7,405,000
9,392,000
5,269,000
16,051,000
2,113,000
6,525,000
8,749,000
9,698,000
4,854,000
at
residential
94,099,000
91,269,000
OF
AMERICAN
freight loaded
ENGINEERING
RECORD:
2,016,000
New
5,592,000
■■
15,983,000
*16,293,000
building
New
59,121,000
52,710,000
Additions,
50,324,000
58,241,000
51,896,000
55,556,000
SERVE
Jan.
^CONSTRUCTION,
ENGINEERING
COAL
599,357
878,588
687,428
544,621
641,578
699,898
570,976
-
————I
Adjusted
i——-
26,057,000
50,841,000
28,307,000
—.
Jan.
-
lignite
OF
8
38,747,000
8
12,094,000
$90,433,000
54,459,000
(tons)Lli.-
66,034,000
35,974,000
4,696,000
Jan.
>vpenn«ylvani4'anthracite <tdiis)Lil'L^i.______Beehiye/xoke (tons)^--—
.
-i_
3
Jan.
3
Jan.
3
Jan.
-
__
3
11,550,000
37,226,000
746,000
128,300
'v'S *Si,
SALES
INDEX—FEDERAL
103,500
•
9,238,000
:• r
FAILURES
;iCOMMERCIAL
STREET, INC.:l^_
205
COMPOSITE
:
steel
AXD
Jan.10
INDUSTRIAL)—DUN
PRICES :,:
13,300,000
1,181,000
11,489,000
V :/141,600
'108,200
-
881,000
PRICES
Electrolytic
-
(per
(E.
&
M.
J.
(St.
U.
S.
York)
Louis)
St.
Govt.
at
$37.98
37
$37.06
6
$40.00
$40.00
$40.25
Bonds
7
7
3.18925c
.
7
21.200c
;
3.18925c
DAILY
21.200c
'
21.575c
•:
7
7
80.000c
70.000c
>.
Utilities
Banks
10.500c
Average
100.73
101.84
104.2J
110.88
117.20
116.22
114.08
10.9.79
115.82
115.82
114.46
110.34
NEW
117.40
103.80
103.30
103.80
104.66
105.52
112.37
H4.85
112.75
114.85
'
Jan. 13
.•
2.45
,
3.12
2.84
2.86
V.
;." W
•
:
BY
Jan. 13
■■i-.-'f.'---
Jan.13
2.95
Number
2.86
——
3.03
,
Nov.
Bank,
of
(000's
GREAT
Ltd.—Month
miles
3.4
of
3.02
after
^'';i;,:v:!;2.9i
of
448.1
.
455.3
289.2
242.1
,
Cereals
78.82
237.9
DEFT.
of
(est.)
OF
:—
IN
LARGE
LABOR—1935-
September
15:"
•'
——•
veal
and
280.0
275.6
••
270.4
229.2
and
—!
310.8
305.3
315.2
199.f
269.1
260.1
270.1
-
226.7
Fats
216.0
*215.7
198.2
157.6
Sugar
178.8
179.9
178.1
154.3
220.4
220.6
161.0
160.8
236.2
236.3
154,5
156.4
137.7
141.8
226.0
216,6
159.3
•
2^6.4
,
-
•
•
*137.7
136.8
195.2
,140.6
129.7
134.5
134.5
129.3
*225.3
219.4
oils
.Jan.
3
Jan.
3
—Jan.
3
——
—_j.„_——
at
—-,
Jan.
.
187,093
114,444
136,219
•
3.
229,231
126,659
:•
78
452,124
179,582
71
v
,
406,738
98
466,628
•"
196,927
■
> 588,406
at
1G2.«
AND
176.6
178.5
151.4
181.1
179.8
141.3
$1,137,900
$1,234,800
1,198,700
:
IMPORTS
CENSUS—Month
of
Nov.
—
.—
:
—
Aid
any
31,100
3,500
31
400
491,500
;;;;;;
LIMITA¬
(000's omitted):
that
time
DEBT
±
3,700
400
454.900
——
STATUTORY
*
1
900
36,400
—
of Dec.
one
1,300
—
—
amount
,
...
—
j
GOVT.
face
Program...
Program
Lease
—
TION—As
be
may
outstanding
$275,000,000
$275,000,000
$275,000,000
256,899,845
258,211,995
259,148,766
81,40.9
89,074
338,565
$258,981,254
$258,301,069
$259,487,331
854,280
858,192
933,000
$256,126,974
$257,442,877
$258,554,000
authority,—$18,873,026
$17,557,123
$16,446,000
$256,981,254
$258,301,069
$259,487,331
3,097,078
3,935,085
3,501,877
$253,884,176
$254,365,984
$255,985,454
'2.137%
2.057%
....
Outstanding—
V
PRICE
OF
Relief
S.
148.7
181.7
omitted):
Adminis.
Total
181.1
185.6
jUli£»il_
EXpORTS
Greek-Turkish
U.
.
165.7
263.4
—
STATES
Imports
85
202.1
157.3
261.2
1,096,300
^
Foreign
142,338
176.4
202.4
—-—-——
sweets
UNRRA
191.1
186.6
193.3
1S9.8
rrt**-
Commercial
120.8
.
183.8
212.3
187.0
and
(000's
125.7
141.8
192.8
237.8
iiii.
Exports
153.3
226.0
:
156.4
187.6
180.5
262.4
198.2
—...
—BUREAU
142.2
215.6
'
-
232.1
c
235.9
—
Vegetables
1-
and
UNITFD
182.A
229.3
191.4
Beverages
.
180.3
230.5
-
275.7
canned
—
18 LA
229.8
239.7
Dried
...
188.5
244.0
Canned
316.:
J
137.3
241.9
*.
———
—
Fresh
274.9
.*'
174.1
155.7
228.4
203.5
245.9
and
342.4
■
196.5
157.8
240.6
—
Fruits
.
(tons)—
Total
Jan.
—
9
150.6
149.4
150.7
debt
obligations
public
gross
Guaranteed
151.0
''
Treasury
owned
not
—_—
by
the
—
LABOR—1926==100:
Total
-Jan.
3
164.4
161.0
139.1
_Jan.
3
199.2
197.0
193.6
166.1
3
181.3
177.8
179.6
156.4
204.0
133.5
..Jan.
3
202.2
-Jan.
products
x
..
anteed
3
147.5
3
-,
203.4
127.7
119.4
152.0
151.3
134.2
189.4
Balance
189.1
187.6
156.1
3
135.0
able
133.0
138.4
135.3
134.8
120.9
121.8
121.5
120.1
107.8
groups-
v
UNITED
3
Jan.
•
184.5
•
debt
obli-
limitation——
outstanding—,
omitted)
180.0
135.1
of
DEBT
December
—
—
fund
DIRECT
31
AND
(000's
-
—
balance
153rl
157.3
above
GROSS
GUARANTEED—As
.
183.4
3
157.9
157.4
3
._
156.6
155.0
153.3
..Jan.
3
156.6
155.4
153.7
133.2
-Jan.
3
146.4
146.6
143.1
124.1
Net
134.1
products
products and foods...!
•
—
public
debt
face amount of obligations issu¬
under
STATES
General
materials
'
to
126.6
135.3
3
'
guar¬
97.0
152.0
3
3
-
outstanding
subject
total
Grand
..Jan.
*'
and
-
146.9
128.5
not
3
.
debt
obligations
Deduct—Other
■gations
-Jan.
i materials.,
public
gross
171.3
145.3
163.0
*
81.45
$44,987,037
'
216.2
ASSOCIATION:
figure.
77.05
$89,490,106
Lamb
376.3
278.6
-Jan.10
commodities
•Revised
536,140,303
611,871,599
595,314,499
INDEX
—
Beef
341.9
..Jan. 10
than farm
All commodities other than farm
227.527
$658,246,778
—
Meats
279.6
..Jan. 10
All commodities.' other
227,414
$794,165,231
•
bakery products
poultry & fish
Meats,
„t
Special
227,527
$755,324,174
&
Lend
Building
£15,348,000
.
foods*
337,1
,
«■
..Jan. 10
——___
machinery,.,.
groups combined—
Textile
£8,837,000
OF
'
...Jan. 10
DEPT.
$28,860,914
£5,974,000
December
November:
charges
S.
1939:—100—As
2.63
-Jan. 10;
,
S.
$28,551,870
cent
PRICE
CITIES—U.
2.73
2.91
244.0
-Jan. 10
Building materials^-L—4—i.,
and drugs——
Fertilizermaterials.
i.—!i_—2:
PRICES- -U.
$28,765,641
omitted)
39,600,000
-Jan.10
—L.
WHOLESALE
4.5
48,000,000
-Jan.10
AVERAGE=100_
3.9
44,000,000
-Jan.10
—
INDEX—1936-36
3.5
5.4
BRITAIN—
ROADS (ASSOC.
ratio—per
FOOD
-Jan. 10
REPORTER
3.5
"
income
...Jan. 10
(tons)
6.6
4.6
4.7
64,122,214
3.00
3.04
455.4
,_Jan. 10
OIL, PAINT AND DRUG
4.4
5.5
76,433,466
Al
GROUP—1935-39=1 WO:
activity-:
..
•
7.2
4.7
represented
Chickens
(tons)
;
TREASURY
—
30
RRS.)—Month
Fish, fresh
Dairy products
Jan. 10
Unfilled orders
j
65,577,488
'
2.91
-Jan. 10
Percentage of
'
■
-
5.4
-
ralivay operating income before charges
RETAIL
COMMOD
—
Production
10.500O
10.500c
;
5.3
expenses
3.14
3.42
Jan. 13
—
oils——,
Orders) received
20.500C
,
Dec.:
Pork
Miscellaneous commodities
Textiles
Raw
of
operating
■yp
' Grains——.—
All
of
revenues
2.66
3.52
3.47
'•v>
*
Livestock
,
CIRCULATION
Operating
2.78
3.55
Jan. 13
Cotton
-
20.500c
5.4
operating
2.57
2.93
3.15
3.52
-Jan.13
ASSOCIATION—WHOLESALE
NATIONAL'PAPERBOARD
15.000c
OF
Eggs
Fertilizers-1—
15.000c
20.500c
(200)
Total
2.7 9
2.95
3.43
._Jan. 10
Chemicals
SI.550
15.000c
—
CAPITAL ISSUES IN
•
Metals
$1,800
5.5
2.22
"3.19
•
3.18
Jan. 13
—
—
.
$1,525
$1,775
Net
':st)
3.12
:
Jan. 13
FERTILIZER
$1,500
$1,775
——l--
EARNINGS—CLASS I
120.4:
2.38
3.14
Jan. 13
'
INDEX
2.45
:
Jan. 13
—
:
INDEX—
YIELD
STOCKS—Month
Total
118.4C
114.85
,.
$62,280
$1,750
.
Net
——
COMMODITY
IN
AMER.
113.1£
112.56
RR.
110.5f
105.34
$1,750
———;———
yield
Midland
119.82
109.60
Nominal
$62,000
$65,692
i}
AVERAGE
—_—
121.67
114.08
;
Nominal
Nominal
'
13.000c
110.52
26.5800
—
12.800c
100.69' :
25.780C
33.000c
-33.500c
$80,116,364
—'--I-—;L'-
:—
(25)
14.800c
110.88
33.000c
33.500c
6.5
10.500c
.Jan.13
—-
Farm products
All
27.155c
>
$1,800
(125)
14.800c
10.500c
.Jan.13
—
,
Farm
$88,120
36.030c
«
36.030c '
—
'
(15)
Insurance (10)
.Jan.13
—.
Utilities Group
Industrials Group ——;—
Fuels
$35.00
$79,636
$79,000
(25)
15.000c
15.000c
.Jan.13
—
—_
Group
and
,69.125<®
$35.00
10.500c
COMMON
Railroads
19.800c
.Jan. 13
Public
Fats
70.000b
78.900c
$35.00
—
WEIGHTED
10.500c
14.800c
7
21.525c
.Jan.13
;——
——
ITY
80.000c
84.156c
_
Louis
St.
>;Industrials
19.225c
YIELD .DAILY AVERAGES:
——
Foods
55.500b
$4.02815
plus, ingot (per pound),
ingot
(per pound)—-—
DErT.—As
Group
——
■"
45.019c
$4.02632
pound)—
pound)—
(per
East
•
94.000c
15.000c
1
...
99%
Zinc
$31.17
.Jan.13
Group—————————
A
NATIONAL
45.000c
85.385c
99%
or
pound).—
(per
Magnesium,
$30.14
'•
.Jan.13
——
MOODY'S
86.7329a
74.625c
(pcr 'poundy
(per
MONEY
-
;
Chinese
Aluminum,
AVERAGES:
.1
Railroad
12.014b
14.800c
-•
$4.02750
—-r-
(per
tCadmium
2.83599c
21.200c
21.425c
94.000c
.Jan.
_
Group
Aa
?
$39.00
.Jan.
at
U. S. Govt. Bonds—
Average corporate —_———Ji
.
6
.Jan.
at—
PRICES
MOODY'S BOND
*
3.18925c
.Jan.
;
.
Louis)
Utilities
Aaa
■
■;.
bulk, New York.^—
pound), in cases, Laredo.—
(per pound), Chinese,^ Spot——
Platinum,
refined,^ per
ounce—
tCadmium (per pound)
'}
r
87
.Jan.13
Industrials
.
58
6
.Jan.
—
Public
•I
Jan. ' 8
.Jan.
a
—
Railroad
Antimony
Antimony
Antimony
4,852,513
■
20(1
Baa
.
5,327,470
MOODY'S
corporate
—
Baa
188
QUOTATIONS):
——————----------——
Aa
4,868,011
Jan.
I
—
BOND
Average
•
*
...
Jan.
Aaa
;■
:
'
copper—
(East
MOODY'S
508
Jan.
—
Zinc
v^/.'Yy- 357'
5,277,680
York,
SCaamium
—
Lead
12.190P
74.625c
(per, ounce U. S. price),-—
—.—
Quicksilver (per flash of 76 pounds)
HAntimony (per pound) (E. & M. J.)_—__
Antimony (per pound) bulk, Laredo———
n] 7
:,;
refinery •• at
refinery at____—-a———-t—
Straits tin (New York) at(New
15.000c
14.800c
——
-
Straits—
York
19.1830
15.000c
,:.,;
——_■t.—
pound)—
21.200c
21.460c
/
—
Louis
19.2750
21.200c'
\
Gold
•!
Export
Lead
270
44.1
21.488c
refinery
refinery
^York
St.
Tin
BRAD-
(per lb.)—x-i:—is?;
Domestic
•
&
---—i-—---------
Pig iron (per gross
.ton)-,—--—-r—
Bcrap steel (per gross ton)———
METAL
300
*373
"
pound)—
Silvei^.flnd Sterling-Exchange:
Silver, New York (per ounce)—
Silver, London (pence per ounce)
,*/•. Sterling Exchange,-"Checks"—
• .
JSlectrfc output, (in 000 kwh.)——
■7
300
480
variation—
adjustment—
pound )fc-
(per
New
'
•t'.
Finished
seasonal
export,
New
RESERVE
AVERAGE==100—
RDISON -ELECTRIC INSTITUTE:
4.
-
(FEDERAL RE¬
'
STORE
^SYSTEM—1985-3!)
AGE
for
(per
New
DEPARTMENT
IRON
2,000,000
domestic
Lead
26,736,000
28,808,000
•8,500,000
784,000
:
,
1,000,000
1,000,000
1935-39 Average—100)
Electrolytic,
'
;y.
SALES
—
Electrolytic,
^
MINES):
1,000,000
1,000,000
etc.—
December:
seasonal
Copper
$95,623,000
29,589,000
23,611,000
Jan.
OUTPUT1 (U. S. BUREAU
and
34,834,000
8
13,000,000
10,000,000
2,000,000
*3,000,000
(E. & M. J. QUOTATIONS)—
Average for month of December:
$54,364,000
8
Jan.
j,
$85,675,000
Jan.
—
8
STORE
SYSTEM
Without
84,000,000
56,000,000
*6,000,000
METAL PRICES
t
Jan.
,
coal
682,038
3
NEWS
,
construction
Bituminous
•
3
Jan.
157,000,000
*89,000,000
184,000,000
4,000,000
alterations,
of
324,000,000
6,000,000
non-residential
51,322,000
58,000,000
*553,000,000
*307,000,000
87,000,000
—r—;
residential
New
$337,000,000
194,000,000
85,000,000
163,000,000
...
etc.
construction
16,900,000
50,038,000
♦160,000,000
90,000,000
88,000,000
592,000,000
...
—
—Month
(number of cars)
$598,000,000 »$559,000,000
346,000,000 *309,000,000
342,000,000
non-residential
Additions, alterations,
•
.
Federal
::
of
—164,000,000
New
8,360,000
RAILROADS:
State; and municipal
,
LABOR—Month
residential
93,447,000
Jan.
(number of cars)
Private construction
Public
Ago
S.
—
86,968,000
19,273,000
Jan.
TotafU. S. construction—
-
U.
Additions, alterations, etc.
Non-Federal—all building construction
15,156,000
Federal—all
Jan.
at
Revenue freight rec'd from
connections
CIVIL
THE
non-residential
DEPARTMENT
ASSOCIATION
Revenue
OF
construction
New
4,648,750
linesJan.
(bbls.)
5,264,789
7,041,000
-—Jan.
and in pipe
building
New
-Jan.
(bbls.)
(bbls.)
distillate fuel oil output
(bbls.)
fuel oil output
(bb]s.)_li-!___;__.
and
Residual fuel oil
•
OF
Year
Month
PERMIT VALUA¬
AREAS
DEPT.
Previous
Month
Ago
97.8
All
Finished and unfinished gasoline
Kerosine (bbls.) at
Gas
Week
98.7
_Jan. 18
Kerosine output
Stocks at
18
Previous
Week
TION
(net
runs
Residual
production and other figures for the latest week or month available (dates
or month ended on that
date, or, in cases of quotations, are as of that date):
INSTITUTE:*
PETROLEUM
Crude oil
oil
37
(237)
October:
AMERICAN
Gas
cover
-
'percent of capacity)
i
Gasoline
CHRONICLE
either for the week
are
STEEL INSTITUTE:
Indicated steel operations
Crude
FINANCIAL
Indications of Current Business
Activity
The
AMERICAN IRON AND
&
Computed
♦Revised
of
the
five
——1,
debt
annual
interest
figure.
producers' and
tons
or
more
but
u■
v,j *5
tBased 011, the producers'^ qpqtfWion.
tBased on the average
platers' quotations. ^§BaSed on'praters' quotations.
((Domestic,
less than-carload lot,
packed in"cases;1 f.o.b. New York.
38
THE COMMERCIAL
(238)
FINANCIAL
&
(Continued from page 4)
quired to sell at
consent fixed by someone
line of production?"
The
your
in
and
j
items."
Producers
that
insist
who
which represents
requirements rather than
retailer knows to be
the consumers' requirements, fre¬
their
the
leeway
periods,
attempted
he
if
to
as
else.
But this
was
a freer market, and
to the extent that our market is
i
i
i
1
ii- »
1*
_.i
_
this
.
not
goods and to capital goods.
caused
matter
the
present levels.
ing inventory profits, corporations
earned a little over $12 billion on
total volume of about $170 billion,
ductive
a
of
sense
excess
Nineteen-forty-eight will
be
lems
and
the
tralization
we
prices,
1937
and tax¬
problems, each with
terlacing effect upon the
an
the retail
The
impact
on
in¬
other,
are
too
ate
to
and
the
to
returns
price
owners
real
their
of
value
properties. The percentage lease
does not merely give to the land¬
owner
•—it
return
a
his investment
on
constitutes
nearly
more
with
partnership
an
ing
power
the buy¬
on
of the community.
While there is
tunity
a
merchant
the
added burden,
and
a
in the
inherent
site
of
a
resourcefulness
chant
and
Does
the
raise
Since
nomic
mer¬
capital he invests.
percentage lease
en¬
the merchant's power
croach upon
to
the
of
the
reduce prices?
moved up to new eco¬
wages
we
or
plateaus because a worker
much more of the na¬
takes
so
tional
product^ now as compared
would it be timely
to in.quire whether the percentage
with
prewar,
lease
attacks
normal
a
power
of
consumption?
cooperation
of
the makers
between
The lack of this
makers of-sales.
reflected
price
part
be
to
seems
of
cutters
in
the
fashion
of
little
on
goods.
faith
the
There
on
No
in time.
one
and
The result is
delivered
too
is willing
order goods
goods
causing
markdowns and losses which must
be
'VI'
of
is
not
lies in some
answer
of
ways
turn-over and
there
buying
improving
power.
But
enough- bold states¬
to the price-making
manship as
policy. We in retailing, must pro¬
vide it or inspire it.
the
strengthening of
our
those
who
nation
have
out of their
own
to them that
And
free
a
chaos, and
around which
market
can
is
hub
respon¬
sible government, we must drive
out monopoly in all its
forms, we
must get rid of the
plague of price
Since the retailer is in effect the
buying
agent
of
the
consumer,
since he most nearly knows what
consumer
wants and the price
consumer
will
assume
a
aggressive role in the mak¬
ing of prices, and insist
upon au¬
thority equal to his responsibility.
things must he do if we
All these
here
as
a
in
America
survive
to
are
free society with
a
compensated for in the price
goods arriving on time.
free
en¬
terprise system.
William B. Matheson With
GRAND
liam
All
of
these
with
which may
is
R.
D. Matheson, Inc.
he
was
of
Bradbury-Ames
now
with
In the past
with the investment firm
can be
discussions
Co.
and was
problems
in periodic
an
officer of Roger Verseput &
help to coordinate the Co., Inc.
Unless an
prices
ventories
available capital.
normal year, at least
no
complaints about
make itself
in
adequate return is assured stock-'
additional public invest¬ $2,000 after taxes. If that sounds
ment in American industry cannot high, remember there were V/s
be hoped for, and we will be faced workers in each family then. In
with a long-term decline in our 1947,
the
average family
was
standard of living.
"
earning $4,500 after taxes and
paying dividends, corpo¬
billion left; in ad¬
dition to this, total depreciation
charges of about $9 billion were
available, or a total of $15 billion.
Now let us look at our indus¬
After
what it costs to
maintain it.
The present depre¬
ciated cost of our industrial plant
trial
and
plant
than
approximately
1/15 of the entire American plant
must be replaced each year. ,,To
do this it at present prices would
cost about $13 billion annually.
This would maintain production
that
mean
levels only. As popula-,
or working; hours
reduced, more plant will be
at present
are
increases,
The average growth in
necessary.
the
been
annually.
To
number of families has
estimated
1.5%
at
supply these families with goods
would require an
additional $3
billion
year,
per
or
a
total plant
requirement at 1947 prices of $16
billion.
The deficiency
vated
by
the
is further aggra¬
lack
of necessary
plant construction during the war.
Probaably $20 billion at present
prices must be invested in plant,
equipment and transportation fa¬
cilities to bring
our productive
the
to
maintain
of living
In 1947,
our
point where
it
present standard
at reasonable costs.
corporations spent about
$18 billion on new facilities. We
would have to spend this every
year
$20
for ten years to wipe out a
billion deficit in plant and
equipment.
It is very
unlikely that produc¬
at the
hourly
average
indi¬
not an
since
vidual,
a
is
a
individual,
has
What
family,
spending
happened ^to
group.
will
tailers
of it in the
bear
the
first brunt
markup
form of lower
increased
and
wholesale
the
realistic
rates or
more
hold firm
retail level will
throughout the year.
Should a
decline in demand take place, re¬
markdowns, and
markets will? not
adjust to retail selling prices untU
a
considerable
period has
weekly take-home pay per
in
about $92
much
is
It
manufactured
goods prices in 1948.
This does not mean that prices
family had 2V4 times as much to
spend in 1947 as in 1939. Let us
use family
income as our stand¬
ard.
effect on
have any
employed. The
W2 workers were
likelihood
capital will
felt quickly enough to
great
no
shortage of
that the
average -family
the United States was
the
holders,
rations had $6
is
There
were
then,
so
only temporary until in¬
have been adjusted to
will be
prices, let us develop a standard
of measurement. In 1939, a rea¬
amounted to about 5%.
it is
it forces the sale of
inventories
at
sacrifice prices.
Even then the reduction in prices
that
severe
prices,- we ought to examine
price structure to see if it is
unbalanced. In order to measure
sonably
have no
ital, if it develops, will
effect on prices unless
have
may
supply, lesser
plant facili¬
will continue to rise.
ties, wages
The threatened shortage of cap¬
our
there
can
RAPIDS, MICH.—Wil¬
Matheson
B.
Inc.
other factors
shortage is rem¬
greater
by
demand, or improved
on
dividends
capacity
R. D. Matheson,
the
dealt
corporations of approx-
$120
edied
^
and
labor
until the
$15 billion in gross national
product, or about 7%.
Before we consider that effect
billion,
tion
fixing.
the
imktely
of
would
the
more
American
value
work.
democracy revolves!
We must achieve
about
estimated: book
prove
our economy;
exemplary for
yet worked
not
democracy
of
total
corporations is estimated at
billion and its original
cost, $120 billion.
To reproduce
this plant in full today would cost
at least $200 billion. Asuming an
average life of 15 years for plant,
machinery and equipment, this
The most constructive thing we
do is bend our efforts towards
can
some
late,
an¬
the
the mill converters, the
manufacturers, as well
to take a chance
are
effect
or
the retailers.
as
hard-headed
take the goods, he must
yardage-and garments, and the
is
The
measures.
more
vital need of greater
a
The
does not lie in any of these
swer
level at which the
Cooperation
There is
in
unemployed, and in the fis¬
policy for deficit spending of
make
natural oppor¬
store, sales volume depends upon
the
Security;
cal
frequently disproportion¬
the
Social
government-made work.
inflate
to
served
structure
of
lease, which
the depression,
during
up
expansion
the raising of beneficial payments
to the
.;"v•.; :
percentage
grew
has
dollar.
trade.
and
serious
a
to dividends in 1936 and
$4 billion. On the
compares
beset by
are
wages
ation
gradual decen¬
custom
of
have
These
paid to stock¬
billion. This
dividends
holders mounted to $6
snarl of
unemployment.
reduction in capital
goods expenditure would not re¬
sult in a total decline of more
this
Total
successfully
the inhere is that segment of opinion,,
limited number of desirable cen¬
of course, which sees the answer
tral locations and long-term leases in greater government
controls; in
which may, or may not, take into
the prolongation of taxes; in the
consideration
present-day
at
plant
replace
costs.
least not de¬
cline, as the third round of wage
increases becomes effective.
And
than
to
manufactured goods
raw materials are
for
as
likely to rise, or at
and
production
goods
some
enough to yield stockholders even
a low return and have enough left
overcome.
At the moment
possibly
well
,
for
Prices
However, this
4 v» ttfUi
in which vital prob¬
met
were
By itself, compared
national product of $225
this looks unimportant,
but
capital goods expenditures
multiply themselves very rapidly
in the national economy. It might
well make itself felt in reduced
consumer
exist
ages
by $3 billion.
aged 6.0% on sales volume. How¬
ever, what is more important, is
that
corporations did not .earn
,
T ho non'fiimr
the century
which in 1936-37 aver¬
earnings,
a
-
,
for
competition
by
This is perhaps $2 billion in
of
historical
corporate
7%.
1948
rentals
of
short¬
pride of achievement, rather
than the feeling that he is only a
cog-in-the-wheel.
Long-Term Leases
and
is
There
world-wide
Substantial
billion,
a
Rentals
capital
new
to gross
;
\
of
shortage
relieved by increased cor¬
unless
personal worth
only to consumer goods, but
to raw materials, to heavy
also
-.This
:
Currently, corporate profits are
inadequate to perform all theze
functions.
In 1947, after deduct¬
applies
individual—and
free market.
free market,
government support levels are
about 30% below present prices.
a
However, there is no
in commercial loans.
capital to operate the corpora¬
and, most important, they
must maintain the nation's pro¬
large
a
cut farm prices
in
sharply
very
government pressure
permit much expansion
and
not
of
Prospects
July.
or
world crop could
in roil, leather,„ coal,
steel, paper and many other raw
materials.
Until
supply meets
demand, prices for these items
will at least be maintained at
_
the
This should be
porate earnings or investment by
the public might reduce the pro¬
duction of capital goods in 1948
by
•
ji
will
authoritatively estimated.
possible by June
be
can
loans are
bankers'
Commercial
no
change in price can be expected
until the size of the 1948 crop
being
are
Certainly
'
' demands.
mum
all time high and
an
caution
tion
*ateful year, a year of great probfree, to that extent will it con- | lems> but also a year of great op-'
tinue to be achieved. Goods im- ! Portunities.
It \yill probably deproperly restrained from coming
whether the whole of the
into the market result in a depri- ^th Century will be known as. the
vation of the economic liberty of \ century of fear and defeat, or as
•_
available more money
plant, which in turn de¬
termines its standard of living,
anywhere
_
at
the
the
uneaualled
dvnamirs
achieved
pleasant job; a job in
employee shares with
prices will decline. .There is not
enough to satisfy the demands of
people and suppleT
ment shortages a broad,- Ahy in¬
crease in wages will increase food
securities than they
more
buy.
can
stockholders who have put up
to
and
and for this reason
turnover and an ele¬
a
of
ef¬
creative char¬
performance.
This not
of
achieves
in the world;
ment
more
investors
institutional
provide working capital for
corporations to enable them to
carry on their day-to-day opera¬
tions, they must supply dividends
product; and this is the dignified
status
of
the
employee,
who
right to
with almost every other economy
it has had
better,
a
prospect, that food
no
prices. There will
taxes,
offered
first
man¬
is
the American
insurance companies
the market.
The
bond market has also declined as
nlace in our economv.
working
1
withdrew from
Corporate profits have a specific
Thev m"st
as
factors must be
prices many
There
casualty
profits are necessary.
porate
re¬
only makes for efficiency, but like
all good things reaps a good by¬
favorably contrasted
is
the
acter
It is for this reason that our
economy
well
personnel
produce
which
Democracy means the right to
the
to
management
hurt to the economy.
as
and
ficient and
period in which there was an
under-supply. Price "fixing" is a
well
this
together to simplify procedures so
be
a
as
done
There is also the need of
freely competitive in price
at other times, it would be diffi¬
cult for him to secure goods in
buy.
in
as
fields which
agement
more
choose,
perform
all of the functions for which cor¬
have not
manufacturing.
seasonal distress
or
to
enough
earned
of
merely be made
with which
to bid for a limited supply.
No
I decline in food prices is possible
prises.
until wages decline or world sup¬
The demand for preferred stocks
declined sharply when fire and ply catches up with at least mini¬
in which corporations
years
have
tributive
the price line
over
few
,
considered and evaluated.
I
hood of
goods are financed by corporate
profits, but there have been very
There must
greater production in the dis¬
spect
must be sold for $16.75?
And while the merchant may have
.
.
, there
is little likeli¬
getting them to invest $3
billion a year in corporate enter¬
high
goods. Actually,
production of capital
capital
such
of
be
$10.75
clearance
production
funds available
Transaction
of
tained.
flated expense dollar.
cost the retailer
artcile which
way
Today's prices represent an in¬
easily mouthed word in this coun¬
try. But is it competition to set
specific retail price lines, so that
some
wastes
mation
Competition—Competition is an
for
of
their
Engineered Approach to Consum¬
market!
an
removal
the
find
most of our
the
enslaving
in
result
from a
goods
finto the
price.
In a world which needs
production so badly,
we< must
strive unceasingly from year to
year to find ways and means to
accomplish this.
be done in a way
quently
of
from
which
the
marketing of their products shall
what
stemming
standardization
better
of the
"at least 30%
was
production,
in
the
answer
general price level is too high at
present.
In considering the future course
main¬
be
increasing and the wprk
'V Corporations in 1947 had $15
week is shortening, so our Indus¬
billion from profits and deprecia¬
trial plant must be increased to
tion.
About $3 billion less than
supply consumer goods to our in¬
creasing
population
.and. made .they needed to perform the func¬
tions for which profits are neces¬
more
efficient to turn out, .more
sary;
M'-'r'V' * '• ■ •' ■
•
goods in less time.
iWitb stockholders getting only
The
amount of capital goods
a. 5% %
return on their money in
produced depends upon having a
peak profit year and paying
for the
at the
group,
can
,
is
tion
time working out economies
same
rate
this
at
tion
(Continued from page 3)
:
activities of each
price without
a
Outlook
The National Economic
Price Making In a Democracy
1948
Thursday, January 15,
CHRONICLE;
/.-v
elapsed.
|
previous
In
'•;
wholesale
years,
prices were readily adjustable to
changes in retail demand.
Since
prices
Rent is up only 11%. | 1936, however, more
It used to be 20% of a rent-pay¬
our production costs
and more of
have become
fixed rather than flexible.
The
growth of labor unions and their
since then?
it is now about
high—they
are
up about 100%.
It is inter¬
esting to note that no buyers' re¬
sistance to these prices has de¬
ing family income;
10%.
Food prices are
veloped — food
consumption
is
considerably above 1939 and lim¬
production.
ited by
Manufactured
goods prices are
Here some buyers' re¬
sistance may be developing.
In¬
ventories
are
increasing
but
86%.
up
mainly in lines which
were
suf¬
fering "acute shortages a year ago.
American industry has performed
noteworthy
a
achievement
in
down and main¬
taining a reasonable profit rate.
Hourly wage costs have increased,
at least 100%, labor efficiency has
keeping
prices
declined, and raw material prices
have advanced 150%
since 1939.
partial offset, industry has
production
and the use of a low cost indus¬
As
a
I'
present strength makes it unreasonable to assume that a decline
in demand
and in retail prices
can be accompanied by a decline
in manufacturing costs. On the
contrary, industry in the face of
declining demand, will be met
by government and labor union
pressure, as in 1945, to increase
wages in order to sustain purchas¬
ing power. '
-
:
.
about re¬
ducing prices but nobody wants
to do his share.
Organized labor
wants to stop inflation by raising
wages, the Government wants to
stop it by increasing its budget
and reducing production, munici¬
palities and states want to stop
it by paying subsidies to the vet¬
eran,
the
unemployed, and to
Actually, we all talk
had the benefit of full
stimulate housing.
trial
in
plant.
The BLS
stands
consumer
164%
at
price index
of the
1935-1939
There is very little
election
an
year
Government will do
alleviate the
chance that
the Federal
anything to
upward pressure on
None of the required ac¬
politically acceptable.
average.
prices.
held
tions can be
Of course this has been
by rent "control but
even if this item were allowed to
rise 50% the index would be in¬
down
Let
creased by
can
This
we
only 10 points to 174%.
total
increase
of 74%
in
average
family
expenditure
is
the in¬
crease of 125% in family income.
There
is no evidence that our
more
than
matched
by
us
took at some
measures
take
and
try to
think would
voters in
its
bodies
select those
a
be popular with
presidential campaign
year.
,
Reduce government
from
deflationary
that government
present
employment
of over
level
•tVolume
167
Number 4664
*5,000,000 to increase
tive (labor supply.
Enforce
public
sales
produc¬
our
investment
to
in
(Reduce
with
corporate
taxes
and
taxes but only in the
.upper brackets.
personal
government
payments :to farmers,
sured veterans and
the
iployed.
Reduce
tion.
the
Spring
the
last
round of wage
*
half
not
gov¬
store, sales
ernment debt and not for further
tax decreases.
5%.
it
develop, and I do
will, department
should
decline
Historically,
retail
about
volume
declines less
tariffs
rgpidly than national
income, mainly because consum¬
ers
do not readily adjust them¬
imports and
on
reduce exports of products in short
supply.here.
Back up
*with labor
-
"It is
..
*
-
selves to,
industry in its disputes
over
ing simultaneously with
wages.
unlikely that
Should
son
prices
the
of
.re-election.
The only
which may
i
.
trols
deflationary
be
bank
The
mercial credit
/
..or
even
deflation
depression if sufficiently
: '-,)i'-y.'"7.
^severe.
However, even if some defla¬ and adopt the measures that are
tionary government action is taken appropriate to its solution."
.' it will be more than offset by
The solution the President pro¬
inflationary measures.
posed is his 10-poiot anti-inflation
:
A number of these
discussed
most
-
sure
The
to
and
pass:
European
igram;
:
be-
are
•.
..
al-
7
.
Recovery
Those
almost certain.
are
iy
.
vand
unemployment benefits.
/increased
We
s'tuation
>
with
the
•
.observations
that first, prices are not high rela¬
tive to family income; second, if
they move .from present levels,
they
are more likely t/>
'. down; third, any break in prices
this year is likely to
develop ei-
.
.
tion
ther
all'
crops
,
the
as
of
large farm
..the world
over
shortage
a
result
and
ier tax
a
from
or
below
.the
that
materials, capacity and
permit,". Mr. .Truman
said. "It would, however, have an
anti-inflationary effect which
Would
wholly
in
decl'nes
would
be
strongly
in
ulate demand and there
able
-
funds
enormous
demand with
In
-
the
are
to
c
re¬
Basic
-prices
products.
of
1.
power.
you
are
the
textiles
and
textile
Your program
-indicates it will be discussed
fully
later
who
in
can
the
morning by people
qualify as experts in that
particular
*
remark
field.
I
like
would
to
that the textile in¬
only
dustry,
particularly cotton, has
possibly the weakest price struc¬
ture
*
t
<
generally strong price
picture and the one most likely
to be affected by changes in fora
eign'demand.
*
.
*
in
Perhaps
ming
be
.
the
;
way
of
sum-
my observations would
relate them to department
up
to
<'■ store
sales volume to be expected
in 1948. It is a
very good odds-on
bet
was
business activity at its
high level will continue
during the first half of this year.
stitutes
no
price structure
first
here
are:
.
.
must
.
inflationary
he
the
be
trend."
repeated
the
It
basic
goals of his anti-inflation program
was largely turned down
by
'he
recent
session
emergency
Congress.
2.
"Our
for
1948
of
>7 it
second
main
should
be
objective
to
maintain
maximum
employment, achieve
maximum production,,and adjust
the price-income structure so as
to stop
inflationary spiral with¬
out
production cutbacks
sive unemployment."
3.
,
or
,
"To establish firmer founda¬
tions
for
the
long-range growth
and prosperity of our
economy
the years ahead."
From
a
in
Short Range Standpoint
The President's economic
report
listed
as
national
goals
for
the
present year:
con¬
1,
threat to the continua¬
A
3%
increase in production
high production and full compared with the 7% achieved in
1947.
;
employment. Government and la¬
tion
of
.
*
bor unions will do almost
to change this
-
nothing
picture, except pos¬
sibly accentuate shortages and in¬
purchasing power without
increasing production.
crease
For the first six
ment
<
The
store
sales
months, depart¬
2.
long
Jobs for
59,000,000
as a year¬
1,000,000 above
figure.
Last
year's June peak topped the socalled "full employment"
goal of
the
average
average
60,000,000 jobs.
asked
on
{
the
4
that
the
term
within
of
ten
policy, the President
a
10% increase
in agricultural output in the dec'_*
ade ahead through soil conserva¬
tion, more machinery and Federal
price supports.
i
n
i
or
1947
require courage
and politics
boom
than
-i
.
J.'Donnelly Now
J.
Donnelly
Cashier
of
Bank of
Jan.
been
the
appointed
First
National
Greenwich, Conn., as of
Mr. Donnelly was for¬
13.
merly Assistant Cashier.
Prior to
his connection with this bank he
was with the Chase National Bank
in New York
City for 10 years.
He served
of
as
Colonel in the
Army
U. S. for five years, join¬
the
ing the Greenwich bank
ing service.
on
leav¬
anti-inflation
attacks
rampant
the
symptoms
inflation
The
that
grips the
from roots
nation
today springs
implanted in the Roosevelt New
Deal era: extravagant
government
soending; deficit financing; unbalanced
budgets;
heavy public
rates; exhorexcessively
high
wages;
reduced working hours;
increased money supply; exces¬
sive bank credit; a premium on
spending and a penalty on in¬
debt;
low
bitant
interest
taxes;
dividual saving. New Deal infla¬
tion was accelerated and inten¬
sified by war spending.
Be Formed in New York
formed
at 120
Taylor, III, & Co. will be
as
of Jan.
23
with offices
Broadway, New York City.
of the firm, which will
Partners
hold
membership in the New York
Stock
Exchange will be B. L. Tay¬
lor, III, general and limited part¬
by
a
tour
of
modern
exhibits.
The evening's
will
be
concluded
light refreshments;
"
on
Holders
of Dollar Bonds
of the
Chilean
Consolidated
Municipal
are being notified that on
and after Feb. 1, 1948, holders of
assented bonds of these loans will
! Loan
be entitled to a payment at the
rate of $10,296 ,per $1,000 bond,
Payment will be made at the
.
Trust Department of Schroder
Trust Co., in New York, as correspondent of the Autonomous Institute for the Amortization of the
Public Debt.
Henry J. Jensen Willi
Dempsey & Go., Chi.
CHICAGO, ILL.—Dempsey &
Co., 135 South La Salle Street,
debt
J.
reckless, wasteful, careless,
inefficient spending for the
pros¬
ecution of thp war, the national
expanded
to
'stratospheric
members
Jensen
heights; and commensurately, the
with
nation's money
many
supply increased.
sound, efficient, anti-inflation¬
ary
Administration
could
have
A
conducted the
at
50% sav¬
The Administration's huge,
ings.
war
;■
.
V,--.
•.
present boom is
7!'.:
v
;
a
this
one
is out to
abnormal
grab
Every¬
orgy.
farmer higher
speculator higher profits.
wages;
ards;
with
lower
on
personal
selfishness,
Inc.,
in
Hirsch
excesses,
&
New
York
New
York
nounce
as
a
Stock
Exchange,-an¬
Smith has
associated with
registered
the main
Staff
City, members of the
that J. Harold
become
to
the
H. J. Schrader & Co.
SOUTH
Schrader
BEND,
&
Co.
IND. —H.
is
engaging in
315
West Jefferson Boulevard.
-
SAFE
PROFITABLE
Gleve. S. E, Resumes
Special Programs
CLEVELAND',
listed
N.
Sears,
was
in Miller &
Jr.,
formerly
and
the "Ex¬
a
partner
land
1947
Dodge.
Stock'
corporations.
meetings
was
Each
of
the
successful and
well attended.
.
The membership and close
friends of the Exchange have been
invited by the General Electric
T
volume
should
approximate
the
levels, of the
third quarter of 1947, 286 on the
•tFederal Reserve index; 'On this
3.
cial,
Inauguration of
public
a
welfare,
broader
so¬
resources
(Special
conservation and industrial devel¬
basis,
department
store
sales opment program to protect the na¬
should be about 3% in excess of tion from periodic
depressions and
Now With Slayton & Co.
to The
Financial
Chronicle)
QUINCY, ILL.—Edward C. Hess
is
now
nois
with
National
Slayton & Co., Illi¬
Bank
Building.
Co.
to attend a specially planned
session, of The Nela Park Lighting
Institute
on
Monday
evening
.Tan
26.
Since
the
affairs
of
the
J.
a
securities business: from offices at
,
Mr. Sears
Seymour
Greenwald,
in
office.
SURE
yours,
change member, general partners.
Lester S.
firm
representative
and in¬
;
W. J. KNAPP
Virginia Street Ext.
Sistersville, W. Va.
Dec. 29, 1947.
St.
Co., 25 Broad Street,
'
Respectfully
1
living
stand¬
but ultimately _all America
pay
the
inevitable
price
temperances.
Co.,
prices;
greed, millions of Americans will
suffer
Blair ;&
For
associated
was
Hirsch Co. Adds
So the
boom must continue until it bursts
like a toy balloon; and while the
feeds
associated
Louis.
than his
more
share of this boom: Labor higher
inflation spiral
Stock
Henry
that
organization..
he
years
with
Chicago
become
their
cream-
prosperity.
It cannot last.
The American people are mort¬
gaging their future; they must pay
for
the
announce
has
a
peacetime budget
spending adds to the inflationary
fire.
of
Exchange,
O.—The Cleve¬
Exchange announces
the 1948 resumption of its series
of informative meetings
featuring
ner,
fol¬
wild,
Through
must
Taylor, III, & Co. to
'B. L.
on
near-
be
Chile Bonds
i
President's
rather than the basic causes.
for
B. L
Co.
the
will
and, like Republic of Chile, Mortgage (Bank
politicians, are of Chile, Water Company of Valof
course
political » paraiso,
City - of \ Santiago and
puff
CONN.—Robert
has
This
Paymenls
1928-
Moreover, the Repub¬
leadership lacks the moral
The
Cashier of Bank
GREENWICH,
Electric
plans for
entertainment
with
President
unprecedented
Robt.
and
future.
lighting
boom.
program
be
by Congresses
housing
General
lowed
election year.
an
the
Washington today with
this
The
re¬
should
t;.7;..\?i7;. '.777::;77i;77..'
farm
is
would
following a
expediency.
and
exten¬
•*
'29
land,
control
areas
said, should aim at
to
which
that
present
Our; present
They
"The
the
7
;
best
by
President.
up
with
Objectives
Three basic economic objectives
for 1948 were proposed
halt
business,
concerned
of
avail¬
back
purchasing
retail
particularly
.•course
American
•
sisted.
Furthermore, any decline
price is likely to sharply stim¬
hope
Stock Exchange
will begin at 7:45 p.m.
short discussion by officers
outlook
statesmanship;
lican
long-range hous¬
program, and
years, v.:
of capital
.
the
on
pasture
start toward decent standard
a
the reduction in individual income
taxes."
V
.
and
prpmptly acted
•
i
proposed im¬
management
crop
building of slum
large degree
offset the inflationary influence of
or
sufficiently
The President stressed that howliquidation of in¬ ever
good times have been in reventories; fourth, if there is any ronl
r»vrf l-i
+
cent months, "a wave of inflation
break in price it cannot go very
."
has
already caused serious
far, nor last very long.
A 10%
decline in price would wine out hardship and presents grave con¬
cern for the future." I'y
manufacturing profits and further
..
0f
all eyes on next
November. Presi¬
dent Truman will do no more to
in¬
equipment need
dams, for flood
He urged also a
ing
1948
so
dominates
doubling of the sustained
timber yield, and development and
stockpiling of strategic materials.
laborcwill
do
and
power, a
available
rv>
.
output
soil
nation's
more
production to fall
highest
and
Truman also
proved
correspondingly heav¬
cause
plants
Mr.
force
to
severe
to
dustries.
business corporations.
on
wouid not
+v>sn
un
able
expansion, listing particularly the
steel, oil, coke and electrical in¬
Tax Revision
"An increase in corporate taxes
the entire nrice
un
sum
be
years
annual national output
our
ness
In the matter of tax revision the
President again recommended his
$40 per person income tax reduc¬
production.
can
should
by 35%." He maintained that busi¬
)
None of this ircreased purchaspower would be matched by
*
con-
ten
"We
'rols and the right to ration scarce
ing
..
price
wage and
..
ing
.
crease
years,
stated:
items.
•
And possibly more public housan/ an increase in old-age
,
within
by power for
An increase in minimum
wages.
...
planning for future
the President
fall which would give him stand¬
Pro-
7x :U \v;i7
reduction; > ;
{General tax
As to.
given to Congress at the
opening of the special session last
pre gram
:
.
little
Cleveland
a
courage to stop inflation;
the
Democratic
Long Range Plans
; /
To
crack
provide "richer and more satis¬
fying lives" for all Americans.
-
now
are
some
is
ladies
program
with
1
Coolidge did to break the
to
*
-
fall.
we
the
The
farther this boom
extends,
deeper will be the next depression: the higher we go, the
the
There
(Continued from:first page)
vY4
.
to
The
harder
•
are
equally as interesting
as
they are to the
men, wives are invited also.
bursts, and the American
people will again have the pain¬
ful
experience of a depression.
1948
those of
1947.
"/
ing
until it
to expect total sales for
President's "Economic Report"
Renews Plea for Inflation Curbs
,
can. cause
living standard. <S>——
The boom will continue Institute
squeezed.
because
from their
Controls on com-
paper
and Financial Chronicle:
The major interest and concern
of the American people
during
1947 has been the
high cost of living. Economists forecast the infla¬
tionary trend will continue throughout
1948; so our people enter the
new year with the
prospects of having their dollars further
cheap¬
ened and their
opti¬
an
on
Editor, Commercial
Administration will halt
inflation,
iwould help retailers, few of .whom
can finance .a substantial increase
resources.
expect
decline in wholesale
a
rampant inflation.
at least approximate
1947, the general price structure
to remain relatively firm and your
earnings to approximate those of
nor can
wasteful government expenditures and
on
goods
former
"
>wn
not
do
volume,
Reader comments
com-
loans.
/in' installment
expect
you
con¬
cred't ant
on consumer
jmercial
are
decline,
dollar sales
more
measures
adopted
-sell
the
consumer
to
products
i
you
"Cream-Puff Prosperity"
spring. A 50% in¬
however, would
net income available
rents,
taking everything into
consideration, you have good rea¬
decline
a
Calls Present Boom
un¬
now
mistic note;
in income.
of these
.will be considered
seriously : by a
President and > Congress seeking
many
increases
increased wages.
I think I can close
lower standard of liv¬
a
fully
purchases of
all your potential
customers by
only about 5%. Its net effect on
department store
sales
volume
may not exceed 2 or 3%, which
might be offset by the effects of
.
Reduce
in
crease
for
this
believe
not
do
39
Letter to the Editor:
this
controls
reduce
Should
governmental construc¬
retail
(239)
do they adjust for
elimination of rent
derway, nor
the possible
of the year,
7%.
some
estimates
These
duce total national production by
unem-
long after a
takes place.
recognize the effects of the thiro
if
the threatened shortage of capital
funds materializes, it would re¬
unin¬
Use surplus to reduce
price decline
CHRONICLE
FINANCIAL
&
until
prices
of
likely
in the first gu&tter, the
quarter will be about even
last year.
In
expenses
vand
.
for
come
second
mon^negotiable^government bonds;
{Reduce
volume
1947. Most of the increase is
*
*
'-THE COMMERCIAL
•
U.S.
SAVINGS
BONDS
40
COMMERCIAL
THE
(240)
FINANCIAL
&
they're to get $38,000,000 from us
or nothing—just the same.
—all
Who Gets the Money
$234,000,000
Norway:
1
Under Marshall Plan?
countries- realistic, production-minded Amer¬
and
Austria. ican handlers to whip it. When
There are other reasons for help¬ we get this done, we can stop fail¬
ing in the pattern of the $22 biling them, but not gratitude.
is in for $234,000,000 from us.
to
go
enemy
Italy,
Germany,
Then, there's Norway, where the
way
to
are
that
tries did not
even
the wind since the
We
fight in the war.
can
with
already gone
has
that
ilon
to countries
These coun¬
$700,000,000 goes
stayed neutral.
communist vote is about 7%. Nor¬
(Continued from page 8)
1948
Thursday, January 15,
CHRONICLE
end of the war.
get
really
place,
some
and Europe,
If that's a
and the cause of lasting peace, by
billion, to be exact—goes to the City, $2,436,000,000.
Norway.
«■■■
■'
war
than
they've ever been—
calculated risk against commun¬
British Isles.
making these vital changes in the
largely
at
American
expense.
ism in Holland, it's quite a calcu¬
Portugal: $150,000,000
plan. We can also save ourselves
Communism in Britain No
They might well be giving some¬
lation.
Yet, the plan is presented
billions and billions besides, that
Consider Portugal next, in de¬
Problem
thing hack to us—as if anything
as
"take
the
whole
plan
or
would have been wasted had we
ciding whether or not the propa¬ like that could ever happen.
Certainly, Britain's share hasn't nothing"—all or nothing.- Why,
allowed
our
judgments to be.
ganda for the plan is padded in its
anything to do with buying .off the* figure
for
Holland ' alone
blitzed.
*
The
$234,000,000
gives
plan
to
In
really serve ourselves
fact, they got richer during the
...
,
-
communist
this
large
Plan
popularity there. To
extent, the Marshall
should
sented to
been
have
not
us as
an
pre¬
anti-communist
than
over-all anti-communist appeal to
of $308 for
Zee.
over
But
000,000,
more
any
on us
every man, woman and child who
lives on the shores of the Zuider
the
last $3,750,000,000 we gave Eng¬
land in 1945. Maybe the British
need this money—I don't know.
measure,
charge
a
means
Denmark
they certainly don't need it
stop communism in England.
$500,000,000
Over
supposed to get
half-billion dollars—$582,-
a
is
exact.
be
to
public.
Have
That's for
summer
traveling in
one
First
Colony Corp.
Offers Securities Stock
long, I have been
European country
after another—in
Salazar.
England, France,
Italy, Greece, Switzerland, Bel¬
gium, Luxemburg, Holland, Ger¬
many.
I broadcast from Paris
where the 16 nations were meet¬
did not fight in the
Portugal profited immensely
Portugal
war.
Switzerland, However,
Us for Nothing.
&
Asked
Praise Be
All
try has been, and remains in, the
hands of a Fascist dictator, Dr.
was
Denmark
Sweden
In Portugal the com¬
munist vote happens to be non¬
existent.
For 20 years, the coun¬
our
First Colony Corp.
made a pub¬
offering Jan.
14 of 36,000
shares of 5% cumulative convert¬
lic
country, with a in the war, by Portuguese stand¬
ible preferred stock and 100,000
comparable to Chi¬ ards. Yet Portugal gets our money ing to put in their request, now shares of common stock of the
to suggest that the British cago.
It's as much as all the stop¬ just the same.- Portugal gets a being considered, for additional First Guardian Securities Corp.
are on
the verge of voting com¬ gap
aid for which the special 150 million American dollars in American funds and substance. I The public offering price is $25
munist/
session of Congress was so dra¬ the Marshall Plan. All orr nothing.
have tried to say on the air, as per share for the preferred ana
Had the fact been made nubh'c, matically
called last November.
Can the $17,000,000,000 be cut?
factually as I could—right there $10 per share for the common.
and early, that a third of the $17 Denmark—a half-billion dollars.
Can
the
first
installment now on the scene, in London, Rome,
Proceeds from the sale of the
billion called for was to go to
asked for—$6,800,000,000—be cut?
Athens, Zurich, Berlin, Brussels, shares will be used by the com¬
Ireland:
$497,000,000
England, it would have been im¬
I should say so. And now.
Paris, and in a dozen other places pany to buy and sell securities for
possible to present the powerful
Now, Ireland.
Ireland was not
since I've been home—that the the
purpose of trading
and fotf
appeal for the overall $17 billion in the war., Ireland is an island. Are We Discouraging Commuism?
objectives of the Marshall Plan the purpose of investment.
fund on an anti-communist basis The communists would have to
The- anti-communist
angle is are good. Heavens knows there's
Upon completion of the present
If there's a valid to a degree in some places no
—all-or-nothing basis. Certainly swim to get there.
question about that. But the
financing, the sole capitalization
official
there
now,
not
an
support for the outlay communist
where the money is to go, such as gigantic amounts asked for were
of the company will consist oi;
But Ireland
could not be sought, on such a Irishman knows it.
Italy.
But now that we get the over-stated, inflated, padded,
36,000 shares of preferred stock
basis, for at least one-third of the is to get a half-billion dollars,
figures, so belatedly published, it padded, and padded. Furthermore, and
125,000
shares of common
entire proposition.
$497,000,000
to
Ireland, to
be is clear that over 10 billion of the
the plan is shockingly weak in
T
stock.
There is no funded debt
Along with England, seven ad¬ exact.,,' v, :■■■ ,v'v-"
17 billion is going to countries— providing how the money should
nor any bank loan outstanding.
ditional countries are ruled out
So, my friends, three and
a
and I've visited every one of them be administered to get the, results
in the same way because there is, half billion dollars, out of the 17
The corporation was organized
myself—that are by common con¬ on which we pin our American
by common consent, no more idea billion, go to Holland, Denmark
in November, 1947, as a closedto
No
has
one
ever
had
even
this
the
little
one
population
nerve
,
.
of the
and
nist
even
population .voting commu¬
there is in England—
whether this plan or no plan is
adopted. I refer to Holland, Bel¬
than
a
Iceland.
what
see
and
come,
Little
at
Holland:
last,
from
into
our
is
to
$2,436,000,000
For Iceland comes
Marshall
and
Plan,
for
in
about as much
the throes of chaos—just about
as
much tottering on the
And Iceland is just
get
2,436.000,000
Fantastic as it
tion
in
Iceland,
But,
anyway.
Bee.
2,
•common.
Corp., Ann Arbor,
(letter of notification) 40,000 shares ($5 par)
Price—$5 a share. Underwriter—Dean W. Titus
Co., Ann Arbor. To build factory, pay
and for working capital.
.
All
American
obligations
:
:
Inc., New York;
Industries,
to
to American §teel & Piimp Corp.) Under¬
writer—Herrick, Waddell & Co./York. < Price by
amendment. Proceeds—To pay off indebtedness incurred
S>e changed
in the acquisition of the
(Lawrenceburg, Ind.
American
capital stock of A. D. Cook, Inc.,
;
Bankers
;
3
Co.
of
Florida,
*
(letter of notification)
2,500 shares of class A
(par $10) common, 5,000 shares ($10 par) class B com¬
mon, and 11,250 shares 8%
($10 par) cumulative pre¬
ferred. Price—$240 per unit, consisting of 2 shares of class
A, 4 shares of class B and 9 shares of preferred.
No
underwriting.
For capitalization of company to enter
'Into stock
Take another
that
them.
billions
many
are
the
Of
the
Plan,
We must get
of
Included
sharing
countries
16
Marshall
over
in
the
essary
over
will
be
to
of
ratio
Rights expire 3
Boyd
share
York.
stockholders of record
each 16 shares held.
common
one
12
common,
In addition, corporate cap¬
gains
not
are
gains distributed are
Such capital
subject
a
only
to
to the
distributed.
taxed
corporation if they are
real
re¬
normal tax and
25%
to the
tax
stockholders.
«..
for
(EST) Jan. 21. Unsubscribed shares
publicly.
Price—1021/2.
Proceeds—To
Bristol, Pa.
6,000 shares of class A
Price—$5. Underwriting—None,
Inc.,
System,
One.
series
California
/
Union
Co.,
Insurance
of common stock (par $10).
Price—$25 a share. Proceeds—For
28 filed 99,700 shares
Underwriter—None.
working capital.
;
"
5
'
(1/21-23)
Dec. 29 (letter of notification) 101,000 shares of common
stock (par $1), of which 85,000 shares will be sold to
the. public; 8,500 shares will be issued to underwriters
as additional underwriting consideration and 7,500 shares
will be issued to American Die & Tool Co. for invest¬
ment in return for cancelling $15,000 open account for
machine tools. Price—$2 per share. UnderwirterrrR- A.
Keppler & Co., Inc., New York. To provide operating
funds, etc.
A.-/
•
Central Chemical Corp., Hagerstown, -McL^-t
Dec. 29 filed 254,682 shares ($10 par) non cumulative 6%'
stock and 70,643 shares ($10 par) non-voting (common
Aero
Cameron
Engine Corp.
fl'.
to
Public Financing
Price—$6
Jan.
Corporate purposes.
Beam
(James
one
i§iz
'
new
Rights expire March 9.
■
•;
'
'
°
B.)
1
*
m
CO
K.
Distilling Co., Chicago
29
W
U;
deJ
York
FoUiv
150,000 shares
Bendix Aviation Corp.,
Detroit
399,990-shares ($5 par), common. Under¬
writer—Morgan Stanley & Co.
Price by amendment.
Stock owned by General Motors Corp. Business—Manu¬
•
Jan.
2
BoWS'°
.
CKC°
.v.
SAURS
'
A'';'.
Boston
filed
facturing aviation, radio, marine and
J •
of
,
-
Pittsburgh'
ratio
($2 par)
No underwriting.
For
working capital.
Offered to common stockholders of
Philip Blum & Co. Inc. of record Dec. 22. Rights expire
Feb. 20.
,
'• ; ;
;
FIRST BOSTON
_
in
.
(letter of notification)
common.
Price—$2 a share.
Dec.
CORPORATION
9
automotive parts.
ilf/
M'
Underwriters—None. Offered
share for each seven shares held.
The
\
Services,
per share.
stockholders of record
par).
-at.'
San Francisco
Inc., N. Y.
9 (letter of notification) 25,000 shares common (no
Baby
*
(letter of notification)
Corporate purposes.
Nov.
p.m.
offered
Associated
Jan.
BostonviS'^.^ew Yofk
•
Jan.
ranch cot¬
Peabody & Co., and The First Boston Corp., New
in
the
fit
to
is
company
PREVIOUS ISSUE
Armstrong Cork Co., Lancaster, Pa. (1/22)
Dec. 19 filed 88,179 shares (no par) $4 cumulative pre¬
ferred. Underwriters — Smith, Barney & Co.; Kidder,
7
ital
extent it is
the
and, to
the
Registration
in
Welding Equipment Co., Phoenix, Ariz.
Dec. 23 (letter of notification) $100,000 of 6% convert¬
ible sinking fund debentures and 2,000 shares of $1 par
common.
The debentures will be sold at $1,000 each and
the common at $8.75 each. Underwriters—Pacific Coast
Securities Co., San Francisco. To retire indebtedness and
for working capital.
'
Offering—Offered
surtax.
production problem, and requires
Tripp Realty Co., Long Beach. To erect guest
tages and allied expenditures.
Jam
writ¬
there—which is
income to stock¬
ordinary
lieved of corporate
the air pumped out
changes
its
holders
distributed
claims and make the nec¬
problem
$6,000,-
000,000 out of the $17,000,000,000
Now
of
I'm convinced it will not be.
ten.
to
as
investment com¬
This type of company is re¬
quired to distribute at least 90%
goods.
It shouldn't be approved as
company
pany.
and
money
the
regulated
a
as
absorb billions in our
people's
of
manner
no
American
ruled out on. that score?
Enemy and Neutrals
is
an
law and to
Apple Valley Building & Development Co., Long
Beach, Calif.
Dec. 29 (letter of notification) 30,000 shares ($10 par),
class A common.
Price — $10 a share. Underwriter —
•
angle.
for their losses in the
How
Plan
idea. It is now a
tangible piece of proposed legisla¬
tion. It is ready to be enacted into
Now, there are other appeals
are sound.
This isn't one of
war.
the
But
longer just
The appeal
is made to us that we are aiding
the victims of war-torn countries
in gratitude
Plan.
tion
finance expansion program.
fire insurance business.
Corporate and
Victims?
management type
conduct the opera¬
in such a
enable it to qualify
ment plans to
I think we should en¬
objectives of the Mar¬
the
>
Insurance
'v Miami.
Nov.
In short,
dorse
Arizona
100,000 shares ($1 par) common (name
Oct. 30 filed
end diversified,
investment company. The manage¬
Marshall Plan Needs Rewriting
*
Mich.
and
hopes.
voting communist to me.
INDICATES ADDITIONS SINCE
•
Broach
the verge of vot¬
shall
Securities
Acme
on
Are We Aiding War
,
as;
the plan gives Hol¬
little country with fewer
than live in New York
seem,
no more
verge of
brink of
up western civilization—
Trenton, New Jersey. Only
there isn't much western civiliza¬
giving
American dollars.
land, a
people
the
$38,000,000.
Fewer people live on that island
than live in Trenton, New Jersey.
know how much all of
to be taxed for the Dutch?
Holland
may
v
Apparently, there must be quite
communist threat in Iceland.
must be a lot of western
there besides.
Do you
are
$38,000,000
sent
ing communist than the State of
Indiana, which I visited last week
and which hardly looks on the
civilization tottering on the brink
State Department itseif.
us
good measure,
There
theyr'e getting.
Some of the figures are unbeliev¬
able but they are correct and offi¬
cial
For
is included.
Iceland
Iceland:
gium, Luxemburg, Denmark, Ire¬
land, Norway, Portugal and little
Let's
Ireland.
\
m
*
<
m
\
4
<
•>
•.LU'riuU-'
Volume
THE COMMERCIAL
Number 4664
167
&
FINANCIAL
CHRONICLE
De
Walt, Inc., Lancaster, Pa. (1/20)
($2.50 par) common. Under¬
writer—Reynolds & Co., New York. Price—By amend¬
ment. Proceeds—Company is^ selling 20,000 shares and
the remaining 90,000 shares will be offered by stock¬
holders. The company will use its proceeds for plant
construction and for working capital.
amendment.
vDec. 5 filed 110,000 shares
NEW ISSUE CALENDAR
January 15, 1948
Old Poindexter
Distillery, Inc.__Pref. and Common
1948
January 19,
v
Islip Stadium Corp
____
De
Walt, Inc.:
!_
-
Common
Potomac Edison
Bonds
Co., noon (EST)
Potomac Electric Power Co.
11:30
(EST)
a.m.
Doman-Frasier
Jan.
a.m.
J
(PST)
Cameron Aero Engine Corp.__
Common
■
Dec, 29
Common
.___
'General Instrument Corp.
■
.* January 22, 1948
Armstrong Cork Co
—.--Preferred
Water
Kaiser-Frazer Corp
Equip. Trust Ctfs.
-Common
—
etc."
..Bonds
Co.__Bonds & Preferred
_______
Wisconsin Power & Light
•
February 2, 1948
Iowa Power & Light Co.____.
March-16, 1948
Pacific Telephone & Telegraph Co
-Bonds
and
Underwriters—To be sold through
com¬
Central
Maine
Power
Co.
10 filed 160,000 shares
ferred
each
share
one-half
of
share
of
/
one-tenth
and
held.
share
share
of
for
new
each
common
•
V
Central
Power &
•
be
may
Proceeds—For
property
additions and expenses.
Century Steel Corp., Hollydale, Calif.
Nov. 10 filed 4,000 shares ($100 par) common. No under¬
writing.
Price—$100 a share. Proceeds—To purchase
rolling mill, equipment and for working capital.
Gas & Electric Co.
Cincinnati
./V;'/
shares ($8.50 par) common.
No un¬
derwriting. Offering—Common stockholders of record
Jan. 15 are given the right to subscribe on the basis of
one new share for each 10 shares held at $22 per share.
Proceeds—To finance construction.
Rights expire Feb. 2.
Clinton
(la.)
Industries, Inc.
Dec.
15
filed 210,000
shares ($1 par) ' capital stock.
Underwriting—None. Offering—Shares are to be offered
in exchange for 300,000 shares of
Obear-Nester Glass Co.,
St. Louis.
Consumers
Cooperative Assoc., Kansas City,
H
Missouri
Oct.
filed
non-cumulative common
stock ($25 par); $4,000,000 of 31/2% certificates of in¬
debtedness cumulative; and
$1,000,000 of 1.%% loan
certificates cumulative. No underwriting. Offering—To
the
16
$1,000,000
4%
be bought only by patrons and
Proceeds—For acqui¬
sition of additional office and plant facilities.
public. Common
members.
may
Price—At face amount.
Coosa River Newsprint Co.
writing, none. Offering—Stock will be offered direct to
public through directors and officers. Price, par. Proceeds
—Erect, land operate mill for manufacture of newsprint
,from Southern pine. Company also contemplates the sale
of $16,000,000 4% 1st mortgage bonds.
•
•
Cowles
Inc., Cayuga, N. Y.
Jan. ,43 (letter of notification) 5,000 shares of capital
stocli (par $5). Price—$30 per share. • Underwriters—
None. Offering—4,000 shares to be offered to stockhold¬
ers
Co.,
of record Jan. 13 in ratio of two
three
shares
held.
Rights
capital.
5
expire
new
shares for each
Feb.
20.
Working
'
// Dayton
Dec.
(Ohio)
filed
Power & Light Co.
shares ($7 par) common. Under¬
writing—The common shares will not be underwritten.
170,000
Offering—The
common
shares will be offered for sub¬
the basis of one share for
Price—To be supplied by amend¬
scription by stockholders
each nine shares held.
ment.
:
Oct.
on
Proceeds—To finance construction program.
Dee Stores,
v
Inc., Olean, N. Y.
21
Proceeds
to
both
ceive
are
Products
Co., Detroit,
Price—$5.25 per share.
Proceeds—The
being sold by 14 stockholders who will re¬
Products Corp., New York /
(letter of notification) 37,500 3-year 10% promis¬
sory notes due Dec. 1, 1950; warrants to purchase 11,000
shares of common stock (no par) at $5 per share before
Jan. 8
per
Harrison &
(no par). Price
proportion of 200
unit.
Underwriter—
in
$1,000 note, $1,000 per
Co., Philadelphia. Financing of inventory.
General
Instrument
Corp.
Portland
Proceeds—Stock
pro¬
stock held.
velop
a
one
warrant for each share of
Price by amendment.
com¬
Proceeds—To de¬
plant and facilities for the company's subsidiary,
Co., Harleyville, S. C.
Carolina Giant Cement
Glass
common
Corp.
stock
a
500).
(par
Proceeds
Stock
—
stockholder.
v
amendment./ Proceeds—To
purchase
machinery
and
tools to increase production of automobiles from current
rate of 950 per day to 1,500 per day.
Kansas Soya Products Co.,
Inc., Emporia, Kans»
3
(letter of notification) 3,157 shares ($95
Dec.
par)
preferred. Price—$95 a share. Undewriter—Kenneth Van
Sickle, Inc., Emporia. For additional working capital.
Ltd., Toronto, Canada
June 27 filed 300,000 shares ($1 par) common
treasury
stock.
Underwriting — To be supplied by amendment,
Price—50 cents a share. Proceeds—To
develop mining:
properties.
Cement
Co., Philadelphia, Pa.
Jan. 12 filed 564,906 shares ($1 par) common and
282,453 common stock purchase warrants.
Underwriters—
Craigmyle, Pinney & Co., New York; Winslow, Douglas
& McEvay, New York, and
Jenks, Kirkland & Co., Phil¬
adelphia.
Offering—To stockholders on basis of two
shares of stock and
shares
Higginson
Legend Gold Mines,
(par $1). Under¬
being sold by four stockholders who will receive
ceeds.
Price by amendment.
Giant
Co., New Castle, Pa.
Corp.
(1/26-30)
Jan. 6 filed 1,500,000 shares ($1
par) common. Under¬
writers—Otis & Co., Cleveland; First California
Co., San
Francisco, and Allen & Co., New York.
Price—By
(1/21)
Nov. 14 filed 150,000 shares of common
writer—Burr & Co., Inc., New York.
•
150,000
Kaiser-Frazer
Dec. 31, 1950 and 11,000 shares common
attached
Bronze
filed
being sold for account J. P. Flaherty,
Indefinitely postponed.
Citrus
warrants
10
Underwritei^-Lee
Fibers,. Inc., Waterville, O.
Dec. 30 filed 343,000 shares ($1
par) common. Under¬
writer—Kebbon, McCormick & Co., Chicago. Price by
amendment. Proceeds—To repay indebtedness and for
working capital.
\
..
Liberty Discount Co., Inc., Bremen, Ind.
(letter of notification) $300,000 ($100 par) class A
common.
Price—$jC(0r,a share. No underwriting. For
working capital. /^ ^
Dec. 30
Lock Nut Corp.
of America
Oct. 6 (letter of notification) 24,000 shares of 5% cumu¬
lative convertible preferred stock (par
$12.50). Under«
writer—Ray T. Haas, Chicago.
Price—$12.50
per
share.
General corporate purposes.
•
Longchamps, Inc., New York
notification) 600 shares of
Jan. 7 (letter of
common
stock
(par
$1).
Price—$5.12V2.
Underwriter—Delafield &
Delafield, New York. This is an offer of recission, the
stock
having been sold without SEC filing.
..
McClanahan Oil Co., Grand Rapids, Mich.
Dec. 30 filed 260,000 shares ($1 par) capital stock.
-
•
Gulf
Jan.
Oil
Corp.
14 filed
2,269,050 shares of capital stock (par $25).
Underwriter—The
First Boston
Corp.
Offering—The
stock will be offered for subscription
by stockholders
of record Jan. 27. Rights will
expire Feb. 10. Proceeds—
Will augment corporation's
working capital position and
provide funds for acquisition and development of addi¬
tional
production and the expansion of refining, trans¬
portation and marketing facilities.
Guyana Mines, Ltd., Toronto, Canada
:
Nov. 26 filed 303,587 shares ($1 par) common. Under¬
writing—None. Price—50 cents a share. Proceeds—For
equipment and working capital.
*
Harshaw Chemical Co.,
Cleveland, O.
initially will be offered for subscription by stockholders.
Unsubscribed shares will be offered
publicly.
Un¬
Offering—Shares will be exchanged
for $1 par stock of Great Lakes Chemical
Corp. on the
derwriters—None.
basis of
one
share of McClanahan
shares of Great Lakes common.
common
for each
twp
Offer will expire Marqi
15, 1948.
McColl-Frontenac
Oil
Co., Ltd., Montreal, Can*
(no par) common. Under¬
Offering—Stockholders of record Jan. 21
will be given the right to subscribe for the new stock
Dec.
16
filed 900,000 shares
writing—None.
Willis E.~ Burnside &
Johnson
on
with
12
Nov.
Co., Chicago.
shares
(2/2)
(N. Y.) Stadium Corp. (1/18)
(letter of notification) 75,000 common shares
(par $1). Price—$2 per share. Underwriter—E. P. Frazee & Co., New York,
Pay liabilities incurred in build¬
ing staudium, etc., and working capital.
Mich.
100,000 shares ($1 par) common. ; UnderCampbell, McCarty & Co., and Keane & Co.,
General
—Notes
Light Co.
Islrp
Jan.
Dee. 26 filed 58,612 shares
($10 par) common. Underwrit¬
ers—McDonald & Co., Cleveland.
Offering—The shares
Go., Inc., and Otto Fuerst & Co.,
Purpose—Working capital, j :
o
/,;.'r
10,000 shares ($1 par)
behalf of Wm. H. Miller, a director of the
company, to be sold at market.
Underwriter—Sills, Minton &
Power &
Probable bidders: Blyth & Co., Inc.; The First
Corp.; Halsey, Stuart & Co., Inc.; Glore, Forgan
Co., and A.- G. Becker & Co. (jointly); Harriman
Ripley & Co.; Kidder, Peabody & Co., and White, Weld
& Co. and Shields & Co.
(jointly); Salomon Bros. &•
Hutzler; Lehman Brothers. Price—By amendment. Pro¬
ceeds—Construction. Bids—Expected about Feb, 2.
Co., Cleveland
(letter of notification)
24
Forft
&
proceeds.
common,
Toccoa Manufacturing
bidding.
Gabriel
Oct.
are
Brothers,
Boston
Detroit.
shares
through
paid on?
amount
Dec. 22 filed $6,000,000 first mortgage
bonds, series due
1973. Underwriting—To be determined
by competitive
selling
'v
—
Stickley
Iowa
Dec. 15 (letter of notification) 90,000 shares of common
fctock
(par $1). Price—$3 per share. Underwriters—
New York.
and
'
filed
writers
mon
Dec. 23 filed 238.829 shares of common (par $50). Under¬
$6.87%)>
holders.
•
Dec. 1 filed 204,000
Wash.
Airflow, Inc., Wilkes Barre, Pa.
of notification) 15,000 shares of capital
Price—$3,875 per share.Underwriter—E. F.
Gillespie & Co., New York,
Proceeds to selling stock¬
Light Co.
negotiated.
Seattle,
(letter
Fraser
To be sold
reduce
Interstate Department Stores, Inc.
Oct. 30 filed $5,000,000 15-year sinking fund debentures.
Underwriter—Lehman Brothers, New York.
Price to
be filed by amendment.
Proceeds—To repay bank loana
and for general corporate purposes
including the financ¬
ing of new stores. Temporarily postponed, v
stock.
for
To
erty improvements.
Kirkely Corp.,
Proceeds, with other
Fleetwood
9
and/stockholders.
Dec. 24 (letter of notification) 4,000 shares of
5% cumu¬
lative preferred stock. Price—$25 a share. Underwriter
—Florida, Securities Corp., St.
Petersburg, Fla. For prop¬
Inc.;
Proceeds—For investment.
(about
(par 100).
County Telephone & Telegraph Co.,
Myers, Fla.
Exchange
Jan.
21
Sale
Co.,
Co., Inc.
Inc.,
Corp.
$60,000 3% debentures
1, 1957 and $3,000 shares
Price—$502.50 per unit of $500
July
Inter
stockholder.
Price by
ferred.
15.
Fund,
Price—Market
pre¬
filed 40,000 shares ($100 par), cumulative pre¬
Underwriting to be determined by competitive
bidding.
No bids received at competitive bidding Dec.
Nov.
Purchase of inventory;
Buffet Corp., New York
Jan. 7 (letter of notification) 500 shares of common
(par
$2.50). Underwriter—Delafield & Delafield, New York.
amendment.
Pro¬
ceeds—For construction and repayment of bank loans.
common
&
due
Inc., both Illinois corporations, and the Luce Corp. and Stickley Bros. Institu^
tional Furniture Co., both Michigan
In¬
corporations.
definitely postponed.
,M
' V
„ •
used to refund 5%'"debentures.
were
prices.
common
Evans
(N. Y.)
notification)
trant. The merging companies
Co.
Dec. 29 filed 103,089 shares of common. Underwriters—
Pacific Northwest Co., Seattle. Price based on market
($10 par) common.
new
Baker,
Equity
Under¬
writing—To be determined by competitive bidding. On
Dec. 8 only one bid, that of Blyth & Co., Inc.. and
Kidder, Peabody & Co. was submitted and was rejected
by the company.
They bid $13.75, less $1.75 under¬
writing commission. Offering—To be offered to 6% pre¬
ferred and common stockholders for subscription on the
basis
Overseas Securities
funds
pany officers and employees.
Offering — To company
stockholders, employees and customers. Price—At par.
Proceeds—To retire indebtedness and for working capital.
Nov.
,
' Equitable
Co.;
of
the sellers will receive in
exchange for their holdingo
of four furniture companies to be
merged with the regis-
Postponed indefinitely.
&
of
Illinois-Rockford Corp., Chicago
July 24 filed 120,000 shares ($1 par) common. Under¬
writers—Brailsford & Co., and Straus & Blosser,
Chicago,"
Price—$9.25 a share.
Proceeds—The shares are being:
sold by four stockholders and
represent part of the stock*
Steam
ten
Class B stock.
Chicago
Office Building Corp., New York
8 (letter of notification) 9.126 shares of common
(par $1). Price—Market (about $4%).
Shares are part
of 60,000 shares purchased by group of underwriters
pursuant to offering of 1,034,518 shares to stockholders
at $3 per share in accordance with trustee's reorganiza¬
tion plan. Underwriters—Bear, Stearns &
Co.; Hallgar-
—...Bonds
shares
purchase price of property and to supplement
working
Jan.
-
18,500
capital.
writer—Reich & Co.; New York.
Southwestern Public Service Co.__Pref. & Common
Tampa Electric Co
officers
Sterlizing Co.,' Inc., N. Y.
Sept. 22 (letter of notification) 65,000 shares of commor
stock (par 100).
Price—65 cents per share.
Under¬
1948
January 26,
Baltimore & Ohio RR——
(letter
capital stock
.
-Bonds
Co
9
of debentures and 25 shares of stock.
150,000 shares ($1 par) Class A Common.
Offering—To be. offered to em¬
Electric
t
and
non-cumu¬
Underwriter—A. W. Smith &
Price—$25.25 per unit, consisting of
(non-convertible)
ployees, executives and management personnel. Price—
$3.49 a share.
Proceeds — Company did not state how
proceeds will be used. •
./'•
Northeastern
York
Underwriters^-None.
filed
$25)
i
of
(par 50).
Huletts Landing
Jan.
helicopters.
Credit Corp.,
Domestic
(par
capital.
,•
(par $1).
blade system for
January 21, 1948
stock
chase
(letter of notification) 10,000 shares of capital
Price—$1.50 per share. Underwriting—
Operating expenses during completion and demon¬
stration of test flight progress of corporation's rotor-
Bonds
_
New
in¬
share of preferred and five shares of common.
Pur¬
of laboratory equipment and
facilities, working
one
None.
Southern California Edison Co.
8:30
Inc.,
Phila.
notification) 3,700 shares
Co., Inc., Boston.
6
stock
__Bonds
___
Helicopters,
stock
common
Underwriter—Tellier & Co.
January 20, 1948
short-term bank
repay
High Vacuum Processes, Inc.,
Jan. 2 (letter of
lative preferred
Oct.
-Equip. Trust Ctfs.
Proceeds—To
41
debtedness.
Dogpaw Gold Mines Ltd., Toronto
22 filed 1,000,000. shares.,.($1, par)
capital stock
Pric6—400 per share. Pro¬
ceeds—To develop mining properties in Flint Lake local¬
ity of Ontario.
Common
__
St. Louis-San Francisco Ry
(241)
Price by
the basis of
one for each two shares held at
$10 per
Rights expire Feb. 18.
Proceeds—For building
expenditures and to repay bank loan. on
share.
*
Manhattan Coil Corp., Atlanta, Ga.
serial debentures, due 194Sk>'
1957; 12,000 shares ($25 par) 5&% cumulative convert^
May 20 filed $500,000 5%
(Continued
on page
42)
;
.
_
*
;
42
(Continued from page 41) '
*
*
Co., will be used to repay bank loan and / Dec. 29 filed $3*000,000 • 30-year first
construction;- Bids—Bids for purchase of bonds 1 Series B, and 30,000 shares- ($100 par)
Penn Electric
par) common.,, Un¬
Raleigh, N. C. Price
102.507; while the preferred sharei:
par and the common shares
at $L
ble preferred and 85,000 shares ($1
derwriter—Kirchofer & Arnold, Inc.,
for
will
be
rath:
offfered
at
finance
indebtedness
machinery and other plant
of
purchase
bank
retire
Proceeds—To
and
Market
Pasadena,
Basket,
of
/
Bidders—Halsey,-Stuart & Co. Inc.; Glore, Forgan & Co.!
1
-
~
~
issued in
$6 a share.
ness
White, Weld & Co., Glore, Forgarr & Co. Proceeds—To
construction and for other corporate -purposes^
stock purchase warrants
common
Price—Two shares per warrant at
Proceeds—For additional working capital,
Co./(1/20)
Power
(jointly); W. C.,Langley &:
& Co.*
Corp.;;
offered publicly*
(jointly); Harriman Ripley & Co.; Kiddeiy-Peabody &
while stock will be offered to holders of 4V2% preferred.^
Co. and Merrill, Lynch, Pierce Fenner.&Bsane (jointly> •>-Price by amendment. Proceeds—To pay bank indebted-;
and for construction costs. Expected week of Jan. 26.;
Calif.
July, 1945.
Electric
$15,000,000 35-year first mortgage bonds:
and Harriman Ripley & Co.
Underwriting—To be determined by competitive bidding.'-^>'Uo.-vf. White, Weld &'!Co. and Kidder, Peabody
Probable bidders: Halsey, Stuart & Co. Inc.; The First , (jointly);, Blyth & Co., Inc.; The First Boston
Boston Corp.; Kuhn, Loeb & Co., and*B$ytH & Co.; Inc/-" Shields & Co. .Offering—Bonds will be
filed
19
Dec
equip*
writers—None.
exercise
Broad
Potomac
27,788 shares (50c par) common. Under¬
Offering—Shares are to be issued upon
filed
30
-o
finance
Y.
1,000 shares class B stock
(par $1). Price—$15 per share. Underwriter—Cooke &
Lucas, New York. Proceeds to selling stockholders.
Monsanto Chemical Co., St. Louis
Nov. 28 filed 250,000 shares (no par) $4 dividend cumu¬
to
11:30
N.
stock, series B.
Underwriter—Smith,,
Barney & Co., New York.
Price to be filed by amend¬
ment.
Proceeds for general corporate purposes includ¬
Simonds
a.m.
•
Co., Ann Arbor, Mich.
Parts
Precision
'
'J'
(letter of notification) 15,000 shares ($1 par>!
common, on behalf of six stockholders, including four
officers of the company. To be sold at market to Baker,
15
Dec.
lative preference
r
in
be
offered for sub¬
shareholders at the rate of one
share for each five shares held. Unsubscribed shares and
the bonds will be offered publicly. Proceeds—To pay off
Offering—Common stock first will be
Acceptance' Corp.,
(letter of notification) 75 shares
30-year
$60,000,000
filed
refunding mortgages
determined by
Halsey, Stuart
Inc.; Morgan Stanley & Co.
Price—To be deter¬
by competitive bidding.
Proceeds — To finance
bonds, Series E. Underwriters—To be
competitive bidding. Probable bidders:
& Co.
mined
construction
Airlines,
Northeast
cumulative con¬
preferred:Underwriter—Atlas Corp., owner of
100,000 shares of the registrant's common stock, has "
agreed to purchase all shares not subscribed for by other
stockholders.
Offering—The shares will be offered for
subscription to common stockholders on the basis of one
share for each six common shares held. Price by amend¬
83,333 shares (no par) $1
Dec. 24 filed
Proceeds—To pay off
ment.
indebtedness.
Northern
>
Water Co.
New
Offering—For
York,
stockholders
on
ing
Downs
Berlin,
IV,
^
:
Ohio Public Service Co*
$10,000,000 first mortgage bonds, series due
Underwriting—To be determined by competitive
bidders: Halsey, Stuart & Co. Inc.;
First Boston Corp.; Harriman Ripley & Co.; Blyth
bidding.
The
Probable
Langley & Co., and Glore, Forgan & Co.
(jointly). Price—By amendment. Proceeds—To be used
for construction.
Expected later part of January or early
&
Co.; W. C.
California
Edison Co.
filed
$40,000,000
25-year
30
Poindexter
filed
Distillery,
inc.
(1/15-16)
50,000
Price—Par.
Proceeds—To be added to
working capital.
Ltd., Honolulu, Hawaii
Southwestern Gas & Electric
filed
5
Nov.
plete irrigation and water supply system and to repay
'
v
$1,000. To be sold through officers of the company.
working capital and payment of indebtedness.
For
Pittsburgh Steel Co.
of first mortgage bonds, due 1967.
Underwriters—Kuhn, Loeb & Co.; A. G. Becker & Co.,
Inc. and Hemphill* Noyes & Co.
Price by amendment/
Proceeds
To refund outstanding first mortgage bonds.
Freres& Co. (jointly);
& Co. (jointly);
Securities Corp;
(jointly); Glore* Forgan & Co. and W. C. Langley & Co:
(jointly); Harriman, Ripley & Co.; Merrill Lynch, Pierce,
—
shares held.
Hagerstown, Md. (1/20)
Dec. 16 filed $4,000,000 30-year first mortgage and col¬
lateral trust bonds. Underwriting—To be determined by
Potomac
Edison Co.,
competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; W. C. Langley & Co., and The First Boston
Corp. (jointly): Blyth & Co., Inc.; Harriman Ripley &
Co.; Shields & Co.
Proceeds, together with
$1,000,000
Rights will expire Feb. 2.
Dec.
(Fla.)
filed
24
Electric Co.
Investment banking groups preparing to.
competition for the issue include: Halsey, Stuart,
Co/ Inc.; the First Boston Corp.; Harriman, Ripley &
program..
•
Co. (jointly), and White,
.
Pacific Telephone
& Telegraph Co.
(1/26-30) :
construction costs.
Ex¬
St.
Louis-San
Francisco Ry.
(1/19) '
.
$8,280,000 in l-to-15 year certificates. The l-to-10 year
certificates would constitute an 80% loan and the l-to-15
'
year
certificates a 75% loan. Probable bidders:
Salomon Bros. & Hutzler.
Union Trusteed
Funds, Inc., New York
657,500 shares of capital stocky
Underwrit-
ers—Lord, Abbett & Co., Inc., New York, is selling agent.
Price based on market prices.
Proceeds—For invest¬
ment.
1
Washington
(D*
C.)
Gas
Light Co.
Nov. 7 filed 85,000 shares (no par) common.
Shares
were
STATE, MUNICIPAL AND
-
^
CORPORATE SECURITIES
Offering
stock¬
on
the basis of one share for'
Subscription warrants expire Jan. 13.
Price—$20 per share. About 71,000 shares subscribed for.
Dealer-Managers—The First Boston Corp.; Alex. Brown
held.
Auchincloss, Parker & Redpath; Johnston,
Co.; Folger, Nolan, Inc.; Goodwyn & Olds;
Mackall & Coe; Ferris & Co.; Robinson, Rohrbaugh &
&
UNITED STATES GOVERNMENT;
offered for subscription by common
holders of record Dec. 26
five
'
-
INC.
&
Lukens,
added to
Proceeds—To be
general funds for current construction program.
and
Robert C. Jones
&
Co.
YORK
NEW
Sons;
Lemon
Co.
Blair
ATLANTA
•
BOSTON
PHILADELPHIA
•*
•
BUFFALO
PITTSBURGH
•
•
CHICAGO-
ST. LOUIS
':
Halsey„t
Stuart &-Co. Inc.;
pected week of Jan. 26.
Dec, 29 filed
:
Company has issued an invitation for bids to be received
Jan. 19 on $8,840,000 in l-to-10 year equipment" trust •'
certificates. Bidders may submit alternate proposals for
for' construc¬
$6,000,000 30-year first mortgage bonds.
be filed by amendment.
Price by
pay
Co.,
company
,
'
Price by amend¬
Underwriting—To
Proceeds—To
be used for working capital*,
Company has filed with the
purposes.
Tampa
using $7,125,000 to re-.,
outstanding; adding the
(3/16)
California P. U, Commission
application for authority to sell $75,000,000 30-year de¬
bentures.
The money will be used to retire loans from
American Telephone & Telegraph Co. Probable Bidders :
—Morgan Stanley & Co., Halsey, Stuart & Co. Inc. Ex-.
pected that bids will be opened about March 16. '
,
(1/26)
Proceeds—To retire bank loans and
CoM
loan
Co., Inc., and Glore, Forgan &
shares
10,000
Power
reported
Weld & Co,
($100 par) cumulative pre¬
ferred and 103,113 shares ($1 par) common.
Underwrit¬
ing—Dillon, Read & Co. Inc. Offering—The preferred
will be offered publicly (about Jan. 26) and the common
will be offered to Southwestern's common stockholders 1
of record Jan/ 23 at the rate of one share for each 11
each
,
&
•"
filed
24
term
enter
construction-
Proceeds—To* finance
Beane.
13
sion
program.
Nov. 20 filed $6,500,000
Temporarily deferred.
bonds,
competi¬
White, Weld & Co. and Kidder, Peabody
Blyth & Co., Inc. and Stone & Webster
&
of
Decatur, III. ,
,
is preparing to sell at com-'
petitive bidding $15,000,000 new mortgage bonds. Conwpariy will use proceeds from sale of bonds to pay $2,000,000 loan arranged with the Guaranty Trust Co. of"
New York and for financing extensive property expan-;
Illinois
Jan.
Inc:, Lehman Brothers and Lazard
Fenner
amount
plant expansion, etc.
Halsey, Stuart & Co.
Probable bidders:
Life1 Ins;
Mutual
like
balance to general funds to
30-year first ...mortgage
$7,000,000
bidding.
tive
amendment.
Peoples Home Equipment Co., Cleveland, O.
Dec. 22 (letter of notification) $100,000 8% five-year de¬
benture notes. To be sold in denominations of $500 and
tire
Co.
Underwriting—To be determined .at
series B.
tion
(letter of notification) 12,600 shares ($20 par)
common. Price—$20 a share. No underwriting; To com¬
from
.
16:
indebtedness.
indebtedness- from $7,500,000 to $12,500,000
to borrow1 $12,500,000 on 3'%:% notesf
Prudential Insurance Co.'of America and Massa¬
chusetts
ment.
Olokele Sugar Co.,
Dec.
''.t;'
^ '
increasing authorized*,
long-term
retire $22$8§?G00'of bank
loans and to reimburse* treasury; for construction
of *
additional power facilities.
Bids—Bids for purchase of
bonds will be received up to 8:30 a.m; (PST) on Jan. 20
at 601 West 5th Street, Los Angeles 53y Calif. U;
Dec.
cumulative preferred and
both of Chicago.
March 15 stockholders will vote on
Underwriters—To be deter¬
Southwestern Public Service Co.
shares ($20 par) 5% convertible
125,000 shares ($1 par) com¬
mon
into which the preferred is convertible.
Under¬
writers—F. S. Yantis & Co., and H. M. Byllesby & Co.,
31
Dresser' Industries," Inc/ *"
and refunding
first
"
Old
<
Proceeds—To
Inc.
Co.,
in February.
Mar.
>
company proposes
&
,
Dec. 22 filed
1978.
Inc.
reported company is planning to bring to mar-*
through competitive biddings Probabfe^bidders:
The First Boston Corp.; Halsey, Stuart»& Co. Inc.; Blyth
New
quirements.
of New York;
Edison Co.
Consolidated
-
mined
York
Jan. 9 (letter of notification) $150,000 5.5% sinking-fund
bonds,
series
1948-1973.
Price—Par.
Underwriter—
Bioren & Co., Philadelphia.
Personal and business re¬
J.)
(Joseph
ment
Telephone Co., Chicago*
ket early in the spring an issue of $30,000,000 to $40,000,(letter of notification) 13,999 shares oLcommon.
„000 of' mortgage bonds to fund bank loans incurred-, in r
Price—$12.7o a share.
No underwriting.
For property
its
plant construction program.
Probable Bidders —;
additions and improvements.
vy*-* Morgan Stanley & Co.; Halsey, Stuart & Co. Inc.
;
Dec.
Md.
O'Donohue
reported company plans issue of $4,000,000 equip-/
trust certificates later this months Probable Bid¬
•
Inc.,
shares ($10 par) common. No underwriting.
Price — $10 a share.
Proceeds—To build
trotting and pacing race track near Ocean City, Md.
St. Paul & Pacific RR.
Chicago; Milwaukee,
>
•"
'
Southern
shares will be
Proceeds—To
Nov. 28 filed 34,900
•
• <
Jan. 12
19
mortgage bonds, series A.
Racing Association,
Harris, Hall & Co. (Inc.).
Southeastern
improve its public utility system.
Ocean
common
Dec.
_
subscription by common
share for each
eight common shares held. Unsubscribed
offered publicly.
Price—$21 a share.
permission to issue $1,950,000 of Cen¬
equipment trust certificates to be known;
series A. Probable bidders: Halsey, Stuart & Co. Inc.;*.
Jan. 13
of one preferred
basis
Pennsylvania
Central RR. of Pa. have
of
RR.
Proceeds—Proceeds together with-'*"
ders-*—Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutz-;
purchase all of the outstand¬
ler; Marris. Hall & Co.* (Inc.).
of South Carolina Power Co.1 from the
Commonwealth & Southern Corp.
Blyth & Co. Inc.,
as
publicly.
offered
by the Pullman Stand-*
other funds will be used to
shares ($20 par) cumulative pref¬
Underwriters—Central Republic Co. Inc.,
stock.
be
bej
1949. The certificates will be designated" as |
will mature in 10 equal instalments of $400,-
Price by amendment.
Indiana Public Service Co.
Chicago; The First Boston Corp., and
will
the-
tral RR. of Pa.
preferred. Underwriter—Kidder, Peabody & Co., News
Offering—Shares initially will be offered forsub-
shares
!
-■ I
'
asked the ICC for
ferred
Oct. 29 filed 272,694
erence
Central
York.
Unsubscribed
*
The Central RR. Co. of N. J. and
sale, and 687,293
basis-
(1/26U<«
RR.-
top steel hopper cars to be built
ard Car Manufacturing Co.
*
and 404,293 shares ($4.50 par) common
shares reserved for conversion of'
preferred
for
Ohio
&
Feb. 1; 1949-58. The certificates will finance
exceeding: 80% of the net cost of 1,200 70-ton open
not
scription by company's common stockholders, the-pre¬
on a l-for-10 basis and the common on a l-for-2 "
(1/22-23)
Dec. 22 filed $10,000,000 sinking fund collateral trust
bonds, due Jan. 1, 1968. Underwriters—W. C. Langley &
Co. and The First Boston Corp. Price—By amendment.
Proceeds—To pay bank loan.
Northeastern
ible
series X and
convert¬
80,858 shares ($50 par) cumulative
consider'
consolidation!
may
a
000 each, on
Gas Co.
&
Electric
Carolina
South
Dec. 2 filed
company
"possibly
or
with other independent oil interests."
Baltimore
dated Feb. 1,
Metuchen, N. J.
Jan. 8 (letter of notification) 1,740 shares of preferred
stock (par $100) and'1,740 shares of common stock (no
par). Price—Preferred, $100. Underwriter—None. Ex¬
pansion and working capital. /
vertible
i
Company is inviting bids' tb be opened Jan. 26 for
sale of $4,000,000
equipment trust certificates to
Inc.,
Laboratories,
states
additional financing
merger
•
development of mining property.
Raritan
Mass.
Boston,
Inc.,
or
report
annual
10
either
^Raleigh Red Lake Mines, Ltd., Toronto, Can.
Jan. 7 filed 460,000 shares of common stock. Underwriter
—Mark Daniels & Co., Toronto, Canada. Price—25 cents
a
share in Canadian funds. Proceeds—For exploration
and
'
program.
•
Ashland Oil & Refining Co.
•
Jan.
loans and for construction purposes.
New York Telephone Co.
30
expenditures, this
Business—
Piospective Offerings
present
to
scription
»
Philadelphia
of common (par
$100) and 2,925 shares of class A (par $100). Price—Par.
Working capital.
No public offering will be made.
Dec.
contemplated
$256,000
Department store.
shares of common- (par $10). Un¬
determined by competitive bidding.
present facilities.
conditipns.
Motor
and
and provide additional working capital.
Nov. 25 filed 139,739
and additions to
Offering postponed due to market
derwriters—To
•
1947
year
ing financing new plant construction
Jan. 12
Price by amendment; Proceeds—To beJ
together with loans, will be used'
treasury for $382,035 of expenditures made1
received by company,
to reimburse
y
Hampshire
of New
Service* Co.
Fort Wayne, Ind.
"•Corp., Chicago.
^
Detroit.
& Co.,
Public
Dessauer Co/,
75,712 shares ($1 par) value common stock,,
of which 25,712 shares are being sold by company and
50,000 shares by Fort Wayne National Bank.
Underwriters—Maynard H. Murch &• Co. and Lee Higginson*
W., Washington, D. C.
(letter of notification)
9
'Wolf &
Jan.' 9 filed
purchase of bonds wilL be received up
(EST) Jan. 20 at Room 822,-929 E Street
for
Bids—Bids
Refrigerating Co., Ni
Merchants
Jan.
4Vo% cumulative;
(EST) -on Jan. 20 at Robnr
preferred stock. Underwriters—Only the bonds will be ;
Street, New York Cjty.
i'W-iKW* underwritten under competitive bidding terms. Probable)
received up-to noon
901—50
tc
ment-
Dec.
new
will be
—The debentures at
'r'i;
-mortgage bonds.)
Wisconsin Power & Light Co. (1/26)
parent; West
shares of common to
of 50,000
sale
from
—
1
Thursday, January 15, 1948'
CHRONICLE~
FINANCIAL
&
THE COMMERCIAL
(242)i
Volume
Number 4664
167
THE COMMERCIAL
&
FINANCIAL
CHRONICLE
;(243)
43
Sees N. Y. Building Conditions Stabilized
Myron L Matthews praises workers and building employers for agreeing
2*/2 years. Gives details of new agreement.
n
NSTA Notes
party, February 3
Chicago will hold its annual midwinter
at the Ho el La Salle.
Cocktails
are
June 30; 1950,
Myron L. Mat¬
thews
from 6.15 to
,
reports
7.15 and dinner at 7.30 p.m.
in the current
CINCINNATI STOCK AND BOND CLUB
Dow
At
meeting held January 7 the following officers and trustees
a
elected
W^re
the
for
year
1948
to
the
Cincinnati
Stock
and
Bond
Daily
1
n
Club:
by
is
be-
,
tween
the
will
try
York
stance
the
Building' and
Myron L. Matthews
Construction
York
Council
and
of
other
Greater
labor
New
and
em¬
cooperating
that
so
such
the
very
to
Builders
good gam¬
be
the
Bennett
James
E.
odds
which
by
has
sanity to an indus¬
force of circum¬
bordered
to
30
noteworthiness
income
status
their
months
in
found
what
come
Furthermore, the
living reopening
usual
may.
cost-of-
clause
to
be
most wage
agreements,
agreement now
effective (Jan. 1), cannot become
operable until April, 1949, and
while in the
new
only then if the Bureau of Labor
Statistics cost-of-living index for
April, 11949! is
the
above
Under
President:
Robt. W. Thornburgh
last
than
more
January,
15 %
1948,, index.
this -circumstance
in¬
-an
in the hourly wage for the
crease
12
of
months
the
present
agreement would be given effec-.
tive July 1, 1949, in an amount
equal to one-half of the percent¬
Jean E.
Bennett, J. E. Bennett & Co.
y First Vice-President: James E. Madigan, J. E. Madigan & Co.
Second Vice-President:
George Eustis; Geo. Eustis & Co.
\
Secretary: Robert W. Thornburgh, W. C. Thornburgh & Co*~-^*~- age increase above 1,5J% multiplied
i
by a basic $3.7)0 an hour wage.
Treasurer: Lloyd W. Shepler, Merrill Lynch, Pierce, Fenner &
Beane.
'
V-A-. V ;
Thus, says Mr. Matthews, the
'■■[[ '.r-.-f-'"
i
Trustees:
George T.. Grady, John E. Joseph & Co.; Thomas J. building trades worker in New
Hughes/ Edward Brockhaus & Co.; Robert Si Isphording, Van Lahr York City, at least, has set as fine
Doll & Isphording;-Frederic F. Latscha, Frederic Latscha & Co.;
an example of national statesman¬
v
*
Franklin
O.
Chas.
Hinsch
A.
Loveland,
The officers
&
Field
Richards
Co.
;
selected from
were
&
Co., and
one
Ransick,
Neil
which
would
of the largest turnouts in < the Club's history
"
Association.
NATIONAL
An
including repre¬
Mosely,
Security
.
SECURITY TRADERS ASSOCIATION
unusually
large attendance
is
expected
the
and
other
important business will be
under
what
Bend
Traders
Club
of
Chicago;
•
'
i
•
Hotel
dinner will
and reservations
be held
The fee for each
Milw.
•Chicago
RR
Feb. 4. 1948
Ar
Kansas City
Milw.
Lv
Wabash RR J.: Thurs.
Ar
Kansas City
St. Louis
Wabash RR
Fri.
Lv
St. Louis
Wabash RR
Sat.
Ar
Chicago
Wabash RR
Sat.
•
RR
' Thurs.
'
Feb.
5,1948
Feb. 5,1948
Feb.
Feb.
6,1948
7,1948
Feb.
-
7,1948
Two
in
Two
in
drawing-room, each_
For Pullman
T.__
7:30
12:00
a.m.
noon
5:40 p.m.
defined
factor in
they
in
the
face
for
long
a
remove
this as
is
probably
un-
cannot control the manufacturer's
to
a
consumers
of
the
old
Material costs do not
up or
down in unison with-
short period of time
siderable
that
since
days.
and
with
The Board of Directors has declared this day
the following regular quarterly dividend:
Common Stock
No. 52,
payable
record
as
labor's
frequently done in the
therefore
conviction
the
15
(f-
share
per
February 15, 1948,
on
at
complaint.
J for
dence
of
holders of
Dale
Parker
January 8, 1948
Secretary
Here
Labor
a
to
close of business January 20, 1948.
is an evicontribution to
construction
the
calls
industry which
reciprocity from the
for
other parts of
tributions
the industry—con¬
01
cnaracter
a
which
will freze other elements of
struction cost where
DIVIDEND
they
con¬
are.
CARBON COMPANY
Quarterly Dividend
Consecutive
Spencer Hellogg & &o\\$, 3)iu.
a
of $0.50 per share has
stock, payable March 10,
Stockholders
of
record
as
of
the
quarterly
been
declared
1948,
to
close -of
dividend
on
business
JAMES
the
February
L.
13,
1948,
WICKSTEAD,
and Fifth
One -Hundred
NOTICES
quarterly dividend of 50 cents per
A
share
will be
March 10, 1948 to
February 13,
paid
of record
stockholders
1*48, at 3 P. M.
GEORGE L. BUBB
Treasurer.
Treasurer
Boston, Mass., Jan. 8,
At
a
1948
The
regular meeting of
the Board of' Directors
of The First Boston
Corporation held
Company
on
January 8,1948, a dividend of 87^
cents per share was declared for the
first quarter of 1948 on the outstanding 3J4% Cumulative Pre¬
has
.
share on the outstanding Capi¬
tal Stock and a dividend likewise of
close of business
close
2,
of
there
in
is
the
freezing of
trade
the
mailed.
JOHN E. McDERMOTT,
Secretary.
,
LEE RUBBER & TIRE
«p«nininiiiiinimiiniim
CORPORATION
V
-
«
DIVIDEND
NOTICE
•
FACTORIES
YOUNGSTOWN
PARK
CITY
-
•
CONSOLIDATED
CONSHOHOCKEN
DIVISIONS
MINES
COMPANY
REPUBLIC
RUBBER
Youngstown, Ohio
share on the
issued and outstanding capital stock of
Park City Consolidated • Mines Company
was declared at a meeting of the Board of
Directors, held on December 27, 1947.
Said dividend to be payable on February
14, 1948, to the holders of the issued and
outstanding capital stock of the Corpora¬
tion of record, as shown by the books of
the Corporation on the twenty-fourth day
of January 1948.
Those
persons
poration
names
two cents per
are
that
holding stock irt this Cor¬
is
urged
not
to
registered in their
immediately forward
their stock certificates for transfer
to
Com¬
INDUSTRIAL RUBBER PRODUCTS
LEE TIRE & RUBBER COMPANY
OF NEW
YORK, INC.
Conshohocken.Pa.
LEE DELUXE TIRES AND TUBES
The Board of Directors has this day
declared the regular quarterly divi¬
dend
of
50c
outstanding
per
capital
share
on
the
stock of the
Corporation, payable February 2,
the
pany's registrar and transfer office, namely
Commercial Security Bank, Ogden,
1948, to stockholders of record at
Utah.
the close of
Park City
,
Consolidated Mines Company
business
1948, Books will
310 Kearns Building
not
January 22,
be closed.
A. S. POUCHOT
Salt Lake City, Utah -J '• '
'
building trades mechanics by
at
February
Treasurer
con¬
wages
of
cents
1948.
Checks will be
of the
J. Costello,
record
business
of
January 19, 1948.^**
Edward
dividend
(12V2p per share on the out¬
standing common stock of
Company,
payable
on
February 20, 1948, to stock¬
holders
share on the outstanding Class A Capital Stock were de¬
clared payable January 30, 1948 to
per
as
a
one-half
and
the
per
stockholders of record
declared
twelve
ferred Stock. A dividend of $1.00
$1.00
of Directors of
Board
Wentworth Manufacturing
-
material and
equipment,
of cost is still unand
ELECTRIC
&
CORPORATION
under such circumstances no one
j would have the slightest ground
'
wholesale prices which is believed
to be about all they have
passed
on
GAS
in-
an
would then push up building costs, a mere .2% to 3% and
a
ply dealers are not of a publicspirited mind but because they
oast
'
itself such
In
months.
12
NOTICES
COLUMBIA
.m
builder's
a
wages have
information, communi¬
Company, 231 So. LaSalle St.
/
DIVIDEND
increase
15%
enough
make
The
;n
74.76
reliable
^
crease
of
unwillingness
lump sum bids on pro¬
jects of I the type lending them¬
selves traditionally to lump sum
bidding.
to
move
$67.81
71.23
,
when
anchorable not because local sup¬
11:55 p.Pi.
reservations and additional
cate with: Edward H. Welch, Sincere &
Chicago 4, Illinois.
cost
and
OPA
bedroom, each
compartment, each___
Builders
labor
and
material
Now the extremely impor¬
item has been fixed
anchored
City and St. Louis will be:
in
end.
component
leaving Chicago Wednesday night and guest fees at Kansas
Two
under
prevailing
labor
,
6:25 p.m.
7:30 a.m.
the
1949 and for the ensuing
July 1,
A dividend of
{ " The cost of round trip railroad fare and Pullman accommodations,
dinner
would
costs.
'
-
/Wed.
checks
commitments
period ahead to
Special Cars Will Leave Chicago for Kansas City
Wednesday, Feb. 4, 1948
Lv
blank
war's
the
tant
February 6 at the Chase
through Norman E. Heitner;
dinner is ten dollars.
usually
"
to
sources.
Further, says Labor, if living costs
go up 25% above today we will
expect only a 5% wage increase,
or 15 cents an hour more, starting
hun¬
accounts
bank
next
fluctuating
Bleweiy Heitner & Glynn, 320 North Fourth Street, St. Louis.
«
to
heretofore
job
om
should be made
untold
didn't know themselves What the
Avenue, Kansas City, is in charge of arrangements.'
The St. Louis
amounted
all cost
Chicago dinner will be held February 3 at the Hotel La Sallej
Arrangements.should be made through C. J. Newpart; Merrill Lynch;
Pierce, Fenner & Beane, 141 West Jackson Boulevard, Chicago, by
those planning to attend.
:
:
; ;
The Kansas City dinner will be held at the Meuhlebach Hotel
en February 5. John Latshaw,
Harris, Upham & Company, 912 Baltimore
cording
living costs if this should oc¬
cur.
It waives jits rights to the
event as a point for bargaining.
one
couldn't help themselves in refus¬
Security ing to issue to investors firm over¬
,
*
of
since
City, and the Security Traders
February 3-February 6, in connection
The
'
Always
emulate
conditions
Kansas
with the meeting of the National Committee of the National
Traders Association in Chicago.
release
their
on
Club of St. Louis will be held
and lip?
cup
—but not considered probable ac¬
places
projects
by justifiably jittery
investors
who
balked vat
giving builders
NSTA TRI-CITY DINNERS ANNOUNCED
the
do well to
other
of postponed construction
discussion;
The annual winter dinners of the Bond Traders Club of
in
dreds of millions of dollars worth
meeting of
the National Committee of the National Security Traders Association
to be held in Chicago, February
4,. at which time changes in the
constitution
heard of
or
long time and
a
brethren
mediate
at
seen
the
absorb
(copy,
in a plain word). From the labormanagement viewpoint this con¬
tribution on the part of labor to
rebirth of public confidence in the
building industry merits the im¬
The party was attended
sentative groups from out of town affiliates headed by Victor
Stroud & Co., Inc., Philadelphia, President of the National
Traders
has been
as
hereabout for
v.
party held December 15 at the Hotel Sinton.
by
ship
group elected at the Christmas
a
Are there chances for
slip twixt
in
the
an
and publicly
willingness to stay
fixed at that point for the next
Shepler
a
The cost-of-living clause which
labor
has
promulgated is
of
such
declare
W.
get lined up in and under the new
agreement.
local
outstanding decision one
need only review their own per¬
likely to receive increases in
still in negotiation to
instances
worthy of special attention be¬
cause
by its terms Labor agrees
sonal
Lloyd
are
upon
appraise
George Eustis
Madigan
Calculator using
basic barometric trades of the
so
a
: great
In d u s t r y-wide
achievement could be reached. To
E.
10
in¬
sanity. As the saying went "you
don't have to be crazy to be a
builder but it.helps."
Now this
is a thing of the past.
ployer groups not members of the
above—all
of
building industry at their old or
against them new levels, as the case may be,
greatly reduced that' for only a few fundamental trades
be said that the new agree¬ have received Jan. 1 increases or
it may
ciation of New
Trades
are
es¬
industry.
have
but
ment restores
Asso¬
and
the
have been
Em¬
ployers
of
still
blers
of
Building
Trades
Construction
been' because
nature
the
members
as to
component
labor
Estate Valuation
attained.
come
new
and
important
has
Build-
agreement
ivieanwhile, building costs
the
frozen
at a
level
approxi¬
mately 31/2% above the level of
last September. This computation
is based upon certain calculations
made by the Dow Service Real
before
Reports.
g
voluntary agreement, labor-man¬
agement groups have given the
local
building
industry virtual
cost stability in* a degree never
timating will probably never be¬
a precise business.
It never
Service
The
J.
contract for next
wage
N6W York building trades
employers and labor have set a new high in their already
noteworthy public-spirited service to the people of this area by freezing wages of building
trades labor at
approximately 1947 levels for the next two and one-half years, or until
BOND TRADERS CLUB OF CHICAGO
The Bond Traders Club of
on
'
i
,;r
ViTnitnm m rnrrniiTrmnri
Jan. 7,1948
Treasurer
(>
44
THE COMMERCIAL
(244)
FINANCIAL
&
Thursday, January 15, 1948
CHRONICLE
not be taken down.
i|S
-
William
on.
erful
from the Nation'# Capital
«
t
with
is
Martin
McChesney
the most pow¬
one
Truman-
influences for the
Marshall
V/\|i
M Cr £A
/g y| /"/
xJL I HA
Behind - the - Scene Interpretations
s[«
sis
expected to be
•
•
will
great deal of the $300 million
BUSINESS BUZZ
concept of foreign aid
In the main, Mr.
Congress.
Martin, the President of the Ex¬
port-Import Bank, has gone over
He be¬
to the Administration side.
lieves that the foreign
policy ob¬
jectives of foreign aid are of
greater weight than the purely
fiancial
prospects of repayment
of loans. He believes that only the
is looking to the Commerce Department to use the
Republican "anti-inflation" law to make a serious attempt to
arrest inflation, he is doomed to disappointment. This law will be
If any one
new
used to try to
Commerce
bottlenecks and that is about all.
crack a few industry
Department looked^
the
to
break
and
bottlenecks
the
steel, agricultural and
oil machin¬
chemicals including
and possibly
fertilizers.
There is no word as
yet as to what the Interior and
Agricultural Departments will do
with their pieces of jurisdiction
ery,
some
soda
ash,
'
over
clothing,
"voluntary" program.
the
will
Steel
pig
Department's
be the guinea
for the Commerce
-
I
officials.
broad
\
picture of their
industry's
They tell how
supply problems.
and to
what uses it goes, including de¬
tails of what shortages are most
acute.
Then the Commerce De¬
partment appoints an industry ad¬
visory committee and- a separate
labor advisory committee.
From
the industry the department gets
the name of an individual nomi¬
nated by that industry to run the
show for that particular indus¬
try's program of voluntary coop¬
they are producing
much
«
eration.
Thereafter,
the Commerce De¬
works up a proposed
program it
would like to put
across
with the industry.
This
partment
goes
to John C. Virden,
director
department's "Office of In¬
dustry Cooperation," the agency
in immediate charge. Virden and
his boys are supposed to "wring
the water" out of the department's
of the
tentative
Then Virden
his revised proposed
program.
bundles up
and hands it on to indus¬
try. Industry chews it over and
comes
up with its ideas.
When
the
industry
and
Government
have got together on a program
of voluntary allocations, the thing
is submitted to public hearings.
Presumably if the howls are too
loud on this or that point, the
program
In
final
form
it
sub¬
then
is
mitted to the steel industry or
the.
machinery industry or what have'
you,,
for
And
putting
operation.
into
the Attorney
General is
his bright
young boys working right along
with Commerce from the begin¬
supposed
to
keep
ning to the fruition of an indus¬
try cooperation program.
Then
Justice De¬
partment will be prepared to
give
forth
quickly
with
its
"declaratory judgment" that the
—just maybe—the
FIRST OF A SERIES
Hitherto
stood
or
they
kind
programs
The
they
more
a
as
see
trip
had
particu¬
however,
program,
politics.
in
ceived
tended to show that
was
talks
con¬
voluntarily
cost
that
There¬
fore, all parties in interest are
will not do this.
gram
notice that if
on
wants
man
tide
to,
he
can
"I
wanted
say,
the full
compaign,
have
to
to
controls
inflation.
The
Congress
not give
them to me.
stop
would
They
would
said industry voluntarily
do the job itself. It has
failed."
is
There
of
budget
income tax
room
in
Truman
the
earlier this week for
reduction. That is the
this budget is being inter¬
preted by the sponsors of lower
taxes.. On the basis of
all the
way
foreign aid the President wants,
the budgetary "surplus next year
would
amount
to
nearly
$7.5
billion.
budget is $400
Included in the
million
be
not
enacted.
will
probably
which
There are also
substantial
other
some
military
universal
for
training,
con-,
if
they
billion will
be appropriated, as the Presi¬
dent
asks,
for
the
first
15
months
of
long-term foreign
aid. All in all, it looks, off the
like
in
the
tics.
can
cut of almost $2.7
be effectuated with¬
a
of practical
realm
This would
poli¬
bring the ex¬
penditures down to $37 billion.
(Incidentally,
except for some
notable exceptions, the
did
some
President
substantial trimming
parts of the budget.)
in
$1
billion, maybe more.
And
Indiana Gas & Chemical
;
of
cal
1949,
on
tax
laws, also is low.
they see ample
H. & B. Amer. Mach.
Philadelphia 9, Pa.
thru—Montgomery, Stioit & Co.
123 South Broad St.,
'i
*
Snyder,
W.
White House of this notion of cut¬
of everybody's tax
liability and hanging the cost on
to business. Mr. Truman quarterbacked this the same way as the
ting
$40
out
"anti-inflation"
in
matters
advance.
*
One of the
ocratic
r
*
enact
to
crats
or
raise the pro¬
jected freight car building goal
to 14,000 a month, there is now
that
expectation
every
inflation
ten-point
a
industry and
railroad
government
that
the
goal of 10,000 cars will
be achieved this month.
earlie-
program?
The Demo¬
wondering. As for the
are
$40
head
per
drink.
cut
to
hand¬
all
tax
tasted
that
out,
flatter
Loft Candy
unconsumed
than last evening's
\
reasons
Congressmen
why Dem¬
were
tical
is
to
program
up
to
and
for that is
of legislation.
an
message
are
what
an open¬
to Congress.
in the dark
stand
Dem¬
as
or
to
fall
for the present session of
seems
tion,
The
not in
will
they
Congress.
social
It
time
election campaign,
Utopia.
and the place is
ocrats
prac¬
a
feel, for Mr. Tru¬
utter a prayer for re¬
election
ing
with
they
OK,
man
come
of
that it
the Union" message was
failed
dis¬
"State
the
with
appointed
to
So far the President
stand for expanded
security,
and
the
main issue to
aid
like.
be
of
the
tenants
of the Ex¬
to
educa¬
But is the
that Republi- '
Taca Airways
port-Import bank HAS been that
the proceeds of the loan shall be
used
to
purchase
those1 items
which will aid in the future liqui¬
dation of the loan.
The $300 mil¬
Dorset Fabrics
lion Canadian commitment hardly
falls in this category.; Canada will
get the U. S. dollars within the
five-year term of the loan, to re¬
the loan, IF the United States
Canadian merchan¬
dise
to
wipe out most of the
Dominion's U. S. dollar deficiency.
pay
buys enough
If
"
then
not,
will
repayment
the
depend upon
M. S. WlEN & Co.
ESTABLISHED
N.
Members
40
Y.
Exchange PI., N. Y. 5
Canada's ca¬
1919
Security Dealers Ass'n
H.A.. 2-8780
Teletype N. Y. 1-1397
pacity to strain and strive and
improvise and pay it out some
It is thus a "faith" loan.
way.
On this point few
officials will
Trading Markets:
Two things operate in
quarrel.
picture.
One is a deeprooted
national
objection
in
this
Canada
United
to
Ralston Steel Car
being in debt to the
States.
Oregon Portland Cement
The other is the
record of Canada, which
has been exemplary in the mat¬
past
of
ter
repayment,
Riverside Cement K & B
to the
and serv¬
Spokane Portland Cement
even
Dominion taking over
icing local debts of its munici¬
palities in default on U. S. dol¬
lar
LERNER & CO*
obligations.
And if the United
buying
soon
Investment
States starts
enough and in suffi¬
10 Pest Office
Securities
Square, Boston 9, Mass.:
Telephone Hubbard 1990
cient
quantity for foreign
aid,
1'eletvpe Ba M
a
Teletype—NY 1-971
HAnover 2-0050
Empire Steel Corp.
Firm Trading Markets
FOREIGN SECURITIES
Susquehanna Mills
All Issues
CARL MARKS & P.O. INC.
.
FOREIGN SECURITIES
SPECIALISTS
Incorporated
Telephone: DIgby 4-0985-6-7-8
cut
tax
..
*
*
"
Foundry
New York
the
of
program
special session—without consult¬
ing his principal adviser on fiscal
& Common
80 Broad St.
a
the
As
the
Republicans in Congress failed
One
*
*
Secretary of
the Treasury, incidentally was a
most surprised and unhappy gen¬
tleman
when
appraised by the
John
LEWIS & STOEHR
,
of
great deal more.
Established 1926
Herbert H. Blizzard & Co.
enacted
cans
control
leeway to
enact a minimum of $4 billion to
achieve tax reduction, and still
leave at least $2 billion over for
debt retirement—quite possibly a
So
South Shore Oil & Dev.
Pfd.
can't file, and I can't add.
Sometimes,
I wonder WHY you hired me?"
the estimated
$44.5 billion for fis¬
the basis of present
revenues
upon
Congressional leaders probably
also will quarrel with revenue es¬
timates. They think that the re¬
vised $45.2 billion revenue esti¬
mate for the present year is low
oy
I
—
Wolfley,
right,
are
items
tion that all the $6.8
billion
type
Mr.
and
increases.
There is little present expecta¬
tingent
can't
"I
come
in some such words:
he
language
the
manship of some other advocates
of foreign aid.
President Tru¬
election
the
of
in
things, and his line will go over
better in Congress than the sales¬
in the cost
bring down
somehow.
The pro¬
not
if
living,
more
be an
because
influence
Congress thgn of the foreign of¬
fice.
Also he has healthy doubts
about
the
economics
of
some
could arrest the rise
of
a
months
three
Mr. Martin is expected to
It was in¬
industry by
action
concerted
with
associated
nearly
of
effective
cooperation"
"voluntary
The conversion of Mr.
was
duration he made to Europe.
*
$
Timely Ads
Bank
its
only
of
Martin
objective even if this ob¬
This
for
York & Philadelphia
E-I
for
operations. It was
in making the
repayable,
export-
interested
living
possible of
breaking of
were
Pitts. Steel
New
the
steadfast
lar sphere of
jective may not work out.
"SWING 0' THINGS"
Clear
read¬
financing loans which in them¬
selves created the means of re¬
We Are Back in the
Watch This Space
currency
payment.
cuff,
is altered.
program
these
how
want
who
gress
if
after
Departsubmit a
They
ment
go
slay the high cost of
:<!
meet with the Commerce
;
*
currency
justment high on the agenda.
spokesmen here,
this scope and procedure makes
sense, or at least it avoids non¬
sense.
They don't see how a flock
of industry cooperation programs
could be put into operation over
tenable
,
i
European
Hence he does not
economy.
industry's
To
that
along with those elements in Con¬
*
*
:!'
bottlenecks
;
Procedure for operating volun■l tary allocations will be as follows:
•i The industry's representatives
?
newspapers
actions.
achievement.
machinery are ex¬
pected to follow closely
steel, if the plans mature.
'
::''
■'*' *•" • *
*
'.'..I. "
the
of
Government-sponsored
for their
night,
Agricul¬
industries.
other
tural and oil
pages
believes
readjustment will follow from the
correct steps to bolster Europe's
later on the
years
could
program. >
the
some
in¬
secure
should admin¬
at least should
He
the Administration.
even
of the "voluntary"
How industry; coop¬
eration works in steel alloca¬
tions
probably
will set the
tempo and modus operandi for
operation
;
hung
front
>
Department
dominate
against getting
leaders
dustrial
were
State
ister the plan—or
violate the
doees not
anti-trust laws and
program
decided that
industries in which it wanted
field
the
-over
50 Broad Street
,
Hill, Thompson & Co., Inc.
Market*
New York 4, N. Y.
AFFILIATE: CARL MARKS & CO. Inc. CHICAGO
120
and Situation* lor Dealer*
Broadway, New York 8
Tel. REctor 1-2020
Tele. NY 1-2660
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